Johnson Controls CEO Jim Keyes
As chief executive of Johnson Controls, Inc., a multi-national company with 76,000 employees and $12.6 billion in annual sales, Jim Keyes faces numerous challenges as he works to keep Wisconsin’s largest company out ahead.
So how does a CEO with 10 years at the helm keep abreast of goings-on in a global company so large and spread out?
He reads plant safety reports. More than just a record of safety practices, the reports tell him a lot about morale and management of a particular plant.
“It tells how well our people are looking out for out employees – how they are treating them,” says the 58-year-old Keyes, who is the 1998-99 Sales and Marketing Executives of Milwaukee “Marketing Executive of the Year.”
If Keyes sees a plant racking up a lot of safety incidents, it’s an indicator of a larger problem, he says. Seven years ago, Johnson Controls automotive battery plant here in Milwaukee was the corporation’s worst performing unit in terms of safety. One manager threw up his hands and said the injuries were due to the heavy lifting that goes along with making car batteries.
Keyes made sure the safety issue was addressed, and today the battery plant is Johnson Controls’ best performing unit when it comes to safety.
“Safety reports tell you a lot more than just how safe the working environment is,” Keyes says in an interview at the company’s headquarters in Glendale. “It’s usually a sign that morale’s getting bad or something’s going wrong.”
It is that kind of analytical ability to focus and fix problems that has seen Johnson Controls quadruple sales during his tenure – from $3.1 billion when he took over as CEO in 1988 to $12.6 billion for the fiscal year ending Sept. 30, 1998. Sales rose 13% in 1998 over the previous fiscal year, with each of the company’s business units achieving record sales and earnings.
[Johnson Controls is the largest car battery manufacturer in North America. The company also makes automotive interior systems, and controls which regulate indoor environments. It also manages more than 600 million square feet of building space as part of its Integrated Facilities Management division.]
Keyes sits on the board of a number of Milwaukee area organizations. Marquette University President Father Robert Wild says Keyes lends a keen analytical presence to Marquette’s Board of Trustees.
“He misses very little,” Wild says. “He is wise. And he is not afraid to speak up if things should be done in a better fashion, He is a person we listen to and take very seriously. We are very fortunate to have him on our board.”
Keyes is an early riser, getting out of bed at 4:30 a.m. for his swim at the Milwaukee Athletic Club. He’s in the office by 6, and typically works a 12-hour day. He attributes that tendency both to his father – who worked until he was 80 – and his small town roots in Belmont, a village of 800 residents in southwestern Wisconsin.
“I think, for the most part, that people from smaller communities have a very good work ethic,” Keyes says, pointing to the success of Gov. Tommy Thompson, who is from Elroy. “But there’s a lot of luck involved.”
Keyes frequently travels internationally to stay abreast of Johnson Controls’ far-flung enterprises. Last year, the company acquired Becker Group and its European subsidiary for a reported $550 to $600 million, a move which is expected to increase the company’s international sales of automotive interior systems.
Organizations that stand still risk losing whatever competitive edge they currently possess, Keyes says, adding that product innovation and new product development are critical to the long-term survival of a business. [JCI’s Inspira thin-metal battery is significantly smaller and lighter than traditional lead-acid batteries, and could reduce vehicle weight by 20 pounds when it is introduced two years from now.]
Keyes is a major proponent of process improvement.
“We live in an environment where we don’t get price increases,” Keyes says. “Every year, our customers want price decreases in some form. So a lot of that cost reduction has to come from changes to make our process more efficient. We spend a lot of time on that.”
In meetings with his top managers, Keyes asks what the various business units can do to ensure that they are following the best business practices within their industry, or anywhere on the planet, for that matter.
“You’ve got to continually raise the bar,” Keyes says.
Since he first took a seat on the Johnson Controls board in 1985, the company has shifted its primary focus from building controls to automotive systems. Just as the business has changed over the last 13 years, don’t expect Johnson Controls to be the same company it was another 10 years from now.
“Business is going to keep changing very rapidly,” Keyes says. “I believe we are entering a period where all businesses are going to be greatly impacted by the Internet. Electronic commerce will make a great change, so the way we do business will be different, and the product we sell will be different.”
But the basic values of the company, Keyes says, will remain the same.
Keyes is a big believer in human capital as a strategic asset. He says acquiring talented people and putting them in the right position is a key to any company’s success, and should be part of any growing company’s strategic plan.
“If you spend more time there, you’ll need to spend less time in other places,” Keyes says. “At our last management meeting, both myself and our president stressed to our managers that they need to have top talent underneath them, because if they had to do the same thing tomorrow that they are doing today, then they aren’t going to grow anymore.”

Employee retention is no longer as simple as higher pay and more responsibility, says Howard Sosoff of BDO Seidman in Milwaukee. Employee retention is now one of a company’s greatest assets. Employers must recognize the value of retaining their workforce, as opposed to the costly pursuit of recruitment and retraining, Sosoff says.
The following are a few ways to retain your employees:
ˆ? Create lifestyle perks packages that include flexible scheduling, custom-made benefits packages, employee assistance programs and on-site amenities (such as child care, dry cleaning service, and shoe repair).
ˆ? Reward employees for a job well done with movie passes, tickets to sporting events, or an extra vacation day. Handwritten notes also go a long way toward recognizing performance.
ˆ? Establish a corporate culture that values employees.
ˆ? Offer “dress down” days in which employees can wear casual business attire.
ˆ? Institute a goal and incentives reward program.

As INSpire Insurance Solutions has grown, so has the need for programers to develop software for the property and casualty insurance industry.
