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Articles by John Keahey |
August 13, 1995 FRENETIC FRANKLIN QUEST FOUNDER HAS MORE PLANS THAN A DAY HOLDS By John Keahey © 1995, The Salt Lake Tribune ST. GEORGE -- Hyrum Smith, struggling to relax, leans back in his chair and awkwardly plops his feet onto a table. He wraps his arms around his chest, squeezing tightly, as if to keep himself from fidgeting -- or exploding. The 51-year-old Utah native made millions teaching business executives how to manage their time and set goals by using his creation, the Franklin Day Planner. He just cannot do ``laid-back.'' The Franklin Quest chairman and CEO is compulsive, obsessive and driven. He will walk through the door, and by the time he greets his wife, his hand is full of fuzzballs plucked from the rug. Smith would rather pay for hundreds of parking-zone violations a year than waste time finding a meter. And he drives his Mercedes fast. His record shows 27 speeding tickets. ``In the home I grew up in, you had to be physically moving or you weren't being productive,'' he says. ``If you were just sitting there, my mother would come up and say, `What are you doing?' `Well, I'm just sitting here,' I'd say. `Do something to justify your existence,' she'd say. I can remember that since I was a baby.'' Smith's restlessness is so acute that, despite his financial wealth and the fact that he really does not have to work, he has trouble spending seven consecutive days in one place. His wealth came suddenly. After years of struggling, he took Franklin Institute public in 1992 under the new name Franklin Quest. He made $25.6 million from Franklin Quest's three public-stock offerings. As Franklin Quest's largest individual shareholder, Smith still holds 2 million shares, today worth about $46 million. For eight years, he averaged 235 speaking engagements a year throughout the United States. He has not kept track of the number in recent years. ``It got so depressing,'' Smith says. But he has cut back a lot, to maybe 10 or 12 speeches a month. His time away from home even drove his wife of nearly 30 years to declare that since she must live alone most of the time, she might as well live where she wants. So Gail Smith moved her family of six from Centerville north of Salt Lake City to St. George, a southern Utah community just a few miles down the road from her childhood home in Washington. ``Some people are farmers, some are hunters,'' Hyrum Smith says, searching for a metaphor to explain his hyperactivity. ``I'm a hunter. I have to occasionally go out, kill something and drag it home.'' The Beginning: Smith and colleague Dick Winwood in 1983 and 1984 started two organizations that today constitute Franklin Quest: H.W. Smith & Associates concentrated on producing time-management and other productivity seminars; Franklin Institute launched the Franklin Day Planner. Smith proudly says that the planner now is carried by 3.5 million people in 11 countries. But in those early days, there were few hints of the colossal wealth in his future. ``I ate dinner at their home one time [in Centerville],'' recalls Winwood, who traveled for the fledgling companies out of Portland, Ore. ``We had corn for dinner, and that was it -- except for the salt and butter on the table.'' Winwood remembers thinking the sparse dinner was a ``reflection of someone watching how they were spending their money.'' Another clue was Smith's old, beat-up green van. Smith was born in Provo and reared in Hawaii by schoolteacher parents -- Smith's father taught college debate, his mother was a sixth-grade English teacher. After college, and an army tour in Germany, he ended up in Portland with a computer company. That is where he first met Winwood, a fellow Mormon. In the midst of building a career with Automatic Data Processing (ADP), Smith was called in 1978 to serve as a Southern California mission president for The Church of Jesus Christ of Latter-day Saints. The mission ended in 1981. He says he turned down a lucrative ADP offer and decided to remain in the Los Angeles basin to make a living motivating people. ``I didn't want anyone putting a cap on my income,'' he says. ``I wanted to get paid what I thought I was worth. And the only way to do that is to sell something.'' But his one-man firm, Golden Eagle Motivation, was a flop. Smith knocked on every door in the 25-floor McCulloch Oil building on Wilshire Boulevard and got nowhere. He would schedule a seminar expecting 30 people and three or four would show up. ``It was awful,'' he recalls. Then Winwood, who had left ADP to form his own seminar firm, invited Smith to one of his time-management presentations in Los Angeles. Winwood was a hit. He turned several referrals over to Smith. One was to do seminars for Transaction Technology Inc. (TTI), a subsidiary of Citicorp. ``Hyrum was mesmerizing,'' recalls Charlotte Richard, a TTI training manager and now an independent management consultant from Manhattan Beach, Calif. After his seminars, Richard says, ``we had people walking around doing the time-management thing. People carried appointment books, plopped them down, took notes and followed up. I had training managers calling me from Citibank [another Citicorp subsidiary] asking, `How can we do this, too?' '' Winwood and Smith eventually joined forces as independent contractors with Utah-based, time-management guru Charles Hobbs. Smith moved to Salt Lake City and Winwood stayed in Portland. The pair, after a bitter dispute with Hobbs over seminar ownership broke away in 1983. H.W. Smith & Associates and Franklin Institute quickly evolved. Those early years, as evidenced by Winwood's recollection of the sparse corn dinner, often were bleak financially. Things were so tight, ``we would teach a seminar and ask for the check the next day,'' Winwood says. ``We couldn't wait the 60 to 90 days