Tightly wound

Amercable CEO held his company together

Bob Hogan
Bob Hogan is a longtime supporter of the accounting and information systems department and the Pamplin College and has served on the department’s advisory board.

Less than two months after becoming president and CEO of AmerCable Inc., Bob Hogan (ACCT ’78, MACCT ’80) faced a major crisis when seven managers and 13 of 22 other employees at the cable manufacturer’s oil and gas distribution facility in Houston quit to join a competitor. At the time, AmerCable was also a newly independent business, having spun off from its parent company as a result of a management-led buyout that Hogan executed in partnership with a private equity firm.

The company got through that crisis nearly 10 years ago, thanks, Hogan notes, to employees who pitched in to “fill the void” and private equity partners “who didn’t panic.”

International Success

AmerCable today is one of the country’s largest manufacturers of electrical cable for the energy infrastructure and natural resource industries — “the number one producer in North America of cable for the mining industry, with about 60 percent of the market,” Hogan says, and one of the top cable suppliers for the oil and gas industry. “Harsh environment applications are our specialty.”

AmerCable products are also used in solar and wind energy generation. Headquartered in El Dorado, Ark., where it has a 535,000 sq. foot manufacturing plant, the company has operations in Houston, and distribution facilities in China and Singapore.

The company takes pride in its ability to “deliver product in the shortest lead times — twice as fast as our competitors — at an industry-best on-time delivery rate of 99 percent.”

Its success story, including a remarkable strategic planning initiative that helped transform the primarily domestically focused business into an internationally oriented company while quadrupling revenues and increasing enterprise valuation nine times, is discussed in Keith McFarland’s 2008 New York Times business bestseller “The Breakthrough Company: How Everyday Companies Achieve Extraordinary Results.”

An AmerCable veteran, Hogan has led the company since 1993, when he was named president and CEO of what was then a division of Associated Materials Inc., for which he was CFO for nine years. A member of Pamplin’s accounting and information systems advisory board since 2007, he returned to campus last spring as a Wachovia Distinguished Speaker. In his talk and an interview, he discussed the importance of strategic planning and people resources as well as leadership lessons and the challenges before his company and other U.S. businesses.

Rough beginnings

The mass departures of AmerCable personnel in Houston were an inauspicious start for the newly independent business, Hogan agrees; still, he does not consider the crisis as the toughest test he has faced.

amercable spool
Amercable seeks to deliver product in the shortest lead times.

The problem “looked massive at the time,” he says. “It was daunting and scary.” The resignations were also a blow to company pride, “because we had spent a lot of time building a familial culture at AmerCable. And here were people walking out the door.”

Recalling the exceptional response from his remaining employees, Hogan says some of them undertook a weekly six-hour drive from El Dorado to Houston; others relocated there temporarily.

Turning it around

One insight he gained from the calamity was the importance of being aware of and understanding the perspectives of non-headquarters employees. Hogan was based for eight years in El Dorado before moving to Houston. His relocation was a revelation, letting him look back in and begin to understand what needed to be different for the company to grow and thrive. “I’ve told other CEOs this: if you can change your seat in the company sometime, do it.”

The personnel crisis was about tackling a “defined task” and getting through a difficult but “finite period,” Hogan says, an undertaking that was fueled in part by a resolve “not to lose to those other guys.” The bigger and tougher challenge has been “changing who we are — understanding the strategic need for change and then moving the company along that path of looking outwardly.” The change process is less well defined, he notes, and requires leaving one’s comfort zone and dealing with a host of new and more complex issues — including foreign languages and cultures.

The importance of strategy at all levels

AmerCable’s decision to become a global business had emerged from strategic planning conferences involving employees from various levels across the company. “If a mistake is made on the shop floor, the product becomes scrap. If it somehow gets out the door, which very rarely happens, you’ve got a customer who’s upset; it might cost a little bit of money. But, you make an error in strategy — you make the wrong decisions about how you want to go to market, what business model to use, which markets to be in, which acquisitions — you can cost the company big dollars.”

Dissatisfied with AmerCable’s old, executive-centric strategic planning process, Hogan had sought McFarland’s assistance with building a better one. (The author and consultant notes in his book that AmerCable was then facing a recession and in a mature industry, and its sales had stalled.)

harsh environment cable
Harsh environment applications are the company’s specialty.

Given Hogan’s firm belief in soliciting input from the rank and file, participants at the strategy meetings include employees such as shop floor supervisors and field sales engineers. “There are leaders in all different parts of the organization,” Hogan says. Employees at lower levels of responsibility may not necessarily understand all aspects of corporate strategy, he says, but if they “ask one key question that we haven’t asked otherwise, we’ll get benefit out of that.”

Motivating employees

A company’s employees, Hogan maintains, are its strongest resource, and how it selects, leads, manages, develops, and retains its people and builds a team leveraging their individual skills and abilities can give it a distinct competitive edge. “I don’t think you can have high levels of customer satisfaction unless you have highly satisfied employees.” Yet, he says, most companies don’t know enough about selecting and nurturing talent, and most business classes, he feels, don’t cover it well.

In his book, McFarland lauds Hogan for enabling his employees to do their very best, noting that AmerCable succeeded because “Bob Hogan is a superb coach” and he focused on “growing his people right along with the business” by including them in strategy meetings and taking them to nationally renowned programs on management and leadership.

Asked about the accolade, Hogan says he doesn’t consider himself a superb coach but learned that “you can be a better coach with better people.” He seeks, in particular, to hire employees with high levels of self motivation. “Identifying that is really the key to coaching.”

His company’s success is a testament to its skilled and dedicated employees, Hogan says. “At AmerCable, we have ordinary people who do extraordinary things.”

AmerCable was acquired by Paris-based Nexans, the world’s second largest cable manufacturer, effective Feb. 29.
Virginia Tech Pamplin College of Business Virginia Tech Pamplin College of Business Magazine Spring 2012

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