Taking care of business

Taking care of business

When the Kentucky Public Service Commission ruled last August that the Louisville area — in fact, the entire 502 telephone area code — would be intermixed with a new area code, requiring callers to dial 10 numbers even for local calls, most everyone in the western half of the state grimaced and shrugged with resignation.

But Greater Louisville Inc. President and CEO Doug Cobb went to work.

Cobb polled the membership of Greater Louisville Inc. by e-mail and fax and found that 90 percent preferred a geographic split of area code 502 into two different area codes. That option would prevent 10-digit dialing for local calls.

Next, he and leaders of other chambers of commerce within the 502 area code met with Crit Luallen, Gov. Paul Parton’s Cabinet secretary and a former president of the Greater Louisville Economic Development Partnership.

Within the week, the PSC had scheduled public hearings on the previously “done deal.” Within three weeks, the PSC, after receiving public input — much of it organized by Greater Louisville Inc. — reversed its previous decision and decided to split the 502 area code geographically. “This is a great example of the kind of influence the business community can have,” Cobb wrote in a memo to Greater Louisville Inc. members.

The area-code dilemma, while a minor issue on the scale of public-policy debates, illustrates two things: that Greater Louisville Inc. has unprecedented weight throw around as the single, now-unified voice of the corporate and business communities in Louisville; and that its leader, the sometimes brash Cobb, is more than willing to step in the ring on behalf of its membership.

In his short tenure with the year-old organization, Cobb, who previously was chairman of the local chambers board, also has organized letter-writing and telephone campaigns aimed at the Louisville Board of Aldermen and at Jefferson County Commissioner Russ Maple, all as part of what Cobb terms “flexing political muscle in a nay way.”

Cobb wants to make Greater Louisville Inc. far more than a reactive organization that arranges political favors for in membership. Greater Louisville Inc., the entity formed by the merger of the Louisville Area Chamber of Commerce and the Greater Louisville Economic Development Partnership (and later expanded to include the duties of the former Louisville-Jefferson County Office of Economic Development), has a plan to transform the local economy and the entire community from a “nice, average city” into one of the “hot spots” in the first decade of the 21st century. If its early politicking is any indication, it apparently has the strength of will to try to implement that plan — mashed toes be damned. One of its key elements is Cobb’s brainchild: creating a culture of entrepreneurial creativity in Louisville.

Also on the agenda are such politically charged issues as the merger of the city and county governments, the expedited construction of two Ohio River bridges, a reduction in local occupational and inventory taxes, and the elevation of the University of Louisville into a top research institution.

Managing this ambitious agenda wont be easy, and rampant speculation about whether Cobb intends someday to run for an elected office may complicate it went further.

But even moderate success could bring great rewards — or at least high visibility — to Cobb, a registered Republican. Jefferson County Republican Parry chairman Bill Stane claims Cobb is such a marketable candidate that he could have won the mayor’s race last fall. And Cobb can set his sights even higher in the future, Stone says.

“I think he can vault himself into the governor’s picture very easily,” he says.

What vaulted Cobb into his current position has been two key ingredients of the entrepreneurial spirit — an uncanny sense of timing and an ability to recognize a good business opportunity.

Cobb made his name, and a good deal of money, as president of The Cobb Group, a Louisville-based company that was the world’s largest publisher of computer-related newsletters when he sold it for an undisclosed amount to Ziff-Davis Publishing Co. in 1992.

The sale was the culmination of an 11-year love affair with the personal computer that started with the Apple II he found on his wife Genas desk in New York City while he was pursuing a graduate degree at NYU. Cobb was fascinated by the potential of this then-new tool. After earning a masters’ degree in accounting, he worked as a computer salesman and as an author of software support literature in Cambridge, Mass., before starting his own consulting firm there in 1981.

In one of those serendipitous conjunctions that make for entrepreneurial legend, Cobb’s consulting firm happened to share an office building with the Lorus Corporation when it was preparing to launch its Lotus 1-2-3 spreadsheet program. Lotus 1-2-3 went on to become the top-selling spreadsheet program in the early years of personal computers and Cobb ended up co-writing the how-to book, Using 1-2-3, which was published in 1983 and sold 1.1 million copies, making it one of the best-selling computer manuals ever published.

Cobb sold his consulting company to book publisher Que Corporation, and eventually moved to Indianapolis to head up that company business software division. In 1984 Cobb left Que and, with his wife, his brother Steve, and friend and colleague Tom Cottingham, returned Louisville to start The Cobb Group in 1984.

“Even back then he was very committed to Louisville,” Cottingham says. “That’s why we came to Louisville to start the company. He was talking about Louisville and how he waned to start a business in his hometown. I think that one of the very first impressions that I had was that he was a guy from Louisville. He always wore that on his sleeve.”