The Sheboygan location has gone from 85 employees in 1989 to 200 by 1998, says Rick Gaumer, vice president of support services.
But, it’s not enough. INSpire could use an additional 25 to 30 programers, but there is no one in sight to fill these positions. In response, INSPire decided to grow its own by recruiting students right out of high school to attend a newly-formed program at nearby Lakeland College which trains them in computer science, and gives them the skills they need to go to work for the company.
“We’d like to hire experienced people where we can find them, but the reality is we have to grow some of our own,” Gaumer says.
Lakeland College and INSpire have formed an alliance in which the company pays up to $6,000 of a student’s annual tuition in exchange for a commitment to work for the company, says Dirk Zylman, Lakeland’s director of development. For each year they work after graduation, they receive reimbursement of $6000 per year up to $30,000. The 16 students currently enrolled in the pilot program will go to school 12 months out of the year, and will take a curriculum geared to INSpire’s criteria.
The students are invited to company events, and receive internships at the company by their second or third year of college, Zylman says. The students must maintain a grade point average of 2.75 in order to stay in the program and get a job with the company. Lakeland hopes to recruit 30 students a year to enter the program.
“The hope is, by spending three years in the program, and by getting to know INSpire and getting to know the community, these people are going to want to stay in the area and become part of the community,” Zylman says. “Hopefully, they are here because they want to be here, and not just looking at this as a weigh station.”
The problem is that many information technology workers are seduced by offers from companies in larger metropolitan areas. This setup is intended as a “golden handcuffs” arrangement in that the students will feel some obligation to stay after going through the program and having part of their tuition paid by their future employer, Zylman says.
For those who want to move on, INSpire has offices in Fort Worth, Columbia, S.C., and San Diego, Gaumer says.
“It’s a win all the way around,” notes Zylman, a former Firstar banker. “For INSpire, it’s a pool of prospective employees who know the company. For Lakeland, it represents a steady stream of incoming students, and it’s a win for the community because they are going to be positive, contributing members.”

Global economy creates opportunity for small manufacturers
On top of global competition and ever-higher customer expectations, small manufacturers face a labor shortage with no end in sight.
But, for those who are willing to meet the challenge, the global economy offers chances to small manufacturers they haven’t had before, says Vince Barker, University of Wisconsin-Milwaukee associate professor of management, and an expert on the dynamics of competition.
The first step is the simple realization that as a small manufacturer, you can tap into the advantages that exist in today’s global economy, Barker says.
“There’s no doubt, doing business is harder today, ” says Barker. “But [small manufacturers] have more opportunities to sell globally themselves, or to sell their goods to those who do.”
Two successful Waukesha County manufacturers which have done just that shared tips not only on surviving, but thriving in today’s world economy.
The first step is to cover the basics, says David L. Bahl, president of Weldall Manufacturing in Waukesha. Zero defects, 99% on-time delivery, and low price are minimum customer expectations today.
“You have to be able to deliver a quality product on time. That’s a given. And price is always a factor,” he says.
Weldall, a full-service metal fabricating job shop, has a 25-year track record. It began as a 250-square-foot welding shop in Wauwatosa. Now housed in a 45,000-square-foot facility in Waukesha, Weldall employs 90 workers, including welders certified to work on carbon steel, stainless steel, and aluminum. It has estimated annual sales of more than $5 million.
Customer expectations about quality have grown tremendously over the past decade, says Bahl. But Weldall has, by necessity, always paid close attention to quality.
“The type of equipment we manufacture – cranes, excavating machinery – has to be done right,” Bahl says. “People’s lives depend on them. They carry high liability.”
To ensure quality, Weldall documents all incoming material and identifies it for traceability. In addition, it requires its welders to be certified.
What’s different today is the need to have your quality verified before you can move into some markets. Weldall’s attention to quality enabled the company to earn ISO 9000 certification, giving it approved-supplier status with major Fortune 500 companies.
The key to staying competitive in quality and price is finding quality workers, says Bahl. That’s his companies biggest challenge.
“The work is out there,” Bahl says. “It’s a matter of finding quality people to do it.”
Bahl hopes to hire 50 additional workers over the next two years. “I could go out and hire 50 workers today, but I need the right ones if I want to keep a good reputation.”
After your own house is in order, then you work on relationships, says Bahl. What you need is a strong base of steady customers.
Weldall depends on one in-house sales person to represent the company to potential customers, and “I’ll make calls myself,” says Bahl. It’s important that your sales person be knowledgeable both about your operation and your customer’s needs, he adds.
To build and maintain strong relationships, both with customers and employees, Bahl says he lives by “two golden rules” that have served him well. First, be honest with customers. Manufacturers today face such turn-around times that “you don’t have time to quote a price. You have to work on a time-and-materials basis. Your customers have to feel confident you’re giving them a good deal.”
To keep customers, you also have to be honest about what you can and can’t do, he adds. “We’ve turned down jobs because the lead time was too tight. You have to be able to follow through.”
His second rule: Treat employees well. “To succeed, you need good employees. When you have them, you want to keep them for a long time. If you don’t take care of them, someone else will.”
Another Waukesha success story, Acme Machell Co., Inc., is thriving on the second tier by supplying precision-molded rubber parts to other manufacturers who take them on the global market. That’s how every McDonald’s restaurant that sells soft-serve ice cream got a machine with Acme Machell parts in it.
Along with Waukesha Rubber Co., Acme Machell is responsible for making Waukesha County the leading rubber-product manufacturing region in the state. Its annual sales exceed $10 million.
