Resiliency 101: How Kline & Company Faced Adversity Head-On – and Became a Force in the Industry
By Lance Debler
That’s certainly one way to describe Kline & Company. Since its inception in 1959, the NJ-based firm has fought its way through many of the economic crises that muddled other enterprises, but it’s also squared off in a pair of bitter internal battles and faced a solid slice of adversity, all the while becoming a leader in market research and consulting. Now, looking back at their Kline careers, CEO Joe Tarantola and some of the most senior members of his staff are discussing the secrets of their resiliency, what challenged them the most, and how the company managed to attain the world’s latest technology – even back in the ’80s.
“When I got to Kline, there was a Wang computer – it was about six feet long, three feet wide, and three feet high, and it was sitting in the middle of one of the open spaces,” Tarantola says of the then-top-of-the-line machinery. “It was used as a typewriter, basically, with a screen.”
He also mentions a Telex (just Google it) and recalls the day that he, a consultant at the time, was called into a conference room with a slew of senior executives, including the company’s founder, the late Charles H. Kline. There, the suits were making a “monumental decision” on whether or not to buy a new piece of equipment: a fax machine. It gets better – Tarantola also vividly remembers the day he “almost got fired”…for buying a pen plotter.
“It’s a device that would grab a piece of paper and then physically grab different colored pens to draw pie charts and bar charts,” he says. “I went out and got one, and by the time I got back to Kline, Charlie was absolutely livid. But those were the kinds of things that we were trying in the very early stages. We just kept pushing the envelope.”
Eventually, Tarantola’s efforts to modernize the company paid off, as he successfully convinced Mr. Kline to invest in an IT department. His plans, however, were railroaded by unhappy circumstances, and the company soon faced its first major challenge.
“Charlie got sick and sold us to a venture capital firm, and that was a disaster,” Tarantola remembers. “That’s when I was just getting up in the ranks, and I kind of led the revolt to buy ourselves back and pay them off.”
But the internal clashes over ownership, direction, and “control” – a word Tarantola says he, in general, is loathe to use – weren’t over. As the mid-’90s approached, there was, as now-Senior Vice President Eric Vogelsberg puts it diplomatically, “senior leadership whose personal interests were ahead of what was best for the firm.”
Tarantola is more blunt, saying that Kline’s management committed a “high-power betrayal.”
THE SECOND ‘REVOLT’
“They decided that they wanted to sell us to whoever would give them the right amount of money,” Tarantola says, adding that he and three of his fellow board members – Vogelsberg, now-Senior Vice President Susan Babinsky, and former SVP Ian Butcher – “didn’t even know” of the plans. “What became apparent to us was, they couldn’t care less who they sold us to and what they left us with in terms of our jobs and our futures. They were just trying to cash out. And look, I get it – I really do. But I was looking to my left and my right down the hall, and these were all my friends. If they came to us and said, ‘Here’s what’s going to happen to you guys. You’re going to plug into this bigger thing – your jobs will be enriched; you’ll have more opportunities. Here’s the plan; here are the strategies...’ But no one came to us with that. It was a money play. And I don’t know where it came from, but I just said no. I led another revolt to say, ‘You can sell the company, but we’re not going with them.’”
His coworkers quickly galvanized around him – “more quietly than me, probably,” he says – with Vogelsberg, Babinsky, and Butcher agreeing that they would “take care of our people.” Eventually, the four – who, like Tarantola, had started as consultants – won their war and gained control of Kline. But there were battle scars.
“That took a lot out of our growth trajectory,” Tarantola admits. “When companies were expanding quickly in the ’90s, we were dealing with these internal battles. And for me, that was an opportunity lost during a great economic cycle – we lost what I think was a very important growth stage.”
Still, Tarantola says, the future seemed bright. “We finally got ourselves owned by our people and were going in a direction that was not about someone getting rich. We finished buying those guys out and gave them a party in July of 2001. Then two months later, I was looking out the window, and it was 9/11…”
‘THE WORLD JUST STOPPED’
Now, looking back 20 years after the terrorist attacks that nearly devastated America, Tarantola realizes that September 11, 2001, was, in fact, Kline’s first “real battle.”
“What happened to us as a company was insignificant compared to the tragedy as a whole, but that was really the first economic crisis we had to deal with,” he says. “Before that, our biggest struggles were internal ones. But after 9/11, we didn’t get a consulting project for six months. The world just stopped because nobody knew what the hell was going on. I’m not sure I was ready for that. I’m not sure anybody was ready for that.
“We just hunkered down. Yes, we had to make some cuts. But to me, one thing about this group is, we’re battle hardened. You learn certain things, and the biggest thing I think people need to recognize is that it’s all about cash flow – your money. We got through it, and we got through it as a team. We were all in this little rowboat together.”
Indeed, that rowboat continued to sail – and soon set its compass overseas as a new trend began sweeping the industry: globalization.
