Russ Potterfield’s China presence proving profitable Battenfeld improves logistics with satellite office
Russ Potterfield, CEO of Battenfeld Technologies, acknowledged that his move to southern China with his wife and three young sons to establish a satellite office is quite unconventional.
The Chinese seem to find their presence even more odd and often ask if they can take a picture of the unusually tall couple (both are more than 6 feet tall) as they walk around Shenzhen with their blond 2-year-old twins and 7-year-old son.
Potterfield, however, said during an interview in his conference room on the 27th floor of a skyscraper that the move was “not a crazy thing to do.”
He looked out his window at the growing city of more than 9 million people and said: “This is where the opportunities are. It’s the second largest economy, and it’s exploding in front of us.”
It’s even a good thing for his children, who are learning Mandarin, a language of growing importance in the world of commerce.
They’ve taken to the new language like “ducks to water,” Potterfield said, calling their growing language skills a gift he and his wife are giving to their children so they’ll be able to speak the language of one of the fastest-growing economies in the world.
Potterfield is so convinced of the importance of Columbia firms connecting to China that though the company policy of Battenfeld Technologies, a spinoff of MidwayUSA, is to never talk to the media, he agreed to talk to a reporter in the office he opened seven months ago.
His hope is that the publicity will spur other Columbia business people to consider opening an office in China, a country he’s clearly smitten with — and with good reason.
Battenfield Technologies is an independent company spun off from MidwayUSA, a company founded by his father, Larry Potterfield.
Midway retails sporting goods accessories through catalog and Internet sales. Battenfeld designs hunting and other outdoor sports accessories, such as scopes and gun-cleaning supplies, and arranges for the manufacturing of the products. Battenfeld products are sold at dealerships including Bass Pro Shops. Neither Battenfeld nor MidwayUSA designs, sources, manufactures or sells guns.
Russ Potterfield said this move to China is part of his strategy to get closer to his sources of goods. The Potterfields said the new office does not mean the Battenfeld or MidwayUSA offices will be closing. Battenfeld has cut a few positions but added information and technology management slots in Columbia.
Russ Potterfield said the biggest danger to Battenfeld and its 50 Columbia workers from the new office is that the new “fat pipeline” of products could overwhelm the home office. In October, he projected a 300 percent growth in revenue in the next five years for Battenfeld. In fact, he already has another taller office building in his sights for when his company expands. He also expects the office to decrease new product development to market time by 60 percent.
Larry Potterfield started MidwayUSA in 1977. At first, the company operated as a gun shop and sold guns and shooting and reloading supplies. But then the company found success through selling ammunition and accessories.
Today, MidwayUSA is owned by Larry and his wife, Brenda Potterfield, and employs 243 people full time and 100 part time. In 2009, the company won the prestigious Malcolm Baldrige Quality Award. It ranks 20th among Columbia’s employers, according to a published report by Regional Economic Development Inc., a public/private partnership known as REDI.
Russ Potterfield is also adept at seeing opportunity — and at being willing to change.
In 1996, Potterfield graduated with a degree in English from the University of Michigan. But jobs were scarce, so he started editing catalog materials for his father’s company. From that entry-level spot, he worked his way up but realized he needed more business acumen and returned to Ann Arbor and earned his M.B.A. in 2003.
He became the CEO of Battenfield after MidwayUSA decided to spin off the engineering and sourcing portion of the company.
That’s what led Potterfield to Shenzhen, which is near Hong Kong — about three hours by bus — in southeastern China. For seven years, he’d been flying to China, buying products and working to get closer to the sources making Battenfeld-engineered products. But the field of sporting goods is competitive, and the lag time between engineering a new product and getting it produced — with a competitive price — led Potterfield to rethink that business model.
“Now we’re actively engaged in product development with Chinese staff members, talking in the same time zone with Chinese factories,” Potterfield said.
He told his father and the company’s board in 2009 about his plan to move to China and recalled saying, “I’m going to do this.” The board and his father had to agree the move made sense. But his father wasn’t completely happy about the prospect of his son taking his wife and three young sons, his grandchildren, to the other side of the world.
Potterfield said finally his father admitted if he were a younger man, he’d be heading to China, too.
Today, Larry Potterfield applauds his son’s expansion of Battenfeld, as a father and a fellow businessman. “As a parent, it’s rewarding to have raised honest, hard-working children with a healthy respect for the present and a relentless passion for the future,” he said. “The Shenzhen office is part of Russell’s vision, and it epitomizes his passion for the future.”
Larry Potterfield added that the new office is good news for Battenfeld, its customers and shareholders.
“China represents a great opportunity for a small business like Battenfeld, when led by an aggressive entrepreneur like Russell, to better serve its customers with high-quality products at competitive prices,” he said. “Happy customers make for happy shareholders.”
What it’s like to work in China
“It’s incredible here,” said Russ Potterfield, noting the alliance of the American company and Chinese workforce makes sense. “The future of the world depends, at least to some degree, on our two countries.”
Since Potterfield opened the office in Shenzhen, he’s expanded his staff from one to nine people. He joked that he can’t expand beyond 12 workers because that’s how many chairs they have. He hires using ads with complicated English phrases so he’s sure those who apply truly understand the nuances of the language. The ads have yielded a flood of applicants: 700 for the last opening he posted.
Potterfield explained Chinese nationals are eager to work with Americans to learn American management style. And just what is that style? Potterfield said it focuses on outcomes and fixing problems, not just reports or explanations.
