A Chat With Harvey Dean, president/CEO, Pitsco

© Profile of Success, Catalog Success magazine, November 2005

Catalog Success: When was the catalog established?
Harvey Dean: The business was started in 1971.

CS: Where are your headquarters?
Dean: Pittsburg, Kansas.

CS: What is your primary merchandise?
Dean: Educational products. We supply curricula, software, hands-on equipment, teacher guides, books, DVDs, kits, etc.

CS: What is your annual circulation?
Dean: We produce 15 different catalogs with a circulation over 1 million.

CS: What are your primary customer demographics?
Dean: Our customers are primarily grades six to 10 technology and science teachers.

CS: How did the company/catalog get started?
Dean: Two other teachers and I started it as an after-school venture. We each put $50 into the venture. They sold their thirds to me within the first four years. My wife and I then went full time in 1975. They both continued teaching and have since retired.

These two teachers came to me to write a book for them. I was a young guy at the time. These guys were pretty innovative and creative. One of them taught high school, the other taught junior high. We visited together a few nights and finally decided, or rather I suggested, “Why don’t we just start a company?” Because they’d received such poor service from some major education supply company, I said, “Why don’t we just start a company and do some creative kits.” We had this book, or rather, they had me writing this book about what they were doing in the classroom that was innovative. They came to me because I had a minor in language arts. We decided to take the individual chapters and ideas, and turn them into kits for teachers. None of us had any business experience or any brains really. Well, we had brains, but we certainly didn’t have business brains, that’s for sure.

CS: What were the kits, exactly?
Dean: Well, probably the kit that lasted the longest was a wood lamination kit. It was a process where students could actually laminate thin pieces of veneer and make something out of it, for example, salad forks and spoons. We were showing the students how beams in churches had been built using laminated wood. Then we had one or two on mass production where there were management and labor components. The kids would actually set up a production line and use fixtures to mass produce 40 products. Then they’d set up a little company and actually sell the products. It was more of a junior achievement class as you’d think of it now.

Then we had a kit using silicone rubber molds. Back then there was a lot of casting, in terms of metallurgy. That was the early stages of casting plastics into room temperature vulcanized silicone molds, RTV molds. Those were the sort of things we were doing initially.

We put those first four kits together, and they became fairly successful. We didn’t sell tons of them, but that’s what we started out with. We were all still teaching, so we’d work nights and weekends. One of the guys had a pretty good-sized garage, so that became our factory. One of the guys eventually sold us his part of the company, leaving just two of us for a few years. I bailed out of education in 1975 and then bought out the remaining guy, although I didn’t have any money. I was borrowing money from anyone I could get it from. I had an uncle who loaned me some money. Then my wife and I hired a part-time college kid to help us out. That first year on our own we had sales of $138,000. I remember that. And we made a profit. That was the beginning. It’s evolved from there.

CS: When did the catalog come into play?
Dean: Actually when we were all three still together, we decided we needed a little catalog in 1972, so we put together a 16-page catalog. But we also included supplies in the catalog that would go with our kits. Things you’d need to do the projects. These were things like glue and sandpaper. We printed 3,000 of those, not full-size, 7˝ x 9˝ or something. The font was probably eight point or smaller, too.

Back then, we didn’t have computers, so we had to typeset everything. The printing company had one of the new versions of IBM or something. We only sent out about 1,000 of them. I remember we were working on something one night and one of us looked up at some shelves we had on the wall. And he said, look at those shelves! And together we all just had this realization that we knew we could only send 1,000 catalogs, but we had 3,000 printed. Like the extra 2,000 would do us any good. We had no concept. We had a passion for putting new concepts and ideas into teachers’ hands, which was unique, especially for the industrial arts.

CS: Where did you find the names to mail those first 1,000?
Dean: We had a directory for a national organization of teachers in technology education, industrial arts. We also called some state education departments and got some names in the Midwest as well.

CS: So you didn’t have any experience in cataloging?
Dean: Oh no. We flew blind for years. Some people would say we still do. I’ll tell you the reason we changed the catalog when we finally did, though. I got a little flyer once that had been put together by a couple of guys in Utah. I called them on the phone. I guess it was a 16-page booklet, full-size, saddle stitched, and it was laid out well, and very graphically engaging. So I called the company that had put it together, and it was just two guys. I went out to Salt Lake City in 1978, and I asked them if they would design our catalog. And they said no. At least initially. They said they’d only do the catalog if we would paid them a sum of money to conduct a survey and profile the people to whom we were selling, the teachers.

