Benson: Careful growth plan, client training keys to Inacom’s success

MADISON – Nearly a quarter century ago, Laurie Benson and fellow Inacom founders Gary Hoffman and Loren Mortenson had the idea that personal computers might be the next big thing.

That hunch proved right, and so did the idea of becoming partners with customers who were seeking what Benson calls “business-smart technology solutions.”  In the years since 1984, Inacom has grown to be one of the bigger IT companies in the state, with offices in Madison, Brookfield and Appleton. Last year, it did more than $77 million in business.

Today, Inacom is one of the top 500 IT companies in the country. Benson is its CEO, leading more than 150 workers, who provide technology consulting, education and procurement services for businesses and schools around the Badger State and the nation.

Benson has served on a number of national IT boards, is a member of the UW-Madison E-Business Consortium Advisory Council and was recently inducted into the Ingram Micro VentureTech Network Hall of Fame.

WisBusiness.com editor Brian Clark spoke with Benson recently in the main Inacom offices off the Beltline on Madison’s west side.


Brian Clark:  What is the most pressing issue facing your industry?

Laurie Benson: For whom, our business or our customers?

Clark: Both.

Benson: For our customers, without a doubt the impact of technology in every aspect of business is growing. That is both exciting and challenging for them. So when you look at the job of CIOs or those responsible for IT management, this is a very challenging time.

They finally have the visibility for the importance of what they do, but they don’t necessarily have the resources to engage in fulfilling the things they could to do to be able to help. For example, over the past several years we have seen companies downsize in terms of their internal IT staff.

The people who are still there have been asked to know more about more areas of technology and to work more efficiently. So now as the demand is rising, there is a smaller base than there was before and they were already spread pretty thin.

You couple that with the fact that there is a shortage of IT workers that is going to be exacerbated in the future. This is a cycle that we need to get on top of. So I would say for businesses, having the people resources to implement technology is a very big issue.

They are getting very savvy about what technology they should implement and making the linkage to the business side. And that’s very good.

Clark: And for IT businesses?

Benson: From my peers, I believe we are looking at an industry that is arriving at a cycle in our maturity that allows for some choices. And by that I mean that 20 years ago, as the PC came into vogue and the power at the desktop was unleashed, there have been many iterations of the reseller or what we call the partner community.  

We are really an organization that fits in between the manufacturer of products and services – and the user of those services. It’s pretty exciting actually. I think the weaker players have been weeded out or chosen other paths in the past decade.

Now what you have is a lot of strong companies, big and small, that are very strongly linked to their customers. Clearly one of the big issues for IT companies is making sure we have the right people. That is also important for the end customers.  As far as them hiring our people or us hiring their people, that doesn’t help anybody.  So I would say that is a paramount concern.

And a lot of these companies are facing second-generation leadership. How do they grow and evolve without the benefit of the founders? Those are two very compelling current challenges.

Clark: How long has Inacom been around?

Benson: Inacom is a 23-year-old start-up. We began with three employees and we knew that we would always offer quality products and services to our customers. I was there at the beginning and all of the original founders are still involved with the business today.

Clark: Was it your idea to start Inacom?

Benson:  Not exactly. But our chairman of the board, Loren Martenson, was talking to Wang Laboratories and they wanted to open a PC-based organization to call on customers. They had mainframe and the mid-range systems all covered. At that time, Wang had the largest per-capita [base] installed right here in Madison with the university and American Family, etc.

So they were looking for someone to run it and Loren was my landlord at the time. I was working for Xerox as the sales manager in Madison. Gary Hoffman and myself interviewed and were hired. We made the decision in a couple of weeks to go ahead and get this started. Had I not left Xerox when I did, I know I would have stayed there for my career.  It is a wonderful company that gave me great training and wonderful opportunities.

Clark: What is your philosophy for running Inacom?

Benson: I have always run it as if it were a multi-billion-dollar organization. The only difference was that those resources weren’t necessarily on our payroll. But I knew there were resources available to help us. We had an advisory board from day one.

