March/April 1996
“Improve and grow” is the mantra of this Atlanta-based scrap recycler, which is using computer technology and progressive management approaches to prepare itself for the next century.
By Kent Kiser
Kent Kiser is managing editor of Scrap.
Marty Kogon is talking about evolution.
Not protozoa-to-people evolution à la Charles Darwin, but corporate evolution—in particular, the changes occurring at Central Metals Co. (Atlanta), the ferrous and nonferrous scrap recycling firm he owns with Alan and Mark Cohen. “The world evolves and we as a company are in an evolution,” he says.
Not that the company hasn’t made steady progress throughout its decades in business. It’s just that the firm has been changing more rapidly of late. “We’ve exploded, and we’re continuing to explode,” says Marty.
Part of this big bang is due to the company’s relentless pursuit of computer technology as a management tool, the firm’s executives maintain. “We’ve never had a fear of using computers in our operations,” says Alan. “And in the past five years, we’ve really been going gangbusters.”
The company’s principals have also been evolving their basic approach to managing the business, moving away from the traditional owner-operator, top-down management to a more employee-directed operation. “We’re trying to allow our employees to develop a sense of personal ownership in what they’re doing,” Mark says.
Through these and other progressive changes, Central Metals is striving to transform itself into a scrap recycler for the 21st century. As Marty puts it, “We’re evolving into something different than the average bear.”
The Power of Three
If it weren’t for fate, Central Metals might be an Alabama scrap company today.
The firm’s story unfolded this way: Russian immigrant Morris Cohen, Alan and Mark’s grandfather, landed in the United States in 1907 and set to work making a living as a scrap peddler in Maryland.
In 1912, his brother-in-law Joe Rodbell heard of promising scrap opportunities in Birmingham and caught a train southward. When the train stopped in Atlanta, Joe disembarked to stretch his legs. He looked around and liked what he saw. Why go all the way to Birmingham, he reasoned, when Atlanta seemed like a nice town?
So Joe decided to stay, establishing Capital Hide & Metal Co. in downtown Atlanta, and Morris joined him in the business in 1915. The two worked together until 1932, when hard times during the Depression made it impossible for both to make a living in the firm.
So Morris took up peddling once again until 1935, when he and his eldest son Bernard went into business together, founding Central Hide Co. Shortly thereafter, the company branched out into scrap metals and updated its moniker to Central Metal & Hide Co.
Gerald, Morris’s younger son, came aboard in 1945, and the threesome of Morris and his two sons ran the company until the elder Cohen’s death in 1967. At that time, the brothers split the company management responsibilities down the middle, with Bernard serving as the “outside” man, handling sales, while Gerald became the “inside” man, handling operations. Also around that time, the firm left the hide business and adopted its current name.
The 1970s saw the third generation of Cohens join the business, with Alan—Bernard’s son—starting in 1970 and Mark—Gerald’s son—coming on in 1975. Gerald’s son-in-law Marty also became part of the firm’s management, heading a computer firm owned by Central Metals beginning in 1970, then becoming an executive of the scrap company in 1986.
Today, Marty wears the chairman mantle, Mark is president, and Alan is secretary/treasurer, though they dislike donning these titles, preferring to see themselves as a triumvirate of equals.
While having three top executives may seem like a recipe for management disaster, they assert that, in their case, three heads are better than one. “Sometimes it makes managing more difficult because you have three minds that have to meet,” Mark concedes. “But once that forging happens, then we have a strong base. After all, a three-pointed base is more stable than a two-pointed line or one point by itself.”
One reason their trio works is because each has different yet complementary areas of interest, expertise, and responsibility. Marty, for instance, deals largely with administration, planning, public relations, and political issues—clearly illustrated in the photos on his walls showing him with local, state, and national leaders such as Speaker of the House Newt Gingrich, U.S. Sen. Paul Coverdell, U.S. Sen. Phil Gramm, and Georgia Gov. Zell Miller. Mark, a mechanical engineer by training, is the operations man, while Alan is the firm’s principal trader.
Thanks to this division of power, the three avoid stepping on each other’s toes. Still, Mark notes, “we don’t hesitate to tell each other what we see in the other person’s area.”
On the Computing Edge
If there’s one aspect that distinguishes Central Metals from most other mid-sized scrap recyclers, it’s computers. “We’re well into the computer age,” asserts Alan modestly. Adds Mark, without a hint of modesty, “We have what we consider to be the best computer system in the industry.”
The firm’s use of computers dates back to the early 1970s, when its numbers were crunched by its data processing subsidiary, National Dynamics Computer Co., a company Marty directed and which has since been sold. Over the years, Central Metals began installing computers in its scrap offices to the point where, today, “there’s not a person in our company who doesn’t have a PC on his or her desk,” Marty boasts.
