Valiena A. Allison
President and CEO
Experi-Metal Inc., Sterling Heights
WHY SHE’S A CHAMPION
OF THE NEW ECONOMY:
Like many successful CEOs, Valiena A. Allison worked her way up through the ranks, and even spent time at the University of Oxford in England to study advanced global economics and manufacturing. At Oakland University in Rochester Hills, she earned undergraduate degrees in advertising, marketing, and Spanish, as well as an MBA in finance and accounting. “I went back to school to get my MBA because finance was my weakest area; now it’s something I’m very confident with,” says Allison, president and CEO of Experi-Metal Inc., a full-service sheet metal component and assembly-manufacturing firm in Sterling Heights. The company got its start in 1959, and after Allison’s father acquired the company she started working as a receptionist in 1988. She went on to hold positions in nearly every facet of the organization, and was appointed president and CEO in 2002. “We’ve been able to grow our revenue by delivering high-quality products and services to our customers,” she says. “We’re constantly checking and rechecking everything we do so there are no surprises.”
How were you able to expand the company’s product line beyond automotive?
We’re a short-run production facility that builds any number of advanced prototypes, from “Body in White” models — or shells — of, say, a 1932 Ford Coupe to a future concept vehicle frame. More than a decade ago we began to diversify into aerospace, alternative energy, commercial vehicles, defense, and a number of other fields. For the aircraft industry, for example, we can supply components, tooling, subassemblies, and fixturing. We work with a lot of different metals, from aluminum to stainless steel to titanium. It’s very much a team approach among our 150 family members (employees). Our goal is to have everyone on the same page, and we do a lot of training because small daily improvements lead to long term success.
What are the company’s biggest challenges?
We’re consistently riddled with complex projects. Our designers and engineers come together and figure out the solutions, in close concert with our customers. We work with a variety of customers, many of whom are Fortune 500 companies and we are a worldwide producer, so we’re regularly shipping around the world. We also strive to build up the economies of Macomb County and Michigan. We work with high schools, community colleges, and Leadership Macomb, and we regularly host students and provide tours to show how manufacturing is a great trade to pursue. Manufacturing isn’t the dark and dingy work that people might think. It’s very high-tech, and offers a lot of opportunity for people with computer skills.
How did you get started?
I became the company receptionist and I worked with my father, who was my mentor. He purchased the company after having a smaller company in a similar sector. He retired a few years ago, and I really appreciate everything he’s done. For me, I loved the excitement and the energy that came from all of the business segments. On top of that, you have just-in-time delivery of some of the projects, so there can be a lot of pressure to meet the aggressive schedules. When you have multiple product lines and (you’re) developing new product lines, you have to be very organized.
How do you assist automakers with making vehicles lighter and stronger?
We’re a manufacturer and supplier of prototype tooling as well as subassemblies, metal stampings, and stamped metal components. We have a campus of 250,000 square feet of manufacturing, warehouse, and administrative space, so we can take on projects large or small, whether it’s a car, a fire truck, or a plane. We work with exotic metals, and we look at ways that metal moves under different conditions. Hot-stamping is a big thing. With the hot-stamping press of quenchable steel, you have about 10 seconds to complete a certain task — so you need to be very precise with the goals you have set out.
What’s your business philosophy?
Along with growing the company year over year, safety drives everything we do. We have continuous training programs, and we focus a lot on culture. A healthy work and life balance is very important, and we offer a lot of wellness programs such as providing resources for nutrition awareness, exercising, and smoking cessation. We also communicate a great deal. If you have a baseball team that isn’t trained properly and everyone isn’t on the same page, you’re not going to win very often. We want everyone to come to work and carry out the game plan. We just keep smiling and pushing through with aggressive goals.
CEO, Digerati Inc., Detroit
WHY HE’S A CHAMPION
OF THE NEW ECONOMY:
While a freshman pursuing an aerospace engineering degree from the University of Michigan, Brian Balasia participated in a paid internship that exposed him to process mapping and manufacturing processes. “I just fell in love with factory design, and because I was the youngest person on the staff, I was often asked to look at new software and test its capabilities,” says Balasia, co-founder and CEO of Digerati Inc. in Detroit. “It was a great learning experience, and I thought more and more about mapping out everyday business operations to understand how information and technology drive the process through all the steps of manufacturing.” A year later, in 2001, Balasia and Joe Klecha co-founded Digerati to develop digital tools to streamline any number of business activities, from hospital operations to security response teams to sales. “We look at where key data needs to be for a given operation, and at the right time to maximize efficiency,” Balasia says. “We leverage software and technology to drive added revenue and results for our clients, so their operations really hum.”
