Big Business: Doug Starrett
Douglas A. Starrett carries on a family tradition
Douglas A. Starrett may run a large global business representing more than $220 million in annual sales, but his management style and demeanor is more akin to a manager of a small 20-person office.
As he walks the snaking halls of L.S. Starrett Co.'s monstrous 555,000-square-foot headquarters in Athol, he greets employees by name. Many employees - some who've worked at the company producing precision measuring tools for more than 30 years - stop to chat, and to gently chide the boss about his recent decision to shave off his beard. His annual letter to employees and retirees contains as much in the way of business updates as it does down-to-earth charm - including the score from the Thanksgiving Day Athol football game.
He's equally at home setting up operations in some far-flung location halfway around the globe as he is approving name tags for a semi-annual employee meeting.
"We've got a big breadth and scope, but I like to think we operate as a small business," Doug Starrett said.
Tradition
L.S. Starrett got its start when its founder, Laroy S. Starrett, first produced the now ubiquitous tool known as the combination square in 1877. Today, the company makes in excess of 5,000 items, including everything from tape measures to saw blades to electronic micrometers. Starrett is the fourth member of his family to run the company. He took the helm from his father, Douglas R. Starrett, in 2001.
"Doug is following in his fathers footsteps," said Richard Kennedy, a member of L.S. Starrett's board of directors and president and CEO of the Worcester Regional Chamber of Commerce. "He's a fine executive, and really a good friend."
Kennedy described Doug Starrett as a "hands-on executive" who learned the business from the ground up. "He knows every aspect of the business."
As a teenager, Doug Starrett worked as an "errand boy" in the company's micrometer department. After graduating from Miami University of Ohio with a degree in business administration, he worked in the construction industry in Boston. But he returned to the company in 1976, and more than 30 years later, is still walking the halls of the company's Athol plant between trips to the company's overseas operations.
While the company bears his namesake, as a publicly traded firm, Starrett has no birthright to run the company. Instead, he has served for the last six years "at the wishes of the board."
Soon after Doug Starrett was named president and CEO in 2001, his father died unexpectedly of a stroke. At almost the same time, the nation spun into a recession in the wake of the terrorist attacks on 9/11.
"Doug had to take over at a time when the market was changing dramatically, and he responded very effectively," Kennedy said.
New Avenues
Kennedy said the old way of doing business at L.S. Starrett had been to rely largely on brand loyalty, which meant customers felt okay about paying more for a Starrett product because they knew the product would be of high quality. But over the last several years, pricing pressures have meant L.S. Starrett has to be more creative in the way it markets its products and how it produces them. In some cases that's meant moving production to lower costs, or outsourcing some work. For example, L.S. Starrett had been doing its injection molding in house for some of its products, but it recently began outsourcing plastic work to a company in the Dominican Republic, near the company's plant there.
Kennedy also said Doug Starrett has recognized new opportunities in the marketplace, like new channels of distribution that are now available.
For fiscal year 2007, which ended June 30, L.S. Starrett reported net sales of more than $222 million, an 11 percent increase over the previous year. The company was also profitable this year, reporting nearly $6.7 million in net earnings. That's welcome news after several tough years between 2001 and 2004.
Doug Starrett demurs any credit for the company's success both globally and in Athol, instead crediting "the legions of people that have worked here over the past 128 years."
L.S. Starrett has been a global concern since the 1950s when it established operations in Brazil and Scotland. In 1997, the company, with Doug Starrett's help, established both distribution and manufacturing in China. But now, Doug Starrett has his eyes on the Middle East.
After recently returning from the oil-rich Middle Eastern nation of Dubai, which is undergoing an astounding amount of growth, the company is poised to benefit from the increase in construction there.
Competitive Pressures
Starrett isn't shy about his opinions on the difficulties facing American-based manufacturers like L.S. Starrett. He's plainly critical when it comes to Sarbanes-Oxley, the strict accounting rules put into place in the earlier part of the decade in the wake of the Enron and WorldCom scandals.
"There's not a customer out there willing to pay a dime more because we're Sarbanes-Oxley compliant," he said.
He's equally critical of the mounting costs facing businesses in Massachusetts, including unemployment insurance.
While the company's local employment is markedly less then its peak in the 60s and 70s - it hovers today around 650, down from a high of 1,500 - the company is still committed to its home base, despite cost pressures. The company recently invested about $1 million in a new etching facility at its headquarters that will help with efficiency and cut down on hazardous waste. And in a small corner of the building, the company is even creating software and assembling circuit boards for the company's line of digital measuring equipment. In addition, the company is installing a hydroelectric generator in the Millers River that runs by its plant. The cost of that project is deferred by a $538,000 grant from the Massachusetts Technology Collaborative and is expected to be operational in 2009.
Despite the drop in employment over the last three decades, L.S. Starrett is still the number one employer in the town of Athol, and the company - and Doug Starrett - plays a central role there.
"Starrett is Athol and Athol is Starrett," Kennedy said. Even the town's YMCA is intertwined with the company - it's located at the site of the shop where L.S. Starrett tools were first produced.
But Doug Starrett has also carried on his family's tradition of community involvement. Most recently, Starrett played a key role in developing a strategic plan for the local public school system, according to David Ames, Athol's town manager.
"Doug took it upon himself to take a leadership role and worked closely with a lot of the members of the [school] committee," Ames said. "Because of that, everything went very smoothly."
Doug Starrett and the company "have done a lot for the schools" and for the town, Ames said. "When he feels it's a good cause he's definitely willing to donate," Ames added.
Doug Starrett has also led the company in several acquisitions, the most recent of which was a deal to buy a 10-person California firm called Kinemetric Engineering, which will help bolster L.S. Starrett's "camera-based inspection line," which is a far cry from the more traditional precision measuring instruments that the company is most well-know for.
But as Doug Starrett puts it, "We're not in the tool business, we are in the business of providing measuring solutions." And in the 21st Century, that means producing electronic tags that transmit measurements from shop floors to centralized computers as well as calipers and gages.
While the variety of products offered by L.S. Starrett has expanded dramatically since the company's founding, one thing has remained consistent, according to Kennedy.
"They have a very, very excellent reputation and great brand awareness that they've built up through a following that's worldwide," he said.
"That's really a credit to the Starrett family, and Doug who's carried that on."
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