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August 2007
An All-American Business
By Thomas Monigan

    By the time C. Ray Kennedy became the quarterback on his high school football team in the early 1960s, he had already learned about facing up to whatever life might dish out. His family helped supply the lessons, as Kennedy recalls, taking a brief break from his duties as the man in charge of American Product Distributors, Inc. in Charlotte.

    “As a quarterback I always had the responsibility of making decisions, and I was captain of the basketball team, too,” he says. “It got to the point where I felt comfortable being the boss.”

    Ray Kennedy has been moving forward in measured strides since graduating from what was then Maryland State College in 1967. Drafted into the U.S. Army soon afterward, he helped to run the phone system as a sergeant in Saigon during the Vietnam War, and came out of the service as a disabled veteran in 1970.

    After spending 20-plus years in banking, he decided it was time to start a company that would provide a combination of goods and services in a unique way: American Product Distributors (APD). APD sells and distributes consumable products including office supplies, industrial and janitorial supplies, and business imaging supplies to corporations and institutions nationwide.

    Kennedy’s “niche” is to provide the “Single Source Solution” for minority purchasing needs of corporate America. Founded in 1992, APD has grown from a two-employee start-up with $200,000 worth of business, to 55 employees today with nearly $140 million in sales for 2006. Earlier this year DiversityBusiness.com ranked APD first among veteran-owned businesses in the United States. It also ranked APD 39th on the list of the country’s largest minority-owned businesses.

    Other awards since 2000 have come from Bank of America, Johnson & Johnson, JPMorgan Chase, the U.S. Department of Commerce’s Minority Business Development Center, and the U.S. Department of Veterans Affairs.

    APD sells and distributes both non-durable and durable goods. The company was founded on the idea of supplying essential products for business offices, and Kennedy made sure that kept evolving into essential services as well.

    Non-durable goods include copy and specialty papers, office supplies, toner cartridges, industrial supplies, on-line business cards and stationery. Durable goods include construction and building materials.

 

Procuring an Idea

    When Kennedy told Jim Hynes, chairman of the Charlotte Chamber in the early 1990s, that he was thinking of leaving banking, Hynes encouraged him to go into business for himself. Then he got Kennedy connected with Bank of America.

    Thanks to bank executives such as Hugh McColl Jr., Jim Hance and Jim Palermo, Kennedy was able to launch his company with Bank of America as its first major client in 1992.

    At that point in his 24 years with Bank of America, Palermo was in charge of procurement.

    “We had niche businesses we wanted to spend money with but they didn’t exist,” he recalls, “and Ray was just a good smart entrepreneur. We were looking to outsource some of our transactions business and he just had a good knack for seeing a good market niche and responding to it. That’s called America.”

    “We saw a man who had good savvy and sense for business,” Palermo adds. “As we would start him into something he was like a mini-conglomerate, he was always adding something. His was a competitively priced minority business and he was a good businessman. He did what he said he was going to do and we lived happily after.”

    In recent years, contact between Palermo and Kennedy has been less frequent, especially since Palermo has retired from Bank of America. “But if we saw each other tomorrow, we’d still have that connectivity,” Palermo says of Kennedy. “He’s very special.”

    In the 15 years since APD got started, its list of clients has grown to include Carolinas HealthCare Systems, Office Depot, GlaxoSmithKline, Johnson & Johnson, JP MorganChase, National Gypsum, and the U.S. Postal Service, among others.

    “We may have started as a minority company,” Kennedy affirms, “but I knew that was not the thing that was going to keep us in business. We had to bring value to the table and out-perform other companies.”

    From the beginning, Kennedy and Chief Operating Officer Eva Dinion decided they would not get involved with the cost and logistics of delivering the products. They chose instead to focus on customer service and technical support. Being registered and certified to calculate and collect sales tax in all 50 states has allowed APD to go nationwide.

    “It was just a matter of sacrificing the profits to secure the longevity of the business,” Kennedy says. “We had to do it a little at a time, but we knew then and we know right now the sacrifice was well worth it.”

 

Customer and Community Care

    Dinion was there at the start in 1992. She had worked in banking with Kennedy since 1979. Kennedy calls her the “heartbeat around here.” She calls the man in charge a “visionary,” someone who has taught his people about the value of listening to customers.

