By Kirk Stelsel
In the early 1900s, a puzzle was developed that challenged people to connect nine dots in a box formation. The catch was that it had to be done using four straight lines while never lifting the pencil from the paper. To do so required drawing lines that extended outside of the box of dots, which gave birth to the saying “think outside the box.”
Today it has become a tired cliché, thanks to overuse in the business world, but the core message of thinking differently or from a new perspective remains solid. Top minds like Thomas Edison or Albert Einstein were unconventional thinkers who approached their work in new ways, and their accomplishments were extraordinary.
Armen and Vod Alajian, owners of ARTO Brick in Southern California, may not be world-renowned inventors or brilliant theorists, but they are most certainly innovators and “outside the box” thinkers who are unafraid to push the boundaries when it comes to their company and the products it manufactures.
For most people, the first thing that comes to mind when Egypt is mentioned is pyramids and pharaohs. To Armen, it means so much more. His father, Arto Alajian, was born in Egypt and lived there until the 1950s when its king was overthrown by Gamal Abdel Nasser, predecessor of recently deposed president Hosni Mubarak.
In Egypt, Arto was a craftsman and designer, making leather shoes by hand and selling them in the market to the Japanese and Russians. After the government turmoil, he left for Lebanon and eventually landed in North America, where he bounced around from New York to Houston to British Columbia before eventually ending up in present-day Marina Del Ray in Southern California.
There, he went to work as an ice cream man for Good Humor and then as a milkman for Adohr Farms, an iconic Californian company of the era. It wasn’t until he met and fell in love with a woman who was an artist that he found his way back to his craftsman roots. The woman, Irene, made murals on walls that would get a clay brick veneer placed around them. She introduced Arto to ceramics, and he also began selling and installing the brick veneer on the side.
Arto continued making the clay brick veneer until the energy crisis in the ’70s made it impossible for him to fire up his kilns. That seemingly unfortunate circumstance, however, led to a pivotal moment for Arto and the company that would later bear his name. Instead of throwing in the towel, he began experimenting with concrete for veneer and tile. His products became a hit building material for high-end projects because of the quality, old-world look they provided.
“This is where we’re different than most of the other guys,” Armen said. “Instead of a contractor or a mason or a concrete guy, my dad came from the background of a ceramicist, so when he started making concrete bricks and tiles they looked like terra cotta. He’s an artist.”
Arto’s products earned him a prestige that found him installing internationally, as well as in the homes of Hollywood stars such as Bill Bixby and Suzanne Pleshette. At this point, he had survived – and excelled – in the face of government turmoil, multiple relocations and an energy crisis. His next challenge, though, would prove to be his toughest: working with family.
Armen describes his father as a humble man who was never concerned with ego, money or status. He worked hard, but he made sure there was plenty of time for family as well by doing things like finishing his work on Thursday so that the family could get away for a camping or fishing trip by Friday.
“He always said, ‘Make money your slave, don’t be a slave to the money,’” Armen said. “He was a workaholic but played hard too. For him, wealth is time.”
While Armen can now look back and appreciate his father’s approach, hindsight is 20/20. When he entered the business he was a hard-charging, and sometimes hard-headed, college student focused on making money, and conflicts arose early and often.
“I was a typical, arrogant 19-year-old and he was stuck in his ways, so we battled,” Armen said. “I got fired 10 times and I quit 10 times. That’s an exaggeration, but there was a lot of anger when I left every time. Every time I thought it was the end and I’d be gone for a while.”
The last time Armen left, he was away from the company for more than a year and didn’t return until his wife secretly brokered a deal on the side with his father to help get him back to the company. Despite their differences, Armen had a vision for the future of the family business that would prove to be the most important, and most successful, change since the move from clay to concrete.
The Wholesale Shift
While Arto was focused on controlling the projects and had only two installation crews, Armen knew the key to the company’s growth was getting out of the installation end of the business and converting to a B-to-B business model. He started in the late ’80s and early ’90s, focusing on getting showroom space with local retailers. Armen says the process was easy because he was “young and stupid,” and would simply walk in and try to make everyone his friend. It didn’t always work, but of those who came on board early, many are now friends of 20-plus years.
“I wasn’t afraid to go out there and take a chance,” he said. “I didn’t mind getting said ‘no’ to. They can’t take your soul.”
The new business model slowly began to gain momentum, sometimes thanks to wise decisions, sometimes thanks to what Armen calls “providence.” He admits he wasn’t thinking five steps ahead back then, but most of the moves proved to be the right ones as time went on. When the company moved to its new facility in Gardena in 1999, the model really took off, and in the decade from 2000 to 2010 the company grew by 286%.
Today, its product sells at more than 220 locations in 30-plus states. The way Armen sees it, it’s a win-win. His retailers get a strong-selling product and he gets free space in showrooms that, when added up, equates to a whole lot of free rent. It’s like having hundreds of locations without any of the overhead.
Despite the growth ARTO has experienced during the past 11-plus years, it is still a little fish in a very big pond. Its products are made by hand in small batches, the plant is modest, and the entire crew – including Armen, his brother Vod, plus marketing, sales and production – is only 50 employees.
Armen is acutely aware of the overall picture and his share of the tile, veneer and paver industry. “In my industry, I’m nothing,” he said. “There are 7 billion square feet installed a year, and I make a million square feet. We’re nothing compared to that, but we’re Don Quixote. We’re going to have fun and be different by being really different – California style.”
What they are able to accomplish with their small crew, though, is inspiring. The guys on the production floor buzz around as they make new product, clean forms, prepare cured pieces for shipping and more. To an outsider it’s chaotic at first, until you realize every employee is moving with a purpose.
