L to R: Bob Coughlan, Joe Hilger and Bill Coughlan
By Roger Matz - Photo by Jeff Silker
Capstone Press keeps exploding, Mankato may someday be known as the Book Publishing Capital of the Upper Midwest.
Youre excused if youve never heard of Capstone Press. New owners coaxed it out of financially troubled obscurity in 1990, re-starting it with two employees and a vision.
Its hidden away in the former Good Counsel Academy in Mankato, not making much of a footprint on Mankatos landscape. But its become an energized player in childrens educational publishing, spinning off four related enterprises.
From two employees and 48 titles in its first year, the publishing venture now has 136 employees who will market 450 books this year. It has 2,500 active titles in circulation. Theres no timidity about the future. The owners dwell on looking for new opportunities. Theres no talk of consolidating gains, no fretting about putting a lid on unmanageable growth.
The money, energy and vision fueling Capstone comes from Mankatos Coughlan family, an Irish Catholic clan best known for its long association with Mankato-Kasota Stone, Inc.
T.R. Coughlan, great-grandfather of the current Coughlans, bought the quarries in 1885. The family and its quarries are nationally known in the stone industry. Their limestone enhances the durability and appearance of many famous buildings in the U.S. and overseas. (Just to drop an international name, Shanghai Grand Theatre has a feature wall made from Mankato-Kasota stone.)
In the last 20 years, the Coughlans holdings have gone from a single company with less than 50 employees to seven with nearly 250. If youre wondering whether theres a synergistic relationship between quarrying stone and publishing books, there isnt. Certainly, prehistoric societys first written communication may have been pictographs scratched in stone, and God gave the Israelites His 10 commandments carved on stone tablets. But no self-respecting Coughlan would stretch that far to establish a connection between quarrying stone and publishing.
Book publishing is a way of spreading risk, according to two Coughlan brothers who are closely involved in the familys enterprises. Better yet, they say its fun. The Coughlans apparently are carrying on a family tradition of enjoying their work, spreading financial risk and practicing a little philanthropy along the way.
What we learned from our father is that you cant be dependent on just one business, said Bill Coughlan. He is one of seven living siblings in the current Coughlan generation, five of whom are involved in the familys businesses. In the 1960s, during a downturn in the stone business, the family expanded into banking, starting Valley National Bank in North Mankato and acquiring another bank in Mankato, one in St. James and one in Sherburn.
The Coughlans sold those banks in 1978, but diversified again in 1989, buying Mankato Screw Products. That company provides precision-machined parts to original equipment manufacturers in a variety of industries. In 1990, they diversified further by purchasing Ulmer Pharmacal, a Twin Cities company producing health care products. They sold Pharmacal two years ago.
In 1990, a banker aware of their desire to diversify steered them to Capstone Press.
Capstones rapid expansion stretched the familys management resources and eventually changed the shape of their organization. They began reaching out to recruit top talent. As a first step, they hired Bev Weir, who had been in human resources with another Mankato company. She fine-tuned their human resources function, insuring that their pay and benefits were competitive, and the Coughlans credit her with being a key player in their recruiting efforts.
A few months after Weir joined the company, the Coughlans recruited Joe Hilger, who had been one of Weirs co-workers. Discussions between Hilger, Weir and the Coughlans led to the formation of Coughlan Companies, Inc. (CCI) as an umbrella organization. It was formed to provide overall direction to the individual companies and administrative services such as accounting, data processing and human resources.
Hilger, who became CCIs president, said the key to any business situation is being able to build the right team. It doesnt really matter what your product or service or industry. If you have a good feel for your customer and your market and you can assemble the right team, youll be successful.
One afternoon in late May, Hilger sat in a large conference room on the second floor of Good Counsel Academy, talking about CCI. With him was Bob Coughlan, CCIs chief executive officer. Joes done a real nice job of installing talented people in our operating divisions, Bob remarked. We spend a lot of money recruiting and advertising. As weve become a bigger organization, more well-known, more successful, that brings us a constant supply of inquiries. Some of CCIs recruits, like Hilger and Joel Endres, general manager of Mankato Screw Products, came from other Mankato companies. Getting to know players in the various industries in which we operate also leads CCI to potential candidates, Bob said.
Although the Coughlans are loyal to their hometown, Mankatos rural location sometimes is an impediment to recruiting. CCI eliminates that roadblock by allowing people to operate remotely. They come in as needed. Some have staff here, some elsewhere, Bob said, pointing out that technology minimizes geographic restraints. For example, the heads of three Capstone spin-offs live far from Mankato. The president of Compass Point Books lived in Rochester, New York, but moved to Chicago recently to open an office. The publisher of Capstone Curriculum lives in Sacramento, Calif., and the managing director of Picture Window Books, originally from Mankato, lives in Minneapolis. Not insisting that key players live in a particular location is an effective recruiting technique, according to Bob.
