March 1, 2011

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CEO of the Year

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Article

CEO of the Year

Eight Execs Charging Ahead in Uncertain Times

Heather Stewart

March 1, 2011


Our eight honorees come from a variety of companies and industries, from manufacturing to real estate to the cutting edge of technology. But whether they represent global, publicly held companies or up-and-coming organizations, one thread unites them all: an unflinching refusal to let the recession hold their company back. With innovation, adaptability, determination and decisiveness, these eight CEOs demonstrate the essence of leadership while spearheading an economic revival. Jim Loveland President and CEO, Xactware Solutions, Inc. “I grew up in this business,” says Jim Loveland, whose father, James Loveland, founded Xactware Solutions in 1986. Loveland took his first job in the company while he was in high school in 1988 and worked his way through college at Xactware. He has worked in nearly every department of the company, from shipping to customer support to programming. This extensive background enabled him to see “all the nooks and crannies” of the business, he says. Jim Evans, COO of Xactware, agrees. “He’s worked in the trenches…when Jim holds a meeting and talks to [employees], they know that he understands what they’re talking about,” he says. Xactware Solutions provides data analytics and software solutions for the property and casualty insurance industry. Loveland was appointed CEO in 2005 and since that time, the company’s revenues have quadrupled to more than $100 million. The company’s market share has grown to more than 85 percent among insurance repair contractors and to nearly 70 percent among property insurers. Loveland says that a focus on innovation keeps him engaged and motivated, “being able to create innovative new tools for our customers that really streamline and enhance their lives and their workflows.” He has brought that innovative spirit alive at Xactware. For example, shortly after he became CEO, Loveland decided to bring the company’s customer support call center back in-house. While a third-party provider was less costly, Loveland knew that internal support would create greater customer satisfaction and provide a training ground for knowledgeable employees. Loveland also oversaw the opening of a European office in London. More importantly, he engineered a merger with Verisk Analytics, one of the oldest service providers in the insurance industry. This new partnership gave Xactware access to a broad spectrum of insurance services and helped it to accelerate its international expansion. Evans says he most admires Loveland’s “ability and desire to improve and change.” The company routinely holds 360-degree evaluations of top leadership. “Jim over the years has always been willing to take that feedback and make changes, and that’s what’s prepared him to be the CEO that he is today. A lot of times people will say, ‘I want to have feedback,’ but then they don’t want to hear what people have to say. Jim takes that. It hasn’t always been pleasant, especially in the early years, but he’s taken it, he’s learned from it, he’s grown from it.” Going forward, Loveland intends to help Xactware find new vertical markets for its products and services. He is also focusing on new product development and applications that take advantage of the capabilities of the latest mobile devices. Loveland serves on the national advisory board for the University of Utah’s David Eccles School of Business and on the board of the Living Planet Aquarium. He is committed to helping his 350 employees also discover the value of community involvement through matched charitable donations, volunteer opportunities and other activities. “Hopefully you’re making a tremendous impact on the community, not just through the employees that you have and the lives that you are able to support through their families, but also in other types of community events,” he says. Fred Lampropoulos Chairman and CEO, Merit Medical Systems, Inc. “I’m a regular guy. I got lucky and I’ve been fortunate,” says Fred Lampropoulos, whose history spans an astounding range of experiences. When his family first moved to the Salt Lake Valley, they spent time living in Pioneer Park. “We were homeless,” he says. He was the first in his family to graduate high school and, later, college. Upon graduation, he joined the army and became a commissioned Special Forces officer during Vietnam. Back in the civilian world, he became a stock broker and then a real estate developer. Today, Lampropoulos is the head of Utah’s largest medical device company, with annual revenues in excess of $250 million. “All of those skill sets—leadership as an infantry officer, finance, construction and development—are all things that have helped me do the things that I do today,” he says. Lampropoulos founded Merit