Quiet Success

Quiet Success

SARASOTA/MANATEE: STEVE HERRIG

Chief Executive Officer, Bradenton

by Mark Gordon | Managing Editor

Many who know him say Steve Herrig lives to give. It helps that his businesses have been wildly successful, providing lots of opportunities.

Steve Herrig faced a dicey financial decision in 2003, when the three-year-old employee services firm he was running nearly collapsed during a market slump. Turnaround prospects at the company, Progressive Employee Services, were bleak: A few competitors had already shuttered, unable to get workers' compensation insurance.

The decision was not whether to keep going. Herrig, a former college football player who once considered rugby a weekend hobby, had already chosen to hang tough. What he had decided, though, was to repay the six friends and relatives who had initially invested in the company in 1999 when he bought it in Clearwater and moved it to Bradenton. Herrig took the somewhat unusual and costly step - one investor put in $300,000 - so as to not leave anyone in a financial hole but himself for what could be his company's failure.

If the story were to end there, it would be evidence of what people in Herrig's inner circle call his ultra-quiet, top-secret like generosity - a code he puts at the top of his personal principles list. Indeed, many who know Herrig say his prime motivation to succeed in business in the first place was built around a desire to give to others, be it a complete stranger or a lifelong friend.

But the story doesn't end there.

Within a year, Herrig and his top staff had turned around the company, partially because it had a lower loss ratio than many other similar firms, which allowed it to keep building its portfolio when competitors couldn't.

And then, just when things were really rolling, Herrig asked Progressive's then-CFO, Michael Corley, to cut checks to each initial investor, giving them what they would have earned under their original investment.

It amounted to more than $1 million in payouts.

Stellar growth

"He had no obligation to do that whatsoever," says Corley, now Progressive's president, remembering how shocked he was at the request. "I sat there and said I can't believe you're doing this. It was the greatest thing in the world."

Herrig, 46, rarely talks about it, and if he did, he'd probably do it with a shrug or with his head buried in his chest as he squirmed in his chair. Not because he's shy, say his friends, colleagues and family, only because he's humble.

"My core being is doing the right thing all the time," Herrig says in a rare boastful moment. "I just keep doing the right thing."

In business, the right things have led to stellar growth at Progressive, run out of an office in a Bradenton business park. The company has had average annual revenue growth of 51% the past three years, and grew 60% in 2006, from $29.2 million in 2005 to $46.8 million

It's growth like that, combined with Herrig's risk-taking spirit and deft leadership, which led the Review to name him its 2007 Entrepreneur winner for the Sarasota-Manatee market. But the award didn't come easy: Receiving it ends what Herrig has joked to Progressive employees was his "Susan Lucci" moment, as the three-time runner up has finally won the award.

Managing risk

Just like other professional employer organizations, Progressive survives and succeeds based on how the firm manages risk, in what clients it takes on and in what products it sells. It's a small margin industry, so a tiny mistake can quickly become a big problem.

And at Progressive, risk management is a companywide science of precision. Says Herrig: "I don't know anyone who goes to the degree we do to manage risk."

The company has a range of clients throughout Florida, with a majority of companies in the construction and service industry. In addition to workers' compensation insurance, the company has divisions for payroll, employee benefits and general human resources. Progressive currently has about 2,000 clients, which in turn have 20,000-plus employees.

Progressive ranked 19th in the country in a 2006 listing of top PEOs by gross billings published by Staffing Industry Analysts Inc., a Los Altos, Calif.-based research firm. Progressive's billings grew 48% from 2005 to 2006, the report showed, the second biggest growth rate in the country.

What's more, Herrig says the company's biggest challenges, such as hiring the right people and putting them in the right positions and coming up with innovative products, are in the past. Progressive's challenges, and by extension, Herrig's worries, stem from the big picture. That means issues such as the economy, legislation and regulation. Says Herrig: "There isn't much we don't have to grow."

Good deeds

Herrig himself grew up in Dubuque, Iowa, one of seven siblings. In addition to excelling at sports, Herrig picked up three core beliefs he continues to utilize today: An entrepreneurial independent streak, a keen ability to process information in order make a firm decision and a desire to give to others.

The last, giving back, partially comes from Herrig's father, Eldon Herrig, who was in the insurance business in Dubuque and also served on several city and local school boards. While Steve Herrig says he never really had a business mentor, his dad is one of the men in his life he has tried to emulate.

Father and son share a behind-the-scenes approach to helping others. For instance, Mary Beth Greene, Steve Herrig's sister, says their father once heard a local bank president was about to start the foreclosure process on someone's home. The elder Herrig told the bank president he would take care of the debt for the man - a total stranger.

Greene says Steve Herrig, just like his siblings, was regularly exposed to deeds like that.

But When Herrig first moved to Sarasota in the mid 1980s, giving to others was not possible - he could barely support himself. He came to the Gulf Coast after graduating from the University of Dubuque and giving California a shot. He was miserable out West, he says, a combination of insincere people and a cold and dirty ocean.

So after two weeks - again processing information and making a firm decision - Herrig packed up and drove across the county. He wanted to go into the insurance business like his dad, but his first job was as a house painter, where he had so little money, he borrowed from his boss to buy lunch the first week.

Herrig soon began working for Purmort & Martin Insurance, a Sarasota-based agency. He later co-founded his own firm and then eventually used the proceeds from selling it to start Progressive.

'Quietly effective'

Along the way, Herrig has impressed dozens, if not hundreds in the Sarasota and Bradenton business communities with his zeal for business, his instincts for avoiding problems and his ability to disarm potentially touchy times with humor.

"Steve is a person who is very quietly effective at what he does," says Dr. Tom Kelly, a heart surgeon at Sarasota Memorial Hospital who has been a partner with Herrig in some investment deals and a close friend for the past 20 years. "He's just a very good person."

Several others who know Herrig, from a high school buddy he's still in business with today, to a banker who lent him money, to a friend he met through church and later hired for Progressive, second those comments.

And Herrig's touch has gone past Progressive. He has ownership in eight other business, including Liebold Irrigation, a nationwide golf course irrigation company with offices in Iowa and Sarasota; Elite Insurance Services, an insurance firm connected with Progressive; and JetShare US, which leases small planes out of a hangar at the Sarasota-Bradenton International Airport.

With a business resume like that, Herrig struggled for many years with turning it off at home. He was an admitted workaholic. "If I wasn't at work physically, I was here mentally," he says. "That's too high a price to pay for too long."

So while Herrig still works full-time and then some, he's made a concentrated effort to delegate the last few years. And in the process he's made another concentrated effort to work on his three biggest non-work interests: His church, his family - wife Natalee and their four children, ages 6, 9, 11 and 19 - and his golf game.

With a sly grin, Herrig declines to say which interest comes first.

Entrepreneurial TIP: Think big and set high goals. It gives you and your staff something to keep striving for.

BY THE NUMBERS

2004 revenue: $20.7 million

2005 revenue: $29.2 million; 41% growth

2006 revenue: $46.8 million; 60% growth

Average Annual Growth: 50.5%

2004 employees: 65

2005 employees: 120

2006 employees: 160