Management Nirvana: Entrepreneurship & Leadership: Our Stairway to Success
By Marty Schaffel and Jim Tierney
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Management Nirvana - Marty Schaffel
Introduction
Marty Schaffel
Marty Schaffel and Jim Tierney met at a vendor event more than 40 years ago. Over time and with mutual respect for one another’s talents, they became close friends. Jim and his brother, Tom, started and ran Tierney Bros., a successful cutting-edge interactive ed-tech audio-video firm based in St. Paul, Minnesota. Marty, hailing from Florida, built the largest audio-visual firm in the world, Audio Visual Innovations (AVI). As Marty prepared to sell his company, he decided he’d give back to the business community by teaching a University of Florida course about entrepreneurship.
Jim Tierney
Marty’s classes quickly became popular – a must for serious undergraduate business students. In fact, over the years, his course has had different names and content because students want to continue studying with him and his guest lecturers. In the spirit of giving back, Marty and his colleagues do not accept compensation for teaching. They simply want to share their collective knowledge.
His class meets weekly from 4:00 p.m. to 6:00 p.m. When the clock strikes 6:00 p.m., the formal class ends and some of the best learning begins. That’s when Marty and the majority of his students migrate to a less formal location for a bite to eat and lively conversation. They might go as late as 10:00 p.m., with the students rapid-firing questions at Marty and guest lecturers and the whole group chiming in with their ideas, too.
One day in late 2016, Marty called up his old pal, Jim Tierney.
Hi there, Jim!
Marty’s friendly voice came over the line.
Hey Marty,
smiled Jim. Great to hear from you.
You know that business course I teach at the University of Florida?
Marty asked.
Of course,
Jim replied. What’s up?
How’d you like to be a guest speaker?
Marty queried. It doesn’t pay a dime, but it’s a heck of a lot of fun.
I’d love to,
Jim responded, without missing a beat. How can I prepare?
I’ll send you an outline and give you a few topics. During class, just say what you know. I will be asking you many questions. The students will do the rest. They’re smart, enthusiastic and ready to learn from seasoned pros.
The following January, Jim caught a flight to Marty’s hometown of Tampa, Florida. The pair drove north to the university in Gainesville, chatting amiably about life, times and giving back to the world of commerce that gave so much to them. Jim became a regular on the curriculum and five years later, the two decided to write this book.
1
SEIZING MARKETPLACE OPPORTUNITIES
Only those who will risk going too far can possibly find out how far one can go.
– T.S. Eliot
Humble beginnings
More times than not, even the most successful companies have humble beginnings. That was the case for Jim Tierney. When he graduated from college, his parents threw him an open house. The party wasn’t a big deal for young Jim. He had other priorities. His mind was on his cool girlfriend – whom he would later marry – joining his buddies in a house-painting enterprise and the concert he wanted to attend that night. Anyway, his oldest brother, Tom, cornered him at the backyard barbque.
Congratulations, Jim,
Tom said, clapping his little brother on the back.What’s next?
’Dunno,
Jim responded distractedly. Hang out, paint some houses, maybe save a few bucks. I don’t really have much of a plan.
Listen, why don’t you come and see what I’m doing?
Tom said.
What ARE you doing?
Jim responded with mild but growing interest.
I’m selling something called a Kroy Lettering Machine,
Tom said. It’s pretty cool.
Well…
Jim muttered noncommittally.
Here’s the address,
Tom smiled, sliding a newly minted business card into Jim’s hand.
Come to my office tomorrow morning. We’ll talk.
Jim showed up the next day, curious, mostly open-minded and a little bleary-eyed from the preceding evening’s celebration. Tom’s office turned out to be a tiny room sans windows over a Pabst beer distributorship in the warehouse district of St. Paul. There was barely enough room for a second-hand desk and chair. Atop the desk were an old, black phone, five unopened bank statements and a checkbook.
Gotta go!
Tom exclaimed, rushing out the door. I have a sales demonstration in South Minneapolis. We’ll talk later.
Jim glanced around the cramped space and felt a little claustrophobic. But he dutifully balanced the checkbook, ascertaining with dismay that they had a whopping $968 in the account. Pretty soon, the phone rang and he picked up, saying, Tom Tierney and Associates.