“Every guy here knows every job, and they rotate,” said Vod, head of production. “We have a good rhythm here. Everybody is moving.”
With a deep respect for his family and its products, experience working at the plant during the summers growing up, and a decade of experience in various kitchens that shaped his ability to encourage and synchronize workers, Vod is perfectly suited for the task at hand.
An Inspired Product
To carve out a niche, Armen and Vod have focused on relationships, the products and their employees. To them, having strong relationships with the retailers and ensuring they understand the personality of the company is vital.
“At minimum, we’re nothing without our customers,” Armen said. “After 150 to 200 miles, we’re just a product. Instead, I want them to say, ‘I know the guys who build this, it’s a family business. I’ve been to the place.’”
“Our customers, we look at them as our partners – we need each other” added Vod. “Once they realize we feel that way, that’s a good place to build the relationship. Once they know us, they understand the product and our sincerity.”
Early on, Armen was close with nearly all of his retailers, as they were modest in number and mainly concentrated in the Los Angeles area. Today, growth has made that more difficult. To help combat this problem, Armen has conceived the idea of holding a “Camp ARTO” program where 10 or so retailers at a time can visit the plant. While there they can learn how to install, seal and sell the product; see how it’s made; and get to know the ARTO team and the company culture.
Armen and Vod must also differentiate themselves from a variety of competing products in the wall, flooring and hardscape arena – some cheaper with shorter life spans, others made by machines or out of different materials. For them, the difference lies in the care that goes into the ARTO product.
“We sincerely believe that the feelings we put into the product come out to the end user, just like grandma’s cooking versus fast food,” Vod said. “At the end of the day, the product has a soul, and we feel the customers feel that in their home. That’s not just words, that’s perfectly true.”
The quality of the product is so personal for Vod that he stopped answering phones, because more often than not it was people who wanted it faster. It’s the antithesis of what his dad preached and what he and Armen strive for. For them, it’s the family’s name going on the box so there are no shortcuts.
The same as ARTO stands behind its retailers and products, it also stands behind its employees. According to Armen, he has “burned through cash and credit” to keep his employees at the plant. Despite the downturn, he has never laid an employee off for lack of work, and as he and Vod walk around the plant it’s apparent it’s as much a family as a workplace.
Many employees are people they grew up with, such as Vod’s former babysitter, Poncho, or his childhood friends William and Patrick. Others have grown with the company over the years. Daniel, for example, started working on the production floor, but Armen recognized his potential and began getting him training in graphic design. He is now working in marketing and is an integral part of the branding team. Everyone has a back story and everyone is more than just an employee.
“Loyalty helps – it’s great,” Armen said. “It helps create companies.”
What Lies Ahead
In Armen’s office there’s a lithograph that depicts the proverbial journey to success (see above). It details all the pitfalls that can set someone back, such as laziness, weak morals and lack of preparation.
He got it as a kid and has often found himself looking at it for long periods of time. As the owner of a growing company that has plans for a lot more expansion, keeping the lithograph in mind as he and Vod hash out ideas that will lead the company’s future certainly can’t hurt. They often put thoughts, aspirations and big ideas on Armen’s dry erase board, one of which includes a goal of 2,000 dealers in 50 states by the end of 2017.
Among Armen’s biggest fears about growth, though, are losing the personal touch with his retailers and also staying hungry while balancing family life. The Camp ARTO idea was devised to help ease the first fear. The second one could prove to be the more difficult task. As a father now himself, the model his dad set forth has never been in better focus.
“My dad’s work ethic was incredible, but his play ethic was incredible as well,” Armen said. “Are you hungry for the next thing? On the other side of that, if you’re always hungry, do you get to enjoy life?
“Being successful and able to rest is hard.”
The more the company grows, keeping in mind the pitfalls depicted in the lithograph on his wall and the lessons of his father will be more important than ever.
The Arto Brand
How do you stay profitable in a bad economy? It’s a question facing nearly every business owner in the world right now, from Fortune 500 corporations to local businesses.
To help ARTO Brick stay hungry and to sell its product, owner Armen Alajian has been working on building the company’s brand of “rustic elegance.” To him, the company is much more than just precast concrete. It’s a material he uses, but it doesn’t define his products or his company.
“One thing my brother says is we don’t just sell tile, we sell atmosphere – a feeling,” said Armen’s brother Vod.
Building the brand has included buying two businesses that have diversified the company and ramping up marketing efforts. One newly acquired company makes clay pavers, the other is a studio that does high-end decorative painted tiles. Folding these lines into the core business of precast concrete tiles and veneers has only strengthened the company and the brand. By doing this, he has been able to position the company in a unique way.
“If you make a product, you’re that product, but if you make solutions you’re a problem solver,” he said. “The ones who are problem solvers are the ones who grow. Vendors get that because they sell to more than one industry, but we’re more than just one thing too.”
Marketing has also played a critical role in the growth of the brand. Six years ago, ARTO’s marketing budget consisted of the cheapest online hosting possible and a basic website. Since then, Armen has created a marketing department with four full-time employees who ensure the personality of the ARTO brand reaches the customer.
From high-end brochures and magazines to a customized website, social media plan and more, Armen has left no stone unturned in his marketing and branding efforts.
“It costs us more per tile, but we’ve survived and in fact we’ve grown from 40 to 50 employees in the downturn thanks to it,” Armen said. “We are all peacocks, we’re all trying to be a little bit different.
“You have to be different in the sea of the same. You have to be steady, but the experience is what keeps them coming back. We’re a brand experience that makes a product that isn’t available anywhere else, so being different is where
Kirk Stelsel is NPCA’s assistant director of Communication and associate editor of Precast Inc. magazine.