Service is his key tool for growth

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If you have a customer service issue for Spex Precision Machine Technologies LLC, you likely will talk directly with President Michael Nolan or another top manager.
Nolan and his top management team field all calls from customers and pride themselves on immediately rectifying any situation brought up.
“What good is talking to a customer if you then can’t immediately go and get the problem resolved?” Nolan says.
The philosophy has paid off for Spex, which makes and distributes precision-machined metal parts.
When Nolan took the company’s helm in 2000, Spex had six employees, logging $1.5 million in annual sales.
Today, the firm has 47 workers and annual sales topping $10 million in 2006, up roughly 20 percent from the previous year. For 2007, Nolan is projecting a 20 percent increase and a 25 to 30 percent increase in 2008. Nolan, 40, attributes much of Spex’s success to its employees.
“In every level of the organization there’s this enthusiasm about growth,” he says.
Nolan’s father, James, bought Spex in 1967 with two partners. The firm then was a tool-and-die parts distributor. The business did well initially but took a dive in the early 1970s when machine shops that largely were depending on Eastman Kodak Co. lost work as the firm giant looked elsewhere for suppliers.
It was then that Nolan’s father and his partners decided to expand the scope of the business, working with a dozen machine shops to make the tools that then were distributed. That model continues at Spex today.
Nolan says the business always has been a part of his life, but he never took an active role at Spex while his father was at the helm.
“With two strong personalities, you tend to butt heads,” Nolan says.
Nolan attended West Irondequoit High School but earned his general equivalency diploma after leaving the school in 11th grade. Instead of working at Spex, he entered the car business at age 19 in Florida.
“I went there on spring break with a buddy and it took me nine years to get back,” he says.
He returned in the early 1990s and began working for Bob Johnson Chevrolet, where he advanced from selling to working in the business office and on to general manager of the Brockport store.

Taking the helm

When his father retired in 1999, the younger Nolan purchased the business. He closed on the deal in February 2000.
He enjoyed the car business, but he took the chance on his family’s business because he did not want to work for someone else.
“I always felt just a little bit held back,” he says. “I wanted to do it my way.”
Initially, Nolan took time to learn the ropes.
“It was fun and a challenge because every penny counted,” Nolan says.
Running Spex is not all that different from the car business, he adds.
“The basics for both are being able to interact with people,” he says.
Spex’s customers are mainly original equipment manufacturers in the automotive, appliance, fluid- and gas-handling, and petroleum-based industries.
Almost all of its business comes from outside of New York, and 8 percent is shipped directly out of the country to places such as Ireland and Taiwan. The latter brings about a sense of pride in Nolan.
“I get so sick of seeing parts that say ‘Made in Taiwan,'” Nolan says. “One of my favorite things is knowing there are parts in Taiwan that say ‘Made in the USA.'”
Spex gets most of its parts-some 75 percent-from its network of machine shops. The majority are located between Niagara Falls and Syracuse. The rest are done on-site.
The company is in an industrial park on Excel Drive, between Route 104 and Norton Street near Clinton Avenue. Silver Stadium, the longtime home of the Rochester Red Wings, previously occupied the site.
Tax incentives from locating in an Empire Zone have helped the company build a 14,000-square-foot addition. The $1 million endeavor nearly doubled the size of the building to 30,000 square feet, and Nolan is eyeing another expansion project.
Nolan-who moved Spex from smaller digs on St. Paul Street in 2003-has no qualms about the area surrounding his business.
Spex always has been in what is often called the inner city. In addition to having no ties to customers, location-wise, Nolan has many complimentary things to say about the area.
“I’m a big fan of the city,” Nolan says.
He compared the area to Florida, which he describes as a place that gives you an empty feeling and where he found many people self-centered.
“Rochester has a good feeling to it in every way,” Nolan says.
Nolan describes the growth at Spex as steady. He has added a dozen workers over the past year.
One thing he believes helps keep morale up and the business a success is sharing the company’s financial status with workers.
“We’re an open book here,” Nolan says. “I think people get a kick out of knowing what’s going on. It makes them strive for more.”
For the past two years, Spex has placed on the list of the fastest-growing inner-city companies in America by ICIC-Inc. Magazine Inner City 100 list, compiled by Boston-based Initiative for a Competitive Inner City.
Spex has also become a familiar entity-appearing five times-on the annual list of Rochester’s Top 100 private companies, sponsored by the Rochester Business Alliance Inc. and KPMG LLC.