So I gave them the money to do this profile, and they learned all these things. Mostly it was done on the phone, although they did mail a survey to an industrial arts teachers’ group. After they found out a lot of things about our customers, they laid out my catalog. The first catalog they did for us was really great. It was about four years after they had been doing our catalog that we saw a tremendous uptick in our sales nationally. I’d say this was 1981 or 1982.

CS: In the first few years of running the business by yourself, what was your biggest challenge?
Dean: Finances. I was young, living in a small town in middle America, taking some huge risks. I didn’t understand banking or business. I just had this passion for education. My personality was such that I got along well with the bankers. But early on, the first bank really saw me as a huge risk. I had a difficult time. I was able to get the money to finance my inventory, which was important, because our entire reputation was built on the idea of fast, friendly service. And if you’re going to have fast, friendly service, I had the good sense to know that you needed inventory to ship. I worked at a hardware store in college, and I learned a few things there about service. My boss really stressed that it’s vital to keep each and every customer. But financing that way of treating the customer was difficult.

CS: You mentioned in an earlier e-mail that maintaining a focus on your central business goal was especially difficult in the early years. Could you expound on that?
Dean: I fell in love with business in the late 1970s. I started or acquired several small business ventures. One example is this guy who visited me with a patent for a retractable vehicle step for tall, four-wheel-drive vehicles. This was before running-boards were popular. And so I started a small company and hired three or four people to manufacture these retractable vehicle steps in the back of the Pitsco building. Of course, we still did our Pitsco stuff. And there were three or four other business ventures that I entered into. Of course, the popularization of running boards sunk that little business. But I just loved the concept of making something and selling it.

In the early 1980s I had some health challenges, and during the time that I was off work I reflected on who I was and what I really knew about. And I really did have, and still do, a passion for education. I have several degrees in education. And so I refocused my life, and said, I’m going to quit playing with all of this stuff that hadn’t made any success anyhow. I just focused on education in 1984 and stayed out of everything else.

CS: How did you change how you did business after 1984?
Dean: I think it was a refocus on innovation. We changed our byline from “Fast, Friendly Service” to “Innovative Education.” I really refocused on the fact that we were the only company in this field trying to help teachers with new technology and new products to engage children. In 1985, a change occurred to rename industrial arts to technology education. Using innovative education as our byline allowed us to develop a lot of new products, as we still do today.

CS: How long were you a teacher before you started the business?
Dean: I was a teacher for four years in Oklahoma, then I taught at a university for four years. I got a couple of degrees post-bachelor’s degree, but I was also teaching out there.

CS: Career-wise, what’s been your greatest challenge?
Dean: I think it’s been maintaining a dynamic place for people to work. Where they feel a part of it, and they feel responsible and appreciated. We’re still just a small company, but when you get more than 50 people, you have to be very sure that you keep everybody going down the same route, on the same page, with purpose and passion. As you get to 100 employees, it’s still important, but it’s that much harder.

CS: How many new, proprietary products do you come up with in a given year?
Dean: I’d say between 40 and 50 each year that we come up with. We have a full manufacturing facility. That’s only 40 people, but they’ve been at it for a long time, and they’re very loyal. I was out there earlier today for pizza because they won a competition for United Way Giving. We have good people, and we manufacture almost 1,000 products.

CS: Do you carry non-proprietary products?
Dean: That’s an interesting story. If you take the products in our big book, about 380 pages, about 17 percent of the products in there are proprietary. The rest are things we buy from someone else and resell. But that 17 percent we manufacture represents a very large percent of our sales out of that catalog. You wouldn’t know it, because those products are spread all throughout the catalog, but those are the products that sell best.

CS: Do you market those products more heavily?
Dean: We do a better job of featuring them. We have some champion products on double-page spreads.

CS: Do you have teachers on staff developing new products and curriculum?
Dean: Yes, we have 10 teachers on staff. They write curricula for our system side. We have on that team a staff of about 30, the rest of which are programmers, editors, videographers, digital artists. But 10 of them are teachers. The teachers are the leaders of the development teams for new products.

CS: What’s your biggest business challenge in 2005, and how do you plan to resolve it?
Dean: Our ability to communicate our systemic solutions so school districts and administrators will understand the success they can have with them. We have research data from 10 different studies we’ve done. We have conferences. All of that helps our sales force. But it’s a big country, and we’re a little company. It’s part of that conundrum: How do you best communicate a solution like ours?

