ODonovans Loyalty Pays

May 23, 2005
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ROCKFORD — People who hold stock in footwear companies like to see growth. Specifically, there are two kinds of growth they like most. There’s the kind that sends kids’ feet pushing through the toes of their sneakers, and there’s the kind that sends investors’ fund balances shooting through the roof. Footwear manufacturer Wolverine World Wide Inc. has been fortunate enough to benefit from both.

The company’s growth in recent years has come under the guidance of Chief Executive Officer and Chairman Tim O’Donovan. Since he took the driver’s seat in 2000, the company has averaged double-digit revenue growth. For the first time in its 122-year history, Wolverine expects its 2005 revenues to top the $1 billion mark. The company’s stock has more than quadrupled in value during his tenure as CEO.

One reason O’Donovan has been so successful with the company is loyalty. Unlike many top-level CEOs, O’Donovan has not bounced from company to company as he made his way up the corporate ladder.

“The only company I’m ever going to work for is Wolverine, that’s for sure,” he said.

His career with his lifelong employer began in 1969. Around the time O’Donovan was finishing up his MBA at Michigan State University, the school’s dean, Al Seelye, became CEO and chairman of the board at Wolverine. Seelye hoped to recruit someone out of the MBA program to do financial analysis for the company.

“I was just in the right place at the right time,” said O’Donovan.

Shortly after beginning his career in financial analysis, O’Donovan was called up for a commission in the U.S. Army. Having worked his way through his undergrad degree at Iowa State University, O’Donovan had taken advantage of the benefits of the ROTC program. Now fresh out of grad school, he faced the possibility of facing combat thousands of miles away.

“I was very fortunate. I had orders to go to Vietnam in June of 1972. In May, Henry Kissinger was in Paris and ended the war and canceled my orders,” he said. “That was my second most fortuitous career break.”

After his commission ended, he returned to Wolverine. Over the next several years, he worked his way up through the levels of responsibility. He became a product manager for the Bates Uniform Shoe division. Next came a stint as sales manager for the Hush Puppies division. Then he was general manager of the Wolverine Boot division.

“I was very fortunate because I never really had a day when I didn’t want to get up and go to work,” he said. “I was moving through different parts of the company and getting new experiences all the time.”

However, his career growth came with a price.

“When I was a young guy in business, I worked … I was a …” he said, pausing. “I would plead guilty to being a workaholic. I was gone constantly as our kids were young. And I wouldn’t recommend that to anyone today.”

O’Donovan credits Karen, his “saint” of a wife, with making the family a success.

“She really ran things when it came to our family. She has just provided a tremendous level of support. Some women might not have been up to the task and would have told me to get lost,” he laughed.

After taking time off to raise their two sons (Kevin, 32, and Ryan, 29), Karen earned her master’s degree at MSU. She taught and served as the president of the Forest Hills board of education for 12 years. Now she volunteers for the Grand Rapids Public Schools, working on fundraising and other projects.

The O’Donovan family also had the support of Tim’s parents, who moved to Grand Rapids after his father’s retirement in the early 1980s.

Staying rooted in the area has been a boon to O’Donovan’s personal and professional success.

“My job was always right here in Grand Rapids. We raised our family my entire career right here in the Grand Rapids community,” he said. “I talk to people who have moved 15 times and have to pull their kids out of school. We never had to deal with that.”

In 2000, with the children grown and beginning their own careers, O’Donovan was faced with the biggest challenge of his professional life. He saw the opportunity to become the CEO of the company. For eight years, he had been enjoying the presidency of the Hush Puppies division. He was comfortable and happy in this leadership position.

“I loved running one of our brands. It’s a very exciting business. It moves at a very quick pace,” he said. “It was challenging and exciting. I really wasn’t sure if I really wanted to go and be a corporate guy and do things on a different scale when I’m really enjoying what I’m doing.”

Former CEO Geof Bloom encouraged O’Donovan to take the plunge.

“He said, ‘You know, Tim, you like what you’re doing today, but five years from now you may feel differently about it. Now’s an opportunity to step up and take on the next challenge,’” said O’Donovan.

And as shareholders can attest, he has handled that challenge admirably. Wolverine has continued to grow steadily stateside, while its overseas sales growth has outpaced domestic growth by nearly two-to-one. One of Wolverine’s divisions, the outdoor brand Merrell, has expanded its sales more than tenfold during O’Donovan’s time as CEO. Much of that growth has been abroad.

Looking overseas is both cause for excitement and worry for O’Donovan. He said that when he loses sleep these days, he’s usually fretting about macroeconomic issues, such as the undervaluation of the Chinese yuan.

China itself is both a boon and a bane to Wolverine. The country has gobbled up most of the world’s shoe business. O’Donovan said that 84 percent of today’s global footwear manufacturing takes place there. In 1980 the percentage was zero. But on the other hand (or foot), the Chinese nouveau riche are hungry for American brands. Wolverine’s Asian sales have been steadily increasing in recent years and don’t show any sign of slowing.

So while O’Donovan tosses and turns, worrying about international trade pacts and monetary policy, he is also thinking about one more big plan. He and his fellow board members are strategizing how soon Wolverine will double its expected $1 billion 2005 revenues. The plan is called “Project 2.0.”

O’Donovan hopes to be around to see the project come to fruition. He won’t commit to a timeline, but he is certain that Wolverine World Wide will earn its second billion dollars more quickly than the first. That took 122 years.    

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