'Refocus & Rebuild'

'Refocus & Rebuild'

EXECUTIVE SESSION by Mark Gordon | Managing Editor

The new chairman of the beleaguered human resources firm Gevity nearly became a scientist. His laboratory-like focus is now on the company's strategy.

Michael Lavington doesn't consider himself a no-holds barred gambler. The soft-spoken, polite, cricket-playing British native is too refined to get caught up in that vice.

Still, Lavington recently took over the top role at Lakewood Ranch-based Gevity, a publicly traded company he says can only survive by taking on a certain amount of risk. Gevity has long been considered a leader in the nationwide professional employer services industry, but it has been struggling recently.

One source of the struggles, both company officials and Wall Street analysts say, was Erik Vonk, its past chief executive officer and one-time savior. Vonk, who resigned as CEO and chairman Oct. 19 in what he and the company consider an amicable departure, had led a company-wide strategy change the past year.

Vonk's goal: Wean Gevity off the high-risk workers compensation insurance business and, eventually, have the company generate all of its revenues from performing human resources tasks for small- and mid-sized businesses. "He wanted to have a business based totally on [human resources] fees," says Lavington, as opposed to mixing that market with insurance. "Erik wanted the business to be risk-free by 2009."

That approach might have worked in late spring and early summer, when Gevity's stock was trading near 52-week highs and its revenues and earnings were growing. By late summer though, sales slowed significantly and the company sought a new direction. Lavington, who joined Gevity's board in 2006 - based partially on a friendship he formed with Vonk while with another business - accepted the role of chairman and CEO-designate Oct 24.

Says Lavington: "To run a PEO without taking any risk would render you uncompetitive.

"My view is that you could run both businesses and they can be complimentary," adds Lavington regarding both the human resources and the workers compensation insurance industries. "I think this business can and will deliver with two dogs in the race and both will be good income streams."

The designate part of Lavington's title will remain until he gets a temporary working visa from the federal government, a process already underway. Lavington, who shares a home in Bonita Springs with his American-born wife and also has a home in Lakewood Ranch, is legally allowed to serve as a corporate chairman with his tourist visa.

Gevity recently appointed its chief financial officer, Garry Welsh, to serve as interim CEO until Lavington's visa process is completed.

Meanwhile, Lavington is working on a full spectrum of issues, in addition to strategy transformations. The company reported dismal third quarter earnings Nov. 5 and its share price responded just as dismally, reaching four-year lows in the days after the report.

Here's some background into Lavington's past career and current challenges:

PROFESSIONAL

How did you get into the HR business?

"I entered HR more by accident than design. I had this notion that I wanted to be a geologist, but my father felt that the pursuit of a business degree or professional qualification was the route to go. I was sponsored through college in London by a large construction group, Bovis Holdings, which initially placed me in the labor relations department.

In the late 1960s and early 1970s, labor relations was the ticket to have and I had some great experience dealing with the unions in the construction, brewing and printing industries. By the age of 29, I was the group head of HR for an international graphics business, Letraset.

What are some of your greatest career accomplishments?

Lavington has run HR departments in three business sectors: Graphic arts, hospitality and telecommunications. He's also run his own consulting business.

As far as specific companies, Lavington ran the overseas division of British-based hospitality company the Mecca Leisure Group, where his responsibilities included overseeing the Hard Rock Cafe Group. He also spent 10 years in executive roles with Resorts USA, Inc., a subsidiary of the British entertainment company the Rank Group, including three years as CEO.

THE POSITION

What are some of the biggest immediate challenges you face in your new role with Gevity?

It starts with sales. "Sales this year have been below expectation. We have been hit by the economic downturn in certain industries, such as real estate and mortgage brokering. Florida has been the worst hit state and as Florida accounts for nearly 70% of our business, we have clearly seen the state's economic situation impact our clients. A number of our bigger clients have had to close their doors and others have had to downsize."

What are some of the more long-term challenges?

"We have also lacked clarity with regard to our strategic direction. We gave the impression that we were exiting the PEO business and transitioning to become an HR outsourcing company.

This was not the case, but our message was confusing. This has unsettled our staff, clients and shareholders. It has also cost us business and provided our competitors with a certain temporary advantage."

Gevity will also be looking to open offices in other parts of the country, Lavington says. But unlike past expansion efforts, which were centered on opening a new office in one new location per month, this program is geared to opening offices in specific markets.

"We'd rather drill deep in markets with a lot of potential," Lavington says, "rather than spread resources too thin across the country."

Opening new offices, Lavington says, spawns a new challenge, too: Finding a sales staff cross-trained in all of Gevity's products. But it's that staff, both the current employees and the yet-to-be hired ones, that Lavington says will lead the company's turnaround.

"[Next year] is going to be a year of refocus and rebuild," Lavington says. "We have significant challenges, but we are up for it."

Michael Lavington

Age: 61

Family: Married with two adult children, three grandchildren and one step-granddaughter.

Hometown: Currently has homes in Bonita Springs and Lakewood Ranch.

Soccer or Football: His sport of choice now is golf, although he has passion is rugby.

Travel Time: Lavington and his wife Deborah enjoy traveling to Europe. The couple once owned a beach house in Spain, but since 2005 they have changed itineraries, including this past year when they stayed in southeastern France, in Provence.

Books on his nightstand: "The House at Riverton," by Kate Morton.

Surprising fact: Lavington is writing a novel, although it has been a work long in process, as he's been focusing on Gevity lately.