A legacy of change.

IN ITS 125-YEAR HISTORY, ONE THING HAS REMAINED CONSTANT FOR CHOWN Hardware--the commitment to change in order to better serve their customers. While builders' hardware has always been the mainstay, the 17,577 people who lived in Portland, Oregon in 1879 came to F.R. Chown Hardware for farming and timber implements. In the early 1900s, what grew to become Portland's largest retail hardware store manufactured and sold the area's first crystal radio sets and appliances such as Portland's first electric washing machine. At one point when sporting goods were a part of the inventory, Chown Hardware sold the most hunting and fishing licenses in Oregon.

[ILLUSTRATION OMITTED]

Flexibility has been the key to Chown Hardware's continued success. As the manufacturing and construction industries took hold, the focus was on woodworking tools and machines. Chown's product mix later shifted to include industrial supplies, doors, frames, windows, garage doors and even exotic gifts and antiques. Today, Chown Hardware is the area leader in its four divisions--architectural hardware for new commercial construction; commercial hardware to existing businesses and institutions; hardware and access control service and installation for businesses, schools, hospitals and property managers; and Chown Showcase, which sells residential hardware and high-end plumbing fixtures from its Northwest Portland and Bellevue, Washington locations.

[ILLUSTRATION OMITTED]

That ability to change with the times--all 125 years so far--has led the fourth generation of Chowns to focus over the next several years on builders and home furnishings hardware, with an emphasis on providing total security solutions.

Company President Dave Chown attributes his company's success in the architectural hardware business to three primary areas:

Inventory -- "I'd say we're pretty unique in the contract hardware business because we have quite a bit of product on hand. This allows us to stay in a leadership role in the aftermarket business, as well as new construction."

Service and Installation -- "We have four vans on the road doing commercial installation work, masterkey systems and electronic hardware design and installation."

Expertise -- "We've always been considered experts on the mechanical hardware side, and now that reputation is spilling over onto the electronics side as well."

According to Chown, a big challenge facing the architectural hardware business in general is a shifting from a product mindset to a system design mindset. "In the past, companies like ours served as a supplier of products, almost as a commodity; but I believe where we're headed now is taking our service offering to a higher level with the value-added component of system design. Our focus anymore isn't so much on hardware as it is on security, which opens up our universe to a much more service-oriented business than a product-oriented business."

This full-service approach, he explained, starts at a building's conception and carries through the facility's entire life cycle. "We're still doing all the mechanical aspects and masterkey systems, but the trend is toward developing the electronic hardware as well, so that the security of the entire building, including closed circuit TV, is networked into a customer's computer system."

[ILLUSTRATION OMITTED]

The waves this approach sends through the industry (especially post 9/11) involve an entirely different selling paradigm, effectively moving one's outside sales force from being a salesman of goods to almost the level of engineer. And not only are there different products to become familiar with, there's a different sales language employed when you're dealing with IT people and higher management on issues of heightened security.

"The reality is that as long as the customer has mechanical-only systems of locks and keys, you have limited control and limited security. And with the world demanding greater security controls and computerized systems, a higher level of expertise is expected from architectural hardware companies like us. That requires a lot of training and the need to look at a building with different eyes."

What's been missing in the marketplace, according to Chown, is the single solution provider that can offer that kind of expertise under one roof. "I believe what our customers will be looking for is the kind of architectural hardware company that can take care of both the mechanical side and the electronic side."

Over its 125-year history, Chown Hardware has continued to adapt to change, but never so fast as over the past several years when sweeping transformations in technology and the ever-increasing need for heightened security have dramatically affected the industry in which we all work.

RELATED ARTICLE: Major Moments in the History of Chown Hardware

1879 -- On Sept. 15, Francis R. Chown founded the company in Portland, OR.

1894 -- The business survived a year of hard economic times that forced many to close up shop.

1907 -- D.B. Chown, the founder's son, entered the business at the age of 17.

1921 -- Having outgrown two store locations, the company moved for a third time in downtown Portland, becoming the city's largest retail hardware store.

1945 -- Frank D. Chown, back from World War II, joins his father D.B. in the business.

1947 -- Chown Hardware moved to its present location in Northwest Portland.

1974 -- Rapid expansion in the 60s and 70s led to the opening of Chown Showcase, which began selling gifts and decorative hardware.

