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A Hard Copy Original
Waterbury records-management firm attains record growth
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Business New Haven
7/9/2001
By: Mimi Houston
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What kind of company has a “ Director of Customer Happiness” at the helm?
A Stamford or Norwalk dot.com?
No. The title belongs to A.J. Wasserstein, of ArchivesOne, a records-management company.
ArchivesOne manages corporate records the old-fashioned way - at least in part. Wasserstein's “team” (as the founder and CEO insists on calling his workforce) doesn't scan documents, transform them into CDs or stash them away on the Web.
For ArchivesOne and its customers, it's paper all the way.
Lots and lots of paper. Banks, law firms, hospitals and the like depend on ArchivesOne to keep them from drowning in paper. Sometimes that means warehouse or vault storage; sometimes, document destruction; sometimes, indexing for possible retrieval at a later date.
And it all started in Waterbury.
Back in 1991, Wasserstein was a newly minted MBA. While hunting for a place to start up a file-storage company, he minimized expenses by living at his parents' home in New Preston, some eight miles north of New Milford.
The 24-year-old coaxed family and friends into shelling out a total of $70,000 to help him buy a brick building in Waterbury.
The old industrial city held several attractions for Wasserstein - not least of which was its proximity to New Preston. With little of its traditional manufacturing base left, Waterbury's old mills and warehouses were going begging. Industrial attrition had also left a large portion of Waterbury's skilled and semi-skilled workforce unemployed.
Wasserstein recalls, “This city had a willing and able labor force to tap into.”
Equally important, and less subject to the vagaries of the economy, was Waterbury's location at the intersection of I-84 and Rt. 8. From Waterbury, Wasserstein figured, he could easily reach any of Connecticut's major business markets in less than two hours.
He reached the local media almost as quickly, funneling a steady stream of press releases about his fledgling business. The resulting coverage resulted in inquiries from General DataComm and Waterbury Hospital, among other local organizations.
ArchivesOne grew steadily for several years. Then came 1998.
In January of that year, the Waterbury Chamber of Commerce selected the company as its Small Business of the Year. The accompanying award recognized Wasserstein's company for “outstanding business development and achievement in the Waterbury community.”
Wasserstein was pursuing a strategy of rapid growth through consolidation, acquiring companies in adjoining or nearby markets of the same industry. In April, that strategy caught the eye of a Boston venture capital firm. Housatonic Partners paid $500,000 for a 20-percent stake.
By early 1999, Wasserstein's brainchild boasted a five-year sales trajectory fast enough for Inc. magazine and the Initiative for a Competitive Inner City (ICIC) to rank the company No. 33 in the Inc. “Inner City 100,” a listing of the fastest growing urban entrepreneurial firms in the country.
Echoing the credo of business guru Michael Porter - not so coincidentally the founder of ICIC - Wasserstein now reflects, “I'd rather have picked a good industry than be a big fish in a small industry.”
He credits no small portion of ArchivesOne's success to the company it keeps. The high financial barriers to entry in the records-management sector keep margins high, as does the willingness of successful businesses to pay for the service's value-add, expertise in the shoulds and whens of document retention, retrieval and destruction. (A recent Cahners report says that storage management represents 91 percent of business storage costs.)
Margins for the records-management industry as a whole average 20 to 25 percent; Wasserstein demures from giving exact figures for his firm, but places it pretty much smack “in the middle of the more sophisticated companies” in its industry.
Sophisticated? Yes. Over the past ten to 15 years, the top players in the records management world have learned - and earned from - the value of technology.
ArchivesOne uses premier industry software, developed by O'Neil Software, that permits the company to generate pretty much any report that could be asked for and sort the results as needed.
ArchivesOne also uses a bar-coding system. By tracking boxes and files with handheld scanners, workers eliminate most potential data-entry errors inherent in storage and retrieval operations. Along with the use of dynamic locations, these procedures also reduce or eliminate misfiles and speed up the entire process.
The company greeted the 21st century by adding Web access: Soon, customers will be able to log on with unique user names and passwords to order deliveries and pickups, check and search what they have in storage and print reports.
Technology - or, more accurately, its results - earned ArchivesOne the Silver Award in 1999's Connecticut Quality Improvement competition, which is modeled on the U.S. Department of Commerce's Malcolm Baldrige Quality competition.
