Denis Gagnon ’93 had a long and impressive resume that included more than 15 years in the high-stakes world of private equity. He served as CFO of two tightly leveraged companies that he helped turn around, spent a year in Hong Kong with Deutsche Bank to set up its Asian private investment arm, and was CFO of MMC Energy, a firm he co-founded that acquired and managed power plants.
But when the financial world collapsed in 2008, MMC Energy went with it. Gagnon worked for a while for an investment bank and ran his own consulting business, but by 2012 he chose to step away from the drama of private equity. His new focus: improving how people dry their hands in public restrooms. Gagnon joined his parents and brother in the family business, Excel Dryer, in East Longmeadow, Massachusetts.
Talk of Gagnon someday joining the family business wasn’t new. Gagnon just hadn’t been sure about changing the direction of his career, in part because it meant shifting away from CFO roles to a position focused mainly on sales. The switch also meant that his wife, who had lived most of her life in New York City, and daughter would need to move from Manhattan to a sleepy locale in western Massachusetts. Gagnon discussed with his father and brother ways that his skills could help the company. “There was a lot I could bring to the table,” he says, including his international experience. So he agreed to start with a part-time, one-year trial period.
Despite reservations, Gagnon was intrigued by the chance to work at Excel Dryer. In his previous work in accounting and private equity firms, he had focused largely on middle-market companies like Excel, but the companies were often in financial trouble. This made him appreciate Excel’s success and its lean business model. His father, Denis Sr., had purchased Excel Dryer in 1997 and invested in research and development to build a better hand dryer. Around 2002, the company introduced the Xlerator, reportedly the first hand dryer to use a proprietary technology to generate a high-speed, focused air stream that reduces drying time to 10 to 15 seconds.
The company lacked the flash of mergers and acquisitions, but Gagnon says he also felt motivated to contribute to his parents’ and brother’s success. “Knowing that you’re doing all of this for your family’s business makes a big difference,” he says. When the trial year was up, he chose to join Excel full time, with plans to run the business with his brother and assume the CFO role when his father eventually retires.
For now Gagnon’s main task is growing and managing Excel Dryer’s overseas presence; just 20 percent of its current business comes from outside the U.S. The strength of the dollar against foreign currencies makes this a difficult moment to break into these markets, Gagnon says. He also has no direct sales staff based overseas. His strategy is to find the right independent distributors: people interested in selling Excel Dryers who are choosy about the products they distribute and who know their local markets inside and out. Gagnon knows the range of hand dryers found in the U.S., but knowing every competitor in a foreign country is tougher, so he needs distributors to provide these details. “They become our eyes and ears and our voice, and handle business on the ground for us,” he says.
In Brazil, for example, Gagnon is working with a new distributor who labored to cut through red tape to start selling Excel’s products. “Growing this business internationally is a phenomenal challenge,” Gagnon says. “If we can land that key Brazilian distributor, work out all the details with him, and ship that first order to him, it provides the same sense of accomplishment that comes from closing a major deal.”
Looking ahead, Gagnon suspects that Excel may someday consider acquiring other complementary businesses, a task he is well-equipped to tackle. But that remains an option for the future. “The challenge right now, and it’s plenty interesting, is continuing to grow, especially internationally,” he says. “We’ve got plenty to focus on.”
A Chance to Grow
When A.J. Boyajian, MBA’09, graduated from college in 2002, he spent his first year working as an accountant for a mutual fund company in Boston. In 1977, his parents had founded a flooring company in the Boston suburbs, A.J. Rose Carpets & Flooring (named for his father, A.J. Sr., and mother, Rose Ann), and, growing up, Boyajian had wondered if he would someday join its ranks. But first he wanted an outside perspective and experience.
Still, Boyajian spent that year in mutual funds feeling increasingly drawn to his parents’ company, in which he saw a lot of potential. “It was a chance to grow the company into something special, and I was incredibly excited,” he says. So in 2003 he came on board and has worked there since. “Family businesses have a million challenges,” he adds, “but one of the plusses is the passion and the caring and the work you want to put into it.”
Today Boyajian and his older brother, John, co-own the company. Their father retired more than a decade ago, although their mother continues to help part time with various management tasks such as bookkeeping. In addition to finance, accounting, and marketing, Boyajian handles the retail business, which makes up about 50 percent of sales. The company currently owns three retail stores in the Boston area, and Boyajian oversees the merchandizing decisions, such as pricing and which products to include in the showrooms. His brother runs the commercial division, which supplies flooring to businesses, including real estate developers and universities.
In the last seven years, A.J. Rose has nearly tripled in size, says Boyajian. “Business is incredibly good,” he says. “Each month is like the best month we’ve ever had, so right now we have growing pains in terms of trying to maintain our quality as we grow.” His biggest challenge is staffing, which includes determining the right number of employees to hire, training them to ensure their skills are up to snuff, and making sure they understand the company’s customer-service culture, all while keeping customers happy.
