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Samuel Villanti: Business is the ultimate Career for this CEO

Ultimate Technology Corp. president Samuel Villanti has spent his entire professional life becoming a sort of renaissance man in the business world.
His degree is in marketing, but his first job after college was in process management at NCR Corp. He also has served as a practice manager for PricewaterhouseCoopers LLP.
But Villanti-now age 36-learned many of the skills he needs to manage a work force while working summers in the paper mill his father managed. He recalls those hot days doing nearly any task, from working on the production line to mowing the grounds or washing windows.
“I was the low man on the totem pole,” he says. “I had no rights to complain or say anything.”
Seeing first-hand the difficulties in keeping workers happy helped him develop his technique for managing a company. He calls it a “no-apologies” style of management.
“I’ll answer every question, (but) you may not like every answer,” he says.
One of the most common forums for those questions are regular lunch meetings with groups of employees who recently celebrated a birthday.
Villanti got into the habit of holding the birthday lunch meetings shortly after taking the helm of the Victor-based point-of-sale equipment manufacturer whose largest contract is with Lowe’s Home Centers Inc., the nation’s 15th largest retailer.
UTC designs, assembles and integrates point-of-sale equipment that includes printers, cash drawers, scanners, touchscreens, PCs, magnetic stripe readers and signature capture devices.
UTC’s other large customers include Ace Hardware Corp., Ritz Camera Centers Inc., Barnes & Noble Inc. and Wegmans Food Markets Inc.’s Chase-Pitkin Home and Garden.
Villanti sees his leadership style resembling the one used by his business role model: General Electric Co.’s chairman and CEO John Welch.
“He’s a guy that doesn’t apologize for his decisions, yet he understands the softer side of life as well,” Villanti says.
He points out how Welch came to GE and immediately gained a reputation for cutting jobs and selling or closing operations. But Welch has since transformed himself into “the people’s CEO.”
“I think that’s a transition that a lot of people have to go through when they become CEO. When you first come in, especially when you’re hired from the outside, you’ve got to make difficult decisions,” Villanti says. “You’ve got to make difficult personnel decisions-they’re not always popular-and I think you have to live a little bit with the perception that ‘He’s a slash-and-burn guy.’
“But there comes a point when you build the infrastructure, take out the infrastructure you don’t need, and then the softer elements come into play and they’re equally important.”
When Villanti arrived at UTC in October 1998 its founder, Dennis Lewis, was about to retire.
Villanti had been the general manager of UTC supplier Axiohm Transaction Solutions Inc. in Ithaca, Tompkins County, a 500-employee printer manufacturer logging some $120 million in annual revenues.
“This was much different,” he says. “This was a much smaller organization than I was used to and it was different in the sense that it was a company in transition.
“I think that Dennis and the other founders of the business did an exceptional job of (being) entrepreneurs. They grew this thing from zero to $20 (million) or $25 million dollars over a seven- or eight-year period and they deserve a ton of credit for that, but I think they were struggling a bit to get to that next level.”
Intrigued by UTC’s prospects, he took the company’s reins and set about streamlining the firm, and structuring it to run more efficiently. He trimmed the work force by approximately 20 percent to its current level of 75 employees and worked to install measures to improve its manufacturing processes.
“Overall, head count is down,” he says.
“This was one of those challenges that you just can’t turn down,” he says. “It’s an opportunity to come in and invoke a lot of change, and I think we’ve done that.”
He also helped orchestrate UTC’s move away from Westport, Conn.-based Tridex Corp. and its transition back into a private company. The company was purchased by Tridex in 1993. UTC’s senior management team and two equity partners acquired UTC from Tridex in February.
“I think we’ve had some hard decisions to make in the two years that I’ve been here and I think we’ve made them. Now we’re transitioning toward the whole culture end of the business,” he says.
In creating that corporate culture, he has set himself to the task of making sure all UTC’s employees are working toward the same long-term goals for the company, such as improving its on-time delivery rate.
“Everybody in the organization’s got to know what you’re trying to accomplish and how you’re going to accomplish it. Everybody’s got to sign up to it and execute,” Villanti says.
But he explains that because selling cycles generally last 10 to 18 months, he has increased sales and marketing spending by approximately 70 percent. The company is investing now to generate future sales.
Getting its brand name out to consumers is especially important, in light of the tendency within the industry for the hardware to become a commodity item.
Paul Gardener, director of human resources at Axiohm Transaction Solutions who worked with Villanti for nearly three years, says that a knack for keeping track of all the minutiae of a large corporation is perhaps the strongest attribute that Villanti brings to UTC.
