The insourcing trend is one more illustration of a basic business principle: A company’s ability to innovate and adapt to change is crucial to its success — and if the firm can see it coming and prepare well in advance, so much the better.
Many of the following profiles of century-old Detroit-area businesses prove that point. Harper University Hospital and the University of Detroit Mercy have relied heavily on innovation. In Harper’s case, it has carried the hospital to the 150-year mark; for UDM, it has helped two major programs and the school’s college of law survive and prosper.
The same is also true on a much smaller scale. Take Gardner-White furniture, for example. It used its knack for originality to outlast most of its former competitors.
There are a few tales of near-death experiences, as well. Sanders Chocolates was close to a meltdown before it came back strong with new owners, and The Italian Tribune almost stopped the presses due to family succession concerns.
A Sweet Deal
|Sanders Chocolates suffered from diversity overload, producing everything from ice cream to canned soup. The company turned itself around after its new owner, Morley Candy Co. in Clinton Township (factory pictured above), streamlined the product mix.|
When Sanders Chocolates’ Highland Park factory closed 20 years ago, it attracted a lot of attention from competitors. Long story short, Morley Candy Co. in Clinton Township initially contracted with Sanders’ East Coast ownership team to churn out the company’s signature cherry cordials, pecan titans, and other candies, as well as its popular hot fudge ice cream topping. Stroh’s Ice Cream took over production of Sanders’ ice cream, while Country Home Bakers Inc. in Shelton, Conn. saved the bakery business.
Soon after taking over the cordials line, Morley tried to buy the rest of the Sanders brand, but it took until 2002 before the deal was consummated. We “knew the brand had tremendous value and better value with ownership in Detroit,” says Ron Rapson, Morley’s president.
Whether Rapson and the company’s ownership knew it at the time, the lifeline they threw to Sanders ended up helping their own company, too. Four years after acquiring Sanders, Morley’s fundraising-related candy sales, which helped hundreds of Detroit-area schoolchildren pay for band instruments and field trips, soured.
The company turned to using its Sanders brand and, in the years since, sales of longtime Sanders favorites like the cherry cordials and hot fudge topping have taken off. Product innovation has helped, too, — particularly the addition of new favorites like chocolate-covered potato chips and a pear-cinnamon dessert topping.
Brian Jefferson, majority partner of the privately held Sanders, declined to release financials, but he did say 2012 sales exceeded those of 2011 by $4 million. Sanders’ retail operations, with 11 stores, represents 15 percent of the company’s sales in Michigan, Jefferson says. In its heyday, Sanders had nearly 60 stores in the Great Lakes region.
Today, Sanders products are sold in every state as well as in Japan, New Zealand, and Australia. Jefferson says the company plans to expand sales into Europe and China. The company has made online ordering easier, and updated the Sanders logo by re-adopting one from the 1920s.
Jefferson says Sanders has lasted since 1875 because its originator, Fred Sanders — and those who followed him — produced a good product at a reasonable cost, never lost sight of creating value for the consumer, and always focused on new product development.
Unfortunately, not all of Sanders’ family descendants had chocolate running through their veins, and the Sanders brand was diluted when the company expanded its offerings beyond chocolates and baked goods to include bread, ice cream, and even canned soup. “They were almost too diversified and lost some of their core competencies,” Jefferson says. An interesting fact: When Morley bought the brand, it was discovered that many of the hundreds of recipes were handwritten (although none, unfortunately in Fred Sanders’ hand).
Quality remains important, and Jefferson says Morley hasn’t tried to make Sanders products cheaper by using inferior ingredients such as high-fructose corn syrup or hydrogenated oils. He points out that new product development, in addition to maintaining old favorites, also is essential for longevity. Jefferson is, in fact, the proud creator of the “gretzel,” a cinnamon-honey graham cracker that’s shaped like a pretzel and coated — or “enrobed,” in confectionery parlance — in chocolate.
Lastly, Sanders capitalizes on its “seconds,” or candies that don’t pass quality control standards. These rejects used to be sold exclusively at a discount, but that market is limited, so the company uses them in cookies and deep-dish brownies instead. The company does the same thing with Better Made potato chips — another iconic Detroit brand — that are too small for Sanders’ chocolate-covered chips: They’re used in a line of potato chip chocolate bars.
Buy By The Roomful
|While its Fort Street store in Detroit closed years ago, Gardner-White outlasted many of its competitors because it changed with consumer tastes. Today, the company operates 11 stores, including two locations inside Best Buy stores.|
Tina Noor, whose Port Huron advertising agency has promoted Gardner-White Furniture since 1998, associates her longtime client with a “golden decade” in Detroit retailing. Driven by a generation of salesmen-merchants, from 1975 through 1985 Detroiters could comparison-shop locally for big-ticket home furnishings at such retailers as Highland Appliance, New York Carpet World, Art Van Furniture, ABC Appliance, and Gardner-White. There were more homegrown retailers during that time, but now only a few remain.
“Irwin did it all — you had to, in order to run with this crowd,” Noor says about the late Irwin Kahn, who bought Gardner-White in the 1950s and ran the company until shortly before his death in 2009, at age 78. “He was a furniture guy through and through. He knew the product, loved the product, and respected the product.” Today, the company, founded in Detroit in 1912, operates 11 stores.
