Even after several decades in the industry, Harry Kletter keeps searching for new recycling ideas and techniques.
Even after several decades in the industry, Harry Kletter keeps searching for new recycling ideas and techniques.
Experience may be the best teacher, but Harry Kletter is not always convinced it should have the final say.
Kletter, 73, is the chief visionary officer with Industrial Services of America, Inc. (ISA), Louisville, Ky. Growing up in Detroit as part of a scrap collecting and processing family, Kletter has witnessed and operated a multitude of recycling operations and techniques in a span covering parts of nine decades. But as his title implies, by no means does he believe that the recycling idea well has run dry.
Throughout his life, Kletter has been willing to experiment, pioneer and take risks in order to grow his own business as well as advance the recycling industry overall.
A Scrapper's Son
Harry Kletter grew up at a time when the term “melting pot” was coined to describe the ethnic make-up of urban neighborhoods such as Detroit’s east side during the 1920s and ‘30s. While the term has a nostalgic Normal Rockwell feel to it for some, Kletter recalls that things were not always so idyllic.
Kletter’s immigrant parents—from Russia and Austria—were the only Jews in the immediate neighborhood, making Harry and his family not just curiosities, but also targets for the less tolerant.
In the Depression era, Harry’s father, Max, had a business cleaning up and preparing for re-sale properties that had been foreclosed upon. Much of what was cleaned out from the properties made its way to the salvage yard of Harry’s uncle and cousins, who had started a scrap business that began with a horse and cart and was nurtured into a land-owning enterprise.
By the late 1930s, with less of the foreclosure work to perform, the Kletter family started a Detroit scrap company called Illinois Waste Materials Co. Their timing proved outstanding, as World War II brought with it a revived steel industry and a patriotic fervor to collect scrap and keep the blast furnaces stoked.
In 1945, Harry was old enough to enlist in the Navy, where he saw enough of the world to realize that there would always be something new to see—and that one of his priorities in life would be to make sure he made the time to travel and see it.
Staking Out New Territory
After his stint in the Navy, Harry Kletter was full of ideas and was not always finding himself in agreement with the business decisions being made by other family members in Detroit.
Traveling to Cincinnati, Kletter worked for a short time for Abe Byers. By 1953, Tri City Scrap Baling was established, and the property on Grade Lane in Louisville [where today’s ISA is headquartered] became a scrap processing facility. In 1961 Anchorpac, a maker of stationary compactors for the waste industry, was purchased. Shortly thereafter, Tri-Pak was established to manufacture and distribute refuse handling equipment on a national and international basis. While recycling has been the unifying theme in most of Kletter’s business ventures, his trademarks have been a willingness to experiment and an urge to travel to gather ideas and information from locations across the country and around the world.
It is probably safe to say that Kletter was ahead of many others in the scrap industry in his ability to move beyond local markets, in part because he obtained a pilot’s license in the 1950s. Kletter recalls buying some scrap airplanes and engines from an airfield in the 1950s, and striking up a deal to take flying lessons as part of the sales agreement.
“If we had not flown, we would never have grown the way we did,” he says of his company. “We were everywhere so easily in the ‘50s. We were able to get to remote places and make deals for pipeline scrap and surplus,” he recalls. “We would go out on Tuesday and come back on Thursday having acquired materials. It was a great asset.”
Kletter does not go out on scrap search missions today, but he still enjoys flight and travel, and finds the passenger compartment of an airplane as good a place as any office or library to get work done and research business conditions.
When possible, Kletter travels with his wife, Bobbie, and also schedules many family reunions at distant locales where family members can meet up.
“30% to 40% of the reason we grew was flying,” asserts Kletter. “Every piece of equipment I’ve bought was from traveling and seeing it.”
His willingness to travel has allowed him to build the former Tri-City Scrap into the public company ISA is today, with operating units such as Computerized Waste Systems (CWS) that manage the solid waste and recycling needs of national clients such as Home Depot and Office Depot.
In 1967, Industrial Services of America, Inc. was formed and by 1969 it became the first public company in the waste and recycling business. ISA owned, operated, and managed recycling plants, waste hauling companies, and landfills in cities throughout the United States. “We even operated our own seminars and taught most of the heads of today’s largest waste companies,” remembers Kletter.
Beyond the tangible aspects of building a publicly-traded national company, Kletter also remarks that flying and international travel opened the doors for adventures and memories that have been part of a full life. One noteworthy example: his 1980s investment in a Philippines paper recycling operation that coincided with the downfall of the Ferdinand Marcos regime. “We were on the island of Baton and we would get stopped at one checkpoint by armed guards who backed Marcos, travel a few miles, and then get stopped at a checkpoint manned by rebels.”
Fortunately, says Kletter, he was with someone who knew how to say the right things to allow them to go unharmed through checkpoints of either faction. “I lost $200,000, but it was a lot of fun and something I’ll never forget,” he says of his Philippines venture.
Better Ways and Bigger Ideas
There is a 50-year-old photograph that Harry Kletter keeps that is labeled and dated: “First Annual Scrap Seminar, Institute of Scrap Iron & Steel, Inc., Northwestern University, Chicago, August 28-September 2, 1949.”
One of the younger faces in the group shot of some 240 people belongs to Harry Kletter. It is not surprising that Kletter, a lifelong scrap recycler, a lifelong traveler, and a person always looking for new ideas, would be among the attendees at the first ISIS (one of the predecessor organizations to ISRI) national event.