Medical Systems in 1983, after previously serving as chairman and CEO of Utah Medical. The company has grown tremendously from a startup with no investor funding into a global enterprise with a presence in Europe, Russia, China and South America. Just during the past year, Merit Medical introduced several new products, acquired BioSphere Medical in France, opened an office in Beijing and began a $45 million expansion project on a 240,000-square-foot facility in Utah that will eventually employ 700 new workers. Not only is Lampropoulos a shrewd businessman, he is a gifted inventor with nearly 200 U.S. patents to his name. “He has the best grasp of our industry of anybody I’ve ever seen. He understands the marketplace, the customers. He spends a lot of time with physicians in the hospitals, with our sales force, with competitors and other industry leaders,” says Kent Stanger, CFO and co-founder of Merit Medical. For Lampropoulos, the key to success is being decisive and grasping opportunities before they disappear. “When we hear about an idea…we sit and meet and talk about [it], and it’s not unusual for us to actually commission a project within the first few days following an idea,” he says. “The ability to move, and move quickly and be decisive” is an important trait for any entrepreneur, he says. “Where I come from, you made decisions or bad things happened to you. In business it’s not much different.” With Merit Medical’s large facility in Ireland, a new business unit in France, and a growing presence in Russia and China, Lampropoulos finds himself traveling quite a bit lately. “I’ve only been home three days this month,” he says. “Shame on me.” Nevertheless, he tries to find time for his children and grandchildren. For instance, he and his three-year-old son have a tradition of visiting fire stations on Saturdays. “We’ll go first to Merit Medical and raid the candy jars, and when we’re done with that, we go to the shift changes at the fire station.” But with all of the growth and change at Merit Medical, Lampropoulos expects to remain on his toes for a long time to come. “Merit has been known for many, many years as a great innovator of products. We introduce 15–20 new products every year. We’re busy,” he says. Richard Parkinson President and CEO, Associated Food Stores Associated Food Stores was founded 71 years ago—and Richard Parkinson is only its third CEO. While upholding the traditions and values of the association’s founders, Parkinson has also plunged Associated Food Stores into an era of growth and change. AFS is a retailer-owned cooperative that provides goods and services to independent grocery retailers. “We are actually owned by our customers, so our shareholders are our customers also,” explains Parkinson. About 11 years ago, AFS had a unique opportunity to purchase some of its own retailers, including Dan’s, Maceys, Lin’s and Dick’s Market. “So we got into corporate stores, which was really a new adventure for us,” says Parkinson. “When the opportunity came available for us two years ago to purchase the Albertson’s, we could see that as beneficial to our independent grocers because it would increase the scale of our business as well as provide the opportunity for independents to someday own some of those Albertson’s stores.” AFS now operates more than 30 Fresh Market stores in the former Albertson’s locations. Tim Conner, senior vice president of team services at AFS, credits Parkinson’s foresight and planning for restructuring the company to put it in a position to begin purchasing and operating the grocery stores. He explains that Parkinson has an “ability to get up above the day-to-day fray and look out on the horizon and see, not what’s today, but what’s tomorrow.” Even while venturing into new territory, Parkinson remains focused on the independent retailers who are the heart and soul of AFS. “Rich has a deep-seated passion for the industry, predominantly for the independent grocer,” says Conner. The most satisfying aspect of his role as CEO, says Parkinson, is “working with the retailers, helping them to achieve the level of success that they might not otherwise achieve on their own. So we not only provide them with goods, but also provide them with services—counsel them and work with them in realizing their dreams and ambitions.” Serving as a mentor and champion seems to be a role that comes naturally to him. Conner describes his leadership style as “delegative,” adding that, “He has a good ability to establish a direction and provide you with the goals and objectives, to be able to counsel you and then stand out of your way.” For young entrepreneurs and others just starting on their careers, Parkinson has the following advice: “The thing that I encourage young people to do is to find where their hearts are, find out where their passion is, not to follow money or power or fame or glory, but really to find out what’s most important for them as an individual. That