We also went to the (UW-Madison) Small Business Development Center and asked others for help. There were just so many resources available not only for us, but for any small business. That aspect of Wisconsin is very impressive.

Clark: How many employees do you have now?

Benson: About 150 in our three markets, which are Madison, Brookfield and Appleton. We have focused on this state, though many of our customers work nationally and we support them in that regard. The range of customers that we serve is the potpourri that is Wisconsin.  We have enterprise accounts, mid-range accounts and small businesses.

We are really a business solutions provider that uses technology as the enabler. We provide technology solutions, consulting and education. You can also buy hardware from us.

Clark: For example?

Benson: We recommend complete solutions or systems. If you were going to implement voice-over-Internet-protocol (phone service) or storage or even if you wanted us to fix something, we can do all that. Voice-over-IP is becoming very common and it is wonderful to see small-sized businesses benefiting from it as well.

We go in and make an assessment, tell them where they stand today and what needs to happen in order to implement this technology. We will provide the plan, the project leader for that and all the components. We would be the single point of contact for implementing it all. We have gone to that because that is what customers need.

Most businesses have a group of individuals who are responsible for IT. But using the VOIP example, they probably haven’t implemented a phone system before that is integrated with their data. They need to be experts just once.

They probably would like to bring in a team that does this all the time, learn the best practices and then with our training – which is such a foundation to knowledge transfer and success – we know the results will be great. Customers are looking for us to deliver results that drive their businesses.

Clark: What makes you different?

Benson: Our customers say it is our training. We have training centers in each of our markets. People don’t have to go to Chicago or Minneapolis or halfway across the country to get authorized training from the manufacturers. We have been providing training to our clients since 1990.

Clark: Has the company grown steadily or were there any rough periods?

Benson:  All of the above, within reason. We are a learning and a growing organization. I have found that we do much better managing growth than managing stagnancy. We have been growing at a reasonable clip. Of course, it is easy to talk about your growth numbers when they are small. I remember one year we went from $21 million to $42 million. We learned you can do just about anything when people are excited about their work, can see what they are accomplishing and all those things that go with it.

We are not afraid of growth. In fact, we have built it into our strategies and plans. But as we grew, we realized that our ability to grow sustainably requires focus.  The more expert you become in an area, the more successful you become. So we have really focused the offerings that we have and that has enabled us to grow in the best possible way.

I read the book “Double-Digit Growth,” which was recommended by one of our peers out of Minneapolis. It was the first book that gave us a language to talk about what is growth. It was crystal clear that companies that have consistent double-digit growth are executing on the strategy simultaneously in two of five key areas outlined by the book.  

One of the examples in the book was Johnson Controls, a Wisconsin-based company that is also one of our customers. It was great to read about them and see that they had 52 consecutive quarters of double-digit growth.  Whether you are becoming more focused in a niche or merging and acquiring, or going into another area altogether, growth doesn’t just happen ad hoc unless you have plans for it.

Our growth plans have come to fruition. About three years ago, I hired a president. I did not want us to grow any further until we had a strong senior management team in place. We did not grow as much during that period because we were fine-tuning how we were organized.

We saw a lot of people go statewide, but it didn’t always go well. So we studied those models. And frankly, until we had a replicable model for success, there was no point in going elsewhere. We took our time until we thought we had it right. With customers as our guide, we knew we’d be successful going into other markets.

Clark: What areas have you focused on?

Benson: Storage, security and voice-over-IP. I would also lump in infrastructure, which includes managing your networks to make sure you are safe, reliable and secure.  Storage means managing the information that you have. We all know it is growing at a rate that is almost unbelievable.  You don’t have to buy a new server every time you turn around.

There are ways to manage this both in terms of hardware and software to save you money and give you greater capacity.  The third area is the Microsoft suite of solutions, which includes wireless solutions and security and training, as well as something called information worker productivity. Really what that means is a suite of offerings that enables the workers at these organizations to be more productive and more efficient by using the tools in a collaborative fashion.

Clark: Is the storage here or at the individual companies?

