A fire in the belly

by Gigi Wood

CORRIDOR – It’s all about the basics.

That’s what the fastest-growing company in the Corridor practices on a daily basis and is how it beats the competition.

“We really focus on the basics each and every day,” said Thomas Cardella, founder and president of Thomas L. Cardella & Associates, which debuted on the Fastest Growing Companies list with 919 percent growth.

To apply for a spot on the Fastest Growing Companies list, businesses had to earn at least $350,000 annually and were ranked based on the percentage increase in revenue experienced from 2005 to 2007. Companies submitted tax forms or audit statements to Honkamp Krueger & Co., which tabulated the results. The Corridor Business Journal began the list in 2008, when the now-closed Asoyia ranked first with 856 percent growth. In 2009, Bochner Chocolates was ranked No. 1 with 427 percent growth.

The top 15 companies on the list were recognized at a breakfast May 25 at the Cedar Rapids Marriott. Mr. Cardella attributed his company’s success to his workforce.

“The spirit of my team, which I’m sure is the spirit of everyone’s in this room, is that they’re extremely hard working, they put in hours that you couldn’t ask anyone to put in, because that’s how they feel about the company,” he said.

He wants that enthusiasm to carry over to management.

“When I’m hiring for our management team, the first thing I look for is do they have passion, I look for fire in the belly,” he said. “I want people who feel from down here (pointing at stomach) not from up here (pointing at head).”

Additional awards

Cardella & Associates began opening call centers in Iowa in 2007 and has been racking up the awards during the past few years. It was named the “Best in Class Call Center” last year and founder Mr. Cardella was recently named first runner-up for Call Center Leader of the Year award by the International Quality and Productivity Center, (IQPC) an industry organization.

“The interesting thing about that is IQPC had never awarded that to the vendor side of the business, typically those have only gone to companies with internal call centers; so we beat out companies like FedEx Latin America, Nikon, a couple major insurance companies, we beat out some major talent,” Mr. Cardella said. “We attribute that to how we treat our clients and how we conduct our business.”

Last month, the company was named one of the Top 50 Outbound and Inbound Teleservices Agencies by Customer Interaction Solutions magazine. Cardella & Associates ranked No. 13 in outbound calls and 25th in inbound calls by the magazine.

Access Direct origins

Before starting Cardella & Associates, Mr. Cardella ran Access Direct, a telemarketing company he created in 1995 in Cedar Rapids. Working with Paul Heath from the UI’s Small Business Development Center, Mr. Cardella developed his financial plan for his business.

“Today, we still use the exact same spreadsheets for all our financial projections, how we manage our finances, et cetera, that Paul helped me build 16 years ago,” Mr. Cardella said. “He’s partly responsible for $800 million of payroll coming into the state to our employees.”

Access Direct, as does Cardella & Associates, worked with global Fortune 500 companies on inbound and outbound sales calls.

“The companies we work with every day are worldwide companies with billion dollar market caps,” he said.

Access Direct was bought by Precision Response Corporation (PRC) in 2000. He began working for PRC that year and became CEO of PRC in 2003, when he was told to instill the Iowa workforce mentality in PRC to turn it around. He took the company from $60 million in annual losses to 14.7 percent growth in 13 months. Mr. Cardella retired from the firm in 2004 and PRC closed its Coralville call center in 2006.

With his new firm, Mr. Cardella has tried to open call centers in towns where Access Direct once operated.

“We’ve tried to remain in those communities,” he said.

New beginnings

Cardella & Associates operates call centers in Cedar Rapids, Coralville, Keokuk, Marshalltown and Cedar Falls and opened a Grinnell location last year. The company employs 800 people, but expects to be up to 1,000 workers by July.

“We’ll continue to expand our footprint throughout Iowa,” Mr. Cardella said.

Since the company’s inception, each call center has expanded and now employs 60 to 200 workers each.

 “We’re definitely hiring a lot of people,” he said. “We consistently have had a great workforce, we have intelligent people, we have a strong work ethic and those are hard to find outside of Iowa.”

Thirty-five percent of stock in Cardella & Associates is set aside for employee ownership. The average wage at the Coralville location for business-to-business work is $15 to $17 an hour.

“We literally have people, and I’m including Access Direct in this, who have been with us now for 12, 13, 15 years,” Mr. Cardella said. “And that’s unheard of in the industry.”

His Iowa workforce has allowed the company to win over clients who were using call centers based in India and other countries, he said.

“Clients measure us on an ROI (return on investment) basis, not, ‘What’s my cost up front,’” he said.

He expects growth to continue this year. Clients typically include large, Fortune 500 companies.

“We went into 2010, on Jan. 1 we had sold 1 million hours of call center services,” he said. “And we’re very, very diversified. We’ve got about 27 different clients that comprise that 1 million hours.”

Cardella & Associates approaches each client with a different strategy. About 50 percent of the company’s work is business-to-consumer calls and 50 percent business-to-consumer work.

“It’s a different world from Access Direct. It’s much more complex in this world,” Mr. Cardella said. “We’re client driven, so it’s not our model, it’s their model and we adapt; how we do our business to how they need their business done.”

One of the differences is how Cardella & Associates works with its clients. With Access Direct, clients conformed telecommunications and technology systems to work with Access Direct programs. Now, Cardella & Associates creates a new configuration with each client to conform to their systems.    

“And we have a small number of IT folks, so just the cost associated with it is astronomical,” Mr. Cardella said.

Another difference from the Access Direct days to now is the heavier burden companies are experiencing.

“We’re sensing a pressure amongst our clients that I’ve never sensed before,” he said. “Most of our clients are Fortune 500 companies and back in the Access Direct days, there was a greater sense of camaraderie and a better sense of teamwork. Right now, I’ve never worked with clients who are under so much pressure to get their stock prices up, so much pressure on a daily basis just to keep their job.”

The economy, however, has helped the Cardella & Associates, he said.

“We play in an arena where we compete against multi-billion-dollar companies every day,” he said. “And our competitors, being multi-billion-dollar companies, do things on a regular basis that are not in the best interests of the client because the large companies are either controlled by stock holders or equity groups.”

Mr. Cardella is the only investor in his company.

“Because we are closely held, we can make decisions with more of a long-term vision, so we’re not tied to delivering a quarterly spreadsheet number,” he said.