Jay Myers is gritting his teeth so much it feels like some of them are starting to buckle.
It’s April 2003, and Myers, the founder and CEO of Memphis-based videoconference technology company Interactive Solutions Inc., is sitting in his office with the door closed. His hands are shaking.
Based on the figures he’s studying, it appears to him he’s found the payment of potentially hundreds of thousands of dollars’ worth of fraudulent bonuses and commissions dating back about a year – a long-running fraud at his company that escaped his notice until now. Worse, it appears to go back to around the time his brother died, when Myers understandably needed some time away from the usual hubbub of his business.
All at once on this particular day in 2003, it was clear to Myers that an employee was stealing from the company – a crime for which a federal judge found her guilty the following year. The discovery hit the self-professed numbers junkie like a roundhouse blow to the jaw.
That’s how Myers recounts the day he discovered the fraud that nearly crippled his business in a book he wrote about his experiences called “Keep Swinging.”
What came after that period for his company is one of the most crowd-pleasing aspects of any good story: the comeback. He and his firm made it through to the other side, but it still wasn’t all smooth sailing after that.
The recession, for example, took a big bite out of the company’s revenue in 2009 – another hurdle to get over.
Myers’ story is by now an old one and is well-known in the Memphis business community. And episodes like the ones ISI faced have hit plenty of other Memphis-area businesses.
They’re gut-check moments that inevitably force a company founder or CEO to figure out if they have what it takes to go the distance, and then to put those skills into action.
For some, the recession is partly to blame. For others, it was financial shenanigans similar to what Myers had to sort through and fix. Sometimes, the nature of the business just changes – and a business too slow to adapt might find itself on a collision course with ruin.
John Simmons, a Memphis lawyer and board member of the Tennessee Chapter of the Turnaround Management Association, has seen plenty of companies make either missteps on their own or not respond strongly enough to potentially ruinous outside forces.
“Hope is not a strategy,” Simmons said. “You’ve got to really watch your business and watch the financials. I’ve seen a lot of businesses that don’t even really know if they’re making money or not.
“A business can also be successful, and they got there because they’re good, but things change. And the businesses that aren’t paying attention, they think that what they did yesterday will continue to make them successful in the future.”
Especially in times like those, RedRover Sales & Marketing managing partner Lori Turner-Wilson stresses that brand integrity is critical.
“As sales and marketing strategists, we certainly encounter our share of clients facing tough and even downright tragic times, oftentimes through circumstances outside their control,” Turner-Wilson said. “In partnering with those clients to fight to keep their business afloat, we reinforce how paramount it is to keep sight of their long-range vision despite the natural tendency to become reactionary to the circumstances surrounding them.”
The Memphis News talked to a few business owners who found themselves in a bind. Including Myers, they agreed to share their story – what happened to them, why, what they learned and, just as important, what their peers can learn from them.
INTERACTIVE SOLUTIONS INC.
Myers, meanwhile, is continuing to give speeches in Memphis – and beyond – about his company’s experiences. The company is also doing more deals nationwide.
Jay Myers, founder and CEO of Interactive Solutions, is pictured in the company's build room with technician Steve Rutland, right.
(Photo: Lance Murphey)
The company came off a big year in 2011, doing more than $25 million in sales.
That was done in large part thanks to a large contract with the University of Arkansas Medical Services for a telemedicine product.
ISI hit a down year in 2009. It came off $14.5 million in sales in 2008, dropping to about $13.5 million in 2009.
“One of the things we looked at was attitude,” Myers said. “We called different meetings throughout the whole company. Kind of town hall meetings, if you will. They actually kid and call them ‘Jay’s Dance Party.’ We get together on video and audio, the whole company, and just lay stuff out about what’s going on in the business. Very transparent.
“We said, ‘We’re going to continue to work hard and stay focused. We’re not going to participate in this recession.’”
In 2011, the company opened a new office in Little Rock and expanded its Memphis office.
ISI got a tighter relationship with its bank. And the company now does business in more than half a dozen states.