Bill Coughlan, CCIs senior vice-president, said the companies have been lucky at getting good people. They know were good employers. They see the quality of our products, the benefits we provide. Were a family-oriented business.
Hilger said he saw CCI as a good opportunity to get in with a growing, dynamic organization. He felt his background in finance, team-building and developing policies and procedures provided CCI with things a young, dynamic organization needs to start building infrastructure.
CCIs corporate culture is anything but stagnant. Were always looking at new things, trying to figure how to do some or all of them, Hilger said. Were aggressive in terms of growth and sales. There are millions of things going all the time. People need to wear a lot of hats, be flexible and agile and go in a lot of directions. Were young, dynamic and fun. Its not some stuffy, stoic, hierarchical company.
Hilger believes the thing that drives this whole organization is Bob. Hes very entrepreneurial. Theres a constant flow of new ideas, new opportunities.
CCI is like many other corporations in some respects, according to Hilger. Individual entities, for example, are continually fighting for the available resources. Its one of the things that makes my job great, but its very wearing at the same time.
The conference room where Hilger and Coughlan sit on this afternoon sparkles with newness, devoid of dust and corporate clutter. The entire second floor smells of new wood and fresh paint. Its just been remodeled to convert double dorm rooms, which housed high school girls until the academy closed about 20 years ago, into more office space. Capstone, which started by renting 1,000 square feet at Good Counsel, now leases 30,000.
Were building a new distribution center in North Mankato and we could build our headquarters there, Bob said. But we like it here. Its a nice campus atmosphere. Our employees love it because of the very serene environment. Its surrounded by wildlife, by woods.
The campus is home to the School Sisters of Notre Dame, a religious order devoted to education. Capstone is welcome here because were in education. Our mission and their mission are consistent, Hilger said. He notes that Rasmussen Business College is a former tenant and that another small publishing company, AppleTree Press, rents space at Good Counsel.
Bob elaborated on the connection with Good Counsel and Catholic education in general. Many of our staff and their children were taught by members of this order. Joes dad taught at Loyola High School. My brother Bill is on the orders development advisory board.
A modest sign on an out-of-the-way building directs visitors to Capstone Press and its subsidiaries where John Coughlan serves as publisher. John provides the vision for how the products feel and read, what the customer is, the audience were going after, Bob said. Our in-house people try to get Johns vision into guidelines for our authors. Although Johns background is in limestone sales, Bob said he has quite a background in reading and is something of a medieval history buff.
After acquiring Capstone in December of 1990, the Coughlans finished the firms uncompleted books, and then idled the company for a year. They took a year off to study the market, investigated the niche and possible directions, and then ramped up again in 1992, Hilger said.
The Coughlans depend on free-lance writers, chosen for their expertise in various topics, to produce the books, following guidelines and specifications set forth by the various publishing companies. In CCIs lobby, a few of the hardcover books are scattered on a table, colorful and inviting. Theres one called Hawks. Another is titled Animal Ears. There are books on careers, ranging from Travel Agent to U.S. Army Special Forces. There are books on geography (New Hampshire Facts) and books on character building (Honesty).
Bob estimates that 65 percent of the books are sold through distributors, with the balance marketed directly to schools and public libraries. We try to exploit every channel we can, he says. We use a lot of direct mail, we use independent sales representatives, we have an inside sales group that uses the telephone, and we go to many trade shows and conferences.
The company has no presses, so it relies on printers in North Mankato, Wisconsin and Illinois. The possibility of printing in China is being explored, Bob said. The Coughlans export books in English to South Africa, Australia, Canada, Singapore and a variety of Southeast Asian countries. Some titles are also published in Spanish for distribution in the U.S. and abroad.
When the Coughlans first considered acquiring Capstone, Bob said they had a natural interest in childrens books. We had young families. The people in our businesses had young families. They were intrigued by the concept of publishing books for children. The industry had an appeal to us. The demographics were strong. Most importantly, it was the end customer, the young students. Working with schools and youngsters was a nice way to make a living. It was stimulating, contemplating the opportunity, the market, the end user.
The reality lived up to what the Coughlans contemplated. Its fun to see the growth in a little mind. We deal with kids who are learning to read, some of them struggling in the process, Bob said. Bill added our books are also used to assist immigrants who come to our country to learn English and to learn about our culture.
The foray into books holds a more personal meaning for Bill, because he once had difficulty reading. His parents hired a member of the School Sisters of Notre Dame to tutor him during his sophomore year of high school because I couldnt read three words in a row. I didnt want to. The tutoring turned him into a rapid reader. I attribute a lot of my personal success in business to being able to read, so weve continued on with trying to help others to read. If people can read and write, their self-esteem goes up significantly.