The catalogs sell the products very well, but when you talk about selling a system, you’re talking about changing a paradigm where the teacher’s been in charge of delivering the curriculum. The assumption is that the teachers are going to teach everything in a textbook, and they’ll teach 10 different textbooks each year. The fact is, there was a study done that looked at five eighth grade teachers teaching science — same textbook, same class, same lesson plans. They surveyed the teachers at the end of the year. They found that only 20 percent of the content was actually taught in every single class. Only 20 percent of that content was contiguous across the groups as having been taught. Only 20 percent! That’s not to say that the other 80 percent that the teacher taught wasn’t good content, but if you’re supposedly teaching to a lesson plan, you’d hope that each class gets 100 percent of what’s in that lesson plan.

With our solutions, we can assure you that the content will all be delivered exactly the same for every class all day long. And it’s not teacher delivered, but student driven. It’s been difficult to get that message out, but we’re tenacious. And we’ve done all right, we have more than 4,000 labs in schools throughout the United States. I’m talking about a room full of curriculum, workstations and computers where kids are using them every hour of every day. And we only started that division in 1990. I love the challenge. We will get our message out there.

CS: What are some keys points to your success?
Dean: I think in my case, and I do believe this, you always have to acknowledge that sometimes there’s just divine intervention. I’m just not all that bright when it comes to business.

At the core of it, though, a lot of it has to do with key people. I’ve been blessed to have good people at the right time in the right places. That’s a big part of our success.

The reputation for being honest is important for Pitsco. We don’t quibble, and we do turn things around quickly when customers have problems. We get only a few calls a year from irate customers. Nine of out 10 times, they stay a customer, because we admit our mistakes. Either myself or my COO takes care of that customer if they’re really upset. We have high standards for order turnaround. I’m a big proponent of taking care of the customer.

I think in the last 10 years, the thing that’s allowed us to be more successful than the previous 20 is that we have a management program in place that moves the locus of responsibility to the teams. I believe that has been a significant reason for our growth, and the ability to grow without huge stresses internally. I practiced that when I coached track, and it’s an integral part of our educational solutions.

We have a program we run every year called our HOT program. That stands for Harvey’s Official Targets. Every person has a team, and each team has targets. Those targets are spelled out in very formalized ways. We give monthly reports of the targets we’ve attained, and the target’s we’ve lost. There’s a company-wide acceptance that as an employee you are responsible. Once you know what your responsibilities are, you’re expected to do them. There is a mechanism in place to reward you for having achieved them at the end of the year.

CS: Have you had any mentors that you credit with your success in business?
Dean: Probably the best one was the owner of a hardware store where I worked during college. The owner, he was adamant about service. People would come into that old hardware store, and if they had a clock they had bought 20 years prior that needed a replacement screw, he’d get it. He would type out a letter on an old-fashioned typewriter, send it to the manufacturer, and he would get them that screw. I’ve always been impacted by that. And he could charge a higher price for his products because he would get that screw for you. Mr. Hanes was a long-time influence on me, just by the way he treated customers. I still have a passion for that.

CS: In what ways do you think you’ve succeeded?
Dean: I measure that mostly by the success of the people who report to me. I have four vice presidents, and I really like to see them doing their jobs, feeling their responsibilities, and doing their jobs well. I enjoy the encouragement they give me and being able to give it back to them. I enjoy getting their reports. That doesn’t mean we don’t disagree. It gives me a lot of pleasure to see them grow. I get pleasure from seeing these people succeed. We have a very positive company culture. I enjoy that.

CS: What’s your definition of success?
Dean: Seeing that this year we’ve served 6.5 million students who will use products that we’ve shipped to schools in the U.S. makes me feel successful. Conversely, while that’s a lot, it makes you realize how much potential there is out there. I think that’s another encouragement. If we’re serving more than 6 million, we know we can serve more. It’s not about money. Success to me is knowing that we’re helping students across the U.S. and knowing we have the potential to reach even more.

CS: If a new cataloger asked you to name the keys to success, what would you say?
Dean: I think first, and this may not be the model that most catalogers think of, I think the key is to have some unique selling proposition. Unique and innovative products you can build the rest of your product line around are important. In our catalogs we have several kinds of kits for building a CO2 powered dragster. We started that with one little kit, and now we have 10 or 12 different kits that are versions of that kit. On top of that, we have about 40 pages in our big book of support items for that model dragster activity. Track systems, smoke tunnels, wind tunnels, decals, different kinds of axles, wheels, it goes on and on. We have 40 pages of products that are line extensions of that one good idea.

I would say, I’d build a new successful catalog around an idea that’s unique and innovative. We don’t manufacture all those line extension items, but they fit in well.