Today’s CEO must operate his or her company in an unpredictable–and somewhat perilous–environment. It’s true that the U.S. economy grew 3.4% in 2006. And some economists believe gross domestic product growth might surpass 2.9% in 2007. However, leaders of American industry are wary of a number of economic wrecking balls, including spiraling energy costs, reduced capital spending, waning consumer confidence, and a weakening housing market that may come crashing down on their enterprises.
The chief executives of the BE INDUSTRIAL/SERVICE 100 have always had to manage volatility whether economic times were good, bad, or indifferent. The past year was no different. And, as expected, they more than held their own. Total sales grew 4.7%, from $17.2 billion to $18.1 billion, while total staff expanded by 8.5%, from 73,181 to 79,376–at a time when majority corporations have been aggressively chopping payroll.
In fact, the BE INDUSTRIAL/SERVICE 100 in sectors such as information technology, logistics and supply-chain management, food services, and, surprisingly, real estate development and construction posted the biggest gains. One lagging category did not come as a shocker to industry observers: automotive suppliers whose fortunes are tied to the viability of Detroit’s Big Three: General Motors, Ford, and Chrysler.
Albert C. Black was one of the BE CEOs who had reason to smile when he reflected on the progress his company made during 2006. Revenues of Dallas-based On-Target Supplies & Logistics Ltd. (No. 70 on the BE INDUSTRIAL/SERVICE 100 list with $58 million in sales) grew 56%.
Managing more than 800,000 square feet of warehouse space for Rubbermaid, On-Target made those gains, in part, due to a renegotiated contract that accounted for $4 million in revenues. The deal was originally signed in February 2005 after one of On-Target’s sales team members learned Rubbermaid was having trouble with its logistics provider. On-Target then made a presentation to Rubbermaid execs detailing its customized approach to logistics services. Two weeks later the company inked a deal to supply Rubbermaid with 440,000 square feet of warehouse space in two metro Dallas locations and to manage inventories for Rubbermaid’s entire retail line.
That contract was renewed and expanded in 2006. “We made sure we put in the performance matrix that these companies could agree with,” says Black. “We used good communication skills to establish a common strategy, a proper structure, and relative goals and objectives.” The CEO projects 2007 revenues to reach $75 million, with the Rubbermaid deal contributing some $7 million to the top line.
Information technology companies that provide services to government agencies continued to be wired for success as IT spending increased in 2006. While S&P’s fundamental outlook on the sector is neutral, the credit rating agency is positive on systems software and storage.
Russell T. Wright, chief executive of Alexandria, Virginia-based Dimensions International Inc. (No. 24 on the BE INDUSTRIAL/SERVICE 100 list with $186.2 million in sales) also looked favorably at the strides his company made last year. Revenues increased 51% as Dimensions International continued to benefit from synergies from its 2004 acquisition of SENTEL, a black-owned