Noor says Kahn also knew how to adapt to a changing market, had the vision to anticipate what his customers wanted next, and possessed a talent for connecting with people. Today, Kahn’s daughter and son-in-law, Barbara Tronstein and Steve Tracey, operate the business with the same passion.
“Barbara has, I think, a unique marketing sense that sometimes I think you’re born with,” Noor says. “Steve does more of the buying and figuring out what’s next.”
Gardner-White has been an innovator through the years, pioneering successful strategies that other home furnishing companies later adopted. The private, family-owned company was the first furniture retailer in Michigan to advertise on television and the first to use full-color print advertising. It was the first to offer a “whole room package” in the 1960s, encouraging customers to “buy by the roomful and save.” Gardner-White also was the first furniture retailer in the state to package brand-name televisions and furniture together.
The company’s tradition of innovation continues even now. In 2012, it opened two stores-within-a-store at Best Buy locations in Novi and Bloomfield Hills. Tracey, the company’s president, says the concept works because furniture and home electronics are so closely linked. Today, Gardner-White is one of Best Buy’s largest partners in the United States.
The company, founded in 1912, recently moved its headquarters from Warren to Auburn Hills. The 455,000-square-foot Oakland County location, which is near Great Lakes Crossing Outlets, also houses a new distribution center, a warehouse, and retail and outlet space.
Robots in the Operating Room
Harper Hospital in Detroit has been caring for patients since 1863. Above, in this undated photo, a nurse cares for newborns in the hospital’s obstetrical ward (nursery) in what is now the Detroit Medical Center.
When Harper University Hospital opened in 1863, wounded soldiers from the Civil War were among the first patients to fill its beds.
Soon after, the hospital joined with the Wayne State University School of Medicine to become a teaching hospital. Through the years, Harper continued to offer patients medical advances, including the world’s first successful open heart surgery in 1952; the first drug approved to treat AIDS, synthesized by a Karmanos Cancer Institute researcher in 1964 as an anti-cancer medication; and the world’s first superconducting cyclotron for treating cancer in 1991.
Today, Harper is a 470-bed specialized care and referral center where neurosurgeons have access to high-definition imaging and MRI results in the operating rooms, following a recent $30-million upgrade.
Other recent advances include heart specialists who can replace valves through small incisions instead of having to open a patient’s chest, and doctors who treat obesity utilizing the latest techniques in bariatric surgery. “I think, in general, it’s no different than any other business,” says Dr. Thomas A. Malone, Harper’s president. “You have to be flexible and you have to think strategically and adapt to your environment.”
Dr. Michael Wood, director of Harper’s bariatric surgery program and the co-developer of a unique weight loss surgery technique, agrees with Malone that innovation has helped Harper as well as Hutzel Women’s Hospital extend their mission. “I think you have to continually reinvent yourself in what you do and how you’re doing it,” Wood says.
Wood points to Harper’s use of robotic-assisted surgery as an example. In the recent past, colon surgery, he says, required an incision of up to eight inches and a hospital stay of more than a week. Robotic colon surgery, in contrast, requires just five incisions of less than one inch each, and the average stay has been reduced to two days.
Wood says the hospitals’ collaboration with WSU and the Karmanos Cancer Institute has made research and treatment even better. He also cites the dedication of the hospitals’ staff for Harper and Hutzel’s longevity. “We had our appreciation dinner for hospital employees and there were employees who had been there 40 years,” he says.
As health care evolves, Harper doctors are focusing on wellness rather than waiting until people get sick to treat them. It also is partnering with nursing homes and home health companies to provide more care by monitoring patients at their home.
Malone, a neonatologist, also leads Hutzel Women’s Hospital. Hutzel, which admitted its first patients in 1868, relocated to the older Harper in 2002. Offering care for women and children, Hutzel acquired Detroit’s first baby incubator, established the United States’ first mothers’ milk bureau for infants of nonlactating women, opened the city’s first infertility center in 1955, and in 1983 started Michigan’s first in vitro fertilization program. “The biggest changes have been driven by technology,” Wood says.
Teaching the brain and Heart
|The College of Law at the University of Detroit Mercy, located on Larned Street, turned 100 years old last year.|
As Southfield attorney Anthony Asher considered making a major gift to his alma mater, the College of Law at University of Detroit Mercy, for the school’s 2012 centennial, his thoughts turned to the brother who had become his de facto father.
Both of Asher’s parents had died by the time he was 6 years old, and his older siblings, including his brother George, stepped in to raise him. George Asher grew up to become a labor negotiator, then enrolled in UDM law school, along with Anthony. But George didn’t make it; he died in his senior year, due to complications from hemophilia.
Anthony Asher, who now sits on the law school’s board of governors, decided to honor his brother with a recent project that transformed a historic Detroit firehouse into a new home for UDM College of Law’s pro bono clinic; it’s now known as the George J. Asher Law Clinic Center. “In his small way he epitomizes what the university is trying to teach,” Asher says of George. “You’ve got to live your life and give back.”
