From Sheltered to High Tech, Corporate Exec Turned Startup CEO Enables Entrepreneurship in All Kinds of Workshops
Richard S. Jarman, CEO, Sceptor Industries
An engineering graduate from West Point with a master's degree in industrial engineering from the University of Missouri and a decorated combat pilot who served in Vietnam, Dick Jarman retired from Butler Manufacturing in 2000 after a 25-year career that included running the company's electrical products and buildings divisions. Butler, a publicly traded company with $1 billion in sales and 5,000 employees worldwide, engineers systems and components for non-residential buildings.
Post September 11, 2001, in the wake of the anthrax attacks, Jarman got a call from the Kansas City-based Midwest Research Institute (MRI). MRI had developed a technology to collect and screen airborne menaces. But MRI was a nonprofit. Would he, they asked, be interested in starting a company? Jarman acquired the patents in late 2001 and Sceptor Industries, a privately-held company specializing in helping government and commercial groups develop and deploy chemical and biological defense technologies, was on its way.
Jarman was executive vice president for Butler when he joined the board of directors of the Rehabilitation Institute of Kansas City. Many images come to mind when thinking about entrepreneurship but generally not a sheltered workshop for people with disabilities ranging from stroke, brain and spinal cord injuries to neurological and orthopedic impairments.
Jarman not only recognized that the Rehabilitation Institute's sheltered workshop was a small business – albeit with an atypical workforce – but that with so many repetitive jobs going outside the United States and assembly work increasingly automated, it needed to pick certain markets and invest in equipment to compete successfully.
When Sceptor was called upon by the U.S. Postal Service to develop the collection end of the detection system to protect U.S. mail delivery, Jarman saw an opportunity.
"Dick's sense was at some point the supplies portion of this technology was going to become a very important part of the business development," says Rehabilitation Institute CEO Don Harkins.
"When he worked at Butler in other places, they had relationships with workshops. So, in thinking long-term about who would supply the highly purified water and other products that these systems use, Dick turned to us."
The contract with Sceptor has brought several benefits to the Institute and its clients. For starters, it generates more than half a million dollars in annual gross revenues. Just as importantly, it makes a positive statement about the capacity of the agency and workers with disabilities to serve in a sophisticated technological niche.
Having entrepreneurial experience ranging from senior corporate executive to CEO and founder of a successful start-up makes Jarman particularly valuable as a mentor. Shortly after leaving Butler, encouraged by friends, he joined the Helzberg Entrepreneurial Mentoring Program founded by Barnett Helzberg (see www.helzbergmentoring.org).
Jarman's first mentee was Art Blackman Jr., president of ProStar Sports, which manufactures commercial-grade strength and conditioning equipment sold nationwide from its 45,000 square-foot Kansas City facility.
"Generally, Dick offered advice on how to improve sales and factory operations," says Blackman. "He introduced us to production methods and controls based on the Toyota model, which has helped us achieve higher quality and output per manhour. We started as mentor-mentee, but I consider Dick a very good friend. We have lunch six to 10 times a year. I always walk away with a couple of good ideas, and lately I've been able to shed some light on things for him."
The most significant benefit Katrina Henke has gained as Jarman's mentee is confidence. Henke was named CEO in 2004 of her family's business, Milbank Manufacturing, which makes electrical enclosures.
"My background is in art," she says. "We had a culture that was comfortable – do the best you can – but not competitive. We're number one in the market competing against global manufacturing companies, so everyone is shooting at us. We couldn't rest on our laurels. Dick assured me I was on the right track. When I wanted to bring a strong COO on board, he actually helped me find that person."
Jarman sees mentoring as a reciprocal benefit. "When you're helping someone else," he says, "you're learning too."
Jarman's desire to give back to entrepreneurship comes from a fundamental belief that people who make an effort to succeed should be given a level playing field. He pursued that vision for more than a decade as a board member and chair of the Kansas City chapter of INROADS, a national organization that develops and places talented minority youth in business and industry and prepares them for corporate and community leadership.
Now, as CEO of the 16th fastest growing company in the U.S. as rated by Entrepreneur Magazine in 2005, Jarman finds himself well positioned to give back to entrepreneurship in a new way with potential for scalable impact.
Jarman calls Sceptor a "technology enabler."
"Many companies in the high-tech world are focused on their intellectual property," he says. "All they really care to do is develop that technology. They don't do all the other things, like distribution, manufacturing, marketing and program management. They need an enabler to carry it into the market. If it has to do with homeland defense or air quality, they bring it to us. If we see something we like, we guide them and lots of times pay them to finish it to a certain configuration."
Sceptor has done well navigating the risks of technology transfer, but Jarman sees a desperate need for more angel investing. "There are too many people who call themselves venture capitalists that will not do angel rounds with tech companies," he says.
"Smokestack America is gone. Entrepreneurship is the backbone of our economy. As a nation, we have to get behind it."
© 2006 Ewing Marion Kauffman Foundation. All rights reserved.
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