Still King of the Hill

Dave Hill sold Hill Associates to his employees last summer,

by Craig Bailey

Managers at Hill Associates Inc. in Colchester discovered the carriers they hired to transport demonstration hardware among educational sites weren't getting the job done. So they made an unusual change. Following a tip from a client, they began contracting with Rock-It Cargo, a Los Angeles company best known for moving rock bands from venue to venue.

 

 

Hill Associates Inc. provides telecommunications training and education to Fortune 500 companies. CEO Dave Hill says wireless and cable communications are changing the industry's education demands. COO Dawn Terrill handles day-to-day operations for the Colchester business.

 

The choice is indicative of Hill Associates' modus operandi: eschewing convention in the name of quality; getting the job done while keeping it fun.

Chief operating officer Dawn Terrill explains the $16 million-a-year corporation provides high-tech training to Fortune 500 companies. Most of Hill Associates' offerings are curriculum-based programs. The company employs 44 instructors in the blue glass building on Roosevelt Highway and a small office in Denver, Colo. A half-dozen are "remote" instructors, operating from their homes scattered across the country.


Full-time instructors spend approximately 150 days a year traveling to client sites to deliver classroom instruction on a veritable alphabet soup of computer and telecommunication topics like ISDN, ATM, VPN and IP. The core of the company's approximately 25 clients are regional Bell operating companies like Bell Atlantic and telecom heavyweights like Sprint.

Hold the phone. Hill Associates teaches the phone company about telecommunications? Isn't that the tail wagging the dog?

"It's very bizarre," chuckles Terrill, 31, behind the desk in her fourth floor office. She explains that outsourcing training often saves clients money and provides the most up-to-date instruction, even for those that maintain in-house education departments.

"Most of them choose to buy it," says founder/CEO Dave Hill. "Their business is running a telephone company; their business isn't developing technical educational materials," he says, speaking from his Florida office.

"We come from a perspective which is garnered by having done business all over the world with all sorts of companies," he adds. "We come in with a point of view that's pretty broad and customers like that."

A native of Burlington, Terrill started as a bookkeeper with Hill Associates after earning an associate's degree in accounting from Champlain College in 1988. She completed a degree at Trinity College while she worked, and climbed the ranks to controller and chief financial officer.

As second-in-command, Terrill has her hands full running the day-to-day operations of the business. Recently promoted to COO, she continues to handle CFO duties until she hires a vice president of finance and administration. Meanwhile, Terrill tracks a client base that's constantly morphing through mergers and acquisitions, works to grow revenues by $2 million in 2000, and manages a staff of 70 that's busting out of its 15,000 square feet of space spread among four floors.

"I never woulda thunk it," Hill offers, reflecting on the past 20 years. He says he set out to build a company "where there was no nickel-dime .. (bull) to bother people -- where people had a good time. I was pretty damn lucky to be able to do that." His declaration might be a demonstration of what Hill characterizes as his occasionally problematic tendency to "call a spade a freakin' shovel."

"That'd be Dave," says Ted Child, owner of Child Travel Services, which handles Hill Associates' travel arrangements. "You know where you stand with Dave Hill at all times. He's an incredibly bright, strong-minded, strong-willed, driven character."

Hill Associates, which prides itself on employee benefits and a casual corporate culture, gives workers the frequent flier miles they accumulate. According to Terrill, some employees rack up 100,000 miles a year.

Hill, whose teaching these days is usually in front of executive audiences, estimates he's logged approximately 3 million miles during his tenure with the company. He recently reduced his hours after transferring ownership of the company through an employee stock ownership plan (ESOP). This winter marks the first he's spent a considerable amount of time at his Punta Gorda, Fla., condo since he bought it a decade ago. Hill and his wife, Jacky, vacate their southern domicile in favor of their Grand Isle home once the weather heats up. The couple's dog, Sam, travels with them.

In Florida, Jacky, who's been with the company since the late 1980s, works out of their home. She handles knowledge management for Hill Associates -- tracking the collective knowledge of the company's employees.

