Doing well and good
With an unusual restructuring, a Billerica education publishing company has been able to thrive – and stay true to its mission
CALL IT A textbook case of serendipity.
A few years ago, Frank Ferguson, then in his early 80s, reluctantly began considering the fact that he would not be able to run Curriculum Associates forever. The Billerica-based educational publishing company he helped launch in the late 1960s was doing well. But Ferguson lamented the idea that the company might effectively die with him if it wound up acquired by some corporate behemoth, where the imperative would have been to slash costs—and jobs—and simply fold Curriculum Associate’s top-selling materials into the acquiring company’s own product line.
Around the same time, Rob Waldron, a restless Harvard MBA with a strong leadership record in the for-profit and nonprofit worlds, set his sights on finding his “dream job”—a CEO post that combined his business skills and a mission-driven passion for education. Waldron, who also wanted such a job to be no farther than 30 minutes from the Wayland home where he and his wife were raising their two children, knew the odds of finding that perfect fit were slim.
What happened next proved to be the answer to both men’s dreams. It also stands as an unusual example of outside-of-the-box thinking in a corporate culture where that isn’t common and where pursuit of short-term profits often trumps all else.
Ferguson says Waldron was saying all the right things about how he wanted to lead the growth of a company like Curriculum Associates, while maintaining a firm commitment to its education mission of improving schools. But Waldron’s most recent business background was in the cutthroat world of private equity, exactly the business sector Ferguson was trying to avoid in planning the firm’s future.
“He says all the right words, but, you know, this guy is private equity, can’t be true,” is how Ferguson recalls his thinking upon first hearing Waldron’s sweet talk.
For his part, Waldron wondered whether Ferguson would actually give him the room to lead. “If a guy is 82 and hasn’t given up the reins, you’re like, ‘Danger, Will Robinson!’” he says.
Despite their mutual, initial reservations, the two hit it off. They explored various approaches to restructuring the company based on Ferguson’s two main objectives: to see Curriculum Associates remain true to its mission of “making classrooms better places for teachers and learners,” and to have the bulk of his estate benefit the two universities where he got degrees, Iowa State and MIT, as well as several small arts organizations. After considering several options, including converting the operation to a nonprofit or an employee-owned company, they landed on the idea of placing Curriculum Associates into a perpetual trust. Upon Ferguson’s death, the trust will operate the company, with the bulk of any dividends that aren’t reinvested in the company to be paid each year to his nonprofit benefactors, and a smaller share going to his four children and their families.
Waldron came on board as CEO in 2008—and signed a 20-year employment agreement.
By putting the company in a trust, Ferguson was able to avoid subjecting his benefactors to the hefty estate tax they would have been subject to under a traditional inheritance. In such a circumstance, selling off the company to a big corporate player would likely have been the only way his benefactors could have generated the cash to pay off the estate tax.
Waldron says his recruiting pitch is, “I am focused on the long-term, this company is not for sale or answerable to shareholders. We are only about the work.”
The plan has paid off spectacularly. The company has been able to navigate the tricky transition in education publishing from print to digital products with great results, rolling out a very successful online assessment tool that allows teachers to gauge exactly the areas where individual students are thriving and where they are struggling and need special attention.
Company sales have soared from $26 million in 2008 to $69 million last year, and the firm has grown from 100 employees to 270.
“Their growth has been great,” says Deborah Quazzo, founder and managing partner of GSV Advisors, a Chicago-based firm that tracks the education and business services sector. Quazzo agrees that a key has been the firm’s ability to recruit people who understood “the destiny of the business” and who knew “they weren’t going to get RIFed” —shorthand for corporate downsizing through a “reduction in force.”
If the company restructuring is unusual, so, too, in this day and age is Waldron’s contract, in which he gains a stake in the company that only fully vests if he stays for its full 20-year term. He has been told he may be the first Harvard Business School graduate to ever sign such a long-term employment agreement.
“They think I’m crazy,” Waldron says of the reaction of his fellow business school grads. While staying with one company for a career may have been common 40 or 50 years ago, the ethos of today’s corporate captains is to quickly drive up earnings and cash in, while hopscotching from one company to the next.
Waldron worked for 10 years as a top executive at Kaplan, the Washington Post Co.-owned education firm. He then served for four years as CEO of the Boston-based nonprofit Jumpstart, which focuses on early childhood education.
When he left Jumpstart, he spent two years prior to arriving at Curriculum Associates at a Boston private equity firm. “They pay you ridiculous sums of money,” he says. “It is very lucrative—and totally soulless.” For some of that time he served as president of a $135 million luxury bath retailer the private equity firm acquired. “I was really miserable,” he says. “I just can’t get passionate about luxury plumbing supplies.”
Waldron, 49, says his growing aversion to traditional corporate life may have been seeded at Kaplan, where he observed the leadership style of Don Graham, then CEO of the parent Washington Post Co. Graham is well known for his principled approach to corporate decision-making. “He was a great model to me of who I want to be,” says Waldron.
“Rob comes out of a world where we have long-term plans,” says Alan Spoon, an investor at Waltham-based Polaris Partners who was president of the Washington Post Co. during that time.
Waldron thinks society goes too easy on corporate leaders, while blaming Congress and other political leaders too much for unemployment or other problems. “We don’t blame CEOs enough,” he says. “What would happen if every CEO acted with integrity and responsibility? They have so much responsibility for the livelihood of people and often so much more immediate impact than government.”
That integrity seems to come naturally to Ferguson, a down-to-earth Iowa native who favors bolo ties over more conventional business attire. He served as president of Framingham-based Bose Corp. for seven years before taking full ownership and management control of Curriculum Associates in the mid-1970s. Immersing himself full-time since then in the company’s work to help schools has become as much a calling for Ferguson as a management responsibility.
“There were opportunities to sell the company and walk away with a lot of money—$50 million, I don’t know, some ridiculous amount,” says Ferguson, a spry but utterly unassuming 87-year-old who now serves as the company’s board chairman. “Most people look in their wallet to find out who they are, but my life was never really about money.”
Ferguson, who lives in Lincoln with his wife Mitzi, 89, still drives to the office most days and puts in a full workday focused on various projects, including the company’s expanding overseas business.“Authentic happiness has to do with committing yourself to something that’s outside of yourself and making a difference. That, to me, is by far the most important thing in life,” he says. “So when I get up in the morning and think that something that I do today may make schools a little better place for teachers and children, I really can’t wait to get here.”