Positive thinking helped recovering addicts Gerald Chamales and Joe Hiller build Omni Computer Products. Now their employees, many of them with troubled pasts, are turning this scrappy upstart into a telesales powerhouse.
A BACH CONCERTO FILLS a Venice Beach, California, apartment – just loud enough to drown out the periodic gun shots that emerge from a nearby drug deal gone awry. It’s 1978. Two friends, one a struggling scribe, the other a scrappy entrepreneur, are soothed by the music as the sun begins to rise. Outside, the denizens of this bohemian enclave push shopping carts in search of a prime spot to display their paintings or play their music. Inside, the two men set up their own marketplace, preparing for a day of phone sales.
Bach is soon replaced by The Psychology of Winning audio tape; Dennis Waitley’s preachings form an armor that will protect the two salespeople from the rejection telemarketing invariably brings. Repeating the pitch to each other first, one playing the eager rep, the other a reluctant buyer, they hit the phones and begin peddling printer ribbons to businesses. The writer, looking to publish his first book, is selling for some extra cash. But Gerald Chamales, the 26 year-old owner of this upstart business, is selling for salvation. In this Venice Beach apartment Chamales can envision prosperity – once unthinkable for a man who has lived most of his life in poverty. Between the ages of 2 and 7, Chamales lived with foster parents. At 14 he began using drugs; at 17 he drove off with a Rolls Royce that was about to be parked by a valet, and was arrested for joy riding.
Two years later, drunk and high, he crashed his own car. In his early 20s he lived on food stamps, slept on friends’ couches. Eventually he ended up in a psychiatric facility, where he was forced into isolation. He later spent a year in Hawaii, where he quickly slipped back into a life of drugs and alcohol. But it’s the plane ride back from Hawaii in 1976 that Chamales remembers most clearly. Truly acknowledging his addiction for the first time, he wept like a baby.
“THIS IS A LUCKY BUILDING.” On a sunny morning last October, Gerald Chamales stood outside that Venice Beach apartment complex called, oddly enough The Waldorf. There’s little about Chamales to suggest he once blended in with the vagrants and artists who scatter the streets. Dressed in jeans and a black Izod golf shirt, his Black Mercedes190E parked curbside, he exudes class and confidence. Chamales, a college dropout, beams with the pride of a self-made man. He has turned the business he started in his Venice Beach apartment into Omni Computer Products, a thriving $26 million company that manufactures and supplies printer ribbons and recycled toner cartridges.
As president and CEO of Omni he commands a call center that has fueled 20 percent growth annually throughout the 1990’s. What’s more, Chamales has promoted a highly motivational employee culture that helps transform fellow recovering alcoholics and drug addicts into skilled tele-salespeople. Chamales, now 47, lives in Brentwood, next door to Los Angeles Mayor Richard Riordan. And although he no longer keeps in touch with his writer friend, the “genius from the streets” who helped him build his business, it seems that James Ellroy, author of the acclaimed book L.A. Confidential, is doing just fine.
Chamales attributes his and Elroy’s good fortune to an irrepressible spirit contained in the walls of this beachside brick residence. “This place has great energy,” he says. The Venice Beach Waldorf has been a bastion of bohemian lifestyle since 1911. Fledging writers, musicians, and Hollywood legends – most notably Charlie Chaplin – have all passed through the building. But few have life stories more cinematic than Chamales’. In 1977, after confronting his drug and alcohol problem in a Los Angeles recovery program, Chamales discovered sales – “the quickest way to dig yourself out of a ditch.” A friend recruited Chamales to Pacific Computer Products, and within a year he became the top rep. With $7,000 in savings he left the company and rented the apartment in Venice Beach.
When he started Omni in 1978 it was a “hair ball” operation, he says. Because it was a distributor of printer ribbons for a small company, margins were small. Chamales slowly built a company, waking up every morning at 5, ready to call East coast buyers at 6. After he closed a deal, he’d pose as a customer service rep and place a follow-up call using a thick accent. Not long after launching Omni his body, battered by years of alcohol abuse and lack of sleep, began to deteriorate. Yet when he ended up in the hospital with an elevated liver enzyme count, he simply dialed customers from his bed. “This business grew up by [Chamales] dialing away,” says one of his managers.