Growth focus

Nolan is focused on Spex and its growth.
He starts his day at 8 a.m. with a 20-minute meeting with his customer service and shipping team, going over a list of everything that will be shipped that day. He spends the majority of the rest of the day fielding phone calls from customers along with his brother, John, who is vice president of marketing.
Nolan employs other family members, including his brother-in-law, sister and nephew.
He keeps a two-month supply of inventory-at a price tag of some $1.75 million-so customers do not have to wait for a part.
Nolan, who admits he hates to sit at his desk, carries a portable phone as he checks in with employees throughout the building.
He leaves the office around 6:30 p.m. to have dinner with his family at their West Irondequoit home and then attends his children’s activities. Nolan and his wife of 19 years, Wendy, a Fort Lauderdale native, have two children: Tori, 15, and Nicholas, 13.
At 9:30 p.m., he returns to his work, checking e-mails from home and doing other business until midnight.
The best part of the job is the freedom and being your own boss, he says, but he also loves serving as a mentor, particularly to the inner-city young adults that work at Spex.
It is no surprise, then, that his least favorite professional duties are reprimanding and terminating workers.
“I’d rather be a positive influence,” Nolan says. “People have accused me of wearing rose-colored glasses.”
He helps workers with tuition for work-related studies. Five of his employees are taking courses at Monroe Community College and another attends Rochester Institute of Technology.
Five employees who started in entry-level positions at Spex now serve as supervisors and managers.
Nolan strives to be a good role model to his employees. It is something his former bosses gave to him.
“Employee treatment is absolutely a key to our success,” he says. “Even with the car business, which has a lot of negative connotations, you can treat people with respect and succeed. I learned that from Bob Johnson.”
But he does expect his employees to deliver. He admits to having a stubborn streak, a well-known Taurus trait, which is Nolan’s astrological sign.
“Don’t get me wrong, we push our people extremely hard,” Nolan says. “When you come here to work, you work and leave tired every day. No one sits here at a desk bored.”
He is much more comfortable talking to customers than he is at, say, administrative duties.
“My least favorite thing,” he says with a laugh.
Nolan says he leans toward what he calls backward motivation.
“The money is fine, but that always comes,” he says. “I get more out of bringing business in rather than looking at the bottom line.”
While they do work hard, they play hard too, Nolan says. Spex’s Christmas party is a highly anticipated annual event held at upscale local restaurants where Nolan has been known to hand out televisions and other electronic devices as gifts.
“I spend more money on that party than we make for the entire month of December,” Nolan says. “It’s a killer party.”
A self-described neat freak, Nolan keeps order on his desk and in his office. Golf memorabilia is mixed with family photos. A case of lemon Snapple iced tea sits on the floor by a window. He drinks two bottles a day and is never out of stock, thanks to his wife, who has a vending service deliver the beverage.

Off the job

When not working, Nolan’s sole focus is his wife and kids.
“I’m really not too interested in anything else,” he says.
The family spends almost every weekend during the summer months at their cottage on Silver Lake, Wyoming County, where they swim, fish, boat and play other water sports.
He also plays some golf and goes to all the Buffalo Bills home games. He enjoys all the Rochester sports teams and hangs their jerseys on the wall of Spex’s break room.
Stephen Saunders, one of the partners who bought Spex with James Nolan and who now serves as a vice president, considers the younger Nolan a son. He calls Nolan and his wife a good team.
“He has a real love of this business,” Saunders says. “Mike brings youth and enthusiasm and gives us the freedom to fail.”
Saunders also acknowledged Nolan’s stubborn streak.
“He has tunnel vision when it comes to serving the customers and he won’t put up with anything other than excellence,” Saunders says.
Helen Lombardo, Spex quality assurance manager, says Nolan values everyone’s opinions and is approachable.
“He is so positive and always looks at the good side,” Lombardo says. “He really makes you feel a part of the team.”
Lombardo says the atmosphere at Spex comes from the top.
“Mike is just a nice guy and an excellent businessman,” she says. “Everyone here is always smiling and respectful. You don’t see people coming into work who aren’t smiling.”
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08/10/07 (C) Rochester Business Journal