Acme Machell serves an increasing number of manufacturers in the appliance, automotive, construction, electrical, food and beverage, machine tool, machinery, oil and gas, and paper industries. Among its world-class customers are Briggs and Stratton and Harley-Davidson.
To be a successful second-tier manufacturer, investing in quality control is key, says J.C. Riebe, president of the company his father founded in 1953.
“The number of vendors our customers use is shrinking,” Riebe says. “They are being more selective.”
Getting ISO 9002 designation has been important in obtaining new business, he says.
“It is a big sales tool,” Riebe says. “Now you have to be an approved-supplier to even get a quote on a job.”
Getting ISO 9002 certification requires a big investment, says Riebe. Not every manufacturer can do it. Riebe estimates it costs most companies between $25,000 to $50,000 to get the necessary quality controls in place.
But that’s not all the verification many large manufacturers need before they’ll do business with you, Riebe adds. “They will do their own quality audit before they give you an opportunity to bid.”
And they don’t stop checking on you after they award a contract, he adds. Major manufacturers send their own teams to do quality audits, many twice a year. Acme Machell hosts quality inspection teams from various manufacturers several times a month, says Riebe.
While quality has gained in importance in the past decade, price is just as much a factor, says Riebe.
“We constantly look for ways to make a product cheaper while maintaining its quality,” he says. “Sometimes you can’t reduce production costs. Then you may want to take a loss in your profit margin, just to keep some customers’ business.”
To sell the company as a high-quality supplier, you need to have the right sales people, says Riebe. Acme Machell uses carefully selected sales representatives.
“You must have knowledgeable sales people to get the word out. They are the first contact,” says Riebe. “They need to know what rubber is, what it can do, how it can meet a customer’s needs …”
Acme Machell uses a team approach to determine a customer’s needs, says Riebe. The firm sends personnel to work directly with national manufacturers for government contracts to supply all branches of the armed forces.
In addition to government contracts, 30% of its sales come from manufacturing high-precision automotive components.
That narrow, financially-rewarding niche has served the company well. “In 10 years, we went from nothing to $50 million gross,” says co-president Kevin Sinnett, who founded IDC with his brother John.
“We’ve been able to establish our little niche. But it’s never good advice to get stuck in one marketplace. There were some years that were pretty lean,” says Sinnett. “But now, it’s paying off.”

Be ready with the right response to offset objections
The last time you made a call to a current or potential customer, was it simply to sell a new product or maybe to handle a problem? How was your call received? Were you nervous, or did you feel good about placing the call? If you were nervous about the call, ask yourself why.
If the only time you contact a customer is to sell or handle a problem, you’re conditioning your customers to expect negatives and therefore resist your calls. When was the last time that you contacted a customer just to let him know about something that may interest him? Markets have changed, and so must our approach over the telephone. Here are some tips to help assure that your telephone efforts produce the long-term results that they need to:
1. Know what’s important to your customers before you call. What’s changing in their business and in their lives? Show them that they’re not just another call on a list of many.
2. Plan the call. Have a clear objective in mind, and be prepared to state the objective in terms of the benefit to the customer. Know what action needs to be taken. Do you want to schedule an appointment, etc.?
3. Show respect for a prospect’s time. Simply ask, “Do you have a minute?”, or “Did I catch you at a good time?” Be ready to reschedule the call if the prospect can’t talk at that time. After all, would you just barge into someone’s office and start your presentation?
4. Keep the call short and to the point. If your goal is to close for an appointment, do so quickly.
5. Always be there, but not only when it’s time to sell or handle a problem.
6. Match the style of the person you call. If you are working with someone who is brief and to the point, then be brief and to the point. You will be most effective if you employ the logic that your customer most quickly responds to.
7. Match the tone and pace of voice of the customer. This will help the customer to feel more comfortable with you. For instance, if the customer has a slower rate of speech, match that pace.
8. Be conversational. Use a cue card, not a script. Rehearse with co-workers before you make a call. Have a list of common objections handy for you to refer to. Have a general outline available to remind you of the sequence, but don’t read a script.
9. Be different from everyone else. Think of the types of calls you would respond negatively to. Do just the opposite.
10. Clarify stalls by asking open-ended questions. This is where most people get stuck. Customers use stalls when something isn’t quite right. Yet they don’t want to hurt your feelings. Use questions that help reveal the customer’s true intent.
Marcia Gauger is president of Impact Sales, a training and performance-improvement company with offices in Mukwonago and in Arkansas and California. Small Business Times readers can contact her in Mukwonago at 642-9610, or via fax at 501-964-0055.
Most common telephone stalls:
Stall Clarifying Questions
Send me some information.What specifically would you like to see?
Call me in a month.What do you see changing in a month?
Or, What will you be considering during that time?
Let me talk to my partner.What do you think his/her concerns will be?
I’m happy with my current supplier.What do you like most about them?
Let me think about it.What will you be considering?
You seem high priced.How much too much is it?
Or, What are you comparing it to?
I’m going to check around.Who will you be checking with?
Or, What are you looking for that you haven’t found with us?

Dormant accounts might yield gold
Maybe they were left over from a former sales rep, several years removed. Maybe they were dissatisfied with the service your company or a former rep provided. Maybe other priorities took over, and those accounts that were small buyers at the time grew into large accounts – for your competitor.
They’re dormant accounts: one-time customers who haven’t been contacted in six months, or a year, or even longer.
And they’re filled with opportunity.
There are two main reasons that dormant accounts exist: 1)The salesrep left and, during the transition period, the customer was ignored while larger customers got all the attention, or 2) a problem occurred with your company that was never fully resolved.