A look at Kletter’s and ISA’s history shows that he has had an ability to “think outside the box” before that particular cliché was even coined.
While never forsaking his core scrap operations, Kletter has diversified in a number of ways. Whether it was developing and manufacturing waste compactors, operating “the world’s smallest hammermill” to process light bulbs, or buying something called a computer, ISA was designed to evolve. As currently configured, ISA consists of the following operating units:
ISA Recycling, a Louisville and Seymour, Indiana scrap operation, currently engaged in a major processing project of demolition scrap generated by Ford Motor Company at a nearby plant site. “We’ll always own this, even if indirectly,” Kletter says of the scrap operations. He believes that the tangible, hands-on work with the commodities “leads us into the intangible sectors. Sometimes when we talk to investors, they don’t see how the recycling center has led us into knowledge and shows us what the commodities that we take care of look like.”
Computerized Waste Systems (CWS), a company acquired by ISA in 1979 that manages multiple-location solid waste and recycling services for national companies such as Home Depot and Office Depot. Charlie Hulsman, Vice President of CWS, describes the service from the customers’ viewpoint: “they know one phone call gets them the results they need with no problem; they know we’re looking out for their best interests.” A call center in Louisville logs service requests from customers throughout the U.S. and Canada, making sure that regional haulers honor service agreements. For customers such as Home Depot, it means store managers can concentrate on customer service and other tasks rather then waste disposal or cardboard recycling matters.
Waste Equipment Sales and Services Co. (WESSCO), which operates to some degree in tandem with CWS, leasing, selling and servicing compacting and baling equipment.
I R2 Solutions (which Kletter says stands for the Second Industrial Revolution), is a new division offering high technology software development and support to industrial companies as well as ISA’s other divisions. Kletter has added Michael Friedman, a pioneer in e-commerce in the scrap business, and Bruce Burton, information technology specialist, to the IR2 staff as vice presidents “IR2 can provide us with the in-house expertise to be efficient and effective for our customers,” adds Kletter.
"IR2 became part of the visionary team,” adds Kletter. “I got the idea from WorldCom—a vision team has to be inside and outside, but not buried under daily operational duties,” he says. “They have to look out for the vision of the company. IR2 carries out the mission of the visionary team—not only doing our company’s work, but doing work for others and generating revenue.”
Contemplating the Corporate Future
As part of his succession plan, Kletter is delegating an increasing amount of responsibility to key executives and managers.
He has purposely stepped down from the CEO post and now holds the title of chief visionary officer, where he engages in long-term planning and strategic acquisition research.
Many of the strategies he is now pursuing are not new, he contends, and he offers a 1969 brochure from his company that displays a vision of multi-faceted operation similar to what he is now doing. “A lot of people think [what ISA is doing] is new, but it’s not,” says Kletter. “The concept goes back to 1969”
Improved computer and communication technology is just now allowing many of the efficiencies of concepts such as CWS’ to be realized, Kletter says. “I think the paperless network is necessary or else the paper will drown us. Companies need to get information transferred, or their growth will slow down.” Kletter and Friedman see fewer calls coming into the CWS call center in the future, supplanted by a greater number of e-mail requests for service.
Whether customers reach CWS via e-mail or telephone, a system in the works will use Caller ID and other technologies to both confirm and respond to incoming requests.
“IR2 is also making our customer reports web-enabled,” says Friedman, “so a company such as Office Depot tracking its costs against budget doesn’t have to wait for a monthly report, but can get the information it needs at any time.”
Kletter adds that advances in technology cannot be used at the expense of customer service. “Even with the best technology, you need to give the service behind it. You can’t completely divorce yourself, and try to set up an e-business that doesn’t offer genuine customer service,” he remarks.
“If anything, customer service people will actually be more valuable and expensive,” Kletter predicts. “They’ll need to offer service help on the computer side. In the scrap processing business, the new computerized equipment makes it harder to maintain without technical support,” he points out.
A Life Seldom Ordinary
As chief visionary officer of ISA, Kletter is plotting the future of the publicly-traded company that garnered more than $80 million in revenues last year.
But Kletter is the first to admit that the path forward has not always been a clear one, and that at times backward steps have been part of the journey. The early 1980s were a particularly tough time for Tri-City Scrap, when an industrial recession caught up with Kletter’s company while it was deeply leveraged. A bankruptcy resulted in the sell-off of several assets, but Kletter re-grouped and built what today is ISA Inc.
Throughout the journey, though, Kletter’s penchants for travel and for business pioneering have allowed him to live a life that was never mundane. From investment adventures in the Philippines to competitive tennis matches in his 70s, Kletter has tried to seek out opportunities and keep himself active physically and intellectually.
“I think a lot of people I know view me as too fast-moving—a guy who won’t stand still,” says Kletter. “I realized a couple of years ago that I’m ADD (attention deficit disorder). When you have to do multiple things at one time, and can’t work when there is quietness—those are some of the symptoms.”
In his 70s, Kletter has diagnosed himself with a child’s behavioral syndrome—a natural conclusion for a gentleman who refuses to settle into established patterns as long as there is something more to be learned or experienced in the wider world.
The author is the editor of Recycling Today magazine.