“We went out and, frankly, in 2010 worked even harder on doing deals and doubling up our efforts,” Myers said. “We invested in demo equipment, so we could show more things to more people. We didn’t back off that.
“What we did to pull out of the down year, we just got a very laser focus on what we were good at.
The thing I think some people get caught up in is they start panicking and looking for other pockets of opportunities and sideline businesses to fill the gaps. We said, that’s not really our thing. So we doubled down.
When everybody else is running scared, we double down.”
SEE THE DIFFERENCE INTERIORS
Diane Gordon’s business See the Difference Interiors up until a few months ago was an interior design shop with a storefront in Downtown’s South Main neighborhood, nestled amid art galleries, restaurants and retail shops.
Diane Gordon owns See the Difference Interiors, a company she once operated out of a space on South Main Street until an employee embezzled money, nearly putting her out of business.
(Photo: Lance Murphey)
She opened her South Main shop seven years ago, building up an award-winning array of design work. A few months ago, however, she made a tough decision.
It was time to renew her lease, and she decided to let it expire. The reason, according to a statement distributed with help from RedRover, is, “per the Shelby County District Attorney’s office, ‘embezzlement pending investigation.’”
Gordon declined to talk specifics about the incident, but it’s believed to involve former employees.
“Ms. Gordon is a vociferous Memphis lover, former president of the South Main Association and a respected member of the community,” the statement goes on to say. “Despite the decision to close her design showroom, she will continue her interior design practice and library on a much more personal level.”
Gordon decided to go back into, as she puts it, “private practice.”
“I’m basically working individually, one on one, with people,” she said. “Basically, I go on a consultation, meet with a client and determine what their needs are. I scaled down. Instead of having a store where you walk in and look at things, I still have a little bit of product, but … I’m not going to maintain inventory.”
Other than a part-time assistant, she doesn’t have employees anymore. At one time, she employed four people.
“We’ve all been to the pity party. However, I don’t like the people that live there, so I quickly check out. It’s all about attitude and your attitude to return to your passion about why you started your own business in the beginning.”
– Diane Gordon
Owner, See the Difference
One thread running through each business comeback story The Memphis News encountered is the way each owner stresses the importance of the right attitude.
“It’s all in the desire and not the fear of defeat,” Gordon said of the mindset she assumed. “We’ve all been to the pity party. However, I don’t like the people that live there, so I quickly check out. It’s all about attitude and your attitude to return to your passion about why you started your own business in the beginning.”
THE BOOKSELLERS AT LAURELWOOD
In late 2010, the parent company of the East Memphis bookstore formerly known as Davis-Kidd Booksellers declared bankruptcy.
Jason Richardson, left, and David Collins read magazines in The Booksellers at Laurelwood, formerly Davis-Kidd.
(Photo: Lance Murphey)
The chain of bookstores had been buffeted by the same forces of change hitting stores around the country, many of which closed in the face of competition from tablets, e-readers and the bargain basement prices of Amazon.com.
Other stores in the former chain got picked up by new buyers. Some closed. Davis-Kidd didn’t get bought – but it didn’t close either.
That’s thanks in part to a large community response and to the ownership of The Laurelwood Shopping Center supporting the store behind the scenes to keep its doors open.
Neil Van Uum, the founder of the former Davis-Kidd’s parent company, left that chain and is now the direct owner of the store, which changed its name to The Booksellers at Laurelwood and signed a new lease at the shopping center.
“There’s obviously been a seismic shift in the book industry,” Van Uum said. “We’ve got less competition now, which is a good thing. We were less certain about things a year ago, and now we’ve got a better grasp on things.”
One way he and his store met the challenge of the future is by giving the store a makeover.
Van Uum spent months planning and overseeing a renovation that included new carpet, fixtures, renovated bathrooms and an expanded children’s section.
The store’s café has an updated menu, including vegetarian and gluten-free items, and Van Uum expects Project Green Fork certification in about a month or so.
“Things turned upward in April and have been good since then,” Van Uum said. “One constant we have is great employees.”