Solving either type often begins with a phone call. Sometimes there’s been turnover at both companies, and the customer’s new buyer doesn’t recall a problem. You’re the first contact the account has received from your company. On those calls, mention that you’ve worked together in the past “before either one of you was in your current position,” then get the prospect talking about current and future needs. Forget the past.
Sometimes, as perfect as we all try to be, mistakes are made, or we just can’t live up to the expectations of a customer. We’d like to have those situations forgotten, too.
The best approach is to call the decision-maker, introduce yourself, and pave your way to the future. Mention that you know there was a problem in the past, but that your job is to meet current and future needs. Then ask an open-ended, needs-based question. The sooner the prospect starts telling you about his or her needs, the sooner you can both move ahead and leave the past where it belongs.
In either case, avoid pointing the finger of blame at a former employee, especially by name. If the customer asks, explain the situation briefly and without emotion.
Keep it subtle. The message will get through, and you’ll be respected.
There really is gold in those dormant accounts. All you have to do is dig.
Joe Guertin is an Oak Creek-based speaker, trainer and consultant. Small Business Times readers can contact him at 762-2450, or by e-mail at jguertin@tcccom.net.
Ten tips
For Reactivating Dormant Accounts
1 Uncover past problems. Know about past situations before you call
2 Avoid blaming former employees. It hurts your own credibility
3 Don’t dwell on the past. Customers usually won’t, either
4 Be “customer-focused.” Never say, “I’ve been assigned to your account”
5 Offer a “service guarantee.” To put past concerns to rest
6 Expect reactivating to take time. You’re earning the prospect’s trust
7 Remain upbeat. Don’t sound dejected by past mistakes
8 Defuse old “grudges.” Offer to bury the hatchet
9 Make a fresh start offer. Tell the prospect you’ll work hard for his or her business
10 Take action.

Reform may lower shipping costs, but force bankruptcies
Deregulation of the ocean shipping industry could lead to lower transportation prices for importers and exporters this year. But it could also spell doom for small shippers who could be forced into bankruptcy by the new market pressures, local industry leaders say.
For years the major ocean carriers such as Sea-Land, Evergreen and Maersk, all members of the National Industrial Transportation (NIT) League, have prodded Congress to deregulate foreign shipping. With compromises to appease the longshoremen unions, Congress salvaged an ocean shipping bill late last year that sends waves toward deregulation. Labeled the Ocean Shipping Reform Act, the bill was signed into law by President Clinton on Oct. 14.
Although the new law retains an independent Federal Maritime Commission and specifies that both vessel-operating and non-vessel-owning common carriers continue to issue public tariffs, pricing agreements will become confidential between carriers and shippers. The elimination of public disclosure of service contract rates has everyone in the industry nervous about what’s going to happen when the new regulations go into effect on May 1.
Tom Donahue, director of Export Services for Circle International, Inc., in San Francisco, one of the largest international freight forwarders, explains how the present rate system works.
“If you’re a small toy manufacturer, you have access to all the contracts and rates that a larger toy manufacturer enjoys. When the big toymaker signs a new contract, the little guy has 30 days to me-too that contract and get the same rate. The new law eliminates me-too contracts.”
Carriers, who own and operate ocean vessels picking up and delivering containers to the same ports, belong to groups known as conferences. Under the Shipping Act of 1984 and the new reform law, those conferences are immune to anti-trust laws. They get together and set rates and regulations for transporting ocean freight in their bailiwick. The practice would be price-fixing in any other industry; but for as long as most people in the business can remember, ocean-going carriers have enjoyed anti-trust immunity.
Under the new law, conference members can make maverick, confidential pricing arrangements with a large shipper as long as they notify the conference within five days of signing the contract. Moreover, all such agreements have to be filed with the Federal Maritime Commission.
Del Brahm, president of both the Transportation Association of Milwaukee and Brahm and Krenz International, Inc., a local freight forwarder and customs broker with offices in Milwaukee and Chicago, thinks there are reasons for concern with the new law.
“Almost every article I’ve read says the small shippers are going to get it in the neck,” Brahm says. “The big shippers will make sweetheart deals with the big carriers, who will make up their profits on the small shippers. The conferences still maintain their anti-trust immunity. Any carrier in a conference can make a confidential rate deal with a shipper the size of Wal-Mart, independent of rates agreed upon by their conference.”
Hellmann International Forwarders, Inc., with headquarters in Miami, has offices in 20 different countries. Jean Albers, a certified ocean forwarder who manages its Oak Creek terminal, sees the change leading to lower prices and to industry consolidation.
“Like the deregulation of the air freight industry, there will be a lot of consolidations and bankruptcies among carriers,” says Albers. “Deregulation will drop prices. Ocean prices are already the lowest they’ve ever been. But we won’t see the loopholes in the law until after May 1, when the law goes into effect.”
Hellman handles about 400 sea freight exports a month and about 100 import transactions and an equal number of air freight shipments each month, according to Albers.
Marge O’Connell, Global Transportation manager for Mercury Marine, sees deregulation as a benefit. “It’s going to be interesting,” O’Connell says. “We’re considered a mid-sized shipper. Most of our exports go to Europe. In preparation for the impending new law our corporate people, Brunswick International, are soliciting ocean carriers for package deals that will pool all corporate exports.”
At Trek Corp., in Waterloo, Joyce Keehn, director of worldwide sales for the bicycle manufacturer, views the deregulation part of the reform act as a “wait-‘n’-see situation.” She and Linda Bourdo, import- export manager, find that some of the firm’s biggest problems originate with the surcharges made to reposition containers. Last year 1.5 million empty containers were returned to Asian ports.