Carpets and flooring are like any other business, says Boyajian, in the sense that understanding the market is key to success. He believes customer service separates his company from the big box stores and giant flooring companies that advertise next-day installation. He monitors his competitors by talking to vendors, customers, and others in the business, and says his field is rife with botched installations, high prices, and poor customer service.
Boyajian is acutely aware of the power of social media in his market. He closely monitors customer satisfaction and online reviews. “Customers are more powerful than ever with their ability to really affect your business if you’re not giving good service,” he says. He realized soon after joining A.J. Rose, for example, that reviews from the online subscription service Angie’s List, which crowdsources evaluations of products and services, would drive business. Boyajian works hard to follow up with customers, especially the dissatisfied ones. “If we can show customers that we’re going to do everything we can to correct a mistake and make them happy, they end up being the person that writes a good review,” he says. “But you have to handle it correctly.”
The payoff is worth the effort, notes Boyajian, who says one of the best feelings is when a customer gives him positive feedback and then writes about it online. “Everybody else gets to see it,” he says.
A Place for Ideas
Throughout his childhood and until his sophomore year in college, Dave Butler, MBA’91, dreamed of being an oceanographer. He majored in geology and participated in a summer program at Woods Hole, Massachusetts, where he helped collect research data on land and from a tall ship at sea. But this was 1983, before the era of personal computers, and Butler found the endless handwritten calculations tremendously boring. “I thought, ‘This is not what I want to do for the rest of my life,’” he says. When he returned to school that fall, he switched his major to economics, with a plan to go into business.
Business was a logical choice. His family had owned Butler-Dearden, a wholesale distributor headquartered in Boylston, Massachusetts, for four generations. From its beginnings in 1882 as a twine and packaging store, Butler-Dearden grew over the decades to offer janitorial supplies, office papers, packaging materials, and food service supplies. It sells everything from brooms to plastic forks to copy paper to packing tape. But Butler didn’t want to join the family business, at least not at first, so after graduation he went to work in sales at Xerox. Butler had worked there for two years when his father, George, came to him with an important question. George’s cousin and business partner was ill and wanted out of the business. “My father said to me, ‘If you want to come in, I’ll buy him out,’” Butler remembers. If his son wasn’t interested, George planned to sell the company.
Butler was just 23 years old but already sensed that he could have a bigger impact in a smaller organization. “I’d had enough of a taste of Xerox at that point to realize that I wasn’t crazy about working for a huge international company,” he says. He also was working toward his MBA at Babson at the time and brimmed with new ideas for Butler-Dearden on topics such as sales management and strategic planning. “The bulk of the research projects I did were about the company,” he recalls. And so Butler agreed to join the business.
At first he worked in sales and focused on building relationships with new customers throughout the region. Over time, his father asked him to take on bigger responsibilities, and he got the hands-on involvement that he had once craved at Xerox. “At a small company you can see results right away,” Butler says. “Let’s say something’s not going well. We can instantly change it. We don’t have numerous boards to go through or committees. Sometimes that’s good, sometimes it’s bad, but you don’t have a lot of meetings or wasted time.” The company makes its own rules, he adds. If customers ask for something new, the company can easily decide to give it a try.
He and his father worked side by side for roughly 20 years until 2005, when George handed the president’s role to his son. George continues to remain involved in the business as chairman of the board. “I think we work well together,” Butler says. “He was always more on the sales front and really great with customers. My skill set is more in the finance and operations arenas. Together we’re a good mix.”
When Butler joined the company 28 years ago, competition came from other small, independent companies. But shifts in market trends mean the company now competes with Internet-based businesses and big office supply stores such as Staples, which now also carries janitorial supplies and packaging materials. One strategy Butler employs to set his company apart is nurturing a strong sales team. “We don’t have a lot of turnover in the sales force, and the knowledge they’ve acquired on the products is substantial,” Butler says. His sales force strives to develop long-term relationships with clients and shows them how to use products to save time and money.
As with any business, knowing the customer is key, so Butler makes an effort to understand why his customers keep coming back. “They like consistency,” he says. “A lot of the bigger companies hire young kids in their first job. They’re there for a year, and then they’re gone.” At the same time, one of Butler-Dearden’s biggest challenges is attracting young employees, especially for sales. “Coming out of college, not a lot of kids say, ‘Hey, I want to sell toilet paper,’” says Butler. Young people rarely respond to the company’s job openings posted on websites like LinkedIn. So he and his team seek out potential employees by word of mouth, talking with vendors and sales reps to get leads on promising talent.
Butler believes young grads miss opportunities by passing up companies like his. “Salespeople can make a tremendous amount of money in this field,” he says. “Our people are on straight commission, but there’s no cap. The sky’s the limit. The majority of the sales reps here are doing very well for themselves.” Butler also believes that a sale is a sale, no matter what a person sells. “You still get the close,” he says, “and that rush of adrenaline.”
Erin O’Donnell is a freelance writer living in Milwaukee.