What kinds of clients do you work with?
Manufacturers, retailers, hospitals, and medical operations; security firms; and government agencies. We also address
community challenges. We apply the same approach almost every time by first undertaking an in-depth approach (to) getting to know our customer and the process they have for producing or managing their operations, and then we work to improve upon those processes. Along the way, we look for new lines of revenue and new products for our customers. When Joe (Klecha) and I started, we treated our classwork like meetings, so we didn’t overload our schedules. That forced us to really get focused on our schoolwork so that we had the time to work on the business. The company we worked for in Troy allowed us to use their resources if we agreed to continue working as interns. In the beginning, there were four of us working (different) shifts in a cubicle. From there, we moved to the Guardian Building (in downtown Detroit).
What was your first project?
It was on the medical side, and we did some automotive work early on with a Tier 1 supplier where we were able to increase efficiency and cut almost $24 million out of their procurement budget. To accomplish that, we focused on how they moved equipment among their production facilities. Our first client was a medical group in Ohio, and we helped them grow revenue to $9.5 million from $4.5 million in 16 months. We scrapped what was a traditional operation with long wait times for the patients and built an online patient registration process (where we) used different diagnostic algorithms and developed a purely paperless medical office. We integrated electronic medical records into the operation, and now (patient) wait times are under two minutes, on average, and the office flows with calm and focus.
What’s a good example of a community challenge you’ve worked on?
We began working with NEI (the New Economy Initiative in Detroit) on how to increase internship opportunities for students attending Michigan-based colleges and universities, and how to keep (these students) in Michigan (following graduation). It’s a big challenge, because what we learned was that 70 percent of all of the jobs in the labor market are at small- and medium-sized businesses, or those with fewer than 500 employees. And those companies typically don’t have big HR departments. So a lot of the college recruiting is done through connections generated from family and friends. In a real way, 70 percent of the available jobs or internships are almost invisible. We dissected 1,100 job titles into 44,000 characteristics and then put them into a (digital) matching system. Once a student goes into the program and selects their chosen field of work, the system prompts them very quickly with a series of questions. Let’s say a student wants to enter public relations and marketing. The system will ask how much time they want to spend writing press releases, attending sales meetings, or writing marketing strategies.
What have been the results?
Once the student answers the PR and marketing questions, there could be seven correlated matches to their job preferences. We have interns and companies looking at the information, and now a business can quickly connect to the students. It makes recruiting more efficient and effective. In the last 18 months (since the program was launched), we had 15,000 paid internships (generated) from more than 5,000 companies among 55,000 candidates from six continents and more than 1,400 universities. It’s what we call Intern in Michigan. DTE Energy is a big user. It takes 3.5 minutes to post a profile, and the matches are done within seconds. Now we’re expanding that into what we call Work Fountain, and we’re taking it to the national market with 80 partners. It’s much easier to consider very specific recruits than sorting through 900 resumes. It also helps increase the diversity of student applications.
How was your own team built?
We look for the best people for the positions presented. For instance, David Hunke is our chief strategy officer, and he comes from a rich history as (former) chairman and publisher of USA Today and (former) president and publisher of the Detroit Free Press. He helped oversee the transition of USA Today to a digital model, so he has a wealth of experience. At the end of the day, we’re systems engineers, and we believe everyone has a story and the opportunity to grow.
Ramzi Y. Hermiz
President and CEO
Shiloh Industries Inc., Plymouth Township
WHY HE’S A CHAMPION
OF THE NEW ECONOMY:
Branding can be a powerful tool. When Ramzi Y. Hermiz was named president and CEO of Shiloh Industries Inc. in late 2012, the automotive supplier was treading water. “At that time, we were doing steel processing, but we had zero growth,” says Hermiz, a mechanical engineer. “What we were doing was taking weight out of a vehicle, and we called it material optimization, but what we were really doing was light-weighting vehicles. So we created that as our core premise.” Taking a few weeks to hone the message, Hermiz began to share with employees and customers that the company’s main technological offering was reducing vehicle weight without compromising safety, performance, cost, or quality. He also led the company on a buying spree to lay the foundation for a highly integrated, global corporation. To get there, he tapped the public company’s access to capital markets as well as his more than 20 years at Southfield-based Federal-Mogul Corp., where he worked in a variety of executive positions for the automotive supplier, including two different assignments in Europe. In 2014 (FY), Shiloh reported $878.7 million in revenue, and gross profit of $79.6 million — up 18.5 percent from the previous year.