“That (surcharge) adds three to five dollars to each bike we produce,” Keehn explains. “We wrestle with currency rates, selling in 70 different countries. Forty percent of our business is export, and we ship about 200 containers a year.”
With its new plant in Ireland, Keehn looks forward to reduced shipping costs to European distributors.
The new law defines both freight forwarders and non-vessel-owning common carriers (NVOCC) as ocean transportation intermediaries. However, there is a difference. The freight forwarder works on commission as a travel agent does; commissions are commonly 1.25%.
The NVOCC , which combines goods into container loads, takes title to the goods while aboard ship. Its income is the difference between the carrier’s rate and what it charges the shipper. Most large international firms the size of Hellmann or Circle will function as either forwarders or NVOCCs.
To cope with the new law, small to medium-sized shippers are advised to work with their freight forwarders, who will be competing to combine shipments for the best possible freight rates. In the month of March the National Association of Brokers and Forwarders has its annual meeting. Brahm anticipates that 500 to 600 small to medium-sized forwarders will form a group to negotiate their own confidential rate contracts with carriers.
“Face it,” Brahm concedes. “It’s a way of life in this country. The little guys drown first. As for what’s going to happen after May 1? Only time will tell.”

Resting on your laurels will ensure loss of market share
Core Creative
This is the eighth in a monthly series of marketing tips from southeastern Wisconsin.
This month’s advice is from Bruce Bock of Core Creative, of Milwaukee. Each month, the featured firm is also providing a commentary on a specific area of business
marketing.
Regardless of size, companies content to rest on their laurels often lose market share to those executing well-strategized public relations and advertising plans. Like any marketing vehicle, public relations efforts require thoughtful planning to achieve positive results. So it pays to take a good long look at how to get your company’s PR efforts off the ground.
Ask 100 practitioners to define what public relations is, and you’re likely to get 100 different definitions. Textbook definitions describe PR as everything from “the shaping of perception through communication for the achievement of positive goals” to “the art of communication.” Essentially, PR is a way to shine a light on your product, service or issue. But from the viewpoint of a budget-conscious marketing manager, PR is simply this: non-paid media communications.
Why use PR?
Public relations has a number of benefits that make it a highly-effective tool. It is broad reaching and cost effective. Consequently, there are no excuses for your company to be without some realistic, workable PR plans in place.
For example, a single well-written news release can generate feature news coverage and thousands of exposures for your product, service or issue. In addition, PR is an effective tool for delivering multiple, complex messages – something hard to do in one-page ads. Perhaps most important in the ever-changing world of business, PR is flexible in terms of its execution. One feature article placement can be reprinted and used as a direct mail piece, incorporated into a Website, or used as background material for media relations efforts.
When to use PR
The obvious time to use PR is when you need to create awareness for a new product or service. However, PR can also be used to help maintain or increase market share once it has been secured. PR should also be used when credibility or legitimacy is desired. That is achieved via the implied, unbiased third-party endorsement that newsworthy media placements carry. PR is also an effective tool to lessen or manage the effects of unfavorable publicity. Keep in mind that PR doesn’t produce an immediate payoff like direct mail often does.
What do you want to achieve?
Setting realistic goals and objectives is necessary to keep your company’s efforts on track. Review the following:

Industar’s Rao sees new wireless solutions for business
For a technological visionary, Kailas Rao reacts like anyone else when he gets an $80 phone bill for making an international phone call.
“When you travel abroad, you realize the importance of communications,” says Rao, who is on the verge of launching his own digital wireless phone service in Milwaukee.
“The phones don’t work, and when they do work, it’s very expensive,” Rao says.
If all goes according to plan, Rao intends to be at the forefront of a digital revolution that, among other things, will allow a business person to dial four digits to place a call to the office from anywhere in the world.
He predicts that in the not-so-distant future, he will be able to place that same call for $8. Additionally, wireless users will have a single phone device that performs multiple functions, and a single number that follows them wherever they go.
To Rao – a former UWM professor who made his mark by establishing the Computer Bay franchise – those are not far-off visions of the future, but rather are pending realities that he intends to capitalize on.
As he stands on the verge of launching his $160 million Milwaukee-based wireless phone service, Industar Digital PCS, Rao has an impressive list of investors behind him who believe in his ability to deliver on a complex technological vision.
Those investors include Hughes Network Services, a division of General Motors, which is contributing $5 million in cash and $60 million in infrastructure financing to Industar; not to mention Japanese super-bank Kanematsu and cordless phone maker Uniden Corp. – both of which are contributing $5 million to the effort.
Locally, the list of investors includes Fiserv CEO George Dalton, Super Steel Chairman Fred Luber, and baseball commissioner Allan “Bud” Selig.
They’re all banking on Rao’s proven ability to take a budding technology and bring it to the masses the way he did with Computer Bay, a franchise he founded here 18 years ago that sold personal computers to business customers. By the time he sold it in 1992, Computer Bay was a national network of 350 stores in 44 states and Canada. Annual sales for Milwaukee area operations alone were $100 million.
This time, the plan is to take digital wireless technology and create a model here in southeast Wisconsin that can be duplicated again and again.
Same vision, different technology.
“Kailas is a pretty tenacious person,” Dalton said in an earlier published report. “He dreams and see things – and then he makes them happen.”
A revolution is coming
In recent years, technology pundits have predicted the convergence of the Internet, cable television, personal computers and the telephone. Given the magnitude of this coming together of four major mediums, such a day would seem a long way off.
But when it does happen, Rao’s backers are betting that he will be at the forefront of this melding of technologies. That could take shape in the form of a wireless phone capable of performing multiple functions.