Jake Halliday, president and CEO of the Missouri Innovation Center, which operates the MU Life Sciences Business Incubator, called Potterfield a dynamic visionary. He praised Potterfield’s ability to bring clarity to a muddled situation, something crucial in opening an office in a foreign country.
“He’s a very clear and decisive thinker,” Halliday said. Halliday has worked with Potterfield on company boards as well as on projects involving evaluating investment opportunities.
Andrew Beverley, president of Landmark Bank, said Potterfield seems to have tireless energy and a devotion to details, strategy and creativity and called him one of the most talented business people he knows.
This focus on getting things done and the thrill of problem solving is why Potterfield enjoys working with the Chinese workforce. “Everybody here wants to work twice as much or more than a USA worker,” he said. The age range of the local employee pool is 25 to 35, and though he encourages his workers to keep to a 40-hour work week, it’s not uncommon to find them in the office early, late and on weekends.
His own schedule reflects that kind of work ethic; he takes frequent trips by jet within and outside of China. Two weeks before Christmas, he was in the US, and prior to that he had visitors in China, including his parents and his sister and her children.
Potterfield praised the entrepreneurial spirit in his office and in the surrounding city. “There’s a lot of work to be done,” he said.
Shenzhen was China’s first Special Economic Zone. The city was developed by government fiat specifically to encourage and foster Western-style economic growth. In just 30 years, the small fishing village of 30,000 people became a metropolis of 9 million people, according to official estimates. Potterfield puts the number much higher, at 11 million to 14 million.
During the past few years, the government also began to look beyond manufacturing, and today the environment is recovering, and the economy is shifting toward high technology, financial services and cleaner industries such as a sourcing company such as Battenfeld.
Living in China doesn’t mean the Potterfields are living on rice and noodles. In fact, the point of Shenzhen, and specifically where they live, the Shekou area of the city, is to provide a comfortable place for foreign business people. As Potterfield noted: “I can get Doritos here; there’s a Starbucks” and a Walmart nearby. There’s even a Rio Grande Mexican restaurant there operated by Texans.
Potterfield pointed to these expatriate entrepreneurs as signs of China’s booming opportunities. “This is where everything is going,” he said. There are roughly 3,000 to 4,000 expatriates in Shenzhen, he said, and it has a vibrant community of Westerners.
It’s also a beautiful city, with hanging flowerpots on guard rails and overpasses along the eight-lane highway between the bustling downtown district and the more relaxed residential areas. The spacious highway between the two areas features landscaped gardens, palm trees and grassy areas — nothing like the choking crowds of Beijing, Hong Kong or Shanghai. Nor is the air heavy with eye-watering pollutants as it is in Beijing and Shanghai.
Potterfield said the new office offers more than business benefits. An intensely focused husband and father, Potterfield said his family is gaining from the experience as well.
In Columbia, life was more than hectic once the twins arrived 30 months ago. But in China, he and April, a former biology professor at Westminster College in Fulton, can afford in-home help. That includes a nanny, a housekeeper and other assistance for such things as helping them to navigate language issues at their children’s school.
His oldest son attends an international school where he’s taught in English and learns math, science and English. The school offers three hours of Mandarin a week, and he receives Chinese tutoring at home. April Potterfield said they want to enroll him in a Chinese immersion school, but there’s a waiting list. As for the twins, they attend a Chinese preschool where the whole day is conducted in Mandarin, with no English at all.
The Potterfields see this language training as a gift to their children. “(Chinese) is the best second language to learn,” Potterfield said, “and we’re giving that gift to our sons.”
All the household help, Potterfield said, allows him to be a more attentive husband. “I love cooking, and I love grocery shopping, but now I don’t have to think about it, and it doesn’t all fall on April. We have time to spend with each other and our family.”
His father, however, did point out downsides only a father, grandfather and avid hunter would note: “Living there is a great experience for Russ and his family, but it does require sacrifices, like giving up life in Columbia for life in a city of several million people and suspending your hunting and fishing activities.”
Not all of life in China is easy; there are dangers. One evening while jogging, Potterfield was struck by a bicycle when he was crossing the street. Although he was knocked down, he wasn’t hurt. There’s also been conflicting advice on how to get residency and which visa he should have, an issue he was still sorting through four months after arriving.
He also noted the sharp contrasts within Chinese cities. In Hong Kong you might see stores offering $100,000 watches and nearby see ducks dripping fat in shop windows. As for concerns about sweat factories and labor issues at the companies producing his products, he pointed out that China is experiencing a skilled labor shortage, and workers who are unhappy with conditions have been known to simply not return from fall holidays that typically involve going home. Such problems, confirmed by media reports, can cause delivery problems, Potterfield said.
There also are some challenges in conducting business from a time zone 13 hours ahead of his colleagues in Columbia. “Normal 8-to-5 working hours don’t overlap very well with China time,” Potterfield wrote in an e-mail. “But I work into the evening many nights and should be available for a conversation by Skype (video or voice).”
Potterfield’s main complaint during an interview on Oct. 27 was his inability to get the newest iPhone, a problem resolved the next week.
Yet, he admitted, the learning curve on how to set up an international operation was brutal, too. He now has an international accountant to help guide him through the financial and regulation challenges. Also, Chinese law limits his residency to five years, so Potterfield will be homeward bound in 2015.
But for now, Potterfield doesn’t view himself as living far from home. “This is our home now,” he said. “It’s a great adventure.”