Benson: Both. It does not have to be centrally managed. A storage solution can be as simple as, if you have a couple of servers, we can look at your organization and say, “How can this be set up and where should that data reside given the redundancy and the backups that you need?”

Let’s face it, if you are sitting at your desk, you don’t really care where it’s coming from as long as you can get it quickly. There are ways that we can enhance the performance while keeping it safe and reliable, as well as fast.

There are some exciting things going because the technology has really evolved in this area.  EMC, HP and IBM all have innovative solutions in this area. We are certified on all of those. We can both design and support those systems. Virtualization is also optimizing networks.

Clark: What are your annual sales now?

Benson: More than $70 million. But we no longer focus on our top line as much as we do our bottom line. There is a saying that revenue is vanity and profit is sanity.  We could sell a $10 million Cisco solution at such a low margin that it’s not worth it. We are not doing this for an external audience. Last year, for example, we grew our margin by 2.5 points, which is unheard of.

Everyone talks about eroding margins, but the way that we were able to do that was to truly package together the software, the hardware and the services in a way that saves the customer money. It gives them greater value and makes us more profitable.

Clark: Last year, CDW bought Berbee. What does that sale mean for Inacom?

Benson: We do stay abreast of what is going on in our competitive landscape. And in our industry, many organizations are shifting toward a services model. In that light, we compete in Wisconsin with a number of companies that provide great service and certainly Berbee is one of them.

We have a lot of respect for our peers at Berbee. We have done things together in the community with them as IT providers. And I say, “Wow, let’s celebrate what happened there because they validated that the model of a partner calling on customers, getting to know them and meeting their needs is here to stay and that investors are recognizing that and willing to pay a price for it.”

I think the value of all of us has risen because of that transaction. They were a start-up just like ourselves, so I celebrate that success. As far as the implications of the CDW takeover, you’d really have to ask clients.  That is not an area I choose to comment about.

On the other hand, we approach our customers knowing they have a lot of choices and that quality is not a question in our market because it has some of the top providers in the country. Berbee and ourselves are gold-level Cisco authorized and there aren’t that many in the country.

We will always have competition, but the customers who choose us do so because they trust us and they have a relationship with our engineers and our salespeople. That is what they tell us.  With the advent of more managed services and outsourcing of these services, companies aren’t going to be jumping from one firm to another. They will have to make a commitment.

They are saying, “if we are going to let you manage our storage and keep track of our data, we don’t want three other companies in here doing that.”  I think you see a lot more loyalty based on changes you are seeing.

Clark: Are there many other women in your position running companies like this?  

Benson:  It’s a small number, but it’s not something that I dwell on. I’m pretty humble and don’t want to stand out that much. But in Wisconsin there aren’t very many. I’m only aware of a couple.

It shouldn’t be that way. If you look at the opportunities for women in this industry, they are absolutely limitless in IT. I find it just shocking how few women are going into IT. But on the other hand, I don’t have an IT background. I consider myself a businessperson who is customer- and employee-focused. I can hire people who have the technical background.  We have wonderful talent here. They don’t need me to tell them how to do their jobs.

Nationally, I was recently listed as one of the top 50 influential women in the channel.  The people on that list are worldwide partner leaders who work at IBM, Microsoft and companies like that. So it’s not just business owners in IT.  There are a handful of my peers who I know on a national basis. In a room full of 400 people, I might be one of 10. And it hasn’t changed much over time.

But what is interesting is that a lot of women are involved in this business, but not that many are running them. I think some of them are not captured in IT surveys at first pass because they might not have a computer science background.

What is exciting to me is the collaborative way this industry is evolving with software tools. There are so many roles that are evolving that do not have to be tied into the technical side of the business.

We are members of the state IT association and I just went onto that board of directors because their top priority is workforce development. We have got to attract girls who are in middle school to the IT careers or we are going to have a big void.  And the ones who get involved love it.

Last year, I was involved in the Wisconsin School Collaborative and it was for all the STEM (science, technology, engineering and math) careers. Science, engineering and math are holding their own, but technology has gone the wrong way. We need to do something about it.