passion will drive them to excellence because we typically do best what we enjoy most.” David Flynn CEO, Fusion-io David Flynn is something of a chameleon. While deeply immersed in the technology that Fusion-io develops, he has also made it his business to learn about the different departments within the company. “It’s not enough to just hire great people, he also wants to be able to understand what it is they’re doing. In fact, we’ve nicknamed him ‘The Sponge,’ because if he hangs around you long enough, your talents and what you do become his talents,” says Rick White, CMO of Fusion-io. Flynn and White co-founded the company nearly five years ago, and until recently, Flynn served as CTO. When the executive team launched a global search for a new CEO, it quickly became clear that Flynn would be the best person for the job because of his thorough technical knowledge and his broad grasp of sales, marketing, finance and all the other aspects of the business. “We build a new type of server memory and the technology to virtualize it so it can be used in today’s modern data centers,” explains Flynn. “Very high density memory, it allows systems to process up to 10 to 20 times the workload. It goes in some of the world’s largest data centers, helping everyday names that you know.” With Fusion-io’s virtual memory technology, social networking sites run faster, financial trades can be completed in a matter of milliseconds and life science researchers can quickly visualize DNA and genome strands. Flynn, whose father is a nuclear physicist, became interested in technology and computer science at a very young age. During high school, he worked for Computer Sciences Corporation writing a flight simulator for a Department of Defense missile system. After graduating from Brigham Young University, he worked for Oracle and then Network Computer Incorporated, a spin-out from Oracle. He later became an architect for super computers and delved into high performance networking. With this rich background, he co-founded Fusion-io to develop the new NAND virtual memory that lies at the heart of mobile devices into viable systems for large-scale servers. “The opportunity to really do something game changing doesn’t come around every day,” he says. The company has developed industry partnerships with global giants like Dell, HP and IMB. In 2010, Fusion-io shipped more than 15 petabytes of its ioMemory technology—enough NAND flash-based memory to hold 15,360 times the entire print contents of the Library of Congress. The company also introduced new hardware and software innovations to drive forward Flynn’s original vision of Fusion-io. “When he knows he’s right, he doesn’t bend to social pressure. He doesn’t do what’s easy,” says White of Flynn’s unwavering commitment to Fusion-io and its groundbreaking technologies. “He stands on this high ground and says that it’s right.” Reflecting on the company’s early challenges and growing success, Flynn says, “The most important thing is to have a belief that you can affect the outcome, that time works in your favor, and opportunities come along that if you’re open to, you can make things happen.” Michael Lawson President and CEO, Commerce Real Estate Solutions Michael Lawson values his contribution to building communities and strengthening economies. His early ambition was to be a homebuilder, but he became caught up in the world of economic development. He spent more than 25 years in leadership positions for chambers of commerce and economic development organizations throughout the country. Lawson served as executive director of the Economic Development Corporation of Utah from 1993 to 2000. “The thing that still really excites me about [construction], excites me about economic development, excites me about real estate is you get to build something, you get to see the results of your efforts,” says Lawson, who joined Commerce Real Estate Solutions as president and CEO in 2002. After nearly a decade in the real estate industry, Lawson still takes a wider view of his work. “You can look throughout the valley—we average somewhere in the neighborhood of 2,000 transactions [a year]. We’ve kind of got our finger on the pulse of everything that’s moving in the community. It’s both something we’ve earned…and something we’re honored to be part of,” he says. Perhaps it is that big-picture approach that enabled him to steer Commerce Real Estate Solutions through the recession, helping it to become even bigger and more successful than before. “Despite breathtaking and stunning declines in revenue, Mike announced a strategic decision to the company: Commerce would not cut any staff, we would not make any cuts in market research, we would not cut any of our resources,” says investment specialist Kip Paul. It’s a strategy that paid off. The company has expanded from one office in Utah to 10 offices throughout the region. Additionally, the number of staff and agents has grown from 