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The comeback: Paradigm Learning got lean to weather recession

Robb Gomez, president of Paradigm Learning in St. Petersburg, said Zodiak, a simulation game of business finance and strategy, is the company’s top seller.

MELISSA LYTTLE | Times

Robb Gomez, president of Paradigm Learning in St. Petersburg, said Zodiak, a simulation game of business finance and strategy, is the company’s top seller.

Paradigm Learning uses games to help Fortune 1000 companies from Lockheed Martin to Honeywell train their work forces.

The 17-year-old St. Petersburg company's most popular training tool, a board game called Zodiak, places players into simulated business situations "and has them learn their way out" to save their company, said Paradigm president Robb Gomez.

In 2008, Paradigm would have to play the game itself … for real.

Early that year, the company made an ill-timed decision to hire a dozen more people to court mid-sized customers in the 1,500- to 5,000-employee range. Shortly afterward, the economy began tanking and Paradigm's bank, the soon-too-fail Colonial Bank, froze its line of credit. Some mainstay clients postponed, scaled back or canceled training.

With sales falling, Paradigm fell into the red.

The comeback

Paradigm adopted a new slogan, "Bringing the Bottom Up." And lived it.

• Strangled by office lease payments of $30 per square foot in Tampa's Rocky Point, the firm relocated to a downtown St. Petersburg office tower, cutting its rent in half.

• Even as Colonial was absorbed by BB&T in 2009, Paradigm took its business elsewhere. It shifted its credit line to a new bank, USAmeriBank, and paid down the entire line of credit in 11 months.

• It laid off about 10 employees, the new sales group it had hired to target the middle market. Among the remaining 30 workers, it slashed salaries 20 percent for management and 10 percent for all other employees.

• The sales team focused on building deeper relationships with existing customers instead of generating new leads.

• No expense was too minor to be culled — from watering their own office plants to stopping a coffee service to renegotiating prices with vendors to printing materials in house when possible to save money. "All these little things add up," Gomez said.

Bottom line: The company posted one of its most profitable years ever in 2009 despite a continued drop in sales.

Growth projections

After sales grew a modest 3 percent in 2010, Paradigm is now tracking at an 18 percent increase in sales year-to-date. Profits are up 26 percent year over year.

In 2010, employees received an additional sales incentive. For every quarter that the company increases sales at least 15 percent compared with a year ago, workers receive bonuses that would, in essence, reinstate their cut salary. So far, the company has met its revenue target six straight quarters, and it has hired four more employees to build on sales prospects.

The future

Paradigm is targeting 15 percent annual growth over the next five years. Gomez said he "absolutely" expects to meet that goal next year despite some skittishness in the current economy and his management tendency to be paranoid about the future.

One in-house measure that gives him hope: The pipeline is filling up with corporations booking through December 2012 to visit Paradigm's offices for training sessions.

Why business improved

Looking back, Gomez said, he's proud no one left the company after the 10 percent pay cuts. He credits that in part to practicing what the company preaches to clients — constant communication with employees, especially during tumultuous economic times.

In monthly all-staff meetings between 2008 and 2010, Paradigm executives talked at length about their current finances and projections.

"We were very overt about how we did that previous month … letting people ask whatever questions they needed to ask, so they felt comfortable that the sacrifices they were making were, in the long run, going to pay off," Gomez said. "You need to really do that if you're going to get their buy-in to right the ship."

About the series: This is part of an occasional series profiling area companies that have come back from hard times and how they're doing it. Have a story to tell about a company on the rebound? Contact reporter Jeff Harrington at (727) 893-8242 or harrington@sptimes.com.

The comeback: Paradigm Learning got lean to weather recession 10/01/11 [Last modified: Saturday, October 1, 2011 2:39pm]

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