What were the results of the company’s rebranding and expansion efforts?
If you look at our growth in Michigan (since 2012), we had 117 employees and today we have 613. Overall, we went from 1,400 to 3,300 employees (globally). Today, through internal realignment and acquisitions, we offer a unique technology portfolio. We’re one of the few companies that offers a full range of light-weighting materials and processes, from laser-welding to magnesium die-casting. We also went from being a U.S. company with nine operations to a global business with 22 plants, and we’re opening two facilities in China this year. The face of the company has significantly changed. We were founded in 1950 and went public in 1993. The company is really headquartered in Valley City, Ohio, but most of our activity stems from the new technical center we built in Plymouth Township.
How did you drive home the plan?
It starts with a strong team. When you looked at our base business (in 2012), we were solid financially; we made it through the (2008 economic) recession by right-sizing things. Going forward, what we were able to do was rally the team around a vision of change. If the company was going to continue to survive, we had to recognize that our customer base was changing. Our customers were looking for global companies with a global footprint. If we were going to be relevant, how were we going to change and offer a number of different processes to meet our customers’ needs? (At the time), we hadn’t done an acquisition since 2000. Since then, we’ve completed eight acquisitions. Today, we operate with three business acumens: Lead with technology and innovation; act with a sense of purpose, urgency, and speed; and achieve global, sustainable, profitable growth.
How did your team respond?
Those business tenets go across any function. If you’re the finance guy, how do you lead with the right tools to close the books on time? How can you do it faster and provide more valuable data analysis? How do you drive more profits? If you’re an engineer, how do you hire the right people and include some of the latest tools available in social media? How do you make the hiring process easier, and find the right people who can grow (the company) and achieve results? You can analyze things to death, or you can create more of an entrepreneurial approach and take more risks. You’re not going to grow your business without the ability to explore and try something different.
What was the response from your customer base?
We opened a new (40,000-square-foot) technical center (in March 2014) in Plymouth Township. With half of the building for lab space and the other half for office space, we brought our technology in front of our customers and our employees. It’s a nice environment with a bright, open floor plan that encourages engagement. We had a lot of activities in Ohio, but with Detroit being so auto-centric, it made sense to bring more activities here. Two years ago, we added Jaguar and Volvo (as customers), and one of the materials we developed was a new dash panel (between a dashboard and an engine) that better manages sound while reducing weight and improving safety.
What does the future hold?
We see a lot of runway for continued growth. Light-weighting is agnostic to the powertrain. Whatever the weight reduction is, it has an impact on electrical cars or gas engines. A good representation is our aluminum laser-welded door. With our technology, we made it 25 percent lighter than a conventional aluminum door — so that goes back to improving your engine performance in terms of (range) efficiency. We’re very excited about the future. We work with Tesla, Ford, GM, Chrysler, and Honda as a Tier 1 selling directly to OEMs like Nissan, and we’re also a Tier 2 that helps Tier 1 suppliers with their technology — like a JCI or Faurecia. We also support new technology in the energy sector. Fracking can generate a lot of oil, but a lot of natural gas also gets released. We’re working with a company to capture the gas and convert it to synthetic fuel. We were able to leverage our process technology in automotive and translate that to oil and gas. We see a lot of opportunity for further growth.