At that instant, he was not only in charge of accounting, but became the office manager, technical advisor and customer service department. It was also the moment Tierney Bros. was born. The enterprise steadily grew into a successful venture. When they sold the company in 2021, that initial $968 had laid the foundation for a multi-million dollar enterprise boasting a world-class service and work culture.
Vintage Kroy Lettering Machine.
Insubordination pays
Marty Schaffel had equally humble beginnings. While in the MBA program at the University of Florida, he didn’t see eye-to-eye with his economics professor. While the fellow drew out endless algebraic and calculus equations on the white board, and the other students took detailed notes, Marty often asked, When we get into the business world, how are we going to apply all this to solving problems?
Of course, these interruptions ruffled the professor’s feathers. Who did this young man think he was? Marty’s punishment for thinking enough to push back was a big, fat F. That one grade tanked his GPA and he was called before the graduate school dean.
Mr. Schaffel,
the dean somberly began.You’ve been here for seven years. You really need to get out and get a job.
I’m in my last semester,
Marty responded. I’ll leave as soon as I have my master’s degree.
It’s not going to happen here, son,
the dean said, shaking his head. Your grades have fallen below 3.0. We’re going to make you a one-time offer. You can accept a second undergraduate degree in business or you can leave with just a degree in political science.
But I really want to finish my MBA,
Marty replied with incredulity.
I’ll tell you what,
the dean said. You have about 30 seconds to make up your mind. Take the double major or we’ll boot you out without it.
Marty accepted the second degree and soon landed a manager trainee position at Montgomery Ward department store in Clearwater, Florida. After two days, he knew the job wasn’t for him, but he stuck it out for six months to learn everything there was to know about managing each and every one of the retail giant’s many departments.
It was good practical experience, but he was more than ready to jump ship when Lanier Business Products recruited him to sell copiers and audio-visual equipment. They offered him a straight commission sales job in Lakeland, Florida. This was 1977, when electronic equipment was still fairly rudimental. Marty saw great potential in the product line, but he found his boss’s management style left much to be desired.
His idea of sales force motivation was to hang a toilet seat in the lobby,
Marty explained. Every month, he’d place a photo of the lowest-performing sales rep in the middle of the toilet seat for everyone to see.
In essence, the man was a bully whose negative reinforcement effectively resulted in high turnover.
Within a year, Marty was a senior member of the team. Still, he wasn’t immune from the manager’s outrageous behavior. One time, Marty was in the office when in marched the manager to announce, From now on, this place is going to be immaculate!
With that, he swiped his arm across Marty’s desktop, scattering all his papers to the floor.
Marty sometimes met with his former co-workers for coffee at the local McDonald’s. Unfortunately – or fortunately in this case – the sales manager saw him there one day and accused him of sloughing off on company time. Marty was fed up and said so. Never mind that he was a top producer working on commission only, the boss who taught him everything about how not to lead people let him go.
I was fired from virtually every job I ever had,
Marty laughed. I guess I was too outspoken. I always had my own ideas about how things should be and when I saw a problem, I wasn’t bashful about saying so.
Next, Marty went to work for a firm to head up an audio-visual division. Sadly, the owner started financing his sideline failing art galleries with company assets, forcing the organization into a credit situation. Marty saw the writing on the wall and ended that relationship. By this time, the 27-year-old had developed a pretty deep understanding of the electronics product line. He saw great potential and approached Kroy Industries to become a dealer to resell their products.
When ya ain’t got nothin’, you got nothin’ to lose.
Marty often opens his classes drawing on singer-songwriter Bob Dylan’s verse from Like a Rolling Stone, When you ain’t got nothin’, you got nothin’ to lose.
It is reminiscent of my earliest days when I had virtually nothing on which to build,
Marty said. Nothing, that is, except his smarts and chutzpah.
Do you have a credit line?
the credit manager queried. Kroy only dealt with established companies that were solvent.