What truly propelled Omni to success, however, was Chamales’ ability to continually envision and strive for his next achievement. He took classes at UCLA, learning how to read income statements and balance sheets. In the mid 1980s, frustrated with the paper-thin profits earned from Omni’s middleman role, Chamales built a manufacturing facility in Carson, California, and turned two floors into a call center. Today that manufacturing plant makes products for Omni’s two major lines: ribbons for computerized printers and recycled laser toner cartridges – all of which are sold under the Rhinotek brand name. (Omni donates $25,000 annually to a nonprofit group dedicated to the survival of the rhinoceros.)
Telemarketing may be the only link to Omni’s fledgling days in Venice Beach. Chamales wonders if the apartment has changed too. Politely introducing himself to Arturo, a Waldorf manager, he asks to visit apartment #306. Once inside the room, which has since been turned into the building’s office, he explains how it was here that he began his metamorphosis from junkie to sales superstar. “For sentimental reasons I’d love to have a place here,” he says, handing his business card to Arturo. “I have some kind of connection with this place.”
That strong connection to his past inspired Chamales to help people with similar rough backgrounds. About a third of Omni’s workforce is recruited from halfway houses, drug treatment centers, and welfare programs. Neal Holtz, a sales and marketing consultant in the laser printer industry, calls Chamales’ commitment to Omni’s employees a competitive advantage. “Any time you have someone at the top of the chain that people would just say lay down in the street for, it almost becomes like a cult,” he says. “That’s how people feel about working for him”. “But these employees also deliver superior performance,” Chamales says. Recovering alcoholics and drug addicts, and yes, even ex-prisoners, make model employees, he believes, because they possess the same drive and determination that enabled him to start his own business. (Bouncing back from a bad sales call is nothing when you’ve lived on the streets or have been thrown into jail.) “Instead of giving one hundred percent these people give four hundred percent,” Chamales says. “We’re betting our future on them.”
AT FIRST GLANCE that future looks dubious. Inside Omni’s headquarters in Carson, a nondescript warehouse houses two floors of salespeople. Together these 116 telereps represent a hodgepodge of styles. Forget about dress codes. Omni telereps have short hair, spiked hair, braided hair, and greased-back hair. They sport jeans, khakis, and baseball hats. Rhino and Bugs Bunny ties. Some wear skirts better suited for a singles club, and press-on nails – in silver, gold glitter, and ice blue – that would scare off any reasonable recruiter. It’s this group of men and women ranging from ages 19 to 60, however, that serves more than 35,000 customer accounts, including Disney, Federal Express, and Goodyear.
The ringleader is Joe Hiller. Bald and sporting a goatee, Hiller could pass for a bubbly Bruce Willis. As befits those of his title – senior vice president of sales – Hiller, 40, has an amazingly upbeat attitude and an irrepressible smile. He even smiles when he’s sick. (Runny nose and watery eyes be damned, this man is going to have a good day.) And he smiles when he talks about his depressing past. “My mom was horrifying,” Hiller says, relaxing in Chamales’ office. “She’d get so rip-roaring drunk that my dad would take us to the movies and my mom would lay under the car and yell, “Run me over.” Eventually she walked out, leaving Hiller, then 10, and his two siblings with their father, who raised them in California. (Hiller is also a single dad of three kids.) At age 13 Hiller started using drugs, but it wasn’t until he turned 20 that he detected an addiction. “But I was unable to admit that my life was unmanageable,” he says. He lost complete control when a potent cocktail of paranoia, alcohol, and drugs sent him on a plane to Wisconsin, where he lived with relatives and hid from a deranged man he had created in his head. He eventually returned to California and found employment, not to mention a supply of drug dealers, at a beverage company.