Microsoft and a few others from the Puget Sound area gave us funding for the girls’ projects if schools and businesses would collaborate. It was so exciting to see what they had done, like building their own robots, analyzing crime scenes and figuring out the physics of a motor boat. We have got to make this exciting.  

Clark:  Was there ever any kind of a “glass ceiling” in this company, or did you start at the top?

Benson: No, I helped start it.  We want to have a diverse group of employees here, all centered on our core values. That is our common bond. Our company has always been about 50 percent female, but that wasn’t because of any plan. Women who work here believe they can do anything.

I didn’t understand the term “glass ceiling” when I first heard it. Nothing in my background was about barriers to success. That doesn’t mean I didn’t have struggles and failures and lessons learned.  

But having listened to others and been in business, I am keenly aware that this is a real problem. Many good companies are stepping up and saying they want to be a part of changing that and giving women opportunities and developing them. But the evolution is still taking place. I never experienced any glass ceiling personally, though.

Clark: Are there many women in senior management at Inacom?

Benson: Of our officers, half are female. Of our board, five are female and four are male. And our company is 55 percent owned by women.

Clark: Where do you see Inacom going in the next five years?

Benson: We have a three-year plan and the overarching strategy is to leverage the investments we have already made. We have brought on a president and a senior leadership team from the industry. We have invested heavily in our technical and sales resources. We have gone into new markets.

In our training, we have gone into other markets in the United States. I think we are on the on-ramp in terms of what our company can do. We will absolutely stay focused on our existing customers and not forget who got us here.

At the same time, we will use our resources to grow in our other markets. We have hired locally in those markets. Some took us longer than we anticipated, but we got the right people who are involved in their communities. We have made a lot of changes to get where we are. Now the fun comes through growing through those actions. We might also do a little mergers and acquisitions activity, as we have along the way.

Clark: You mentioned Johnson Controls as one of your clients. Who are some others?

Benson: Throughout the state in our top 25 list, a third of the customers come from our new markets. The kinds of customers we do business with ranges from Zimbrick – and we were right there when they opened their European office – to Bemis up in the Fox Cities to WE Energies.

We also have multiple customers here in the health services, where there is a great focus on the importance of technology. It has a lot of implications for health care providers and patients. This is an area where we can really help.  Our customers include UW Hospitals, Dean, St. Mary’s, Meriter and the UW Health Foundation. …

Clark:  Did you ever think you’d be doing this?

Benson: No. But that’s irrelevant. I’m a forward thinker. I credit my parents for instilling very early on that all of us have gifts and what we do with them is up to us. There will never be a shortage of opportunities and don’t sell yourself short. At the same time, lead a path of kindness, observe the golden rule and bring others along with you. How you get somewhere is as important as where you end up. I do my best to be true to those things.

Along the way, though, I’ve taken detours. My background is nursing. I was just at the 21st Century Skills forum that was put on by the Department of Public Instruction. They invited business leaders from all over the state.

They said the average 8th grader will have 15 jobs by the time he or she retires. I would have been shocked about that early on and I remember a time when I worried a lot about keeping people. But my philosophy today is that if my company is a better place because you worked here and you are better offer because you were here, well then when the time comes that you leave, let’s celebrate.

I believe that and it is such an empowering environment. No one feels guilty if changes need to be made. I believe the next generation of employees is so innovative and creative. And I look at my own career and I know that I had a few jobs. That was never a big deal because what is core is that you believe in what you are doing and you know it has substantive impact both economically and on society.

You have to be open to how you navigate through those choices. That’s how I got into this job. I was exposed to an idea and I was able to run with it. You can’t be afraid of things. I can’t wait to see what happens next. We have important work left to do at Inacom.

And my greatest satisfaction today is helping others realize their potential in business and as people. I certainly want to make sure this organization is sustainable long past the presence of the founders.

Clark:  Anything else?

Benson: At a time when there are so many others in this field, we differentiate ourselves by our reputation with the customers we serve. There is nothing more important to us than that.