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Functionality to Fashion: The STS Systems Success Story
Harvy Simkovits, CMC - 1995

What does it take to make a successful business? It takes a vision of a potential business opportunity, and then the hard work and personal sacrifices to bring that vision into realization. As Stephen Covey says in his book, "The Seven Habits of Highly Effective People," in human existence "all things are created twice. There is a mental or first creation, and a physical or second creation to all things." Covey goes on to say that "leadership is the first creation," and that "management is the second creation."

STS Systems Inc. is a case in point to Covey's theory. STS started from the "first creation" of the President, Howard Stotland, and has been realized in "the second creation" by him and his key partners, Bill Lassner and Stan Zack. STS Systems has achieved steady growth and success as a computer systems integrator in the highly competitive fashion retail marketplace. This success has been unfaltered by the recessionary times of 1989 to 1992, with company sales and staff doubling from 1988 to 1994, expected to be well beyond $70 million and 350 employees for 1995.

In asking its managing partners what has contributed to the company's success, the following responses came:

On the Outside

Long Foresight

Howard Stotland, the President, has been very instrumental in predicting the future of open systems architecture as well as point-of-sale and communication systems in the fashion retail industry. Without his vision, as well as an ability to get his top team to adopt his concepts, the company would not today be the undisputed systems leader in its marketplace.

Business Focus

Concentrating on what STS does best, and not straying too far afield, has helped the firm to achieve excellence in its product/market. STS clients, which represent the high-end of the retail marketplace, are drawn to a full- service provider with an offering that provides high product functionality. STS works hard to provide business solutions, not just sell hardware and software, thereby capturing highly profitable business.

Company Philosophy

The company strives for customer retention through the effective delivery and ongoing servicing of its systems. STS delivers what it promises, handholds customers through system installations, provides extensive customer training, and works to treat is base customers well by providing customized and continuing services.

Good Fortune

In response to the recession, retail companies have turned to automation, reducing staff in return. Their expanded processing needs, coupled with increased service requirements has boosted STS to new sales highs all year but one since its inception.

On the Inside

People Fairness and Fun

STS treats its employees well, investing heavily in staff recruiting, benefit packages, social programs, education, performance management, and career development. The result has been turnover levels at 60-75% below industry averages. Also, most middle and senior managers have been with the firm over 10 years, allowing for management continuity and organization structure stability.

Strength Financially

STS has always been a self-financed business, relying little on outside capital and debt and reinvesting profits into the business. This has easily allowed the firm both to weather the storm of the past recession and to take financial risks, investing heavily in new product development.

Motive Force

Sheer hard work on the part of the company executives and senior managers of the firm has given it the ability to generate loyal customers and effectively fulfil their needs. The company has also learned that, periodically, it needs to reinvent itself in order to discover the right product/market formula and internal structures and systems to meet ever-increasing demand from current and new customer.

It’s important to note that any weakness in any one of the above areas could have yielded much poorer results for the company. Business, like life, is not an additive, but multiplicative process. Breakdown in one crucial area could yield failure across the board. It is the exceptional company, as STS, that has learned to do well all those things that yield business growth and success.

When asked what challenges STS continues to face, the most significant response was not to over strain the company's human resources to the point that they reduce the quality of the work performed by the organization. Fast growth has put pressure on all employees to perform at full capacity. Over taxing these important resources in fulfilling current and new customer requirements could compromise the longer-term development of the business. As Stephen Covey again notes in his book, true effectiveness lies in the balance between generating production output and building production capability. Overemphasizing output creation over capability development is like, as Covey points out, potentially killing the goose that lays the golden eggs.

Harvy Simkovits, CMC, President of Business Wisdom, works with owner managed companies to help them grow, prosper and continue on by offering innovative approaches to business development, company management, organization leadership and learning, and management education. He can be reached at 781-862-3983 or .

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