50 to more than 260. Commerce also incorporated new services, including new distressed property and sustainability services. Under Lawson’s leadership, the amount of property the company manages has increased from $1 million to $6 million. “I’ve been really lucky to work with some talented, special people,” says Lawson. “The way I define success is by them—if they’re doing what they’ve set out to, if they’ve achieved their capacity, if they’re helping in the community, then I’ve won.” Helping in the community is a core value for Lawson, who has led his team in numerous volunteer efforts for organizations such as United Way, the Utah Food Bank, No More Homeless Pets and the Utah Arts Festival, among others. The company also provides financial support to more than a dozen nonprofits that work to improve the local community. His advice to would-be entrepreneurs boils down to one word: tenacity. “There are 20 ways to do something, and you need to explore and exhaust all of those. You just simply can’t quit.” Jorgen Moller CEO, Snap Lock Industries Snap Lock Industries designs, manufactures and ships its products all under one roof in its Salt Lake facility. The company is proud of its “made in the USA” tradition, but faced serious challenges when the Great Recession took its toll on revenues. With 100 employees on the payroll, CEO Jorgen Moller was sure of one thing: he did not want to layoff his workers. “We chose another route,” he says. “We changed our manufacturing processes, came up with some proprietary methods that saved us some money. We went back to looking at our product: where else can we sell it, what other needs does it fill. That seemed to work for us—we came out of 2010 with our highest revenue year, over 20 percent growth over the year before.” Snap Lock Industries was founded by Moller and his wife, Kerry, in the mid ‘90s to produce modular dance and event flooring. But Moller realized the company’s one-product, one-industry model would not sustain it through the economic downturn. Moller, a racing enthusiast, says, “I stood back and looked at our product and where it could apply, and I took my own personal interests…I know how car guys feel about their garages. So we took our modular flooring concept, which did not exist for the garage industry, and we developed the RaceDeck line, and that really changed our company.” RaceDeck modular flooring, like all of Snap Lock’s product lines, is easy to install, requiring no tools, glues or special skills. In fact, Moller says the RaceDeck flooring has launched an entire industry of garage flooring that did not previously exist. In addition to the RaceDeck line, the company developed its SnapSports backyard game courts and FastDeck portable flooring, among other patented products. And Snap Lock took its entire product line into the European market and developed a strong global distribution network. “If you’re going to survive, you have to be creative, you have to adapt quickly, and once you commit you have to go in full steam ahead,” says Moller. Moller’s drive, energy and enthusiasm are infectious, and the entire Snap Lock team gets caught up in his ambitious plans. “The man goes 400 miles an hour,” says Jeremiah Shapiro, director of product development for Snap Lock Industries. “The man is not scared of any challenge…He is one that just finds industries and tackles them, finding new avenues for our product lines. He’s always moving, he’s always navigating, he’s always thinking.” Kerry Moller serves as COO of the company, and the duo launched Snap Lock Industries after Kerry’s father retired from the modular flooring business. Moller’s background is in the restaurant industry, which he says provided a surprisingly good “training ground” for his role at Snap Lock. “I had to deal with hard work, dealing with customers on a daily basis, and learning the showmanship that my father sort of transcended to me,” he says. “I took a lot of that and applied it to what I do now.” Scott Beck President and CEO, Visit Salt Lake Hospitality runs in Scott Beck’s blood. With an extensive background in the hospitality industry, Beck has capitalized on the success of the 2002 Winter Olympics to ensure that Salt Lake is world-renowned as a welcoming, exciting and entertaining place to visit. Beck’s father was the general manager of Sundance Resort, and Beck spent his early years mowing lawns and bussing tables at the resort. Later in his career, he served as the director of sales and marketing for Sundance. From there, he became general manager of Cedar Breaks Lodge at Brian Head, where he became involved in the civic life of the community. “I was on the local planning commission. I served the chamber of commerce and really got my first taste of what it was like to be involved in the community,” he says. In 2001, Beck was hired to open the Salt Lake Marriott City Center hotel. He remained active in the community, serving as president of the Salt Lake