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Company profile: ESW Inc.

One of Inc. magazine's fastest-growing companies

Fewer than seven years ago, James Razumich and Lawrence Caldwell were frustrated.

Both were middle managers at LTV Steel Co. in East Chicago. Both were responsible for training in the industrial maintenance area. Both were working on a $300 million project that necessitated advanced training for some 250 workers. They brought in five different training organizations. None met their needs.

"In a year, we put 50 instructors up on a podium, and we were not happy," Caldwell says. "We wanted to be the guys to get that training delivered."

Caldwell, Razumich and co-worker Eugene Barbee found strength in the old adage "if you want something done right, do it yourself." They developed objectives, outlines, curriculum, materials and texts, and taught their own work force to bring the new equipment on-line.

From their experiences, the LTV employees built ESW Inc., short for Educational Systems Workshops. Razumich--president "because I lost the coin toss"--and Caldwell--the vice president who spends much of his time on the road--have built the Dyer-based business into a powerful force in the training industry. Sales have grown 961 percent since the company's founding in 1987, from $155,000 the first year to more than $1.4 million in 1991, landing ESW at No. 302 on Inc. magazine's recent list of the country's 500 fastest-growing private companies. Inc. estimates that ESW's 1991 profits fall between 6 percent and 10 percent of revenues.

Caldwell and Barbee started ESW in Caldwell's basement shortly after LTV Corp. began what has become one of the country's longest-running bankruptcies. Although Caldwell knew his job at the steel giant was safe, he felt it was a good time to go out on his own. Razumich joined the firm a year later, and Barbee has since retired. LTV became their first, most frequent and biggest customer.

"We train workers to cope with technological change," Razumich says. "We try to be the solution to any training-oriented problem."

"We're here to be the answer to the supervisor's prayers," Caldwell adds. The partners have worked together since 1964--their entire careers--though sometimes they didn't know it. Razumich was born and raised in East Chicago's Harbor neighborhood in the shadow of the steel mills. Caldwell moved to Hobart as a youngster in the 1950s. Both worked at LTV during summer vacations but did not realize until years later they had worked in the same department on different shifts.

Today, ESW Inc. employs about 52 people in five locations, providing custom industrial training primarily to steel and other heavy industries. It also serves government projects, small businesses and the average consumer, and expects to be international within the year.

In the increasingly competitive training industry, Razumich and Caldwell believe their backgrounds give them an edge. They stress custom-designed, hands-on teaching. "We consider ourselves good judges of what the customer needs because we've been there," Razumich says. "Nothing can interact with a person trying to learn better than another person."

James D. Donley, supervisor of training at Bethlehem Steel's Burns Harbor plants, says the experience Razumich and Caldwell have in the steel business is a definite plus. "They really understood the requirements, what a supervisor expects of the people in the work place, so they could provide the type of direct training they know our supervisors would be looking for," Donley says. "It's not just theoretical."

So far this year, ESW has trained more than 100 Bethlehem employees in 10 custom-designed classes. Donley says the firm's instructors are very well qualified and experienced in their fields, and ESW gives its instructors plenty of time to prepare for courses.

ESW operates on six levels:

* "Generic" courses designed to improve the skills of electrical and mechanical maintenance workers.

* Equipment- or system-specific courses giving trainees in-depth knowledge of new or upgraded machinery.

* Facility-specific or start-up programs designed to help the customer have a smooth beginning at a new facility or at an old one that's gone through a major revamp.

* Apprenticeship or work-force upgrade programs developed with the customer to meet specific goals.

* ESW's Computer Time, located in Century Mall in Merrillville, offers computer courses to the general public.

* ESW's newest division, Leadership America, which is the "soft skills" side of the business. The program caters to today's corporate needs for team building, motivation, total quality management, statistical process control and other key elements of competitiveness.

Caldwell says this area is becoming particularly important as U.S. firms strive to meet ISO 9000 certification, the International Standards Organization requirements for selling to the emerging European Community. The North American Free Trade Agreement also is driving American companies to focus on Mexico and Canada. "The demand is there," Caldwell says of the market for training workers to compete in a global economy. "Some companies might need it and not yet recognize they need it." New doors already are opening to ESW in Mexico, Malaysia and other foreign locations.

Diversity has helped the company grow continually from its roots in the Northwest Indiana steel industry. Two years ago ESW opened an office near Youngstown, Ohio, and last spring the company sprouted another branch in Pittsburgh--not coincidentally, two other steel and manufacturing centers. Another operation is in central Illinois, and a fifth runs a learning center for the U.S. Army in Texas. Razumich and Caldwell say they plan to open a few more sites during 1993.

Their Dyer headquarters, tucked modestly in the center of a strip mall, has expanded from 1,400 to 4,000 square feet. Office and warehouse shelves are stocked floor-to-ceiling with training manuals developed and compiled by ESW instructors. "By the time we give someone training," Razumich says, "we give them their body weight in books."

A video library supplements the written materials, but again, ESW's founders emphasize hands-on learning. Two back rooms house just a few of the company's "props," the simulated machines and circuit boards used in ESW's "road show" that brings training to the customer's shop floor.

"That's a fundamental part of our business," Razumich says. "We furnish things you cannot get elsewhere. The way we teach it is the way people need to learn it."

He and Caldwell see opportunity in the push toward privatization of the educational system. "We're as private as you can get, and we're good. We are very intensely quality-driven. We want to be the ones that when someone needs training, they're going to think of us," Razumich says.

"The enlightened companies invest in and take care of their people," he continues. "They follow the belief that if you take care of the people, the people will take care of the problems. If you fail to invest in the work force, well, it's getting to be a tight market out there."
COPYRIGHT 1993 Curtis Magazine Group, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Regional Report Northwest
Author:Falzone, Kris
Publication:Indiana Business Magazine
Article Type:Company Profile
Date:Jan 1, 1993
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