“Many companies were contemplating whether they should expand internationally,” recalls Li Wang, who now serves as Senior Vice President of Kline Asia. “The risks were obvious, but we had foresight and courage. We decided to, one by one, set up offices around the world; today, our geographical footprint is an invaluable asset.”
The global expansion began with China in 2004.
“I pounded at the senior team and said, ‘Let’s do this. I can promise you – we’ll break even the first year in China if you let me do it,’” Tarantola recalls. “They said, ‘Oh, okay – if we’re not going to lose money, then go ahead.’ But you have to understand, I didn’t know what the hell I was doing. We just got on a plane; we met little companies and government businesses and tried to figure out what we were going to do. And we made some right decisions, but honestly, we just got lucky.”
A key cog in the machine: Wang, who was willing to head up offices in China.
“Brother Li volunteered to go,” Tarantola says, before swiftly explaining of Wang, “I call him Brother Li, and he calls me Brother Joe. When he said he would go back to China and run the business group there, that was it. How could I have hired a stranger in China? But Brother Li said, ‘I’ll go and do this little adventure with you’ – I still remember the email he sent saying he would – and that was a big deal. Once we did that and were successful, it emboldened us to really expand.”
And expand they did: Kline then spread its reach to India when, along the lines of Wang, Ali Khan volunteered to head up offices in Delhi/Gurgaon in 2006; he now serves as Managing Director of Kline India.
“That territory is a big piece of the engine now,” says Tarantola, noting that a Hyderabad office opened in 2012. “Then we wheedled our way into Eastern Europe. That became Prague. We got into Oxford next and then moved into London, getting all these great people we have there. Strategically, the center of gravity for companies is moving East, and I think, pretty soon, you could argue that London is a very important place for us.”
THE GREAT RECESSION’S ‘SHARED PAIN’
There were more bumps along the way; one of the biggest was the Great Recession that began in 2007.
“We did pay cuts,” Tarantola says. “The highest cuts were among the most senior people, down to a pretty nominal number for admins. But it was shared pain instead of firing people.”
And throughout it all, team members were kept apprised of any – and all – happenings.
“One of the most important things to do in such situations is to communicate frequently and very transparently,” says Babinsky. “We made sure to foster esprit de corps and explain all that we were doing to keep Kline viable. That hadn’t been done in the past, and the rank and file were often left in the dark. When Joe took over, we agreed we would never be that way again.”
Indeed, Tarantola says, “We all talked a lot. I learned to be a better communicator during the recession, and it did make a difference. When people don’t hear anything, they assume the worst – that’s human nature.”
Other challenges tested the stability of Kline’s core. Among them: the departures of key staff members.
“We lost some critical leaders about 10 years ago,” Babinsky recalls. “It was not expected and was a setback. It took a while for us to rebound and determine a path forward – it was challenging.”
“It left a massive hole that we had to backfill,” he says. “That one totally blindsided us. We moved some people around and, mostly, moved people up – maybe a little before they were ready. Because, for the most part, we don’t bring in senior people very often. We’ve always kind of developed them. It’s a homegrown mentality here. If we can push somebody into a job before they’re ready for it rather than hire somebody above them, I’m going to make that choice almost every time.”
And in 2020, along with the rest of the world, Kline began dealing with the COVID-19 pandemic. Once again, the company faced the crisis with as much aplomb as possible.
COVID-19 – AND HOW IT STRENGTHENED KLINE
“I think we have navigated the pandemic as successfully as we could have to this point, as earlier crises provided learning experiences,” says Vogelsberg. “We focused on maximizing employee retention and minimizing cash outlays by taking judicious management of expenses such as travel, entertainment, rent, and leases. At the same time, we took advantage of any incentives offered by various governmental agencies.”
It helped that the nature of Kline’s business allowed its employees to work from home, which Vogelsberg believes only improved the company’s offerings. “I would go so far as to say that the pandemic helped strengthen our relationships with colleagues and clients, as we’re able to often provide very personal insights and perspectives via technology like Microsoft Teams and Zoom video conferences,” he adds.
Speaking of technology, the Wang computer is long gone. Today, the list of Kline’s high-tech accomplishments is extensive. Perhaps the most impressive: All its servers and systems are Cloud-based, putting Kline in the first 5% of companies to be entirely on the Cloud – ever. And despite the pandemic still unfolding – plus a past that left more than a few war wounds – the team at Kline remains ready for whatever may come next, with little fear of failure.
“If you’re not failing, you’re not trying,” says Tarantola, who – this month – marked his 40th year at Kline. “I’ve made so many mistakes, but I have one rule: Never make the same mistake twice. Yes, we’ve tried things that were failures – but none of those mistakes was so big that it really set us back. And one of the things I’ve learned, to be quite honest, is that I don’t have any fear.”
That, surely, comes with the decades of ups and downs tucked under his belt – plus a crew that’s sailing in Kline’s now-bigger rowboat with a well-deserved sense of ease. After all, Tarantola says, “You just have to stay calm and stick to the mission.”