2008 Minnesota Business Hall of Fame

In a very real way, Guy Schoenecker learned nearly everything he needed to about business by growing up in Eden Valley, a small town about 70 miles west of the Twin Cities.

Schoenecker’s father operated a number of businesses there: a hardware store, a plumbing and heating contracting company, even a funeral home. “I learned business from him,” Schoenecker observes. One lesson: the profound importance of happy customers. “My dad used to say, ‘When we lose one customer because they were not satisfied, you may lose a whole family.’”

By satisfying his customers, Schoenecker has created a large family of businesses under the trade name BI (originally short for “Business Incentives,” later for “Business Improvement”). Headquartered in Edina in a six-building complex comprising 300,000 square feet, BI is a $485 million company that ranks third nationally in the business-improvement industry, that is, the creation of customized incentive and marketing programs to improve employee performance and customer loyalty. (St. Louis–based Maritz and Minnetonka-based Carlson Companies rank number one and number two.) BI’s 1,000 employees are in Edina, Eden Valley, and 24 other offices nationwide and overseas.

Schoenecker grabbed his first opportunity while a student at the University of St. Thomas. In the late 1940s, the school was flooded with veterans studying under the GI Bill. Many were planning to get married. Schoenecker’s father had a friend who bought and sold diamonds, and soon Schoenecker had his own engagement ring business.

After law school, Schoenecker opened a diamond shop in Minneapolis, as well as a couple of furniture stores. One customer was Ford Bell, a scion of General Mills’ founding family. Bell had struck out on his own and started the Red Owl supermarket chain, but his new business wasn’t taking off. Seeing something in Schoenecker, Bell asked the young man to evaluate the stores. Schoenecker’s fundamental diagnosis: Red Owls simply weren’t very friendly.

“You’re right on,” Bell said. “Now what are you going to do about it?” Schoenecker, though astonished, went to work.

“Fundamentally, I came back with the same ideas, without realizing it, that [my] company’s based on today,” he says. Among them: Employees need encouragement by being rewarded for their hard work and good service, “and those rewards can’t be normal compensation. They have to be something extra and above so that they can feel good about it.”

Schoenecker helped put together a campaign for Red Owl employees, telling them what was expected. “Typical people things,” he notes—say hello, smile, be outgoing and courteous. He also developed a reward system for employees who treated customers particularly well—“housewives” with shopping bags full of rewards to give out, like wristwatches.

The program was successful, and Schoenecker decided that creating incentive programs for retailers was more interesting than being a retailer himself. He closed his stores and started Business Builders, whose customer list would grow to include gas stations and banks.