'Like a Pitbull'

'Like a Pitbull'

Alexandra Miller was cut out of running the family business just as the company was nearing $20 million in annual revenues. She didn't sit on the sidelines for long.

TURNAROUNDS by Mark Gordon | Managing Editor

In 2003, after working her way up to head of operations for a then-$16 million medical distribution company - twice named to the Inc. 500 - Alexandra Miller found herself on the losing end of an internal company power struggle.

Miller, just more than eight months pregnant with her second child, was ordered to go home. The firm, Sarasota-based Mercedes Medical Inc., would pay her like a consultant, but she wouldn't have any say in company decisions. For a caffeinated, type-A perfectionist like Miller, the move was a wind-sucking punch to the gut.

It didn't help that the person jettisoning her was company founder and president Noelle Haft, who happens to be Miller's mother.

Miller didn't just go home. She hung around the edges of the company long enough to see the outsider Haft brought in make some bad calls, both with staff and products. The company quickly began sinking; within eight months, net income had plummeted to almost $500,000 in the red. Customers left. Its bank stopped credit extensions.

Miller, though, didn't stay gone for long. After about a year, the new chief executive, who previously worked for one of Mercedes' accountants, was out. Miller was back in, this time as CEO.

"I'm sort of like a pit bull," Miller says, in a tone suggesting she's not sure if she should be embarrassed or proud. "I'll do whatever it takes."

Miller has continued running Mercedes Medical since her return and the company - as well as family relationships - is better for it. Net income moved almost $1 million in the positive direction, from $450,000 in losses in 2004 to $450,00 in profits in 2005. Revenues, which had dipped 14% from 2003 to 2004, also began to rise again, just like 2000 and 2001, when the company was named by Inc. magazine as one of the fastest-growing small businesses in the country.

What's more, Miller has used her second chance to become the corporate version of a "player's coach," rebuilding trust with a low-morale staff, hiring back a few senior executives who left or were fired by the previous CEO and improving floundering relationships with customers.

And, she is on good terms again with Haft, who continues to serve as president and majority owner of the company, along with her husband, Robert Haft. Noelle Haft works mostly out of her home now, although her presence is still felt: "My mother is the matriarch," Miller says. "She makes the decisions - always has, and to some extent, always will."

'Collecting a paycheck'

Miller considers herself the last person who would work for her mom, even though she had an interest in the family business as early as kindergarten. Growing up on Long Island, N.Y., Miller would go straight off the school bus in the afternoons to the family's home office. She would seal envelopes or help set up furniture for another medical distribution company Haft founded.

In 1994, when she could legitimately call herself a college graduate for the grand sum of three days, Miller drove from Warwick, R.I. to Sarasota. She wanted to relax for a while before hitting the job market and her family had recently relocated to the area.

With her freshly minted B.S. degree in psychology from the University of Rhode Island, Miller was ready to take on the world - not her mother.

"I had no interest in working for my mother," Miller recalls. "None. No interest at all."

But she did have an interest in paying bills. So she took a job answering phones with Mercedes Medical. The firm focuses on supplies for doctors, veterinarians, labs and the histology industry.

Over the next 10 years, Miller worked her way up in the company, doing about every job around. She worked in purchasing, accounting and her favorite, marketing. She even suffered through a stint in the telemarketing unit, making sales pitches. She doesn't remember the experience fondly. "I was a complete failure in over-the-phone sales," she says.

Miller spent the first few years with Mercedes just "collecting a paycheck," but as she got older and the company grew, she became enamored with the idea of running the business someday. She also grew to appreciate the psychological aspects of managing people and the challenge of acquiring and keeping customers.

Miller also honed the tenacity and stubbornness she's become known for as she rose in the company, although Haft says she had those features when she was young, too. "She's been like that since birth," Haft says. "She doesn't know how to be laid back. She has to be involved."

Soon after taking the COO position, Haft says, Miller showed her mettle at an industry trade show. An executive from a competing company was at the show, a man with an nasty reputation, whom Haft and her staff had shied away from either talking to or confronting for years. Miller walked right up to the competitor and began speaking with him.

Miller takes the never-give-up approach in her personal life, too: For example, her first son, Kannon, was the result of three fertility treatments.

Culture change

But becoming CEO has presented an entire new set of challenges for Miller. First, there was getting the job.

Haft was looking to be less involved with the daily operations, and the founder sought a chief executive with a new perspective. She chose to hire from outside, rather than promoting from within, and installed Mark Burton as the new CEO for Mercedes. That forced Miller into the background, a position she did not enjoy.

It was a decision Haft would regret.

Burton brought an IBM-style, big business corporate culture to a family-run, small-business enterprise. Mercedes had succeeded by allowing employees to bring their dogs to work, planting bobbleheads on people's desks and sending customers stuffed animal mascots and fresh-baked cookies. Burton, both Haft and Miller say looking back, turned the culture, and the company's fortunes around. He tried to make what was essentially a sales and marketing company into a corporate behemoth, Miller says.

Haft says the bottom was when the company's bank, SunTrust, cut them off. "Banks always had fought over us," Haft says. "It was a jolt to our self-esteem."

Burton, who Haft says lives in Sarasota, couldn't be reached for comment.

Miller saw the company going to pieces from behind the scenes and she began pestering Haft to come back. By 2004, Miller returned. Only now, Miller wasn't running a thriving, growing firm. She was instead trying to win back past customers and soothe anxious employees.

"We had to change everything, starting with the employee culture" Miller says. "We had to reassure employees that this wasn't a sinking ship."

Miller started by reinstating the company's old bring your dog to work plan. Miller's office is now occupied by a doggie beanbag her black lab mix Samson uses as a couch. Other signs of a fun place to work are scattered around the Mercedes Medical complex, in an industrial park near the Sarasota-Bradenton International Airport. A break room contains a pool table and a big screen TV and Miller plans to buy the warehouse staff an Xbox so they can play videogames on break.

Miller and Mercedes' Chief Operating Officer, Andy Wright, then began the arduous task of bringing back customers that had dropped the company. While both executives are fond of saying the medical distribution business isn't brain surgery, they also recognize that customer service is a delicate operation that needs constant tinkering. The results were immediate, as Miller says the company didn't have one red month after her return.

Finally, Miller has grown as a leader, figuring out the balance between managing and micro-managing, not an easy feat for someone so driven. And she has focused on the future, too, looking for ways to grow Mercedes through acquisitions. "After reaching $10 million," she says, "it's hard to grow organically."

At A Glance

Mercedes Medical Inc.

Year Revenues % chg.

2003 $15.95 million

2004 $13.62 million -14%

2005 $14.63 million 7%

2006* $17.46 million 19%

* Projection Source: Mercedes Medical Inc.