American's 1-2-3 Success Plan
Combining opportunity, empowerment and synergy benefits customers, sales associates and suppliers.
Ask Larry Zavadil where he sees his company in the next five years, and he won't have a clue. That's because for the president of American Business Forms, Glenwood, Minn., "There is no future beyond the next 12 months." By then, he explained, the industry will be presenting you with clearly defined challenges that will shape your evolution.
And, according to Zavadil, identifying solutions to these challenges is like compiling a David Letterman Top 10 List, "But the solutions must create win/win situations," he noted. "No one in the chain—end-user, American or supplier——should lose, or it won't work."
What he does know for certain is that life is about choices, and if you choose to do good things, you can make good things happen. Oh, and another thing, "Never underestimate the power of dumb luck," said Zavadil.
Whether it's been good choices, dumb luck or a combination of the two, Zavadil has led the American distributorship on a consistent course of growth and success since its inception in 1981. At that time, he and two dedicated individuals, Marianne Fosker and Naomi Holmgren, set up shop in the basement of Zavadil's home. Steady growth moved the business to the attic, then to the house next door. Eventually, seven empty buildings in the area were rehabed to house American.
The company entered the '90s as a strong regional printing distributorship with a product mix that included all types of printing, stock tab, labels and promotional items. In 1992, Zavadil reasoned that the negative impact of technology on traditional products wouldn't be reversed and decided to use technology to tap into the explosive print-management marketplace.
American created client-specific electronic business management solutions, deploying a nationwide network of warehousing and distribution facilities. Today, the company serves more than 400 print-management clients on a server network tied to 25 distribution facilities in the U.S. and Puerto Rico.
But Zavadil's vision for American's future was brought into sharper focus by life events transpiring well beyond the walls of his corporate office.
In 1999, Dusty DePree, a dedicated, award-winning sales associate and friend, lost the battle against cancer at the age of 51. Part of the American family for more than 17 years, DePree's passing had a profound impact on how Zavadil viewed his business and his personal life, including health and fitness.
Dusty reminded me of my mortality and that life is short," he said. "If that had been me, my family would have had to sell the company to pay the taxes."
Tragedy struck the American family again in February of 2000, when 36-year-old Sales Associate Dave Corradino died in a plane crash, and then again in March of this year when customer service representative Roxann Blair passed away. American's Web site refers to the company's Hall of Fame, where tribute is paid to Dusty, David and Roxann.
These events underscored Zavadil's core belief—the importance of family, friends and community. In fact, Zavadil credits his family—his wife, Diane, and their three children—with much of his success. "It couldn't have happened without their support, especially my wife, Diane, who kept everything going while I was on the road."
Zavadil has spent 47 of his 52 years in Glenwood, a rural community with only one stop light and home to the 12th largest of Minnesota's 10,000 lakes.
"There's not a lot of industry here, maybe five or six larger companies in the community," he said. American is vital to the town's economic growth and stability, providing jobs and attracting families to this retirement community.
In addition, Zavadil believes that it is important to support community activities. The company plays a major part in Waterama, an annual three-day event that attracts 20 to 30 thousand visitors to the lake, and local causes, including Hospice and Food Shelf.
"These organizations need dollars to operate, and if the people with the where-with-all to do it don't, who will? You have to lead by example," he said. "There isn't a lot of industry here in Glenwood—jobs are scarce. People depend on us."
Among those people are more than 350 sales associates and 255 support people, including Executive Assistant Gladys Freese, who has been holding down the fort for Zavadil since February 1989; Vice President of Marketing Blake Wold; Wayne Martin, director of vendor relations and product support; Dion Harste, vice president of technology; and Craig McLain, vice president of sales.
In 1999, Zavadil established an employee-owned company, and plans for the employee stock ownership program—or ESOP—were set into motion. Employees in the ESOP receive shares of American stock every year and have 401Ks, as well as health coverage and life insurance benefits.
"A lesson I learned in the late '80s and early '90s is that you can't buy people. They must choose to be part of a company. We don't screen the sales associates. If people come and want an opportunity, they should be given a chance. That's what our country is about, giving people a vehicle for going out and making things happen."
While Zavadil wants to create opportunity and give people choices, he knows that the company isn't for everyone. As American sales associates grow their businesses, "They must do it clean, without giving anyone else a black eye in the process. The object is not to win the battle, but to win the war," he said.
"Technology allows you to have American anywhere," Zavadil continued. Of the 48 contiguous states, the company has sales associates in 43, many working out of their homes or in offices they already own.
Typically, they pay for and manage their offices, although there are three warehouses American manages directly. Meanwhile, Zavadil is micro-managing the big picture by reviewing profit and loss statements for each individual.
"A $300 million company serving a $2 billion customer is in trouble if there is a slow down in payment," said Zavadil, whose business model offers a solution to warehousing, distribution and cash flow issues.
"Ink on paper isn't particularly exciting in the eyes of an investor," he explained, "not like technology is. This makes it harder for companies to get the necessary capital to grow.
"The synergy generated by people bonding together creates strong buying power and more tools to compete," he continued. "As we grow, we're exposed to bigger opportunities. We have access to more products and can improve service to customers."
Describing his distributorship as a "mini major," Zavadil noted that, "We don't have all of the equipment or the R&D capabilities, but all of that is available through other sources.
"We focus on being a marketing company. Approximately $0.70 out of every profit dollar goes into sales."
By Maggie DeWitt
- Places:
- Glenwood, Minn.