Dave recently set up shop in a small office three miles away, but makes time for sailing, golfing, and bird hunting with a local club -- hobbies he also enjoys in the Green Mountains. "A lot of people use black powder rifles, but I got a couple of black powder shotguns," he says. "I've convinced a couple of old-time Florida guides that these things kill things just as dead as modern guns do. So now they don't look at me like this stupid Yankee."

Taking stock in ESOP

According to Stephen Magowan of Gravel and Shea in Burlington, there's a high concentration of employee stock ownership plans (ESOPs) in Vermont. Magowan, who has handled a number of ESOPs, believes this is due to the worker-oriented, entrepreneurial culture in the spirit of Ben & Jerry's Homemade Inc.

In Chittenden County, Hill Associates, Lane Press, Gardener's Supply Co. and Perry Restaurant Group maintain such plans, which work in a similar way to retirement plans: When employees leave the company, the business buys back their shares of stock.

ESOPs promote employee appreciation for the company by building a stronger connection between employee and employer, and by allowing workers to share in company profits.

On the other hand, says Magowan, the open-book management style inherent in ESOPs can make them less appealing to some managers.

For more information, contact the National Center for Employee Ownership in Oakland, Calif., at (510) 272-9461, www.nceo.org, nceo@nceo.org.
-- Kate Nobile

 


Hill graduated from Steven's Institute of Technology in Hoboken, N.J., with a Ph.D. in applied mathematics in 1963. Following a postdoctoral fellowship through Stanford University's Medical College he moved to the University of Vermont in 1965 with an appointment to the Medical College and the math department. Medicine and math naturally evolved into computer skills for the native New Yorker.

"Fluid flow in the human body -- blood flow -- is an incredibly hard problem to understand," he says. "You wind up being a computer jock, because in the times I was educated there was no such thing as computer science. You did it yourself." Computer skills grew to include data communications as Hill ran UVM's computer center and focused on installing time-sharing networks.

By the time he left UVM to work for Bell Laboratories in '79, Hill was chairman of the computer science department as well as a professor of computer science and anesthesiology.

He spent the next couple of years commuting between his Grand Isle home and an apartment in New Jersey while working to build an internal education organization at Bell Labs.

A new boot camp-style instruction course, led by veteran Hill Associates teachers, should reduce the time to prepare new instructors from a year down to six to nine months. Pictured: Robin Gronlund and Dave Train. (Photo: Stephanie Bertoni)


Eventually, Hill wanted to spend more time with Jacky, whom he met at UVM and married in '77. "I couldn't be an employee and live in Vermont; they didn't have that kind of flexibility," Hill recalls. "So I was a contractor," developing education and training programs at a distance for Bell Labs.

"The company started, as I've often said, just me and my dog in the back bedroom of my house in Grand Isle." Chesapeake Bay retriever Gen. George S. Patton -- Pat, for short -- "was the vice president for security," Hill explains, "and he did a hell of a job."

Hill began building the company's brain trust almost immediately. Within a few years he had attracted enough employees, many UVM faculty working for Hill as contractors before signing on full-time, that the business relocated to an office above the Merchants Bank in South Hero.

"Then in 1984 the world changed rather precipitously, because AT? divested itself of the local operating companies -- the so-called 'Baby Bells,'" says Hill. "Those companies could no longer derive services from AT? like technical consulting and technical education, etc. They had to go out and do it on their own."

Hill Associates grew rapidly following the divestiture. The business relocated to the Champlain Mill in Winooski. In 1992 it moved to the Colchester location -- a building it bought with Child Travel Services, which has done business with Hill since 1987.

"The people who are involved with that company are extremely bright, very forward-thinking, and really on the edge of technology," says Child. Child Travel moved out of the Hill Associates building in October 1998, when both businesses needed room to grow. "Hill Associates has taken the high road at all turns," enthuses Child, who moved his business to the building on the other side of Libby's Blue Line Diner. "They always have made good, solid business decisions. I think the sky's the limit now."

