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Entrepreneur develops businesses to fill national markets

As a curious young accountant at a venture capital firm in Racine, Mike Harris would ask to sit in when entrepreneurs came asking for funding. And so he learned what it took to finance a start-up. Later, as chief financial officer of a technology company in Illinois, Harris would attend meetings for the sales force and for branch managers. It wasn't part of his job. He was just curious. That's where he learned about selling a company's services and managing offices. Curiosity has led Harris to success, and that success has made the 44-year-old Racine native a prototype for Wisconsin entrepreneurs.

Last month, Manpower Inc. reported that Jefferson Wells - a Harris brainchild that is now a prized internal audit and accounting subsidiary of the staffing company - generated nearly $238 million in revenue through the first nine months of the year, triple the 2003 level. It has 2,550 employees in 37 offices worldwide. In 2000, five years after he hatched the firm from his kitchen table, Harris had built Jefferson Wells into a 1,600-employee, 25-office firm with about $131 million in yearly sales. In 2001, Harris and his investors sold the company to Glendale-based Manpower for $174 million. Within weeks, Harris was starting another business. Since Jefferson Wells, Harris has launched five other companies, including a little consulting business in which he advises other entrepreneurs, a role he suggests he would like to build on eventually. "I think he's driven, and he has been for some time. But it's not ambition over everything else," said Bob Carlson, president, chief executive officer and co-founder with Harris of SilverTrain Inc., a Milwaukee-based technology and staffing specialist.

"Mike is high energy and high intelligence," said Carlson, who also worked with Harris at Alternative Resources Corp. in Barrington, Ill. "It's not just winning; he enjoys the process." A compulsive curiosity - honed by his training as an accountant - drives Harris to see a business, break it down and figure out how to make it better, much as a tinkerer is compelled to dismantle a gadget to try to improve it. "He's got a great natural, intellectual curiosity for businesses," said Cindy Lu, vice president and co-founder with Harris of Novo Recruiting Inc., a Milwaukee-based staffing services company. "He's great at taking a business that he doesn't know anything about and just tearing it apart and understanding it."

Harris' pattern has been to develop businesses to fill gaps he sees in national markets for professional services. "I'm not really one to create a brand-new marketplace for something," Harris said in an interview. "I like to look at things that are robust, that have a lot of great potential, and try to go at them at a different and fresh and innovative way." Harris said he is demanding - of himself, of his associates, and of the service professionals he hires. And when service providers disappoint Harris, he's inclined to turn it into a business opportunity. "It starts with these high expectations," Harris said, "and if people can't quite get there, then I see a gap, and I'm like, "Well, geez! If they just go at it this way, . . ."

His observations of public accounting firms while chief financial officer at Alternative Resources inspired Harris to create Jefferson Wells as an accounting alternative focused on internal auditing. Likewise, his experiences using corporate information technology consultants led Harris to team up with Carlson at SilverTrain, and his dealings with recruiters prompted his business with Lu at Novo Recruiting. "He has a great vision and ability to see existing businesses and be able to find a way to improve them," Lu said. "And then I think he gets a real charge out of starting up businesses and seeing them grow."

Harris said he begins looking at a business by how it sells what it does to its customers. In the companies he has created, he has aimed to be customer-focused and cost-efficient. "I'm a CPA," Harris said. "So I think I bring a strong focus on cost management and financial reporting." He also starts up businesses with the intention of taking them nationwide, which he said is important to communicate from the get-go both to the associates he hires and the investors he enlists. "He has passion and energy, and people for the most part like him, and that serves him well," said Dan Weinfurter, who worked with Harris at Alternative Resources and last year led an investor buyout of Capital H Inc., a human resources provider Harris had started.

Harris isn't immune from missteps. Capital H, he said, hadn't grown as he had hoped, to a large degree because the leadership - including himself - didn't click well enough. "You can't just take a bunch of great, smart people and throw them in a room and expect that they're going to have great chemistry and work well together," Harris said of Capital H. "I learned that." Weinfurter's group has since advanced Capital H by making it more of a traditional consulting firm and securing additional financing. One trait that should endear Harris to Wisconsin entrepreneurs is that he is home-grown. A graduate of Horlick High School in Racine and the University of Wisconsin-Parkside in 1982, his father was a production worker at American Motors and his mother was an office worker at Johnson Wax.

When he and his wife and three children built a house - about 15 minutes from where he grew up - Harris hired Ken Dahlin, a Racine architect with whom Harris has formed yet another business: selling high-end home designs to buyers of more moderate means. Harris has started all five of his companies in Milwaukee or Racine, although under its new ownership Capital H is based in Chicago. Still, except for initial contributions from himself and his business partners, Harris has had to reach beyond Wisconsin for early-stage capital to build the business.

"When you start a business, you tend to look in your backyard. That's where you want to go. You want to give the Wisconsin investment community a chance to invest in a Wisconsin-based company," Harris said. "It's funny. I've always thought that way, but it tends for me I'm always ending up getting funded out of Chicago." In between his various ventures, Harris said, he has been trying to stir interest in generating an institutional source through which less-established Wisconsin entrepreneurs - people of curiosity and ambition - could get some coaching and a bit of cash.

"I think it would really help the state," Harris said. "There are a lot of good ideas that don't ever get a chance to fly because they can't find a source of money."

By Joel Dresang (Journal Sentinel)