Cobb, 41, grew up in he Highlands and attended Atherton High School, where he was in the advanced program and played soccer, and had a generally successful if not particularly distinguished high school career. Before earning his masters’ at NYU, he graduated from Williams College, in Massachusetts, with a degree in political economics.

Cobb lives in Anchorage with Gena and their three children, Wes, 13, David, 10, and Sarah, 8. When he’s not wrestling with visions of the city’s economic future, Cobb can often be found on local basketball courts, where he plays in pick-up games several times a week when his schedule permits. (And, for the record, he’s a committed U of L fan.) He’s also an outdoorsman who enjoys camping and fishing.

His took up his latest avocation, golf, about a year ago, with two goals in mind: to break 100 and to score at least one birdie; he says he succeeded in meeting the first goal last summer, but has yet to achieve the second.

Cobb is a member of — and a deacon at — Southeast Christian Church. With all of the demands of his busy schedule, he retains a hard-and-fast rule that helps him keep his business and family lives in at least assemblance of balance: “Every Friday night is family night and Saturday night is ‘dare night'” with his wife, he says.

Cobb says he’s not the type who grew up idolizing the great industrial tycoons like Andrew Carnegie or J. Morgan, nor did he dream of building his own empire one day. But he was not without role models in the business world. His father, Stewart. Cobb, is a successful entrepreneur who has started several businesses, including Clarksville-based Midwest Veneer Inc. and the now-defunct Lamnips, also in Clarksville.

And the godfather of many contemporary Louisville entrepreneurs David Jones Sr. — is a close family friend who considered young Doug to be “like an additional child in our family. “(Cobb’s mother and Jones’ with, Betty, were high school classmates; while Stewart Cobb and Jones were U of L fraternity brothers.)

“I didn’t always know that I would (start my own business), but I always was aware that it was an option to do it,” Cobb says of his entrepreneurial bent. “I had seen how you do it. So when it came time to do that, it was no a big cliff to jump off of. I was a relatively straightforward thing to do.”

Ironically, in Cobb’s first year at the helm of Greater Louisville Inc., both The Cobb Group and Humana — the companies started by Louisville’s most outspoken champion of entrepreneurism and its greatest success story, respectively — were to have been plucked from the city by our-of-town corporate owners. (The sale of Humana to Minneapolis-based United HealthCare Corp. was scrapped after United HealthCare’s stock price plunged dramatically in the weeks following the agreement; Ziff-Davis moved the entire Cobb Group operation Rochester, N.Y., last summer.)

Still, the news of the then-pending Humana sale hit the city hard, delivering a sucker punch to its collective ego and scaring the local arts community, which has relied on heavy funding from Humana for many years.

The message was clearer an ever before: what corporate buyouts and mergers giveth (Tricon Global Restaurants Inc.), they also can taketh away.

Even a homegrown pillar of the corporate community such as Humana is vulnerable to the entreaties of a wealthy-enough suitor.

As evidence of the ever-changing nature of the business world, Cobb likes to relate a little-noticed piece of news from last fall: Microsoft Corp. edged ahead of General Electric Company as the highest-valued corporation in the world. That shift, he says, unofficially marked the end of the industrial-manufacturing era and reinforced the supremacy of the Information Age.

Competing in is new technology-driven age, Cobb argues, requires new strategies and priorities — ones that Louisville has been relatively slow to adopt. The result: Although the city’s population and economy continue to grow modestly Louisville has fallen behind other cities to which we like to compare ourselves.

One of the dominant cities in the region during the heyday of the postwar manufacturing age, Louisville has fallen from the nation’s 32nd-largest city in 1960 to 57th today (Louisville ranks 44th in the U.S. as measured by the more inclusive Metropolitan Statistical Area). While the populations of nearby Indianapolis and Nashville have grown by more than 50 percent over the past 20 years, Louisville’s has increased by only 10 percent over the same period.

“It just drives me crazy see cities that I know used to be our inferiors passing us by,” Cobb says.

That’s where Cobb’s vision for Greater Louisville Inc. comes in. A 1960 study by independent economic-development consultant Ross Boyle concluded that for Louisville to shake to its sluggishness and join Indianapolis, Nashville and Charlotte as “hot spots” in the 21st century will require a substantial retooling of the local economy.

City leaders, according the Boyle report, have two choices: maintain the city’s current second-tier status, with moderate-paying distribution and manufacturing jobs at the heart of the economy, or take bold steps to invigorate the city by cultivating high-tech industries, improving local universities and investing heavily in worker training, among other measures.

The former course would maintain the relatively comfortable status quo and require little vision and enforce the latter course calls for a unified metro government, two new Ohio River bridges, a first-class research university vision from local leaders and a commitment to change from the community a large.

In response to the report, the leaders of the Chamber and the Economic Development Partnership — which jointly commissioned the study decided to merge the two agencies and draft an ambitious business plan to meet the challenges presented in the report.