While calling on the mom-and-pop shops that lined his South Central Los Angeles route, Hiller would get high in customers’ bathrooms, using the tanks on top of their toilets to chop up his cocaine. He alternated between sleeping on his father’s couch and in his car, which he parked overnight at Dodger Stadium. “I’m not proud of that,” he says, in a curiously cheery voice. “But now I can laugh at the insanity of how I was.” On June 8, 1984, Hiller, then 26, awoke from his real-life nightmare and decided to rid his life of drugs and alcohol. “I was sitting in my car in the mall parking lot,” he recalls, “with a bottle of vodka.” Lamenting his misfortune and thinking about his friends who were becoming parents and buying homes, he drove from one side of the lot to the other avoiding a security guard. He checked himself into a hospital the very next day. Just one month later Hiller showed up for an interview at Omni wearing his dad’s suit, worn-out shoes, and a mangled tie. Despite his fears that they’d check his references or question his nine-month employment gap, Hiller instead was offered a job on the spot. He soon got a crash course in responsibility, courtesy of Chamales. “He asked me to memorize an override to an objection, and I didn’t,” Hiller recalls. “At that time I was just an employee, another recovering alcoholic and addict at his facility. He pulled me aside and said, ’If I tell you to do something and you don’t do it again, you can get another job.’ So obviously whenever he told me to do something, I did it.”
Chamales still pushes Hiller. Yet when it comes to motivating the sales staff, Hiller runs the show. Standing before his reps at their weekly sales meeting, he takes out a stack of $20 bills and reminds everyone of the company referral program that rewards salespeople for bringing candidates in for interviews. “Jimmy met someone on the bus,” he says, handing the rep a crisp bill. Next he explains an incentive contest that rewards the winning sales team with a trip to the Cheesecake Factory with Omni’s upper management. “I’ll personally serve a slice of cheesecake to the winning team,” Hiller jokes. “Will you wear your spandex?” yells one rep, poking fun at Hiller’s obsession with working out.
A lighthearted atmosphere is crucial to Omni’s success; its telereps face excruciating rejection. Although they distribute products for such original equipment manufacturers (OEMs) as Epson and Hewlett-Packard, their ultimate goal is to sway buyers away from these brand name products and toward the OEM compatible Rhinotek line. But just as grocery store shoppers will fill their carts with such trademark products as Coke and Ivory soap, companies appreciate the reliability associated with buying a Hewlett-Packard printer ribbon. “The competing product could be half the price. It doesn’t matter, some buyers just won’t switch,” says Vee Molinari, who sells to the U.S. government. “The judges [I sell to] want to see HP. They have such intense brand loyalty.”
WHEN OMNI SALESPEOPLE arrive at work each morning, they’re greeted with a small steel sign that reads: Through this door pass the best telemarketers in the world. Inside a large “ego board” at the front of the room lists Omni’s 13 sales teams – “Miracles” and “So Fine”, to name just two – and their respective telereps’ performance. With one glance, salespeople can see, for example, that their coworker Barry has sold $2,043 worth of products today, earning him $254 in commissions. Employees known as expeditors bring salespeople food and run their orders from the sales floor to the order-entry department. And those reps who sell a certain quantity of Rhinotek products step up to the “Omni Wheel of Fortune,” spinning for cash prizes ranging between $1 and $20. Joe Hiller acts as the host of this would-be game show. His upbeat voice booms from the sound system, alerting employees that “Big Brian just landed his second new account today,” or “Chris, who stuck around and canceled his dentist appointment, just wrote a $2,600 order.” Arriving each morning at 6 a.m., Hiller spends 80 percent of his time on the sales floor, pushing reps to sell more product. He runs up and down the stairs that connect the two sales floors about 30 times a day – taking a 20-minute break sometime in the morning to devour a tuna sandwich and a bag of potato chips.