“What I’m talking about here with Industar is a killer application,” Rao says from his spartan office in downtown Milwaukee at the corner of Mason and Van Buren. “We’re going to merge the Internet and cable and telephones all into one. It’s going to change the way we do business – how productive and how creative we become. It’s going to be the greatest revolution since the introduction of the automobile.”
When the company begins operation sometime in the first quarter of this year, Industar will start as a digital wireless telephone company, providing the usual array of services one might expect, but with one important twist: Just as he did with Computer Bay, Rao will target business customers, which are a tougher, longer sell, but a very lucrative market once they become established customers.
“We understand business, and how they want to be serviced,” Rao says. “We don’t want to be like the other stores, where it’s just hard retail sales.”
Rao sees vast potential in developing wireless applications for business that improve productivity and translate to the bottom line. Instead of chasing after a market that is already saturated – that being the cellular/digital consumer – Industar is going after business customers by selling wireless as a productivity tool. Over time, this will evolve into more than voice phone service, but data applications, as well.
“Our initial focus will be the phone, but we are going to find vertical applications,” says Rao, a native of Hyderabad, India who came to Milwaukee in the 1970s to teach accounting and business information systems at UWM. “We are going to find a niche in the marketplace. The pie is so large that if you try to be everything to everybody, you are not going to succeed.”
Serving that niche might include giving utility companies the ability to replace their meter readers by placing an automatic device on a water or electric meter which can transmit data automatically. Rao estimates he can do that as cheaply as $5 per home.
On the voice side of the equation, Industar one day will be able to install a cell in the ceiling of an office, enabling callers to dial a four-digit number to reach the office from anywhere in the world.
Or, Rao says users will soon have the ability to type a letter on the computer and then send it via wireless phone.
Rao recalls a meeting he had with Steve Jobs back when Apple Computer was still in its early stages. He told Jobs that the business applications for his personal computer were enormous, demonstrating it by putting a spreadsheet program on the computer.
“I told him, ‘I can reduce your cost of operations by 10 percent before you blink your eyes,'” Rao recalls. “He said ‘Show me,’ and I did.”
It’s that same entrepreneurial spirit that is the brains behind Industar.
Getting it right
In 1996, Rao paid $60 million in an FCC auction for a 30 MHz license for the bandwith to launch his wireless service. Since then, the long and expensive process of establishing the network infrastructure has been ongoing. That means establishing 63 cell sites in the seven-county area of southeastern Wisconsin at a cost of $500,000 per site. Calls are routed downtown to Industar’s switch, which was purchased from Alcatel Communications of France for $15 million.
Rather than begin operations with a service that is not completely bug-free and ready to go, Rao has pushed back the launch of Industar several times – from the end of last summer, to sometime in fall – in order to ensure that the service is seamless once it begins.
Industar will use the digital technology of Time Division Multiple Access (TDMA) for its service platform – the same technology used by AT&T Wireless, with which Industar has a roaming agreement. (Industar customers will note the service has the look and feel of AT&T wireless).
TDMA has advantages over analog cellular technology, including: increased call capacity; higher quality voice transmissions with fewer dropped calls; longer battery life, secure voice transmissions; and, the ability to support enhanced features and more versatile product offerings.
When it comes to building its technical infrastructure, Industar is traveling first-class. Alcatel is the number one switch provider in the world, and Hughes is a leader in base stations. And, then there’s the roaming agreement with AT&T.
“We want to do this one more time,” Rao says of his stated intention to franchise Industar, “and I think we can.
“We have come a long way, and we are close to turning the system on,” he adds. “And, we have placed a big emphasis on putting the right people in the right place.”

The shortage of computer programers and information technology (IT) workers has brought employers to their knees, as today’s IT workers have almost unprecedented clout as they move from job to job in search of ever greener pastures.
“If a typical IT person is making $50,000, and, all things being equal, if they can go somewhere and make $60,000, they will go to that place and make more,” says Bob White, president of Impact Solutions, which recruits IT workers.
“In this job environment, people have many opportunities,” adds Marlene Haigh, a Racine human resource specialist. “There is always someone out there trying to attract your people away.”
Back when employers were calling the shots, White met with companies and determined their needs, and then came up with people to fill those positions. Not anymore. Now White tries to find workers with exceptional skills, determines what they are looking for, and then finds a home for them.
“It’s become a candidate-driven market instead of a company-driven market,” White says.
According to a recent survey by RHI Consulting in Milwaukee, average annual turnover within a typical IT department is 19%, with many companies reporting annual attrition rates of 25% or more.
White says IT employers must move to streamline their hiring processes, as most good candidates are lost because a company didn’t move fast enough.
“When you take somebody in this field who is good or exceptional, their shelf life might only be two weeks,” White says. “I talked to one guy in the morning, and three phone calls later, he was hired that afternoon. When someone is willing to make a change, employers have to move very quickly to hire that person.”
In another case, one company made an offer five minutes before a competitor made an equal offer. The first company got the employee. Small to mid-sized companies can use their size and flexibility to their advantage, White says, as they can generally move faster to hire an IT candidate.
They want to be challenged
By the time an existing employer comes back with a counteroffer to an IT employee who has received a job offer, it’s almost always too little, too late, White says. More often than not, the reason the IT worker is leaving is because he was not satisfied with the projects he was working on, or he was not kept up to date with new technologies because the company was not willing to spend money on it.
Troy Wyss left Fiserv, Inc., to work for M&I Data Services two years ago after 17 years with the Brookfield financial services data processing company. The 38-year-old started with Fiserv in 1980 as a programer, and was fortunate in that he was always able to move into new areas when he would become bored with a particular technology. But when he was moved into a new position in 1996 that examined new technologies, it broadened his horizons.