Rather than simply buying off-the-shelf programs and shoehorning its processes into them, the company modified existing programs or created its own systems from scratch. What else would you expect from a company that has two executives—Marty and Alan—who are not only systems engineers, but also IBM alumni?
Far from designing the system themselves, however, Marty, Mark, and Alan enlisted the help of all Central Metals employees, gathering everyone in chalkboard-brainstorming sessions in which all were asked to reveal their computer-system dreams. The goal was to design a system that would enable employees to keep up with essential management data—such as dispatch, purchasing, sales, and production—with minimal error and maximum ease. “We wanted to design a system in which the computers would serve our employees, not the other way around,” Marty says. And as Alan adds, “We had no illusion that we would simply change over our manual system to a computer system. We were aiming toward using computers as a management tool.”
And, indeed, everywhere you look around the Central Metals headquarters, an employee is tapping away on a keyboard—at the scales, in the cashier’s office, in the administrative offices. This is a scene the firm’s principals relish. Given half a chance, in fact, Marty will lead you into the firm’s inbound scale house so you can watch the weighmaster process incoming loads. With the push of a few buttons, the supplier’s file is called up—or a new one is created—the material is identified, and its weight is registered. “It’s like McDonald’s,” Marty observes.
The benefits of becoming computerized have been “boundless,” Alan says, asserting, “control of management information is key.” As if to illustrate this point, the company’s cashier comes into Marty’s office and says a supplier lost one of his scale tickets but wants to be paid for the load he delivered. Marty wheels in his seat and punches a few keys to initiate a search of the firm’s payables. Within minutes, the system finds the supplier’s unpaid ticket and prints a new copy. Marty gives his signed OK to pay the supplier, and the problem is resolved—just like that.
To Marty, this anecdote shows perfectly how computers have enabled the company to establish almost airtight control of its detailed management information. “You have to be able to think on the macro level but act on the micro level,” he asserts. “You can’t be successful in the long run if you don’t take care of the details.”
Building a Team
To understand the Central Metals approach to its employees, you need to get one fact straight: People who work at the company aren’t employees—they’re “players” or “coaches.”
Mere semantics, you say? Hardly. These terms capture the firm’s team approach toward its 130 employees—er, players. “We try to give our players a sense of belonging to a team,” Mark explains. “We want everyone paddling in the same direction because everybody’s long-term benefit lies down the same river.”
Considering that team-building is easier said than done, how does Central Metals motivate its players and promote its team philosophy? Primarily by being a good team owner, which means offering not only “all the benefits” and dependable employment—the firm has never laid off an employee for lack of work, Mark notes—but also other above-and-beyond amenities. “If our players are hardworking and reliable,” he continues, “the company ought to be the same toward them and their families.”
For starters, the firm is “very bonus-oriented,” Marty says, asserting, “We’re very willing and anxious to profit share in a variety of ways.” Players in every department, for example, are eligible to earn a weekly production bonus that can amount to “sizable dollars,” as well as a year-end profit sharing bonus. “We’re strong believers in rewarding the people who make things happen,” Marty explains.
Beyond monetary rewards, Central Metals gives its players the chance to grow in their jobs. “There’s a lot of upward growth potential in this company,” Marty says, offering as proof that “most of the people in management positions started out at almost entry level.”
In essence, the company believes in letting its players climb as high as their abilities will take them, even to the point of “putting them in business for themselves,” which means allowing them to make their own decisions—within specified boundaries, Marty explains. As an example, he notes that the manager of the firm’s Marietta, Ga., buying facility operates it as a virtually independent venture. “This isn’t a top-down organization,” Alan states. “We try to move as much of the decision making as we can down to the playing field. While Marty, Mark, and I might be forming the game plan, we’re not calling every play.”
To enable its players to reach their potential, Central Metals has made training—or “human development,” as Marty puts it—a top priority. Without a highly trained work force, he argues, it’s much more difficult—if not impossible—to achieve management goals. And Mark concurs, “You can have the tools, you can have the people, you can have an objective, but if the training isn’t there, it’s difficult to make the system work.”
By training, the firm means both on-the-job instruction and off-the-job continuing education, for which it offers a tuition-reimbursement program. To understand its commitment to training, consider this: The company has hired a consultant to create a step-by-step, position-by-position manual that outlines everything players need to know to do their current jobs and advance to the next level. This manual, which could take two years to complete, will be a living document that changes as positions and the company change.
Though the process is expensive, “we have to invest in our people, not only in equipment, and part of that investment is allowing them to see growth and improvement,” Mark says. “Training is a form of maintenance of people.” Or, as Marty adds, “By helping our players, we also help ourselves. It’s enlightened self-interest. We’re in it to develop a better group of people who feel more connected.”