"I never really thought it was going to be much of a business," counters Hill. "I thought it was just going to be something I was going to do until I figured out what I was going to do." Once the ball started rolling, though, there seemed no stopping it.

"In the early days we used to laugh about the fact that we ought to put in one of those things like they have in the supermarket, where you pull a number to decide when you get your shot at the deli, because we were the only show in town," says Hill. "We probably grew to $6 or $7 million in revenues without ever making a sales call."

Terrill says the company still enjoys practically no competition in the curriculum-based market. However, with hands-on workshops and one- and two-day courses, she says, "There're lots of companies that do that."

Hill Associates' deli line mentality vanished in 1994, when the company experienced an off year. "The epiphany that said there is a discipline called 'marketing' and there are people who may not know anything about data communications who are valuable because they come from that discipline -- that was the real turning point," says Hill. "We had substantial difficulty in believing there were things we didn't know how to do ourselves."

In 1996 Robin Gronlund was hired as vice president of sales and marketing. "They seemed to be open to my 'new' way of thinking regarding marketing. They viewed me as an expert and allowed me to make recommendations and changes," says Gronlund, former director of marketing at Bruegger's Corp. "I did create a lot of change in a company that wasn't used to change. .. But as sales increased, their faith in my judgment and aptitude also increased."

Hill believes the business's biggest challenge is adapting to a changing market: The type of training clients seek is evolving. "You don't need to know how an internal combustion engine works to sell cars," says Hill. He explains salesperson education, which constitutes more and more of his business, must answer the question, "'How do you improve your business by using technology?' as opposed to 'How does the technology work?' That's a tough transition."

Merging clients have more often than not meant more business for Hill Associates, rather than less. "In the long run, I don't see any catastrophic consequences," says Hill.

Katy Villa, vice president,
publishing services


It's obvious Hill's heart is still with the business he founded, even though he no longer plays an owner's role. In 1994 he and a handful of long-time employees/minority owners sold 40 percent of the business to the company's ESOP. The employees purchased the remaining 60 percent in June for approximately $6 million.

"Dave could have really rung the bell by going out and selling this thing out," theorizes Child. "He didn't. That's the kind of commitment he has to the company and the people who are there."

"The culture is unique and I didn't want to see it get screwed up by being embedded in a larger organization or by being subject to a kind of a bottom line mentality that just wasn't the way we wanted to do business," explains Hill.

"It's not the most lucrative thing to do, I assure you," he says of the ESOP buyout, "but that's never been very high on the popularity chart anyway."

More important to Hill has been an office culture based on friends working with friends -- where T-shirts and jeans outnumber suits and ties. "We always kid around about the fact that the corporation owns a tie and we rent it out periodically," says Hill.

The company's Christmas party offers an ironic twist: The extravaganza evolved into a black-tie affair through a series of good-natured one-upmanship. "We fly all employees and their significant others to the party in Vermont," says Dave Train, vice president/chief technical officer. "This includes the staff we had stationed in Australia."

"It costs us a bloody fortune," says Hill, who's certain the impact on morale is more than worth the expense.

"The camaraderie and commitment of our employees has to be experienced to be believed," confirms Train.

For Gronlund, who worked for comparatively straight-laced corporations like Procter & Gamble and IBM Corp. before joining Hill, the casual atmosphere took some adjusting. "I still can't bring myself to wear shorts to work," she says. Nonetheless, she enjoys the small scale: "I enjoy the ability to see the impact of my efforts. In a big company, it's harder to see the difference you make."

Small and large are relative terms, much like long and short. By anyone's measure, Hill's in it for the long haul. His 99-year-old father is a New York lawyer who still goes to the office four days a week. "I think he's still going strong because he keeps his mind occupied and sharp, and I'd like to emulate that," Hill says.

Besides, he adds, "You just can't go sailing or hunting every day."