People respond to Hiller because he, too, once struggled to close deals. Early in his career Hiller hung up on a buyer when he didn’t know the answer to a question. His first paycheck was a paltry $29.70. “I thought, Jesus Christ, how am I going to make it here?” Eventually he adopted a regimen of studying, drilling, and rehearsing. Joining up with other rookie employees, he practiced his presentation before taking it live. “I’d write overrides on three-by-five cards and learn a different one each week so I had a repertoire,” he says. But more than anything, Hiller was successful because he was enthusiastic.
“In a call center environment you want someone who is highly emotionally charged because it’s contagious,” Chamales says of Hiller’s infectious attitude. “It’s really mission critical.” Letting out an ugly cough, Hiller attempts to pick up his already turbocharged pace. It’s 11 a.m., and his sales force has sold $56,000 worth of products. “By 12:30, I’d like to be at $75,000, so we’re a little behind,” he says. Popping a piece of Nicorette gum into his mouth, he cruises through a row of cubicles addressing each rep he passes by name. Uttering words of inspiration, he plays the part of a coach. When he reaches the cubicle belonging to Ed Wood, one of his sales managers, he turns on his speaker and listens to the call. He’s just in time. The buyer says he has been instructed by the company that makes its printers to use only OEM supplies, even though Omni’s products are cheaper. Hiller has heard this objection before. “Tell him, ’It’s like if you have a Ford car. They’re going to want you to get serviced at a Ford dealership.’” Wood repeats: “It’s like if you have a Ford car. They want you to get serviced at a ford dealership.” “Tell him you’re just trying to save him money,” Hiller says, giving his manager a reassuring pat on the back when the client decides to purchase the OEM brand instead.
TELESALES OPERATORS AREN’T known for their lavish benefits or commitment to employee motivation. As a telerep, you’re lucky if you get more than an hourly wage. Not at Omni. Chamales’ company is so committed to motivating its workforce that it has more than $200,000 dollars in loans out to its employees. When Hiller lost his house after a messy divorce, Chamales loaned him $125,000 to purchase a home just blocks away from the beach. “It motivates people when they improve their lifestyle,” Hiller says. “When they get a mortgage, they’re motivated. When they get a new car, they’re motivated. When I get up in the morning my feet are running before I hit the floor, because I have a nut to crack.” Hiller has every intention of retiring with Chamales; the idea of working for another company is unthinkable.
When Hiller’s 11 year old daughter, Marissa, was diagnosed with leukemia, Chamales never asked him to choose between work and family. After she finished her chemotherapy, Chamales threw her a party, complete with clowns, musicians, and magicians. “Would I get that same treatment anywhere else?” Hiller asks. “Hell no.” Omni is truly unlike any other company. Rita Gomez is another reason why. Several miles down the road from Omni’s headquarters, Gomez, 36, is proudly showing off the building that will house the “call center of the future.” Wearing a flowery red dress reminiscent of Woodstock, Gomez, the call center’s project coordinator, brushes a wisp of her wild blonde hair off her face. She enthusiastically explains how the 350 salespeople who will work here will be able to track their sales on an LCD panel at the front of the room.
Not too long ago Gomez couldn’t even leave her house. “I wasn’t feeding my cat or my daughter,” she says, recalling her days as a cocaine and speed user. At Omni, which she joined when she had been clean for four years, Gomez found an employer who understood her. You see, it’s a priceless employee perk when you don’t need to ask for time off to visit your mom in jail. “My whole family is in prison for drugs,” she says, matter-of-factly. So what do customers think of doing business with recovering alcoholics and drug addicts? When Kathryn Queen, a buyer for Blue Cross Blue Shield of Oklahoma city was first contacted by Omni rep Al McGreevy, he followed up with several articles about the company’s hiring practices. “I thought it was incredible – really commendable of the president,” Queen says. “I showed the articles to my boss and said, “This is one of the reasons I love Omni.” McGreevy brought those articles to life when he confided to Queen that he, too, was a recovering alcoholic. Queen dismisses any notion that some of Omni’s employees may be unstable: “The people I work with could be unstable,” she says, adding, “they just don’t admit it.”