When Wyss felt Fiserv was not moving fast enough on investing in technologies for alternate platforms, he left for a job with M&I.
“I didn’t feel that they were going to move on things immediately, and then I heard of another job where they were already using the technology I was exploring,” Wyss recalls.
But after five months with M&I, Wyss was offered more money to return to his old employer, along with the ability to pursue the leading-edge technologies he had thought the company was dragging its feet to get.
“I am much more comfortable than when I left that I made the right decision,” Wyss says of his return to Fiserv. “In my field, the ability or the opportunity to work on leading-edge technologies is essential to motivation and retention.”
The unfortunate reality is, most employers tend to look at technology expenditures from a bottom-line standpoint, White says. When they fail to make a capital expenditure for cost reasons, they risk losing dissatisfied IT workers down the road.
“It becomes more a matter of being more in tune with the employee’s needs, what would make them happy as far as providing them with the tools to get the job done,” White says.
“The whole thing that is driving this is, if they are in a situation where they don’t like their manager or the technology they work with, they can change [jobs] relatively quickly assuming they are a good employee and have good skills,” White adds.
After he paid for the education and technical training of an employee, Rick Schmaelzle of PrismaGraphics Inc. saw the employee leave shortly thereafter for greener pastures.
“If I had to do it again, I’d probably be less generous,” says the president of the specialty printer at 24th and Clybourn in Milwaukee. “I’m not down on training people, but there are just too few people in that business. Loyalty is questionable. We make the investment, and then they find out that they have some skills that are very marketable.”
Be flexible
Deluxe Electronic Payment Systems in Glendale is retaining more of its 1,200-employee workforce by being more flexible and listening to what its information systems workers are saying in terms of their individual needs, says vice president of human resources Jill Zoromski. Today’s technology workers are just as interested in quality of life concerns as they are making more money, she maintains.
“When people come to me and say ‘I can get 30% more from a consulting firm, with benefits,’ we’ve been winning that with the quality of life argument,” Zoromski says. “In Wisconsin, we have a very family-oriented community, and I think people like being here and not traveling all of the time.
“There’s an extreme amount of flexibility here,” Zoromski adds. “Instead of having a one-size-fits-all approach, we have done a good job of listening to what people need in terms of flexible starting times, changing career paths, or being exposed to new company initiatives. A lot of it has to do with communication. It’s a matter of having your managers talk to their people.”
That type of approach has helped stem turnover at Deluxe, which also has operations in located in New Berlin. In April 1997, Deluxe had 44 people leave the company. One year later, in April of 1998, eight people left. In March of 1997, 43 people left the company compared to eight people who left in March of 1998.
“To say IS people don’t have any loyalty, who do you think started that?” Zoromski asks. “It was stuff like corporate downsizing at the drop of a hat. And, you’re not going to win the battle where the company says ‘Have my values.’ It is really difficult to change somebody’s values, but it is much more achievable to ask somebody what they want, and then deliver on that.”

The building has both a 6,100-square-foot lower and first floor level. Construction has commenced and completion is scheduled for spring.
PIC Wire & Cable, a division of the Angelus Corp., has broken ground at the site of the firm’s new corporate headquarters on Corporate Circle in the new Sussex Corporate Center Industrial Park.
DBI, Inc., a Pewaukee-based design/build firm, will manage the construction of the building. The 12,000-square-foot facility will house offices, production, and warehouse.
PIC Wire & Cable, which was founded in 1970, designs, manufactures, and supplies electronic cable and cable assemblies engineered for the aviation industry.
Fleming Companies, Inc.-Milwaukee Division has selected MSI General Corp., of Oconomowoc, for the design and construction of a new 54,265-square-foot Sentry Food Store to be located at 741 S. Taylor Dr. in Sheboygan. The new store will be the first Sentry Foods Store in Sheboygan. It will be a part of the retail shopping center, Pine Tree Plaza, which is currently being developed by Pine Tree Commercial Realty of Lake Bluff, Ill.
– MSI General will also handle design and construction of an approximately 1,900-square-foot addition and major remodeling to the Sentry Foods Store located at 6700 W. State St. in Wauwatosa.
– Fleming Co. is also currently renovating the Supersaver store located at 4275 S. 76th St. in Greenfield through MSI General. The renovation consists of a major interior remodel and the addition of two entrance canopies. The Supersaver store remains open throughout the renovation work.
– MSI General has completed the exterior renovation to its office facility, MSI General Business Center, W215-W225 E. Wisconsin Ave., near Oconomowoc. The exterior renovation consisted of a new overhead canopy, new windows, a patio with a fieldstone half wall and columns supporting an overhead trellis, new landscaping, parking lot and flagpole.
The office facility, formerly known as the Oak Del Business Center, is home to Space Innovations and MSI General. MSI General moved into the building in 1970 as a tenant. In the late 1970s, Benchmark Leasing, an affiliate of MSI General, purchased the building. Through the years, MSI General has acquired additional space in the building.
T-3 Group, of Milwaukee, has contracted to build the new 16-unit addition to the Nicolet Parc Condominiums in Glendale. The two-bedroom units will be completed in spring.
– T-3 Group has signed a design/build contract for a new Jimmy John’s restaurant. The new sandwich shop will be its first store in the Milwaukee area and will be located at 3129 N. Oakland Ave.
– T-3 Group has also contracted to provide interior of the common areas of the County Building in Schlitz Park. This work is currently in progress with completion scheduled for this month.
– T-3 Group has contracted with Dollar-Rent-a-Car for the exterior renovation of its facility building located at 4939 S. Howell.