Valley Lodging Association. He was brought on as president and CEO of the Salt Lake Convention and Visitors Bureau (now known as Visit Salt Lake) in 2005. “Leadership involves taking chances,” says Beck. “Risk is a very important component. Playing it safe, I think, is not the role of a leader. And Beck hasn’t played it safe in his role at Visit Salt Lake. He developed a long-term plan to reorganize and re-energize the organization, overturning conventional approaches and strategies. “There are no sacred cows with Scott. He doesn’t care where a great idea comes from. He is able to see things from any source, and if it’s a good idea, he moves forward. He’s willing to let people challenge the status quo,” says Guy Woodbury, immediate past chair of Visit Salt Lake. For example, Beck spearheaded a marketing campaign for the Ski Salt Lake Super Pass—a joint lift ticket to all four Salt Lake ski resorts—and the bureau’s own Connect Pass. The Ski Salt Lake Super Pass has been the best-selling lift ticket on Travelocity.com for four years. In a major coup, Beck persuaded the Meeting Professionals International to hold its annual World Education Congress in Salt Lake in 2009. “That enabled these thousands of meeting planners to leave as ambassadors of Salt Lake and will be bringing back literally millions of dollars in economic impact to Salt Lake,” says Woodbury. In 2009 alone, Visit Salt Lake booked nearly 307,000 room nights, generating millions in visitor spending in the community. And Visit Salt Lake finalized an agreement for the Outdoor Retailer Winter and Summer markets to remain in Salt Lake through 2014. Each year, the Outdoor Retailer markets bring an estimated $35 million in direct visitor spending in Salt Lake and surrounding communities. For Beck, success is all about the basics: pleasing the visitor. “I always tell people starting out that you can learn more from the guest than you can learn from listening to me,” he says. “Oftentimes, the longer you are in business and the more success you have in our business, the further away from the guest you become on a day-to-day basis.” Michael Phillips CEO, Phillips Edison and Company During the past two decades, Michael Phillips has built his company into a strong, durable organization. That strong foundation has enabled Phillips Edison and Company to withstand the recession, which slammed the real estate industry harder than most others. Phillips Edison owns 250 shopping centers in 35 states, totaling more than 26 million square feet of retail space. The company has more than $2 billion in assets and saw its revenues grow nearly 5 percent from 2009 to 2010. Phillips attributes that continued strength to wise investment strategies. “People tend to, particularly in our industry, use debt at a very high level, and we have not done that historically,” he says. Phillips’ guiding rule is to always put at least 25 percent of the cost of an asset in cash, minimizing debt. The company saw the early warning signs of an impending recession in the summer of 2007, says Phillips, and was able to restructure and meet the crisis head on. Phillips Edison had raised $66 million for a strategic land development fund, but when the economy nosedived, Phillips engineered a new strategy for the capital to take advantage of new opportunities in the marketplace. He also restructured the company’s leasing team to focus on maintaining low vacancy rates. “We have to treat our tenants right, we have to negotiate the agreements that we have fairly, we have to be ethical, we have to have fun when we are doing it, and we have to love what we do,” says Phillips, describing the philosophy that has propelled the company to success. “Mike is dynamic, he is a true motivator and a visionary,” says Robert Myers, COO of Phillips Edison. “Mike’s drive and push to be the best in whatever he does has allowed him to grow and succeed in being the largest private owner of shopping centers in the country. I’ve seen him take a company from one property to 230 properties over a seven-year period. I’ve also seen him meet with private and institutional investors and raise over $400 million to provide for that success.” Phillips got his start working for his father’s company, building Ralph Lauren Polo stores in the West. After the business was sold in 1984, he went to work for one of the chain’s landlords. “That’s how I got into the real estate business,” he says. He worked for several companies, including the Taubman Company and May Centers, before joining Biggs Hypershoppes as vice president in 1989. He founded Phillips Edison and Company in 1991. The secret to success, says Phillips, is patience and adaptability. “Whatever you think is going to happen, it’s always going to be different. Your ability to be nimble and adapt and learn what you need to learn in order to get to ultimately your goal is the secret to being successful.”
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