Managing Partner and CEO
Bedrock Real Estate Services, Detroit
WHY HE’S A CHAMPION
OF THE NEW ECONOMY:
When Dan Gilbert, founder and chairman of Quicken Loans, was in the midst of moving what would be 3,500 employees from the suburbs to downtown Detroit starting in late summer 2010, Jim Ketai, a childhood friend who became a real estate attorney and development manager, “jokingly suggested we should buy some buildings downtown. And Gilbert said, ‘That’s a great idea.’ And I wondered if he was serious — and if you know Dan, you know very quickly he was serious.” After growing up in the same neighborhood in Southfield and attending the same schools, including Michigan State University in East Lansing, the pair took different career paths: Gilbert jumped into the mortgage business, while Ketai attended the Detroit College of Law. Following graduation in 1986, he started working at a law firm in downtown Birmingham (now Carson Fischer in Bloomfield Hills) before joining Etkin Equities Inc. in Southfield, where he worked more than 20 years as a development manager and in-house counsel. “After I was with Etkin for five years, I became a partner and we did a lot of ground-up development in the suburbs, and then I ran into Dan and we formed Bedrock in January 2011, and the rest is history,” he says.
What were the early days of Bedrock like?
Dan and I started talking about forming Bedrock in September 2010, and after putting together a plan, we acquired the Madison Building the following January. We wanted a place where we could set up a business incubator and venture capital firm (Detroit Venture Partners), as well as draw other businesses downtown. When we started, there were just four of us, including myself. Since then, we’ve grown to over 200 people with 70-plus properties (including such iconic buildings as the First National, Federal Reserve, Chase, and One Woodward).
How do you stay on top of such a vast portfolio?
It’s a lot of work, and we have a lot of good people on the team. You just never take your foot off the accelerator. We never say we can’t do something; we just go and figure out how to make it work. We’re always trying to reinvent ourselves and improve the process, like making our operations more streamlined. It’s exhausting, but a good way to go. All of our various teams, from management to leasing to construction, meet internally every week, and then each of the leaders has a one-on-one with me each week. Every quarter we have leadership meetings offsite and we work on the business, instead of working in the business.
What’s it like working with Dan Gilbert?
We adapted to Dan’s culture, which is really amazing. He has a code of business principles that he calls his “isms.” You always have to be looking around you to see what’s really going on. You can’t measure everything on a spreadsheet. You just have to make the right decisions, and it’s not always about the money. But if you make the right decisions, the money will follow.
What goes into acquiring a particular building or property?
We have plans for almost all of the buildings we acquire, such as whether it will be offices with ground floor retail, but there are times where we don’t know what the exact use will be. We just know we don’t want a rotten tooth in the lineup, so we get it and figure it out later. We’re also very supportive of other developers. We want others to come to downtown and add energy. For instance, when (Bloomfield Hills real estate developer and investor) Matt Lester acquired a few downtown buildings on Woodward Avenue (from Sophie Tatarian), we joined with him. We get a lot of calls, and investors are saying, “Are we too late?” and we say, “No, we’re still in the top of the second inning.” There’s so much more to go and, frankly, the waiting list for (downtown) apartments is long. As for the office tenants, there’s not much space left. But there’s plenty of open space (to construct new buildings).
What’s the long-term vision for downtown?
A place where all kinds of people — although it’s mostly younger people now — can live, work, and play. They can live in a place that has mass transit and public transportation, and you don’t need a car. They can go out for entertainment, have an apartment, and downtown is their living room. We have lots of vibrant restaurants and clubs, and more are coming. There are cultural events and art exhibits, and you’re really seeing artists coming now, which is a healthy sign of an urban district. When we host other people who have gone through an urban renaissance, they say we’re on the right path, and that we won’t believe what things will be like in another five years.
What else do you foresee for downtown?
The riverfront is emerging as a new dynamic (initiative), and the Ilitch family, with the new hockey arena (coming to the northwest corner of I-75 and Woodward in fall 2017), and their surrounding residential, office, and entertainment districts, are really going to connect downtown with Midtown. Once people start seeing the new development and they feel secure — and, believe me, we focus on that a great deal — it just adds value to everything you and others do. Once you change the perceptions, the overall value of being downtown just goes up tremendously. That’s the path we’re on.
Team Schostak Family Restaurant, Livonia
WHY HE’S A CHAMPION
OF THE NEW ECONOMY:
Sometimes, a new business is launched from a simple inquiry. When Schostak Brothers & Co. in Livonia was building a shopping center in Alpena in 1980, they were approached by Burger King about building a restaurant in the parking lot — often referred to as an outlot. The challenge was that Burger King couldn’t find a franchisee in the area, and so they asked if Schostak would be willing to serve as the restaurant operator. “From there, we started a division and developed or acquired Burger King restaurants in mid-Michigan and metro Detroit,” says Mark Schostak, executive chairman of Team Schostak Family Restaurants in Livonia. The expansion effort didn’t stop there. In addition to owning 60 Burger King eateries in Michigan, the company has 67 Applebee’s, four Del Tacos and, in partnership with Olga’s Kitchen, they invested in 11 freestanding restaurant locations. Team Schostak also is adding MOD Pizza locations this year in Livonia and Northville Township, with more eateries on the drawing board.
