Federal Heath Sign Company: Putting Others Up In Lights
Source: Exec Digital USA, December, 08
From incandescent lighting more than a century ago to the LED of today, CEO Kevin Stotmeister tells Exec how this innovative company is an industry leader
by Kevin Doyle , Exec Digital
Browse the company Web site and then listen to company President and CEO Kevin Stotmeister rattle off some high-profile clients, and it seems as though Federal Heath Sign Co designs signage for every company you can think of. “I wish we did,” Stotmeister says with a laugh. “We do have some great ongoing accounts and we do conversion projects as well. We did the re-signage for the AT&T/Cingular wireless conversion. All mergers and acquisitions represent an opportunity for us.”
The predecessor company was founded in 1901 on the premise that incandescent lighting could be used for commercial advertising and sidewalk illumination, and was an instant success. Federal Sign has been at the forefront of industry change and innovation since and was combined with Heath & Company in 2003.
Stotmeister came on board in 1980 upon completion of service with the US Navy and has served many roles. He became President of Federal Sign in 1993 and remained in that capacity with the newly-formed Federal Heath Sign Co 10 years later. He has a ready response when asked about the company’s success that spans more than a century. “I guess the first thing that comes to mind is that we embrace change. A lot of companies are conservative and stick to what they’re doing even when it’s not working too well. That’s not us. We’re constantly looking for new and better ways to improve how we do things,” he says. “We always try to find ways to take care of our customers and satisfy their needs tomorrow better than we did yesterday.”
Stotmeister’s lengthy experience with the company provides him with a unique insight into operations. “I’ve really been able to experience it all. I started on the tech side, so I understood things from that perspective. Then I moved on to sales. These days I’m involved with strategic planning issues and have some pet initiatives, Lean being one of them. The Lean initiative has kept us current and has squeezed waste and expense out of the business,” Stotmeister explains.
What they do
“We’re a national sign company, among the largest in the industry. We have a national presence and the ability to take care of clients with multi-location requirements. We provide quality electric sign products, canopies and fascia, as well as maintenance, for high-profile companies,” Stotmeister says.
He explains the timing of the acquisition with Heath couldn’t have been more fortuitous. “Federal Sign was part of a public corporation Federal Signal Corp. (FSC). They were going in a different direction and we were no longer considered a core business for their future. At about that time Ken and Diane Hendricks were introduced to FSC. They decided to acquire Federal and combine with Heath which they already owned. Ken asked me to become CEO and lead the new company,” Stotmeister says.
The company now has approximately 600 full-time employees and generates annual revenue of more than US$125 million. It has more than 20 offices and manufacturing sites between Texas, California and Ohio; shepherds projects through from design to installation; and provides post-production maintenance through its MX Services group. The company uses its own workforce for installation projects in Las Vegas and relies on an enormous network of 2,000 pre-qualified sub-contractors to perform install/service work nation-wide.
“Our preference in major metro areas is to try and stick with one or two primary local installers. We spend a lot of time screening and pre-qualifying and they can be very, very loyal. We’re only as good as they are and if we pick them, we’re responsible for their work,” Stotmeister says.
Perhaps the most daunting task with any job is adhering to local guidelines for signage. “Some of them are pretty restrictive. Understanding the sign codes is crucial so we can advise our clients on height and size,” Stotmeister says.
Relationships and service
The company values its long-term relationships with clients, a partial list of which includes: Brinker International Restaurant Group (Chili’s, On The Border, ), Kohl’s, Cheesecake Factory, Target, Shell, Chevron, YUM Brands (KFC, Pizza Hut), Burger King and numerous Las Vegas and Native American casinos such as Harrah’s, Palms and Paris Hotel/Casino. “It’s critical to our business. Most have been with us for years and years and it’s rare that we lose a client. We think of ourselves as a team and we make sure the entire company interfaces with a client,” Stotmeister says.
That includes senior executives via the company’s Star Customer program. “Each of our senior executives adopts three to five clients and stays in touch with them several times a year. We’ve been doing this for eight or 10 years and it’s very meaningful,” Stotmeister says.
The company relies heavily on customer satisfaction surveys. “I get involved in the ones with the highest and lowest ratings. They’re going to get a call from me to find out what went wrong or what made them happy,” Stotmeister says.
Impact of technology
“I was around when we brought in the first Gerber machine to cut vinyl. It’s pretty rugged by today’s standards but it was the first time we didn’t have to hand-cut vinyl. Now we have CAD and AutoCAD® design and everything in the shop is state of the art,” Stotmeister says.
In the past 10 years, LED has replaced neon as the primary lighting component and Stotmeister labels the emergence of digital graphics as the next big thing. “It’s just getting started with banners with graphics that are hung from the sides of buildings and stadiums,” he says. “The technology in terms of communications has been a real plus. When I started we had creative artists hand-painting renderings. Now we can email attachments with complete digital design presentations. It’s allowed our industry and the world to do a lot more with less overhead,” he says.
A working democracy
Stotmeister says the company spends extensive time on employee training. “When we hire people, we want them for their brains as well as for their muscles. We’re doing a lot of training on process improvement, safety awareness, Lean — whatever it may be.”
When an internal survey revealed that some new employees “didn’t feel as though they were being incubated enough”, Stotmeister says the company decided to beef up its orientation process and add a buddy system designed to acclimate employees more successfully. “The managers here have big ears and listen a lot. We make sure the value system we preach is actually happening, so we can’t have autocratic managers. We have monthly meetings telling the employees what’s going on, when times are good and when they’re not so good,” he says.
“We say this all the time and we try to live it. The way we lead our industry and get customer satisfaction is by providing the highest value, quality, speed and flexibility for all of our customers,” Stotmeister concludes .
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