Katherine M. Hudson.

Look at this guy," Kathy Hudson sputters, slapping a copy of USA Today on the table and stabbing a finger at the photo of a man surrounded by flying wood fragments as he cuts down a tree with a chainsaw. "No protective goggles, no work gloves, no hard hat, no nothing. Who chops down a tree without protection? I'd never let my husband do that. I bet OSHA would have a field day with this one."

Shaking her head, the president and chief executive of W.H. Brady Co. settles in her chair, then smiles self-consciously at the outburst. "It's just so stupid. We should have one of our signs there. You know, one that spells out, 'Use caution.'"

W.H. Brady is in the identification business. The $255.8 million company in Milwaukee, WI, makes labels, signs, specialty tapes, adhesive parts for microfloppy disks, and portable printing systems. In this fragmented market, Brady is something of a little fish as it competes with the likes of Avery Dennison and Panduit. Analysts often refer to it as a miniature 3M. Nevertheless, Brady boasts customers such as Boeing, IBM, PepsiCo Food Systems Worldwide, and W.W. Grainger, and it operates in 13 countries including Singapore, Canada, Belgium, and Australia. Hudson, a former executive vice president/general manager of Eastman Kodak's Professional, Printing, and Publishing Imaging Division who came on board as CEO last January, seeks to expand Brady's operations in Italy, a highly industrialized nation that is just now realizing the need for safety signs and labels.

Perhaps Brady's biggest opportunity lies in the recent wave of environmental safety regulations that have swept the U.S. and Europe. In a partnership agreement, Brady supplies parts for and distributes the LeakTracker[TM] fugitive-emissions-detection and data-management system developed by Long Beach, CA-based Fugitive Emission Controls last January. The system scans a bar code or radio-frequency tag at a valve or flange, then tests for emissions; it records emission levels digitally and advises the technician if a component is leaking and needs repair. Brady also provides training to distributors and end users and has an identification/installation service for facilities.

"Governmental compliance is one of the key markets today, and Brady has benefited from the trend," says Jay E. Van Cleave, first vice president at Robert W. Baird & Co. in Milwaukee. "The outlook continues to be robust." Indeed, net income for fiscal 1994 jumped 10 percent to $18.5 million, and it continued to rise through the first quarter of fiscal 1995. Today, Brady manufactures and markets more than 30,000 products and looks to expand in the long-term through acquisitions.

Like most companies, Brady faces the same two ubiquitous. challenges: coping with new technology and the cultural changes it brings. To help employees adapt to change, Hudson, 48, relies on what she calls "walk-around" management, roaming factory floors and talking informally with the company's nearly 2,000 employees.

A sense of humor also helps the acclimation process. Known at Kodak for gimmicks such as sending IBM a pair of pink socks for submitting a proposal that "knocked her socks off," Hudson doesn't shy at indulging her sense of humor. At her first Brady management get-together, Hudson enrolled the executives in the "Lighten Up Club," whose motto is, "Lighten up; life is too short to be taken seriously." She got everyone Groucho Marx glasses and noses and sweatshirts and lined them up for a photo in front of a wall of commodes affectionately called the "Great Wall of China."

Says Hudson, "There's no reason you can't have a little fun."