Kevin Barry Fine Art Associates was at a crossroads. The family-owned company’s growth had stalled as the economy was beginning to nosedive. Purchases of artwork to adorn the halls of company offices – KBFAA’s core business – had begun to slow, judged expense items that could easily be cut. The founder’s plan, to retire and sell the business to his children and another manager in about five years, was at risk.In 2007,
But today, with the help of CEO to CEO, KBFAA has weathered the economic storm. KBFAA, now a $7.2 million and growing firm, clearly knows where it is going, who is going to lead it when the CEO retires in 2014, and how it must be led for future growth.
The 15-person company, based in Los Angeles, procures artwork for corporate, hospitality, healthcare, and residential placement. The firm’s galleries in Los Angeles, Las Vegas and San Francisco carry a full-line of work including original art, limited editions, sculptures, tapestries, and fine art reproductions.
The company is owned and led by Kevin Barry, who has been in the art business for more than 30 years and has operated a Los Angeles gallery for the past quarter century. KBFAA comprises a team of experienced art consultants and other professionals in the art industry. The team is rounded out by Kevin’s daughter Allison, who runs the company’s San Francisco showroom; his son John, who runs KBFAA’s Las Vegas operation; and Jason Fiore, a childhood friend of his children who serves as KBFAA’s marketing director and general manager.
Everyone in the company handles sales and design consulting. KFBAA almost always supplies the art that it specifies in its designs, often outsourcing the production work to picture framing factories and other contractors, and then reselling it.
Six years ago, however, Kevin felt that he and his team had reached the limits of their ability to adequately plan for the firm’s future. Since they were a small company, the team found much of their time was being swallowed up by the minutiae of daily operations. “We were growing, but in some ways we were so busy with the day-to-day stuff that we couldn’t see the forest for the trees,” Kevin says. At the same time, Kevin, who is 66, was beginning to think about retirement. “It became important to develop an exit strategy and figure out how my successors were going to carry the baton.”
Around this time both Kevin and Jason Fiore became aware of Robert Sher’s firm CEO to CEO and thought Robert might be of use to KBFAA. “Jason thought it would be a good idea to have an outside consultant come in to work with us, and maybe help us see the big picture in terms of what the future might look like and how we could grow the business,” Kevin says.
Kevin had actually met Robert 10 years earlier, when the latter was CEO of Bentley Publishing Group and KBFAA was a small customer of Bentley’s. Recalls Kevin:
“Rob came to the gallery in Los Angeles and we did business. We didn’t work very closely, but I remember being impressed with Rob. I liked the way he handled and presented himself. And I thought it was good that, as the CEO of his own company, Rob was out making the rounds and staying close to the streets, so to speak. A lot of CEOs who run small businesses get trapped into managing the business and lose that face-to-face contact. But Rob wasn’t like that at all.”
Kevin also enjoyed the fact that Rob already knew the art business. “We knew what was kind of in his wheelhouse,” he says, “so we had a couple conversations with Rob, and he came down and we talked some more.”
Kevin signed a month-to-month consulting contract with Rob with the initial goal of developing a one-page business plan. Immediately, Rob began to reach out to all five on the leadership team in the organization and met each one individually, either by phone, email or in person. According to Kevin, the results came quickly.
“It is advantageous for us that Rob had a good working knowledge of what the industry was about. But he is also a visionary guy with great organizational skills. He was able to see things more objectively because he wasn’t an employee. We had a lot of thoughts and ideas about where to take the business, but we were so busy chasing the day-to-day stuff to execute – we were a little like rats in a maze. Rob kind of put our feet to the fire in terms of what his own expectations were, and made sure everybody got on board with the same goals. Then he was able to galvanize a lot of our thoughts and ideas into a plan of action.”
It was fortuitous that Rob began working with KBFAA right before the most challenging time in the company’s history. After three decades in the business, Kevin says that 2008 and 2009 were the toughest years he’d ever seen.
Rob’s first goal was to help KBFAA draft a definitive plan for where the business would be in five years and how it was going to get there. The focus was on results. Said Kevin: “Rob taught us two things: how to be more productive, and how to look closer at the bottom line and your margins.” The plan was concise, and articulated not only a crisp vision and mission, but specific metrics to be watched every month, specific high-value projects, and a set of key strategies that would deliver growth. The team would know each and every month if they were focusing on the most important things, and whether that focus was delivering the results mandated in the plan.
To help steer the company through rough waters, Rob worked with Jason. According to Kevin, Jason has been with the company for more than 10 years and already had significant managerial expertise of his own. “In 2008 and 2009, we had to tighten those purse strings company-wide,” Kevin says. “Rob worked closely with Jason to develop better financial reporting that helped us all determine what should be cut, and what should not be cut.”
In the depths of the downturn, KBFAA was reaching a juncture where growth had all but stopped. However, Rob pushed Kevin and his team to think about nearby adjacent markets. “Traditionally we did a lot of business with hospitality and high-end residential designers. But now we have broadened our target markets to include senior living facilities and healthcare organizations. ” Kevin says. “Personally, I always wanted it that way – I didn’t want all my eggs in one basket. But Rob helped us actually make the move.”
Financially, things began to turn around as well. “Our business was flat during 2008 and 2009, but in 2010, things began to pick up and we had a 10 percent increase in revenues,” Kevin says. “In 2011, we’re on track for another 10 to 12 percent growth.” KBFAA also opened a second gallery in Las Vegas run by Kevin’s son, and a third gallery in San Francisco, run by his daughter. “We’re certainly not out of the woods economically,” adds Kevin. “But since working with Rob, we’ve expanded our business, our revenues are growing, we added three new employees, and we’ve increased our market share.” Rob's role includes teaching the next generation what it means to be owners. “We’ve got a good, strong team of young people – our executive team is all in their mid-30s,” says Kevin. “Since working with Rob there has been a definitive maturation process among them.”
2012 marked a change in business ownership and scale. With Rob's direction and coaching, a team was assembled to begin the transfer of ownership to John, Allison and Jason. The board was formalized, with regular quarterly board meetings and Rob was asked to be the outside board member. The focus of the firm was clear, sales rose by 42%, and net profit grew dramatically, more than enough to fund the gradual transfer of shares to the next generation. In 2013, the governance process continues with Rob on the board. What has for long been governed by the founder is slowly transitioning board-based governance. Plans have been laid for growth toward a target of $15 million revenues over the next few years.
Asked what makes Rob so effective, Kevin suggests it’s a number of factors – among them intelligence, accessibility, communication and experience both as a CEO and working with many other CEOs.
“Rob has great people skills – he knows people very well. That’s one of his most salient features,” Kevin says. “He’s also triple smart, and part of the reason for that is that he doesn’t sit still. Rob chairs roundtables with other CEOs and works with lot of different companies and with different executives. Everybody in business is scrambling to get to that next level, and the exposure Rob gets from working with so many innovative leaders helps him, and helps us.”
“Rob went over and beyond most of our expectations,” he added. “We’ve had some bumps along the way, and that’s part of business, but Rob was always there for us. Having a seasoned CEO who is participating in the company’s growth, serving as a mentor, and providing guidance is great. It’s given us a little additional edge to see the future. You certainly want to focus on tomorrow, but five years is always right around the corner.”