After buying Capstone, Bill says one of the first things we initiated was to give away our books to every school in Mankato. Now the company donates thousands of books every year, many to inner-city schools across the country. Learning to read is something we need at all levels in our culture.
Bill pointed out that the stone company has often contributed limestone for buildings at the University of St. Thomas and the College of St. Catherine in the Twin Cities and to many local institutions, including Bethany Lutheran College, Minnesota State University, Immanuel St. Josephs Hospital and the School Sisters of Notre Dame. This is a tradition started by his grandfather, which has been carried on through the years. All our lives weve seen that what we give away keeps coming back. Thats the theory behind corporate philanthropy.
The Coughlans are pleased about how the publishing business has developed. Its more than quadrupled since 1996, become bigger than our original hopes, Bob said. Were surrounded by a wonderful team and extraordinary customers. Were blessed with a really strong mission.
Stone Cold Love
Despite the fun and explosive growth its enjoying with book publishing, the Coughlan family remains committed to its core businesses of quarrying and manufacturing.
The family formed Coughlan Companies, Inc. (CCI) in 1996 as a holding company for its various operating entities.
The stone company is the oldest business in the group. Its been operated, either actively or under lease, by four generations of Coughlans. My father once said anythings for sale for a price. But its been in the family for so long, I dont think wed sell it, said Bill Coughlan, senior vice president of CCI.
Bob Coughlan, CCIs chief executive officer, agrees. The stone company is integral to who we are. CCI is organized into two areas, manufacturing and publishing, and we want to see both groups grow.
Over the years, the Coughlans have developed a personal and professional attachment to the stone business. Bob, active in selling limestone before heading the publishing venture, recalls how he absorbed the history and traditions. When we were little kids, we traveled with our dad. He pointed out interesting architecture, particularly if it used his stone. He had an interest in the way buildings were designed. Hed talk about it and instilled that sense of heritage in us.
Bill remembers growing up when the stone company produced cement and powdered lime, two products that have been discontinued. The quarry once turned out cement slab sections for city sidewalks, all imprinted with the name T.R. Coughlan. When Bill saw that name on so many sidewalks around Mankato, I always thought my great-grandfather owned the town.
Mankato-Kasota Stone plans to open a new quarry soon just north of the Mankato city limits. That quarry will have stone reserves lasting 40 to 50 years, said Joe Hilger, president of CCI. The life expectancy of our present quarries is about 20 years.
Hilger says the quarries have typically provided stone for building facades. Now were investigating stone for the landscape market. Were always looking for ways to sell stone. The beauty of it is we can take a lot of the broken pieces or mill ends, do little or nothing with them, and they would be appropriate for landscape applications.
Although the Coughlans and Hilger say theyre always looking for new opportunities, that doesnt necessarily mean theyre in the acquisition market. Our basic philosophy is to build rather than buy, Hilger said. We feel we can do this successfully over time, without buying an organization and dumping all that debt on top of it. That often kills a start-up.
Both Mankato Screw Products (MSP) and Mankato-Kasota Stone (MKS) operate with state-of-the-art equipment. MSP, which has attained the ISO 9001 quality rating, furnishes machined parts to original equipment manufacturers. Founded in 1954, it was purchased by the Coughlans in 1989.
MKS is currently involved in attaining the same type of ISO 9001 certification as achieved by MSP. The stone company employs a variety of fabricating and finishing equipment, some computer-operated, to slice and shape limestone for various building applications. Most of it forms facades for buildings, but some is split and used for windowsills, countertops and flooring.
Founder T.R. Coughlan was an Irish immigrant who came to Mankato in 1883, working as a masonry foreman during construction of the Saulpaugh Hotel. In 1885, he bought the quarry property, which contains limestone formed by glacial pressure.
In the companys early years, nearly all its stone went to railroads for use in everything from bridges to ballast. In the early 1900s, the Coughlans began selling stone for buildings. Now the well-known stone is specified by architects across the U.S. and in some locations overseas as well.
The companys current sales catalogue shows the stone used in various kinds of buildings across the U.S., from California to Pennsylvania. The catalogues cover features La Salle Plaza in Minneapolis. Other Minnesota buildings in the catalogue include Adath Jeshurun Synagogue in Minneapolis, the Minneapolis Post Office, the University of St. Thomas, and the St. Paul Companies.
Also pictured are the Gates Computer Science Center at Stanford University, the Philadelphia Museum of Art, Jacobs Field in Cleveland, OH, and Aronoff Center in Cincinnati, OH.
Many of the buildings on the University of St. Thomas campus have facades of Mankato-Kasota stone, some of it contributed by the Coughlan family. That practice began with T. Merritt Coughlan, son of the companys founder. T. Merritt and several other Coughlans are St. Thomas graduates.
[Roger Matz is a free-lance writer based in Stewartville, Minnesota.]
© 2002 Connect Business Magazine. All Rights Reserved.