Some small-business owners gauge their successes using conventional benchmarks: adding customers, increasing revenue, or hiring additional staff. One could argue that Bob Keeney gauged his success by counting paper clips, pens, and pencils.
For nearly 40 years, Keeney — a Seattle businessman who became one of the first commercial tenants to operate in the once-nascent Bellevue Square when he opened Keeney’s Office Supply there in 1947 — ran his eponymous company. Its bootstrap beginnings were lean, but the company eventually grew to include seven Puget Sound retail stores that employed 80 people.
In 1983, one of Keeney’s five daughters, Lisa Keeney (now Lisa Keeney McCarthy), went to work for him — eventually buying the business when her father retired in the late 1980s. She continues to run it today as the company’s president.
As expected, Keeney’s Office Supply has had to adapt to a dynamic industry.
The rise of big-box stores such as OfficeMax, Office Depot, Staples, and Costco Business Centers during the 1990s led McCarthy to move the company away from retail (the last of those seven retail stores shuttered in 2004) and become a business that delivers office supplies and furnishings exclusively to commercial customers.
And the increased popularities of Amazon and other types of e-commerce spurred the company to grow its own online business early on, allowing the Redmond company to survive — and even thrive. Yes, it’s a smaller operation than it was when McCarthy sold her first ream of paper 35 years ago. But it also is one of the largest woman-owned businesses in Washington state, employing 35 people, and generating $12 million to $13 million in annual revenue.
McCarthy and Steven Sterne, who started working at Keeney’s 30 years ago and is the company’s general manager and McCarthy’s closest business associate, recently shared their insights into how this legacy Eastside business has survived for so long.
Q: Your father started the company in 1947. Is it true he sold office supplies out of the back of his car? How did he get into this line of business?
L: He delivered (supplies) out of the back of his station wagon. My dad grew up in Seattle and went to Roosevelt High School. I’m not sure why he (got into office supplies). His father had a hardware store near Green Lake. My father wasn’t really a guy who talked a lot about why he did things. My guess is that the whole Eastside was just starting to grow. After World War II, everybody was going to the suburbs. He saw an opportunity.
Q: What circumstances led you to start working for your father’s business in 1983?
L: When I graduated from college, I was not a business major; I was a preschool education major. I got a job in my major, but it wasn’t great. I left that job, and I needed another job while I looked for something else. I asked my dad if I could come work for him. Of course, he was thrilled. I just ended up staying. I got thrown in fairly quickly. I was young when I started — 23 or 24. But it was fun. I just kind of learned, saw what needed to be done, and moved on from there.
Q: The company has evolved from operating retail stores to exclusively serving commercial customers through direct distribution. How and why did that evolution come about?
L: The whole market landscape was changing in terms of retail. All the big-box stores were proliferating, and we needed to know what we do, and we needed to do it really well.
S: When I started in 1988, there was an Office Club a few blocks from the downtown Bellevue store. There was also BizMart. Office Club (merged with) Office Depot. BizMart (was acquired by) OfficeMax. Staples came into the area later. We kind of lost 10 percent of our business to the first wave of box stores, and the second wave took another 5 percent. At that point, the critical mass wasn’t there. But there was a pretty good market for commercial business that had a really high level of service and expertise.
L: Like Steven said, if you lose 10 or 20 percent (of your retail business to big-box stores), you are still kind of there, but it doesn’t really make financial sense for the amount of energy that retail takes.
S: Lisa is very good at knowing where the market is going, and saying, “OK, we can do this now, but if we are still doing this in two or three years, we aren’t going to be able to run the company. We have to change before it gets critical.” That’s why we are still here. Most of the office supply companies that were in existence in the 1980s and 1990s are gone. When I say most, I mean 98 percent. It has not been an easy thing to survive. They all dropped like flies. You have to be very nimble and very willing to embrace change to survive.
Q: How are you nimble?
S: We don’t use contract customer service the way Office Depot and Staples do. We don’t have contract delivery drivers the way they do. All our employees come here in the morning: we can meet with them, we can talk to them, we can reach them by phone, we can e-mail them. We have many ways to share information and the ability to share information across the whole company based on the input from the customer. That’s one example of our nimbleness.
L: Another example was (when) the terrible Oso (mud) slide (occurred in 2014), and FEMA called to say they needed a vendor. We said, “Just tell us where (to deliver), and we can have it set up in two hours.” Or someone calls us because their file cabinet won’t open because who knows why, and they get brushed off by everybody else because nobody wants to deal with that kind of (thing). We will go out there, and we will work with them. We have gotten accounts that way.
Q: What have been the biggest threats to your business?