The Jansen Group, of Milwaukee, was recently selected to complete construction projects for the following companies:
Hartford Recreation and Family Aquatics Center, Hartford – This 56,000-plus-square-foot masonry construction is designed to blend in with the historic downtown district. The center will be open to the public and includes two pools, a gymnasium, classrooms and offices. Construction is expected to be completed in January 2000.
Schauer Arts and Activities Center, Hartford – This project, located at 147 N. Rural Rd., consists of a 35,000-plus-square-foot renovation. The project includes the renovation of an existing industrial facility. The construction utilizes heavy timber construction. The center will include a 600-seat theater, art gallery and area for the school of the arts.
John Michael Kohler Arts Center, Sheboygan – This project, located at 6089 New York Ave., is a multi-discipline arts center incorporating state-of-the-art systems for performances, music, education, dance and visual arts. The project includes the remodeling of existing historical facility to improve use of space, plus the addition of approximately 40,000 square feet which will contain a storage area, gallery, studio and performance space.
Nowakowski, Franklin – The Jansen Group completed construction of a 33,000-square-foot metal fabrication facility in August. The Nowakowski facility, a masonry building, is located at 9909 S. 57th St.
St. Elizabeth Ann Seton, New Berlin – Jansen was chosen to complete construction of a 17,000-square-foot addition to the St. Elizabeth Ann Seton’s existing church.
Troyk Printing, Franklin – Jansen began construction in August of a 33,000-square-foot facility to house Troyk Printing, custom screen printing and plant offices. The new facility, located in Franklin Industrial Park, is slated to be completed at the end of this month.
Cliff Bergin & Associates, Inc., Mequon – The Jansen Group has been chosen to complete construction of a 20,000-square-foot building for Cliff Bergin & Associates to be used for plumbing, heating, warehouse and storage. The construction is all masonry and concrete floors. The project is expected to be completed in February.
McCloud Construction, Inc., of Brookfield, has completed work on a 2,300-square-foot addition in the Town of Brookfield. The space, expanding WFS, Inc., is in the Westown Professional Building at 21675 Longview.
– McCloud will build a 4,950-square-foot Hollywood Video on Oakland Avenue in Shorewood. Construction was to begin this month, with a March completion planned. The property is owned by Boulder Venture of Milwaukee. DJR Architecture is providing architectural services.
Gerald Nell Inc., Waukesha, has been chosen for the following design/build projects:
– A 14,000-square-foot manufacturing and office addition to PowerTest Inc., Menomonee Falls;
– A 30,000-square-foot multi-tenant office and industrial building in the Silver Spring Corporate Center, Menomonee Falls, for Pak Investments;
– A 53,000-square-foot multi-tenant office and industrial building in the Franklin Industrial Park for Stout Development;
– A 9,000-square-foot office build-out for F.M. Marketing, Pewaukee;
– A 15,000-square-foot office remodeling project for Shorewest Realty – Mequon office;
– Floral, beverage and produce remodeling for Grasch Foods, Brookfield;
– A 45,000-square-foot multi-tenant office and industrial building for Sunset Investment Co., located in the Gateway West Industrial Park, Brookfield.

In today’s wireless world, the competition is tighter and the enhancements of digital mean better technology and service – and more confusion because the choices are no longer so simple.
Ask Oz
Get some real answers to your questions about wireless options. Here are some questions to help you assess your needs:
1. What is your primary reason for wanting a wireless phone?
The type and style of use will be a large factor in determining which carrier and plan is appropriate for your needs.
2. Will the majority of use be local or out-of-town?
This question addresses the biggest change in the wireless industry: the improvement from cellular to digital. The basic differences between digital and cellular lie in the technology each uses. Digital technology provides a clearer, sharper voice transmission that is as dramatic as the difference in sound quality between cassette tapes (analog) and compact discs (digital). Digital also has enhancements in power requirements, reliability, accessories and features, as well as in privacy and security.
Simply put, analog services have only one remaining advantage over digital: availability. For the moment, however, digital penetration is more concentrated in metropolitan areas. Users also wanting service in rural areas will need dual-mode phones capable of functioning on both digital and cellular networks. The time frame for the increased penetration of the digital networks into rural settings is estimated between 18 and 24 months.
3. How many minutes will you use each month?
Users who spend a great deal of time on their phones may want to consider requesting a contract. Several companies offer business plans that have reduced charges for high-volume use. Some users have found advantages in pre-purchasing their minutes each month.
4. What will your peak use time be?
Many companies charge a higher per-minute rate during high-usage times of day and lower rates during evening and weekend hours. Don’t let the house drop on you here. If you have a high-usage rate plan, your discounted or free minutes may only count during off-peak times.
5. Find out which features you want and what the costs will be.
Take a look at available features. Many companies offer plans that include various accessories with the initial cost of your phone. Or you may want to indulge yourself. PrimeCo has a phone that can play a tune, give stock quotes or even a joke of the day. Nextel has Direct Connect, allowing you to instantly connect with one or all of your co-workers with the push of a button. Sprint’s Touch Point phone – a day, address and phone book in one – lets you point, click and connect.
Pay attention to the men behind the curtains
Don’t get carried away in the maelstrom of fancy offers for free phones and great-sounding prices that will get you and your little dog, too. Somewhere over the rainbow there may be a place where there really are such things as “free phones”; here it’s not going to happen. Even ruby slippers can’t get you out of the contracts that may accompany such deals.
Other things to watch out for are activation fees, network surcharges, monthly administration fees, and with cellular or dual-mode phones, the costs of roaming.