And though Central Metals believes it is farther down the training track than most scrap firms, Marty asserts that the company “will be doing a much better job in the next few years. Everybody can improve. I don’t care if you’re Einstein. Everybody can learn more.”
A Sense of Community
Just as it is committed to its players, Central Metals is dedicated to its community, and one look at its local activities proves that the company approaches all things philanthropic with creativity and zest.
For just one example, the firm could very well be the only scrap processor to recycle a chicken. Not a feathers-and-drumsticks clucker, mind you, but the Big Chicken, a three-story-tall steel mascot of a Kentucky Fried Chicken restaurant in Marietta. Rather than simply recycling the 19,200-pound fowl, the company cut 1,700 pounds of its I-beams and H-beams into 1-pound angle irons. These “chicken bones” were then packaged and sold for $10 apiece at local Kentucky Fried Chicken locations, with the proceeds being donated to a community food bank.
In a more artistic direction, the company has sponsored eight “Art of Recycling” scrap sculpture competitions since the early 1970s. The competition, originally launched in recognition of Earth Day, invites art students from three Georgia universities to create sculptures from scrap collected at the firm’s headquarters. In this win-win situation, the students receive scholarships, purchase awards, and invaluable exposure, while Central Metals reaps the benefits of communal goodwill. In 1994, the company even gleaned national attention for its support of the arts when it was nominated for a Business in the Arts award by the Business Committee for the Arts (New York City).
Assuming the role of a crime fighter, Central Metals showed its altruistic mettle—and metal—in 1994 by recycling 1,500 guns collected by four Atlanta groups in a program aimed at getting handguns off the streets. After running the guns through its aluminum shredder, the firm sent the frag to the sculpture department of Georgia State University, which cast it into a plowshare. This symbol of peace, titled “Isaiah’s Promise,” was then given as a gift to the city of Atlanta and is on permanent display at City Hall.
And in 1995, the firm sponsored a reading program that awarded elementary school students $2 for each book they read.
These programs, of course, provide only a glimpse of the firm’s philanthropic activity, and Central Metals continues to strive to serve its community. As Mark asserts, “We’re always looking for ways that we can have a positive interaction with the city.”
New Age Recyclers
When Marty, Mark, and Alan try to sum up their company’s present and future, they return to two familiar words: transition and evolution. “You either grow or die,” Alan asserts. “We want to be a progressive recycling company that has a growing customer base and that is able to safely and profitably process scrap into the 21st century.”
Toward this end, Central Metals has a heap of “very specific, progressive” plans for the future. “We have a definite vision of where we want to go,” Marty says. “We know where we want to be in five years. We’re all hooked into it very tight, and everybody’s very excited.”
But when asked what these plans are exactly, the triumvirate clams up. Sorry, top secret.
All Marty will reveal is that the firm’s future ventures will continue its transition from an owner-managed company to one composed of minienterprises managed by staff. “We’re creating situations where we’re allowing some very good people in key positions to take care of their details in a way that enables us to be successful,” Marty explains—sort of. “Wherever we expand, it’ll be with that kind of format. That’s the vision of where we’re trying to go.”
On the one hand, Central Metals could grow in leaps and bounds, the trio says, such as it did in 1990, when the company acquired one of its local competitors, J.T. Knight of Atlanta Inc. Virtually overnight, the company increased its shearing capacity 60 percent, baling capacity 50 percent, transportation capacity 40 percent, and operating space 40 percent.
On the other hand, the company is definitely committed to growing through incremental changes and improvements. “We’re not averse to taking big bites,” Mark says, “but, in general, we have a continuous approach to growth and change. We try to take little steps forward every day. We always want our goal to be a step above where we are.”
Marty illustrates this philosophy of continuous improvement by asking, “How do you eat an elephant?” The answer, of course: One bite at a time. The moral: You don’t accomplish large tasks—or evolve—in one swoop. You achieve such goals over time. “A little change every day can bring amazing progress,” Marty asserts.
But no matter how and how much the company expands and evolves, one thing is certain: The triumvirate will never let Central Metals be content where it is. As Alan expresses, “You can be happy with your results, but you can’t rest on your laurels. When you’re growing, you’re always changing.” Mark agrees, concluding, “We are constantly in the stage of starting. The process has no beginning, and we hope it has no end.” nAn industry executive once said about Harry Turkel, “He’s a broker’s broker.” When asked to explain, the executive added, “He’s always there, ready for action.” It was a high compliment. •
“Improve and grow” is the mantra of this Atlanta-based scrap recycler, which is using computer technology and progressive management approaches to prepare itself for the next century.