The Wahl Clipper Corporation was founded in 1919 by entrepreneur Leo J. Wahl in nearby Sterling, IL. Today, Wahl is a leader in the global clipper industry, with its products being used by barbers, stylists, and individual consumers in 165 countries.

As Midwest Entrepreneurs students learned in class yesterday, 2006 Monmouth College graduate Anthony Welty is significantly responsible for the success of Wahl’s products in 162 nations outside of the United States.

In less than seven years, Mr. Welty, a business and public relations major at Monmouth College, has risen to the position of Assistant International Product Manager in Wahl’s Professional Beauty and Barber Division. In this role, Welty is responsible for marketing research, new product development, product pricing, branding, sales support, integrated marketing communications, and other key aspects of Wahl’s international marketing strategy.

The main thing that I took away from Mr. Welty’s presentation yesterday is that while the Wahl Clipper Corporation is now in some ways very different than it was under the original entrepreneurial direction of Leo J. Wahl, it still maintains some of its original entrepreneurial characteristics (due, no doubt, to the fact that the firm is still privately held and [4^th-generation] family run). As discussed below, lingering entrepreneurial characteristics of the company include tight operational control, minimization of debt, an overriding concern for customer satisfaction, and competing for investment resources.

Tight Operational Control

If you are a student in the Midwest Entrepreneurs class or—for some other reason—a frequent reader of this blog, you know well by now that the class is based almost entirely on a series of guest speakers who are local or regional entrepreneurs. You also know well by now that the vast majority of our guest speakers have discussed how they strive to maintain tight, hands-on control of company operations in an effort to ensure that product quality remains at a very high level.

Unlike Wahl, however, most of the companies represented in class this semester are (1) at least relatively small, and (2) service providers. So, it was somewhat surprising—at least at first glance—to hear Anthony Welty discuss Wahl’s ongoing efforts to maintain tight, internal control over its manufacturing operations. After all, we are talking about a global goods manufacturing company here. Should it not be in the best interests of Wahl to contract out the manufacturing of its clippers to some able-bodied firm in China or another low-wage-labor nation? Wahl’s competitors have done this. Would not Wahl HAVE to do this to remain competitive?

In a word—according to Anthony Welty—NO. In fact, at Wahl’s Sterling, IL headquarters, the idea of contracting out the manufacturing of the firm’s products is “a taboo subject.” The attitude at Wahl has always been and remains: “If we are going to sell it, we are going to make it.” Clearly, Wahl believes that any cost savings—and subsequent price advantages—to be gained by having a third-party do manufacturing are likely to be negated by a reduction in product quality.

We have heard this same reasoning all semester from entrepreneurs running small service firms (that are typically highly customized to the needs, wants, and expectations of individual customers).

We have now heard it from Wahl; a goods company employing over 2,000 people in the course of doing business in 165 countries. Surprising? Not really when you understand that (1) the entrepreneurial spirit of Leo J. Wahl still drives the company today, and (2) if you are a high-quality producer and you want something done absolutely right, you should probably not relinquish control of it to someone else.

Minimization of Debt

Our second guest speaker this semester was extraordinarily successful local entrepreneur John Twomey (see http://blogs.monm.edu/entrepreneurism/2013/02/01/what-entrepreneurism-can-and-should-be/). In the blog entry for Mr. Twomey’s visit, I stated that “Business success is predicated largely on being ‘ready to meet opportunity’” and that “Being ready to make the most of major opportunities when they come your way…” is a function, in large part, as Mr. Twomey put it, of “having your finances in order.”

Again, as seen above with tightly controlling operations so as to maintain high product quality, what holds true for the small entrepreneur also rings true for the entrepreneurially driven global firm.

As Anthony Welty informed students yesterday, Wahl “operates on 0% debt.” The reason for this? Like John Twomey, it is to have cash on hand to take full advantage of opportunities when they—sometimes unexpectedly and with short “windows” of time to act—come your way.