No, I’m starting a business just to sell your product,
Marty replied. At this juncture, he was renting a $400.00 a month apartment, owned a beat-up Chevy station wagon and a dog, and had $2,000 to his name. When Kroy sent a sales rep to inspect his facilities, he booked her into a hotel far from his kitchen table office. He suggested their preliminary meeting be at the hotel restaurant. From then on, he met Kroy people at the hotel. He always presented reasons they couldn’t visit his office because he and his people
were too busy visiting clients, thus leaving Kroy with the impression that his was a thriving, successful enterprise. That was the image Kroy wanted their dealers to put forth.
The minimum order Kroy would accept was 10 machines at $1,000 each. Kroy agreed to COD (Cash on Delivery – Marty would pay when the machines were delivered) terms. When the UPS driver arrived, Marty, knowing full well he only had $2,000 in the bank, wrote a check for $10,000. This was before electronic banking and instant check clearing, so he knew he had a few days to sell enough products to cover the check. It was a calculated risk. He’d already developed a list of likely prospects – engineering firms that weren’t too small to afford the unit, nor so big that they’d require a purchase order.
My car only held five machines at a time,
Marty recalled. I unboxed one to make samples for my target companies. At eight the next morning, I walked into my first prospect’s waiting room and presented a sample to the receptionist, asking her to show the drafting/drawing department supervisor. He came out, wanting to know how the machine worked. I sold five for five that day and did the same on day two, immediately depositing my gains. I ordered an additional 10 machines and wrote a second check.
Again, Marty sold the 10 machines right away, so when his checks cleared, there were sufficient funds in his account. By that time, he had established credit and the buying power to purchase 10, 20 and 50 machines at a time. Soon, he was one of Kroy’s largest U.S. dealers.
I don’t recommend the rubber check approach, and in the present era of electronic banking, it wouldn’t work, anyway,
Marty explained. Back then, I had confidence I’d be able to cover the checks, but it was pretty stressful. I vowed I’d never do it again, and I didn’t. I didn’t have to. My business took off and I never looked back.
Yet there were bumps in Marty’s road to success. In the late 1980s, his business nearly imploded (see Managing Through Crisis chapter).
On-line sales
Years later, but still in the pre-Internet era, the idea of posting content online to make sales was in its infancy. In the early 1990s, one of Marty’s greatest hires, Kelly Bousman, approached him with a brilliant idea.
We can sell projectors over the Internet,
she announced. We’ll be way ahead of the competition because we’ll be the first to do it.
Really?
Marty replied. What’s the Internet?
She chuckled, but then grew serious when she realized he honestly had no idea what she was talking about. So, with youthful enthusiasm, she waxed at length about the groundbreaking information superhighway known as the Internet and how it would change the world in every possible way.
How about if I build a website for our company?
she concluded. By then, Marty was utterly overwhelmed. Not unlike a man trying to drink from a firehose, he responded, Look, Kelly. I have no idea what a website is, much less what’s involved in ‘building’ one. But I know you’re smart and I trust you.
His words motivated her as no dollar bonus could have. The boss paid her a compliment and expressed confidence in the young woman’s talents. She asserted, We’re going to sell a ton of projectors!
And she charged ahead. Four months later, she knocked on Marty’s office door.
I built the website,
she said. It’s ready to go.
What?
Marty responded, clearly bewildered. After all this time had passed, this mysterious website thing was hardly top-of-mind for him.
We’re going to start selling computer projectors over the Internet,
Kelly said. Aren’t you excited?
Since Marty had no clue about the Internet, it was impossible for him to be excited about what he didn’t understand. She left his office shaking her head, but the next morning, She returned, bouncing off the walls,
Marty said. "I asked her what was up. She told me, ‘We turned the site on last night. While we were sleeping, Harvard University used a credit card and bought $16,000 worth of product at full retail with a 45 percent profit margin and there weren’t even any salespeople involved.’
"‘Oh my God!’ I exclaimed as I came out from behind my desk to high-five the smiling employee. We danced around my office. I was beginning to understand the value of the mysterious Internet and determined I’d learn all about it. Meanwhile, we were off and running. Within a year, she built a $50 million online business unit we called Projector People. That working capital totally flipped our entire cash flow structure. You see, our industry was in transition. We moved from selling one-off products to organizations, to corporations and government agencies wanting us to assess, design, install and provide service for full-on audio-visual suites. That took a lot of up-front working capital to finance. With Projector People,