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Ancient Materials, Modern Technology, Timeless Challenges

Richard Rhodes, President, Rhodes Architectural Stone, Inc.

My company, Rhodes Architectural Stone, grew out of two bootstrap entrepreneurial companies involved with stone installations, particularly for residences in the northwestern United States. Today we rescue ancient materials from all over the world that are in danger of being destroyed. Then we resell these items and give them new life and new uses. For example, we bought a 500-year-old granite road from China that would have been lost in flooding for the Three Gorges Dam, processed the stone, then resold it for use in a spectacular residential driveway.

Our cultural mission for the company reflects our core ideologies. The primary one is that we're trying to create what we call "value in the round." We create value at every step of the process—buying the material from people who are going to lose their property, preserving the material, hiring people in areas of chronic unemployment to remove, process and crate it. Then we create value to our customers, giving this legacy material a new life elsewhere.

Currently we have collection and processing operations running in China, Indonesia, India, North Africa and France. Revenues have grown from nothing to just under $4 million in three years. People talk about the global village, but it really is possible now, via the Internet, to manage production and collection around the world. It's a complex task, because you're dealing in multiple languages, currencies and time zones. Each step can require some very creative thinking on how to manage the obstacles.

Technology Builds the Best Team

The company tries to fill most of its labor requirements in the countries in which we do business. Currently we have about 600 people working on our collecting and production in factories all over the world. It's always better to use local experts to work on ancient materials, using techniques that have existed for centuries.

Still, without the Internet and other high-tech devices, we would not be a successful business. We manage our far-flung operations using high-speed Internet lines, digital cameras, satellite phones and laptop computers. If you are even thinking about a global operation, you need to understand and use this revolutionary technology.

Using the latest technology also helps us attract the best people overseas. When you're working in countries that aren't as technologically advanced as the United States, the promise of being able to be trained to use digital equipment can be a persuasive way to build the best possible local team. To improve communication with our project managers, we're in the process of installing an ERP enterprise resource database, which is unusual for a company with under $10 million in sales.

Ethics and Economics

Setting up and running a global business involves some other, specific difficulties. In some parts of the developing world, it's like the old wild West—anything goes. I've learned that ethics and standards are tough to maintain, and may be a luxury that right now only a fully developed country can afford. People make choices and decisions I can't understand because, in their society, the rule of law is still new and not universally enforced.

Then, there's the issue of being an American organization. In some of the cultures where we have facilities, it feels as if the national sport is to try and rip off foreign corporations. Also the opportunity to steal is vast, relative to people's income.

It's important to be aware of the economic climate of the place where you're hoping to expand. Many in the West look at China's billion and a half people and think all they have to do is sell one thing to every person and they'll have a huge company. It doesn't work like that. One reason we've done well is that we're going into China with dollars and buying, with hard currency, rather than selling. We pay for every piece of stone or other material, which brings much-needed work and currency to the area. It's much easier to be favorably received if you are prepared to give as well as take.

Contracts, Communication and Chemistry

From a legal perspective, dealing in developing countries, I've learned that contracts and agreements help you clarify expectations—and that's all they do. They are essentially unenforceable. We still write them and sign them, but we're never really sure we'll be able to compel anyone to stick to the printed word.

We have to use translators to read us the fine print and explain the details in these agreements. When you're dealing in six different countries where you can't possibly know and speak all the languages, you need to develop gut instinct and other innate skills. Look at body language and the tone the speaker uses, even if you don't understand the words.

Sometimes it's better to trust how you feel about the chemistry of the deal, rather than what it looks like on paper. That's probably a better way of doing business anyway. Being involved with many different countries and cultures has really expanded my horizon. I'm seeing more of the forest and less of the trees.

Customer Involvement Avoids Problems

Because dismantling centuries-old buildings or roads and shipping the pieces to new countries require so many tasks and procedures, there are bound to be delays as well as glitches. I have to admit we aren't perfect with our deadlines. However, we have found that by using technology and keeping our customers involved in every step of the process, we avoid potential problems.

We try to give customers as much information as we can. They understand the complexity of what we're trying to do, and they can check the status of the project at any stage, thanks to the Internet. That way, they find the whole process exciting. If clients are excited about the process and the story behind what they're buying, chances are they'll become more flexible on the deadlines.

If I had one thing to do over, with respect to our global operation, I would make an earlier transition from first-year cowboy entrepreneur to the push toward professionalism. While I did strategic planning, I was used to the bootstrap model, where there's more freedom. If we had put more controls in place and worked more systematically at an earlier date, we would now be even farther along. In whatever my next business is, I will. And, I want to be known as somebody who found a way to work in the world, made a good living doing it and left it a somewhat better place.

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