Of course, Wasserstein and his team didn't receive the award merely for having the sense (and wherewithal) to buy the best technology available. Rather, they won for the way they implemented the ERP (enterprise resource planning) technology and tracked its results - or, in the CEO's words, for “the efficiency pop that we got pre- and post-use.”
To put that in more traditional terms, ArchivesOne showed the award examiners four years of quantitative data that documented a doubling of productivity, due largely to a significant improvement in accuracy.
Two years later, ArchivesOne serves not only Connecticut and Westchester County but New Jersey, Long Island and central Ohio (thanks to a recent merger with National Archival Services; that Columbus-based company's former owner, Joyce Healy-Abrams, is now ArchivesOne's senior vice president for corporate development).
Annual revenues come in at just under $10 million, which Wasserstein estimates makes the company around 15th in size among records-management companies nationwide. Sales are growing at about 25 percent annually - faster if you include acquisition growth.
All this growth makes ArchivesOne more a “super-regional” company than a local one. The 30-odd employees (excuse me, “team members”) still in Waterbury now account for only about one-third of ArchivesOne's workforce. Yet Wasserstein has no plans to move the company, even though he is actively looking for further acquisitions, particularly in Pennsylvania.
Calling Waterbury “the place where we plant our flag,” Wasserstein says, “Our debt relationship is Waterbury-based. We have a great support system here - our bank, attorney, accountant, etc. And our management team's all in Waterbury.”
Purists might say he's stretching political boundaries. It's been more than four years since ArchivesOne's corporate headquarters moved to Watertown, a somewhat more upscale community just five miles northwest of Waterbury.
Wasserstein, however, feels that his company makes its largest contribution to the Waterbury region's economic health by improving the individual lives of ArchivesOne's workers. “I'd rather give money and services to our team,” he says, “than write a check [to some local charity].”
That viewpoint stems as much from the need to retain workers as from any personal socio-political outlook. Not a single employee has been with the company since day one. But Wasserstein does what he can to keep his team happy, offering $100 bonuses for every six months of continuous employment, a home computer-purchase program, and even first-time homebuyer's assistance.
Pressed to elaborate on his interest in the Waterbury community beyond the ArchivesOne team, Wasserstein speaks glowingly about the city's “continuing evolution from manufacturing to a more diverse economy, including service businesses.
“A potential strategy for Waterbury,” he says, “would be to attract and focus on mid-market companies with infrastructure,” especially those that value the logistic and competitive advantage of a location with easy access to Waterbury's two major highways.
“The other thing Waterbury could do, which is really tricky,” Wasserstein continues, “would be to grow its current company portfolio” by investing in its existing tax base.
Does this sound like the philosophy of a “Director of Customer Happiness”?
Wasserstein clearly thinks so. If he spouts buzzwords like any stereotypical hot-shot MBA, he's entitled. Two regional business journals have named him to their “Forty Under 40” lists, and the U.S. Small Business Administration dubbed him Connecticut's Small Business Person of the Year for 2000. He's even gone back for an MBA booster shot, participating in an executive education program at Harvard Business School.
To him, good customer service is simply good business. Or, as Wasserstein says in MBA-speak, “It yields prevention of rework [costs]. Therefore, good customer service leads to profitable operations.”
In other words, all that technology lets team members handle inquiries while customers are on the phone.
In Watertown, the smallest details reflect attention to customer service - and marketing. A standing sign on the reception desk greets both honored guests and lowly journalists by name.
Another customer happiness program that does double duty is the annual “Excellence in Records Management” award. Established “to recognize accomplishments and success in the records-management business” throughout ArchivesOne's markets, the competition is judged by a panel of semi-independent judges - and it's not just for current customers.
That's because ArchivesOne places just as much importance on servicing its internal customers - i.e., retaining its workforce. Wasserstein counts off the company's three key goals: “making customers happy, operating profitably, and having fun.”
His Web site bio calls his “primary responsibilities” “to be certain that all customers are being superbly serviced and that all team members are happy.”
ArchivesOne's “Director of Customer Happiness” says the title communicates internally, too. “I hope,” Wasserstein muses, “that if you asked all 90 of our team members what our goal was, they'd all say, 'Making customers happy.'” BNH
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