Robert B. Yallen was trained as a collegiate sprinter, but even he thought his company might run out of steam in the early ’90s.
Yallen — president and chief operating officer of Inter/Media Group of Cos., the company started by his father — saw a bright future ahead for the advertising agency and media organization that blends direct response advertising and general market techniques. That is until a slew of significant clients went into bankruptcy. Losing business would have been bad enough, but Inter/Media was on the billing end of the media needs for those companies.
“So it was like the double whammy,” Yallen says. “The clients went into bankruptcy, we got held holding the bag on their debt, and we lost their revenue, so it was pretty awful.”
Want the gory details on the word awful? At the time, Inter/Media was doing less than $75 million in billings. The debt it got left with was roughly $2 million.
Oh, and losing those accounts basically cut business in half. “I had our bank talking to me and my father like we were 2-year-olds,” Yallen says. “It was rough. That type of debt would still hurt today, trust me, but we could weather that. Then, that was devastating.”
That’s not to mention that for some of those accounts Inter/Media had set up specific local offices, which were suddenly running with high overhead and no revenue stream.
If ever there was a time to circle the wagons, this was it. Yallen pulled in his top advisers, and they began creating a plan to diversify Inter/Media’s business by adding more clients and making themselves less of a commodity while focusing on accountable production. But before they could act on anything, they had to calm down nervous employees, make sure they had the right people in place to add new elements to the business and then give people the autonomy to create the services that would get Inter/Media back on track.