Overriding Concern for Customer Satisfaction

Like all firms represented in class this semester, Anthony Welty clearly articulated the fact that Wahl is very customer-driven. This concern for customers and customer satisfaction manifests itself frequently—often as a key challenge—in the course of Welty’s duties as an international product manager.

Here, Welty spoke about difficulties faced in communicating with and understanding end product users (e.g., barbers and stylists) in the 162 nations that he is responsible for. Compounding the daunting task is the fact that Wahl products typically go through two or three levels of channel intermediaries—wholesalers or retailers who buy and then resell the products—before they reach the final customer.

Welty’s answer to the problem faced is to engage in extensive marketing research. The methodological approach taken is often what is known as ethnographic research wherein the researcher essentially lives in the midst of what they are studying. In Welty’s case, this means travelling the globe to visit barber shops and beauty salons and (1) observing Wahl products in use, and (2) personally interacting with customers—barbers and stylists—who use them. As an example, Welty discussed a 14-day trip to the United Kingdom, France, Germany, and Poland wherein 12 “innovative concepts” about Wahl product usage and consumer behavior emerged from his research efforts.

While I am tempted to say “How else can a global firm keep in touch with and intimately understand its customers?,” I know that many global firms are either unable or unwilling to do not do what it takes to know their customers as does Anthony Welty at Wahl.

Again, remember that Wahl is not your typical “global firm.” It is driven by the entrepreneurial spirit of its founder and it is—like the vast majority of the much smaller companies represented by Midwest Entrepreneurs guest speakers this semester—obsessed with customer satisfaction. In fact, although my notes are weak in this area, I believe Anthony Welty stated yesterday that one of the guiding principles of Wahl is something to the effect that when a company ceases to be focused on customers, it also ceases to be worth working for. I fully agree.

Competing for Investment Resources

This final category of “lingering entrepreneurial characteristics” at the Wahl Clipper Corporation differs from the three previous ones in that it is not something we have frequently heard from our guest speakers this semester (but, ironically and as to be described in further detail soon, it is something we will be hearing a lot about from this Thursday’s scheduled guest).

Anthony Welty explicitly described to Midwest Entrepreneurs students the manner in which he routinely competes for scarce (internal) resources as being highly similar to the manner in which some entrepreneurs compete for (external) funding from venture capitalists (a key means of usually large-scale funding for entrepreneurs unable to secure more traditional bank financing [see: http://www.sba.gov/content/venture-capital-startups-high-growth-technology-companies]).

According to Welty, successful pursuit of resources for new product development projects he directs at Wahl works much as does the process of getting venture capitalists to commit to invest their scarce resources in entrepreneurial ventures. Here, he must develop the idea and business plan and then present it and “sell it”—against an array of competitive alternatives for investment—to his supervisors. Wahl executives, like the most effective of venture capitalists, do not invest in just any idea. They seek to invest scarce resources in those ideas and projects that are most likely to lead to the most attractive rates of return (i.e., ROI/return on investment).

That wraps up another Midwest Entrepreneurs blog entry for yet another amazingly insightful class guest speaker presentation. Thank you Anthony Welty ’06!!

On Thursday, we will be honored to have as our guest speaker Mr. Larry Gerdes, who currently  serves as Chief Executive Officer of Transcend Services (see: http://www.transcendservices.com/default.asp) and also sits on the Board of Directors of the Chicago Mercantile Exchange (as well as several other companies and charities). Mr. Gerdes also possesses many years of experience as an entrepreneur in the health care services industry and is a business partner—as a venture capitalist—with Monmouth College alumnus Walter Huff (the Huff behind the Huff Athletic Center here on the Monmouth College campus). The main topic of the interactive discussion with students will be–you guessed it–venture capitalists as a potential source of funding for entrepreneurial ventures.

See you Thursday for what promises to be another great day in Midwest Entrepreneurs class!!

Regards,

Prof. Gabel