UDM has celebrated two other centennials in the past two years: While the university marked 100 years in 2012 of turning out lawyers in the Jesuit tradition, the university’s engineering and cooperative education programs did the same a year prior. The milestones also reflected on an early innovation — the university established Michigan’s first, and the nation’s third, college-level co-op program where students obtain credits while earning a salary.
“We educate people who understand the world and the place of technology within it,” says Leo Hanifin, an alumnus and professor who led the College of Engineering & Science for 21 years until a new dean was appointed last August.
Besides instilling a world view in its students, Hanifin says UDM stays relevant for engineers-in-training by remaining innovative: achieving female and minority enrollments above the national average; keeping up with new technology, in part by nurturing close relations with the industry for programs such as its advanced electric vehicle project with Ford Motor Co.; looking to automotive companies and other industries to influence its curriculum so it reflects the working world; and making its co-op class mandatory.
“In that sense we’re educating engineers who are prepared to hit the ground running,” Hanifin says. The approach is working. The school’s engineering graduates have attained positions ranging from vice presidents to board chairmen at companies such as IBM, Xerox, Eastman Kodak Co., The Boeing Co., Dow Chemical, BASF Corp., and Ford, he says.
And, just as at the law school, UDM’s engineering faculty try to instill personal traits in their students while teaching them how to build a bridge or engineer a better car. For example, Hanifin was hard at work just days before the winter holidays, putting the finishing touches on a research paper about competencies that foster innovation in engineers.
Notable College of Law graduates include former longtime state Attorney General Frank J. Kelley, Detroit attorney William L. Cahalan, Hon. Roman S. Gribbs, Hon. Maura D. Corrigan, Oakland County Executive L. Brooks Patterson, and businesswoman Denise Ilitch.
UDM’s engineering and science department got a new dean in 2012, and law school dean Lloyd Semple plans to make way for a new leader this year when he steps down at the end of June. He hopes to head back to the classroom.
While dean for just four years, Semple’s tenure has been eventful. The school made millions of dollars in infrastructure and technology improvements, while the law clinic moved from rented space in a nearby church to the renovated firehouse. And, after an extended debate, the law school will remain in its longtime home in Dowling Hall on East Jefferson instead of moving to the university’s main campus, on West McNichols. “I hope we continue to stay here another 100 years,” Semple says.
As at other universities across the country, innovation at UDM continues. Curriculum changes in the last decade have put a greater emphasis on experiential learning, including mandatory time spent in legal clinics to better prepare students for law practice. And UDM uses its unique location, near the United States–Canada border, to partner with the University of Windsor on a three-year, dual-degree program — a big change from the typical six years it can take to be eligible to practice in both country’s courts.
Backbone of the Community
|The Italian Tribune, published since 1909, has been overseen by the Giuliano family, including Marlene Baker, and the two founders, Vincenzo and Maria Giuliano (pictured to the right).|
The Italian Tribune almost didn’t make it to 100 years. Owner and publisher Edward M. Baker, getting on in years and beset with health problems, was ready to fold the publication his grandfather started in 1909 when he told his elder daughter: “If you don’t come back to Michigan and run this paper, we’re going to close it.”
That’s all Marlene Borner needed to hear. She put in her notice at The Orange County Register, a newspaper in California, moved back to Michigan, and started working at the Tribune in 2002. “It’s a legacy, and something I hope my kids want to do,” she says of the newspaper her great-grandfather, Vincent Giuliano, established. “I think there’s a good possibility of it.”
Borner may be right. Son Daniel Kammer worked at the paper for a while, but left for a position in computer technology. However, Borner’s daughter, Linda Richardson, 28, took over as office manager in 2011 and is now CFO.
Richardson says she enjoys the notoriety in the community that she gets from being part of the Tribune’s legacy — a contrast from the anonymity of her life in California. She has a business background gained while working in the mortgage industry, and she started learning the production end of the newspaper business when two employees left in 2011. “When I was younger, I said I’d never do it. But now that I’m older, you definitely have to look at your opportunities out there,” she says. “The more I think about it, the more I think I’ll stick with it.”
Borner made long-overdue changes when she took over as co-publisher. She established e-mail and a Facebook page, and transitioned the layout process from manual to electronic. She hopes to establish more of a two-way conversation with her 30,000 readers, perhaps through Twitter.
Editorially, she shies away from writing about the controversial issues her father favored, preferring instead to focus on more upbeat news that “enriches the culture” of the Italian-American community in Michigan and Windsor. The Tribune has a small subscriber base, relying heavily on free distribution through 250 retail outlets in Canada and metropolitan Detroit.
“When my great-grandfather opened the paper, it was more of a vehicle for promoting citizenship and promoting the Italian community,” Borner says. “(Now) it’s more or less the dissemination of information in metro Detroit that’s Italian.”
Longstanding cooperative arrangements with other Italian newspapers enables the Tribune to run international stories that appeal to readers who may still have relatives overseas. In the 1970’s, the paper’s format changed from broadsheet to tabloid and its two- to three-times weekly publication changed to biweekly.
“It reaches a niche market, but it’s so well-ingrained in that community that it’s almost like the backbone now,” Borner says. db