Nonetheless, plenty could go wrong at Omni. Even managers joke that if you don’t have a criminal record or a history of drug and alcohol abuse, you’re not qualified to work hers. Although employees must prove that they’re involved in some type of recovery program, occasional crises will arise. Chamales has received several death threats from terminated employees and was even forced to evacuate the entire building after a bomb scare. And he once had to take $100,000 worth of merchandise back from a customer, because his sales rep, whom he recruited from a halfway house, was involved in a kickback scheme with a buyer. “I think they were both getting high together,” Chamales says. “It was a nightmare.”
But Omni is confronting a challenge familiar even to more mainstream companies: how to transform from a scrappy upstart into a fully developed operation. While the sales team is clearly its strong suit, there’s little semblance of a marketing effort . The marketing department, in fact, is just two years old. “We’re not optimized,” says Peter Guichard, Omni’s vice president and general manager. “Right now we have no specialization in accounts. It’s kind of a free-for-all.” Despite these obstacles Chamales has ambitious goals: He wants to grow his business to $220 million in sales by 2002 – an audacious target for a company with just over one tenth those revenues. Omni just recently began distributing its products in retail stores, and hopes to begin selling them via the Web this quarter. Another potential project is creating a division that will service the printers for which customers buy their supplies. These efforts, along with the call center that will hold 350 additional salespeople, should bring Omni to the $100 million mark, Chamales asserts. He says he’ll get the rest by acquiring the thousands of local mom-and-pop shops across the United States that also sell recycled toner cartridges.
Whether Chamales can pull off such a colossal feat remains to be seen. Interestingly, the only criticism that consultant Holtz has of Chamales is a conservatism that, he says, may temper Omni’s growth. “He really watches the bottom line,” Holtz says. “On the one hand he’s a gunslinger. On the other hand he’s a conservative banker from the Northeast.”
GERALD CHAMALES IS DRIVING from his old Venice Beach apartments to the Brentwood home that he shares with his wife, Kathleen, and 11 year old son, Ryan. Chamales fixes his attention on an audio tape entitled “Why Not Be Rich?” Begin to appreciate the good that you have, the tape instructs. Begin to appreciate the good that is forthcoming in your life. “You listen to these affirmations, you think differently, and you prepare,” he says, as lush greenery begins to replace the grime of Venice. “To come from there to here I had to prepare myself. Because a lot of people, when they have success, they sabotage it.”
Once inside Chamales’ 13,500-square foot earth-tone mansion one can quite literally see the power of positive thinking. Chamales has a tennis court, a two-level guest house, a pool, a Jacuzzi, 10 baths, a pantry the size of his old apartment, and 14 exquisitely decorated rooms. His office contains a 250 year old Buddha from Burma and artifacts from the Hellenistic period. Waking up in this house every morning, who wouldn’t be a bit flushed with optimism? “It’s a long way from Venice Beach,” he says, almost on cue.
Yet, look beyond the expensive furniture and accoutrements and you’ll find that his palatial home shares a common bond with his humble Venice Beach apartments. The latter was strewn with such tapes as The Psychology of Winning and Think and Grow Rich. In his Brentwood home is The 7 Habits of Highly Effective People, a small statue of Winston Churchill that reminds him to “never, ever give up,” and the Millionaire Next Door calendar.
Chamales’ favorite room is the basement lounge that houses his own theater. With a click of a button, the lights dim, a screen rolls out from the ceiling, and Steve McQueen’s famous chase scene in Bullitt comes to life. Instantly Chamales is reminded of his dad. He hardly knew his father; he died at age 36 in an alcohol-related accident. Before he died, Tom T. Chamales authored two books. One of those books, Never So Few, was made into a movie that starred Frank Sinatra, and provided McQueen with one of his earliest roles. Watching Chamales watch McQueen , it’s easy to envision Chamales’ own tale on the big screen.
But his life isn’t about sitting and watching. It’s about meeting one goal and setting another. “My philosophy,” Chamales says, “is that it’s not where you start in business, it’s where you finish.”