“When people bring him issues, if they haven’t done their homework that doesn’t sit well with him,” he says. “He has a very good knowledge of all the operational issues.”
That knowledge seems to be paying off at UTC. The measures Villanti has implemented so far have given some shelter to a company facing an industrywide downturn that has pushed most competitors down nearly 20 percent.
Last year, his company logged nearly $30 million in revenues, but because of this year’s slump, Villanti expects UTC’s 2000 revenues to hit $27 million.
“This year nobody bought anything,” he says.
Many retailers upgraded their entire point-of-sale systems in 1998 and 1999 to head off potential date-related problems. The current “Y2K hangover” is the result of that investment in new equipment.
Compounding the problem is a slowing economy. A decline in retail sales means capital projects such as store expansions and equipment upgrades likely will be postponed.
“The ‘soft landing’ appears to be a little harder than we would like,” Villanti says.
With the economy cooling, decreased demand for UTC’s products is likely to continue into next year, he says. But the company is projecting growth through streamlining operations and improving manufacturing processes.
Although the company’s official estimate is still being calculated, Villanti expects double-digit growth.
Villanti’s long-term goal for UTC is to transform it into an industry powerhouse. Over the next five to seven years, he would like to capitalize on the fragmented market and grow UTC into a $100 million business, through a combination of both organic growth and acquisitions.
Standing in the way of those growth plans are entrenched industry giants such as NCR which posted $6.2 billion in revenues last year.
UTC’s size, compared with many competitors, can work to its advantage, Villanti says. As a smaller organization, it can react quicker to customer requests, offering a customized product faster than the larger companies.
For example, one contract called for a device’s power switch to be moved. UTC won another contract because the equipment used a vertical swipe to read the magnetic strips on credit cards rather than the standard horizontal motion, which caused cashiers to scuff their knuckles.
The role of computer technology in the point-of-sale devices has grown over the last decade as well, altering the way UTC’s customer’s shop for their solutions.
“Software has become the driver (in purchasing decisions),” says Villanti.
As a result, the company has worked to forge some relationships with software developers to help stimulate sales.
As retailers come to the software developers, they are referred to UTC for their hardware purchases. Likewise, the equipment maker sends its clients to those same software companies to fill any programming needs. The relationships provide new sales leads for both companies.
Unlike many executives who struggle to maintain a balance between home and professional life, Villanti says he has little trouble leaving his work in the office and coming home to Mendon to his wife and three daughters.
“Throughout my career I’ve not found that balance difficult,” he says. “I don’t talk about work when I go home. I don’t fret about work when I go home. You can’t let one affect the other.”
In addition to his parental duties, Villanti has earned a reputation among his colleagues as a formidable golfer. His office walls reflect his love for the game, and are decorated with photographs and illustrations of various courses and particular holes.
He is known to play even when many others might rather stay in the clubhouse.
“He’ll play golf in just about any conditions,” says Kenneth McAlpin, president and CEO of McAlpin Industries Inc. “The first time I ever played golf with him, it was a horrendous day to play golf.”
That day the two teamed in a charity tournament, and managed to finish the course in spite of high winds and blustery conditions.
In winter months, when golf courses are closed, he spends his free time building Shaker-style furniture.
Growing up in Lowville, Lewis County, Villanti wanted to become a music teacher. His father, however, suggested he consider a business career. The advice ultimately changed the course of his life. He discovered that the world of business intuitively made sense.
“Business is only about two things-making things and selling things,” he says.
He attended Ithaca College and received a bachelor’s degree in business with a concentration in marketing.
With his ambition to teach music set aside, Villanti had put down the saxophone, his instrument of choice, for nearly two decades. However, he recently picked it up again after some encouragement to perform at UTC’s recent holiday party, along with an ensemble drawn from the company’s ranks.
“I had an absolute ball,” he says. “It was almost like riding a bike to me. I even surprised myself that I was able to play and remember things.”
He plans to play again next year, even though he has had a difficult time getting constructive criticism from his employees.
“It’s not like anybody’s going to say, ‘You suck’ (when you’re the president of the company),” he laments.
Golf and music aside, running a business and watching it grow is Villanti’s passion.
“It’s an immense challenge to take a company from point A to point C. That’s where I get my pleasure.”

12/29/00

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