How did you get started with Applebee’s?
In September 2012, we had the opportunity to purchase 65 Applebee’s from the parent company that owns the brand and the restaurants. They wanted to divest their corporate locations. After I read about it in a trade publication, I called them. From our family’s roots in the real estate business from the 1920s in Detroit, we’re no strangers to acquiring and enhancing properties. In fact, we’re a fourth-generation company. We saw in Applebee’s the opportunity to change the culture and make them a true neighborhood bar and grill, and become part of the fabric of the community. I told them we would be a great steward of the brand and bring local ownership to the restaurants. That was our business pitch.
How was that received?
They were impressed, and we struck a deal. We followed through on our intentions very quickly and essentially relaunched the brand into the Michigan market. We wanted everyone to know about the new local ownership, and we invested $12 million to redo the image, the marketing, and tied it in with the respective communities where we serve. For each restaurant, we created custom murals that featured local high school athletes,
police officers and firefighters, and other community leaders. We made the bar area much more open and inviting, and we got involved in the communities by become members of the local chambers of commerce and working with local charities. We also identified opportunities to build new locations in Livonia and Southfield, including bringing Applebee’s to the city of Detroit at Eight Mile and Woodward, which will open in the fall.
How did MOD Pizza come about?
We were presented with an opportunity to bring in a new pizza concept. Pizza is very much a part of the American culinary landscape — especially here in Michigan, with great local companies like Little Caesars and Domino’s that have national and international reach. But we wanted to bring a different style that allows customers to make their own pizza. How it works is you walk down a server line and select what sauce you want, the meat, the vegetables, the cheeses, and it’s all one price. It’s a real value. In addition, our gas-fired ovens can bake a pizza in less than five minutes, and it’s a thinner pizza. While 90 percent of pizza is typically sold at dinnertime, we believe, with our value and speed, we will be selling 40 percent at lunch and 60 percent at dinner. Our plan is to add 25 restaurants in the metro Detroit market. Overall, we’re planning to add another 500 jobs to our operations in 2015. We have more than 6,000 employees right now.
How did you form a partnership with Olga’s Kitchen?
Olga’s started in 1970 in downtown Birmingham, and in 2004 my brother Bob was running our real estate leasing (division) in our shopping malls (for Schostak Brothers & Co.), and we had Olga’s as a tenant, so we had a landlord/tenant relationship in place. Bob knew Mike Jordan (vice chairman of Olga’s), and he was telling Bob that (Olga’s) was looking for a strategic partner with capital, along with real estate expertise and restaurant experience. So Bob introduced me to Mike, and we hit it off and created a partnership. We would invest 50 percent in neighborhood locations. In the 1980s, they went into malls and I guess it’s almost a right of passage that you eat at Olga’s while you’re a teenager, and that’s how the business grew. In the last few years, a lot of retail is (being) done outside malls, so they pivoted and developed more neighborhood locations. We’ve built 11 (freestanding) locations with them, so we’re investors and serve on the advisory board, but they operate the restaurants.
How do you set apart your restaurants from all the competition?
If you take a look at Del Taco, which is reflective of what we do at our other restaurants we operate, we make nearly everything from scratch. Our beans, for example, come from local farms and we slow-cook them for three hours. We grate fresh cheese, we make our own salsa, and we’re grilling steak and chicken all day long. We’re very dedicated to delivering the finest food possible in the least amount of time. We operate real kitchens. We offer value and are competitive on price. We have drive-thrus and we also serve breakfast, so we’re open 24 hours (a day). We think there’s a big runway for growth for us in this space, and we plan to add one to two restaurants in the next six to 12 months. And across all of our brands, we encourage our employees to get involved in charity work. It’s the right thing to do, and our employees really like giving back to the communities in which they work.