1975 -- Expanded business to include commercial locksmithing.

1977 -- Brothers Steve, Fred and Dave join their father Frank D. Chown in the business.

1979 -- Chown Hardware celebrates 100 years in business, one of Portland's oldest family-owned businesses.

1986 -- Fred Chown becomes president of Chown Hardware.

2004 -- 125TH anniversary celebration, Dave Chown becomes president.

RELATED ARTICLE: The Golden Rule of Employee Retention

Among the many challenges we face in the architectural hardware industry,

perhaps the most difficult are finding, training and keeping good employees. But the right people--motivated, trained, helpful, experienced--are the best asset a small distributor can put forward in the battle against mega-competitors. Think about it: what can a small company offer that huge retailers can't? The most powerful attribute we can offer is exceptional customer service, the kind that comes naturally from the heart of helpful, caring, experienced employees.

Big box retail stores can boast about their thousands of hours of training, but they have no choice--training is imperative if your employees turn over like hotcakes. Excellent customer service can never really be attained when your employees are always new on the job. There is no substitute for good people. But how do we attract, motivate and train the employees who will make us successful?

The first key is to find the right people. Find people who care and then give them all they need to succeed. Put them in an environment where they can grow, then watch them apply their skills to do exceptional things.

Instead of trying to make people do the right things, we should focus on finding and keeping the right people. The right people do the right things without training. The wrong people will never consistently do the right things no matter how they are taught. The most powerful motivator is what we carry inside our heart, and that is very hard to teach.

Never rush the hiring process. Take your time and look for people who have the personality, integrity, and passion that you need. It's hard to be patient and take the time to search for the right person, and sometimes it is costly. You might even lose some sales while you are shorthanded. But it is far more costly to spend months training the wrong person, only to start over when you finally decide they won't make the grade.

One great mistake we often make is to spend too much time trying to fix the wrong people. Struggling to change someone who will never fit the position may keep you from finding the right person. More importantly, they may never find what they are best equipped to do if they are kept in a job where they don't really fit. Out of compassion, we try to help them and change them, but in reality they may need to find where they fit better ... possibly in another organization.

To keep the right people, you must create a work environment where the right people want to stay. They will only choose to work long-term in an environment that supports them and helps them to grow.

In the end, it comes down to a simple rule: the Golden Rule. We all want to be trusted, listened to, cared about, empowered, and surrounded by people we admire. By treating others the same way we would like to be treated, we create an environment of prosperity, growth, and satisfaction for all our employees. And that's good business for everyone.

RELATED ARTICLE: Keeping it in the Family

This month marks the 125TH anniversary of Chown Hardware, North America's oldest family-owned architectural hardware company. Today, two brothers of the fourth generation of Chowns run the Portland, Oregon-based company, which has 76 employees and does about $18 million in annual revenue.

As with most family-owned businesses, succession planning begins to weigh on the minds of owners as they reach their 50s and 60s (equal partners Fred Chown is 54 and brother Dave is 51). Will their high school-aged boys want to take over the business? How would shares in the company be distributed between active and passive owners? What will happen with the legacy that their great grandfather, grandfather and father have passed down to them? One thing's for sure, current president Dave Chown points out, "There are no guarantees."

"Keeping the business in the family has never been a given or a requirement," Dave explained. "I'm sure my dad, at one point, figured none of his three sons would go into the business." While brothers Fred, Steve and Dave all worked part-time at Chown Hardware as kids--counting inventory, working in shipping and receiving, manning the sales counter and keying locks--all three went off to college and came out with nothing close to a business degree. Fred got his English degree; Steve, Political Science; and Dave, Human Biology and later Theology. Settling into his late 50s and watching his sons move into their careers after college, their father Frank D. Chown started making preparations to sell the company to his employees through an Employee Stock Option Plan.

But, just like in each of the previous generations, a Chown son ultimately stepped in to take over the family business. In fact, Fred, Steve and Dave all returned to work in key management positions. When the company sold off its tools business, brother Steve opted to sell his shares in the company to Fred, who served as company president from 1986 to 2003, and Dave, who took over the presidency in 2004.

"In every preceding generation, one sibling has bought out the others," Dave explained. "We're 125 years into this thing and we'll just have to wait and see what happens."

Ken Koopman, Koopman Ostbo, Inc.