L: Which generation? (laughing) Which five years? In the 1990s, it was the big-box stores. Now, of course, you have Amazon.
S: We got (into) online (sales) early because that’s where the market was going, and we had to be better at teaching our customers to use our online system than anybody else. We put ourselves on that highway (early). Now, we have to deal with Amazon, who kind of runs that highway and owns the toll booths. What happens next? We are working on that. We are not going to stop doing online sales just because Amazon is there. But we have to imbue everything that we do with a higher level of service to justify our existence, and that’s really what staying alive is about — it’s creating value that people care about all the time.
Q: Is your biggest competition with Amazon, Costco Business Centers, and the like? Or is it with other independent office supply companies?
L: There aren’t many other independent office supply companies, really.
S: Office supply dealers, if they are family-owned, have gotten very rare. It’s been brutal. In October, Office Depot bought (Complete Office in Tukwila), one of the last major independent stores in the Puget Sound (area). We compete with everybody: Staples, Office Depot, Amazon, Costco. We have a very major full-service office interiors division that is growing and doing well, but the competitors there — OpenSquare, Systems Source, and Western Business Interiors — are really very skilled and adept. It’s hard work to compete.
Q: Is that scary for you? Do you sometimes wonder how the company lasted this long, and how much longer it can last?
L: No, because we are continuing to grow. When you own a business, there are a lot of things to be afraid of. I think we are going to be fine. We do a good job, and we are pretty lean in terms of the way we run things. I feel like with Amazon, certainly they are not going away. But maybe we have crested that a little bit. Maybe they are losing a little bit of luster. Maybe I am just being optimistic. I don’t really worry about it so much. I just feel like we are going to be good.
S: The other thing that is different from nimbleness — but equally important — is that we make decisions about how to handle a customer based on what the customer needs, rather than what is operationally efficient for us. We have a long view. We plan to keep a customer for 20 or 30 years.
L: Also, that’s just way more enjoyable. We know our customers so well and listen to them. It’s great to be able to go home at the end of the day and, yes, it’s office supplies, but you feel like, OK, this (customer) has had like 87 emails, or it used to be 87 Post-It notes on their desk, and we were able to take care of 50 of those for them. It’s not heart surgery, but it’s good. They appreciate it. It’s fun.
Q: What is an office supply Keeney’s sold 30 years ago and was wildly popular, but no longer is sold today?
L: My husband would say diskettes. But there were Cuff-ettes. Most of your readers wouldn’t know what those are.
S: They were very important in the days of machine ribbons. Cuff-ettes were little plastic sleeve protectors — kind of like gloves without the hand part — and when you changed a typewriter ribbon or re-inked a calculator ribbon, it wouldn’t get on your clothes.
L: Kind of like a shower cap for your wrist.
S: Pocket protectors were very popular. We rarely sell them now. We had slide rules in the retail stores when I started. I could sell them because I knew how to use a slide rule.
Q: What is still around and sells well? What is the cockroach of the office supply industry?
S: The binder clip is the cockroach of the office supply world. I like binder clips. They are very useful.
L: You can get colorful ones. They are kind of fun. We have them at home for keeping our chips fresh, too.
Q: When you tell people you own a 70-year-old office supply company, what do they say?
L: They say, “You don’t look that old,” and I say, “Thank you” (laughing).
Q: But how has Keeney’s managed to survive for so long?
L: I think taking chances. I’m willing to take a risk. You see something, and you say, “Well, can we do it? We’re not sure, but we’re going to give it our all.” So, we jump into it. For example, saying, “OK, retail is not happening anymore. We need to make a move from that.” Not being afraid to take that risk or to say, “That used to be a good decision; it’s not a good decision anymore.” Getting out of retail was one of the best damn decisions we ever made. If you are not a risk-taker, and you say, “Everything has to pencil out,”— I mean, it has to pencil out sooner or later, right, or we wouldn’t be here. But sometimes you have to say, “OK, I’m taking a leap of faith, and I’m going to do it.”
Q: What does the future look like for Keeney’s?
L: We want to keep working with the customers that we have now, and continue to grow our customer base. We feel like there’s a huge opportunity right now because there are a lot of people that would like to deal with locally owned companies. We need to really continue to look at that, do more brand awareness, and get our name out there. Our reputation is very good, and our customers, when they leave their job and go to another job, oftentimes we get pulled in (with them).
S: It’s important that we don’t have a fixed image of what the company looks like in five or 10 years. If we did that, we wouldn’t be able to be nimble and responsive to how the world is changing. That is a core vision of the company: Go where we need to go when the opportunity arises. If we lose that sense of being opportunistic, tuned into the market, and tuned into the customer, we wouldn’t survive.