Our guest speaker in Midwest Entrepreneurs class last Thursday was Mr. Dick Francis, who owns and operates GFI Metal Treating in Rockford, IL (http://gfimetaltreating.com/index.php).

GFI specializes in a variety of high-quality metal heat-treating services performed per exact customer specifications. Clients—including the likes of Caterpillar, John Deere, and major aircraft parts and gun manufacturing companies—come to GFI with key component parts to their products to be hardened and finished. Many of these metal parts cost thousands—if not tens of thousands—of dollars to develop and produce. If these parts are not processed correctly by GFI, resultant failure of client products can potentially cost GFI’s clients millions of dollars (due to product recalls and, potentially, serious injuries or deaths). As a result, GFI must consistently be highly reliable in the services it performs; to not be highly reliable in consistent fashion entails certain business ruin due to client departure, negative WOM communication, and/or lawsuits.

Mr. Francis, who was accompanied by his wife Denise, graduated from Monmouth College in 1977 with a degree in Biology. He also played football for the Fighting Scots under the tutelage of legendary Coach Bill Reichow (http://www.monmouthscots.com/hof.aspx?hof=82&path=&kiosk=).

What we were privileged to hear yesterday was a truly remarkable entrepreneurial story of grit, unrelenting determination, teamwork, and heart—and trial-and-error and adaptation—from a truly remarkable and rightfully proud entrepreneur.

And it was clear to the class that it was here at Monmouth College—on the football field and in the classroom—where these qualities were instilled in Dick Francis.

Dick Francis bought GFI Metal Treating in June of 2000. This acquisition was in part due to Dick’s having grown tired of the corporate world (and the resultant desire to be his own boss). It was also done in part as a favor to the widow of a dear friend—the previous owner of the company—who had recently passed away. When he bought the heavy industrial, business-to-business (B2B) firm, it was a run out of a 10,000 square-foot garage full of out dated and dilapidated equipment. The company had annual sales of about $250,000 and employed 5 people. It was also literally on the verge of bankruptcy; about “two weeks away,” according to Mr. Francis.

Today, GFI is an ISO Certified, AS 9100 Compliant firm operating out of a state-of-the-art 42,000 square-foot building. It had nearly $2 million in sales last year and employs 15. GFI boasts as its major customers—and partners—the likes of Caterpillar and John Deere.

But this amazing transformation did not occur overnight; and not without considerable hardship.

Prior to taking the reins of GFI in 2000, Mr. Francis had formulated a detailed business plan to turn the company around. As he informed the class yesterday, the plan “was handy for the first ten minutes.” You see, his plan, while necessary to secure the bank financing needed to acquire the company, was based on “selling price and volume”; something that many—typically larger and more financially endowed—competitors were already doing. So, initially, GFI made a fair number of sales but they were not profitable sales and the company did little to establish a meaningful niche for itself in the metal treating industry.

This went on for about 18 months until, according to Dick Francis, he—with his wife Denise standing firmly behind him at all times—finally “figured it out.”

The strategic focus of GFI began to shift from the commonplace “low price and high volume” to a unique and more meaningful—and customer-valued—emphasis on high service and high quality customized to the exact specifications and needs of larger and better customers. Also, under Francis’ newly enlightened direction, the firm focused on building and maintaining mutually beneficial relationships with its customers; with a view toward building trust and becoming a strategic partner with the customer.

This shift in strategic focus sounds great but it is not easy to pull off in practice; and it does not occur quickly. One of the hard facts that Francis had to come to grips with in this regard was that he needed to “let go” of some of the firm’s existing customers—namely Chrysler—that were both focused on low price and were, in his words, “too demanding.” In fact, it is just in the last year or so that Francis feels that GFI’s goals in this regard have been achieved; mainly as evidenced in the company’s ongoing and growing partnership with Peoria-based—and quality-focused/obsessed—Caterpillar.

Another major hurdle that GFI has worked hard to—slowly but surely—overcome is in the area of technology. As previously noted, when Francis purchased the company in mid 2000, it was essentially a large garage full of dilapidated equipment. One of the company’s main pieces of equipment—a furnace used to heat steel—went out and collapsed within weeks of the acquisition. The office was outfitted with IBM Selectric typewriters; electric machines that I personally was replacing with electronic typewriters as an IBM salesperson in the mid-late 1980s.

Today, GFI is state-of-the-art and highly automated in terms of both production and office technology. Dick Francis proudly told the class that he uses a $7,000 Yokogawa Controller production automation system whereas many competitors employ devices costing only about $500. According to Francis, he does this because his customers want the highest quality possible and he is committed to doing whatever needs to be done deliver the desired level of quality.

Similarly, in the office, GFI is also on the cutting edge of technology. This is manifest most importantly in the area of the company’s customized, self-created order processing and database management software systems. Francis proudly ran the class through several of the firm’s detailed spreadsheets and invoices (which contain an amazing wealth of order and work detail designed to track everything the company does for each customer on each job). Obviously, countless hours have gone into this. Another indication of GFI’s obsession with quality and customer satisfaction!

I could go for hours with this… But it all keeps coming back to two pieces of advice that Dick Francis ’77 gave to the Midwest Entrepreneurs class yesterday.

First, in hindsight, Francis told the class: “Don’t buy a business with your heart… use your brain.” Clearly Dick Francis has a big heart; he bought the company largely with his heart when he acquired it in 2000 from the widow of a dear friend and it has taken a lot of heart to turn the floundering company—then two weeks away from bankruptcy hearings—into the success it is today.

Second, as he repeatedly told the class, his motto in the “lean years and hard times” was: “I think I can, I think I can.” Francis said that sooner or later, all entrepreneurs are going to get knocked on their backsides. The key—something he learned as a Fighting Scots football player under  Coach Bill Reichow—is to “Get up, dust yourself off, and never give up.”

So, the moral of the Dick Francis/GFI Story: (1) Don’t do what he did in buying a company with your heart, and (2) Do what he did in displaying a lot of heart in running the company. And never, never give up!!!

Finally, I would be remiss if I failed to mention one additional thing… While the vast majority of our guest speakers this semester have been visibly proud to share their entrepreneurial stories with us, no one has been more visibly–or justifiably–proud than Dick Francis. I believe there are two reasons for this. First, as discussed above, Francis brought the company back from the very edge of ruin/bankruptcy. Second, he was very proud to tell us that his son has become actively involved in the business and will, in fact, be taking over the firm sometime in the near future. A lack of “successful succession within the family” is in fact something that we have heard several other entrepreneurs lament this semester. Dick Francis certainly has a lot to be proud of on this front!

Thank you Dick Francis ’77 for a wonderful learning experience!!

See you all next week.

Regards,

Prof. Gabel