    “We never say no,” Dinion says with a smile. “Obviously a request has to make sense, but our customers like that we’re quick to respond. They’re our lifeline. Without them we’re nothing.”

    Dinion says she has no idea what her employee number is, and that’s just part of a corporate culture that encourages employees to contribute in unique ways.

    “We want to challenge them, not just spell it out and have them do it like a robot,” she says. “Ray knows all the employees by name, even the temps. And he pulls all the wagons, so that leaves me free to pull my little red wagon.”

    And yet, Ray Kennedy’s energy isn’t confined only to his career. His civic involvement includes being chairman of the organizing committee for the CIAA basketball tournament, which has made a $30 million impact on Charlotte in the past two years.

    Kennedy has also held key positions on boards and committees at the Charlotte Chamber of Commerce, he’s a founding member of the local chapter of 100 Black Men, he’s on the board of directors for Foundation of the Carolinas, and he’s a co-founder of the Bankers Educational Society of North Carolina.

    And the way he tells it, the basis of all this accomplishment came from lessons he learned in childhood.

 

Standing Up for Family

    Kennedy grew up in Newton, located in Catawba County. His father, Manuel, had left school in the sixth grade because his mother had died. He spent 50 years working at Carolina Mills, and he and his wife, Rebecca, raised nine children. Ray Kennedy had six older siblings, and they helped show the way by succeeding in school and going on to college.

    Young Ray learned much about the business world by caddying at Catawba Country Club. But even before that, he recalls a poignant moment in his real world education.

    He and his siblings would help their father clean a local church. It was in the 1950s, and black people were not allowed to attend this particular congregation. At one point someone reported that a small amount of money      was missing from the church, and word got around that Manuel Kennedy’s children were responsible. So Ray’s father walked into the Sunday morning service with his children in tow.

    “He made an announcement to the congregation that his children were not brought up that way; that they did not do that sort of thing,” Ray Kennedy recalls. “For my father to stand up in front of that large congregation, it showed how strong he was. That’s still with me today.”

    As the Kennedy family walked out of that church, Ray Kennedy remembers he heard some people clapping. “He was that kind of man,” Kennedy says of his late father. “Those kinds of lessons you don’t forget and that’s the kind of moral fabric I’ve tried to pass on to my children.”

    For the past 15 years, Ray Kennedy has been working on passing along the family business as well. And since all three of his children have become involved, it figures he will achieve that goal.

    Son Cy is the oldest and, after five years, has become a senior vice president for administration and revenue generation. In recent months daughters Kim and Mia have also joined the company. Kim deals with “green issues” such as health and environmental compliance and Mia is involved with internal auditing.

    Their mother, Cynthia, is involved with the C. Ray and Cynthia M. Kennedy Foundation. She is also in charge of three University Child Development Centers in Highland Creek and University City as well as Huntersville. These five-star centers have created about 200 jobs and will be adding an academic tutoring service for public school students in kindergarten through eighth grade, which will start in September inside the three child development centers. The Kennedy’s plan for it to expand rapidly to other locations.

 

The Family Team

    Kennedy recognizes the challenges facing businesses with multiple family members involved. “It works as long as families understand business philosophies and strategies and they remain consistent with those philosophies and strategies,” Kennedy says. “It works fine with us.”

    And this former quarterback and team captain apparently remembers that it’s teamwork that wins. “We encourage our children to voice their opinions, and they’re not bashful,” Kennedy says with a smile. “But at the end of the day, when the decision is made, everyone is expected to go along.”

    Cy Kennedy says that business and family issues seldom clash in his situation. “He’s been a great business mentor for me,” says Cy. “There’s plenty of time to talk about business all the time, but our family gets along very well. It’s enjoyable for me.”

    Kim Kennedy says she’s been using the lessons her father taught her all through the process of growing up. “Integrity, honesty, treating people right and doing the right thing, we’ve been able to build the company based on those values,” she says. “We do talk about business a lot, but we do a good job of balancing it out. And if your heart’s in something, you don’t mind talking about it. It doesn’t seem like work at home.”

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