it typically took to get paid. Sometimes, we would ask them to bring the check to the seminar. ``It involved a lot of sweat equity and some smoke and mirrors'' to make a go of the business, says Winwood, who has used his Franklin Quest millions to become a venture capitalist. Today, Franklin Quest has 2,000 employees -- a far cry from the days Smith ran the company from his Centerville basement with his children taking telephone orders. At the end of its 1994 fiscal year, the company reported $216 million in sales. For the first nine months of 1995, it has booked $205 million in sales, and analysts estimate a $65 million to $70 million fourth quarter, which would boost annual sales to $270 million to $275 million, a record for the 11-year-old firm. This year alone, Smith and other presenters expect to train 300,000 people in 6,500 time-management seminars before corporations and the general public, plus another 800 seminars on other productivity topics. But analysts view the firm as a ``growth'' company and, as such, have high expectations for annual sales and income growth in the 25 percent range. Most companies would be satisfied with 10 percent to 15 percent annual growth. Quality Time: Smith now easily can afford to split his time among the St. George family home, a giant ranch near St. George, his West Valley City corporate headquarters and traveling to seminars. His biggest struggle, he says, is spending quality time with his large and expanding family. He and Gail Smith reared six children -- four daughters and two sons -- now ranging in age from 27 to 19. All, except one who is on an LDS mission, are nearby. Three daughters served church missions, plus both sons. One daughter, Sharwan Smith, 24, and her nearly 2-year-old niece, Shilo Shurtliff, were killed this spring in a one-car rollover near Cedar City -- the first tragedy Smith says his immediate family has had to face. The deaths ``caused some serious reflection,'' says Smith. ``Living there, working here, the time away -- all seem more and more senseless.'' He does not know what he will decide to do about ending, or at least trimming back, his travel schedule. But he does know he never will be able to spend seven days a week in St. George. ``I just need to be out doing stuff,'' he says. ``That's me.'' As a concession to his family, Smith says he tries to spend Friday through Monday at home before heading to Salt Lake City, where he maintains an American Towers condominium. Then, Tuesday through Thursday, he either is flying around the country in his private jet conducting seminars, or working out of his West Valley City office. His personal holdings -- accumulated mostly during the past three years when he hit it big taking Franklin Quest public -- are immense. -- His St. George home-office is conservative by multimillionaire standards, but he added a plot of land behind the house when he heard four-plexes were planned for the spot. That land is now his wife's vegetable garden. -- He and Gail Smith purchased the historic cotton mill in Washington with plans to turn it into a reception center and museum. The couple are acquiring antiques for the museum and has some 7,000 items, Smith says, including 50 wagons. -- Smith's impulsiveness led him to buy a horse two years ago. He was passing by a field and saw a horse-for-sale sign. But he needed a place to put the animal. That eventually led him to acquire 2,800 acres in and around the tiny, isolated Washington County community of Gunlock -- on a road that is ``not on the way to anywhere.'' He and his family now own 34 horses on what has become the Eagle Mountain Ranch. He also owns grazing rights on 90,000 acres of federal land around the ranch and runs 600 head of cattle. Smith intends to keep the land intact and free from development, except for an isolated 800 acres that he envisions as a dude ranch for tourists. -- He owns a handful of small houses around the area where family members and ranch employees live. And he owns a stake in a company trying to develop a housing complex along the fringes of St. George. -- Smith also has poured millions into an arts and cultural center known as Tuacan, built during the past year in a startlingly beautiful red-rock canyon outside of St. George. The center trains 400 to 600 youngsters in music, art and dance, and is the site of what Smith hopes will become an annual historical extravaganza highlighting the area's history. ``Financially, we're real close to being overextended,'' he acknowledges. ``From an energy standpoint, I don't know what my limit is. We haven't said `no' perhaps as much as we should have.'' He says one of his obsessions is ``making a difference.'' He believes the best contribution a person can make is to create jobs, and he points with obvious pride to the 300 jobs his various interests have spawned throughout southern Utah. ``I see something and I do it,'' Smith says. ``It leads to this and it leads to that. It drives Gail nuts. She'll look at 15 alternatives on every decision; I'll look at one.'' This impulsiveness has led to some of Smith's most monumental blunders. In the early 1970s, a relative persuaded him to sink $120,000 into a process that promised to turn garbage into synthetic fuel. Smith, in turn, persuaded 17 friends to join him, for a total of $450,000. ``It went down the toilet,'' Smith says. ``Any sophisticated investor would have told me that [would happen].'' He also lost thousands on a car-care company in Pendleton, Ore., and, more recently, made a costly mistake by failing to check out the initial developer for a St. George housing project. ``He had a bad track record. I heard about it, but I had met the guy and [Smith told himself], `everybody's allowed to repent.' I was wrong. ``I'm an easy mark for someone who has a second agenda,'' Smith says. ``That's why I'd make a lousy politician.'' |