WHY HE’S AN EMERGING
THE NEW ECONOMY:
Ted Serbinski has no qualms about jumping into the unknown. A serial entrepreneur who relocated to Detroit from Silicon Valley, Serbinski has co-led investments in 24 companies since 2012 and launched several startups as part of a team. After graduating from Cornell University, he joined a government contractor in Washington, D.C., before working with Drupal, an open source software platform. A short time later, in 2006, he and two partners launched Lullabot, which provided consulting services in advanced Drupal operations. He also was a co-founder of ParentClick, a family-centric website that was sold to Lifetime television. After moving to San Francisco, Serbinski met his future wife, who was from Detroit. Following their marriage, the couple moved to the Motor City and Serbinski became a partner at Detroit Venture Partners, a venture capital firm that invests in early-stage digital technology firms. “I can’t get enough of being in the early startup phase of a company, so when Techstars approached me to launch a platform here, I saw a lot of potential to work in the software and hardware space,” he says.
How can Techstars help build out metro Detroit’s startup ecosystem?
Techstars is the No. 1 accelerator in the world. Since 2007, 500 companies have gone through a three-month mentorship program that connects startups with potential investors, corporate partners, and thought leaders. Those 500 companies have since gone on to raise (a combined) $1.1 billion in outside investments, and they’re now collectively valued at $2.8 billion. We have 18 programs worldwide, and Techstars Mobility is unique to Detroit, given the region is at the epicenter of the rapidly changing convergence of mobility and transportation. There’s a lot of work going on here as it relates to autonomous technology with ground vehicles and aerial vehicles. The movement of people, goods, and services is changing rapidly.
What is Techstars doing to drive the mobility sector?
We’re now recruiting 10 companies to be part of the first program, and I got involved when Techstars was looking for someone who was very entreperneurial, who had their own startup success, and was a community-builder. My passion is being a true seed investor and accelerator. I like the very early stages of a company, and our program is almost like running a 90-day boot camp for entrepreneurs. We’re now looking for space in downtown Detroit, and we’ll be right in the hub of all of the startup activity.
How does the program work?
We start up on June 9, and on Sept. 10 we’ll have our demo day where each of the 10 teams will present before industry leaders, investors, and the community. Each company will receive $120,000 in funding in exchange for 7 percent to 10 percent equity in their company. I’ve served as a mentor (at Techstars) in Chicago and Boulder, Colo., and I’ve been to a bunch of their locations. When I was at DVP (Detroit Venture Partners), I led the investment on ChoreMonster (an app which makes chores fun for kids), and they had gone through Techstars. So I’ve been exposed from the investment side, the mentor side, and now I’m running a program. Once we have the 10 companies selected and we start up the program, the first month will focus on the all-around direction of each company. Throughout the program, we connect the companies to 100-plus mentors who can help them think about their business through different angles like technology, business processes, investments, marketing, and other platforms. The next month focuses on the execution side. How do you take all this new data and adjust it to drive new customers, revenue, or users? The third month is about launching or pitching your company. How do you pitch to investors or gain business development opportunities? Or maybe you’re relaunching the company because you changed it along the way.
What will be the makeup of the participants?
It’s all technology companies, but it’s a mixture of software and hardware, and we’re even looking at some material science companies. They will all go through the same process (and) they’ll have access to what we call our hack stars, which is a team of designers, engineers, and various partners. Right now, we’re building the team. It’s almost like a franchise model and we’re in startup mode. Where in other programs we might partner with Disney, Kaplan, Barclays, or Microsoft, Detroit is a hybrid. Here we have partnered with Ford, Magna International, and Verizon Telematics. It’s all about mobility.
What is the time commitment for the participants?
There’s no specific time requirement. All of the partners have committed financial support, and we’ll have access to their executive officers. Bill Ford (executive chairman of Ford Motor Co.) will be involved. We know we can’t ask for full-time engagement (from each participant) because they’re busy starting or operating their companies, but we’ll offer guest speakers, (provide) resources, have workshop sessions, and offer avenues for growth.
Who else are you working with?
We’ll work across the entire Detroit region. We all fly out of the same airport at Detroit Metro, so we’re all in this together. We’ll have a strong presence in Ann Arbor, the suburbs, Automation Alley (in Troy), just everywhere. It’s the ‘a rising tide lifts all boats’ mentality. It’s really about growing the overall economy and adding jobs. db