Cobb put his personal mark on the business plan by making an improved entrepreneurial climate a central goal of the plan and by insisting at Greater Louisville Inc. place a higher priority on helping local businesses get started and grow.

Recruiting corporate headquarters and production facilities is an extremely competitive undertaking, and Louisville doesn’t have a realistic chance of attracting that many Fortune 500 companies. After all, the largest Louisville-headquartered companies — Humana, Vencor, LG&E ( and Tricon (in the form of its KFC component) — are all homegrown companies. They’re here because they started here, just as Microsoft is in the Seattle area because that’s where Bill Gates grew up.

So the business plan called for the creation of an Enterprise Corporation — now up and running under the leadership of CEO Steve Silverman — to provide extensive support to local startup companies. The mission of the Enterprise Corporation is to identify the most promising local start-up companies, especially potential high-impact companies in the fields of technology and health care, and provide them with training, support and networking.

The idea, Cobb says, is to create a culture of possibility and risk-taking.

“We’re got to get our community growing again,” he says. “We’ve got to be willing to try new things and challenge the status quo and do hard things that are difficult and complex and politically challenging.”

This focus on entrepreneurism is a new approach to economic development, with previous efforts having focused on business attraction more than business development.

Brad Richardson, strategic account manager with Quality Communications Inc. and the former president of the Economic Development Partnership, gives Cobb much of the credit for the entrepreneurial thrust of Greater Louisville Inc.’s business plan.

“No one that I have seen in 16 years in the State of Kentucky had taken (entrepreneurism) on quite as passionately as Doug had,” Richardson says. “My recollection is that he met with resistance, and I believe that it’s a long pull for the entrepreneurial initiative…. It’s certainly untested.” The “single most important key” to Louisville’s future, Cobb says, is whether or not the city can attract and retain talented young people from across the country and even the world — not to mention its own native sons and daughters.

Louisville has become a net exporter of talent, Cobb says, and it has hurt the city in more ways than by simply creating a shortage of package handlers at United Parcel Service. Those who leave tend to be the brightest of all, and their talent, creativity and energy could be invigorating the economy of Louisville instead of Chicago, Atlanta or New York.

Atlanta, for example, has 200,000 more people between the ages of 20 and 40 now than it had between the ages of 0 and 20 two decades ago, he says. On the other hand, Louisville exported 28,000 young adults to other cities between 1970 and 1990.

“I don’t see how we can think of ourselves as a healthy, competitive city if our young people don’t think there’s enough opportunity to keep them here,” he says.

One thing that could bring talented young people to Louisville is what Cobb calls an “attractor” university, such as a Vanderbilt, a Georgia Tech or any of the dozens of top-flight universities in Boston, Chicago and other aggressive cities.

Cobb says Greater Louisville Inc. is considering working with local high schools to track down every graduate who has left the city in the past decade or so and encouraging them to return. But another way to attract young professionals is through traditional advertising, and a national campaign marketing the city to recent college graduates — such as one recently begun by Cincinnati — is also a possibility, he says.

Pulling all these ambitious ideas together a big challenge for the city and for Greater Louisville Inc. It will require some deft political maneuvering, a skill that Cobb admits he’s still learning.

“For me, the biggest thing to learn — and I’m still learning it — is how to operate in the public eye and the political sphere,” Cobb says. “The rules there and the patterns of behavior are just very different from running an entrepreneurial company. (The problem has been) either about our political naivete or about us flexing political muscle in a new way that causes people to take pause.

Lesson number one: Political naivete. Perhaps the most embarrassing lesson of 1998 resulted from the controversy over a Greater Louisville Inc. CEO Roundtable luncheon held at he Pendennis Club, an exclusive private club with a history of segregation. The choice of the Pendennis Club prompted a protest by the Rev. Louis Coleman and other civil-rights activists, who argued that Greater Louisville Inc. — an institution that receives public funding to manage the economic development efforts of city and county governments — had no business meeting at such a club.

In the wake of the protest, African-American leaders met with Mayor Jerry Abramson and Board of Aldermen President Steve Magre, urging that the city delay turning over its economic development duties — and $350,000 in city funds — to Greater Louisville Inc. until the agency detailed how it would ensure that African Americans were included in economic development initiatives.

Claiming that the city’s economic future was being held “hostage,” Cobb countered by asking Greater Louisville Inc.’s 2,500 members to call the aldermen and demand that they proceed as planned. Eventually, after much discussion, the aldermen approved the transfer of the city’s economic development duties and funds.

Cobb has called the Pendennis incident “just a stupid mistake.” He says he called the club’s president prior to the lunch and questioned him about the club’s female, African-American and Jewish members. He was told, he says, that the club had members of each group and that does not discriminate. Nevertheless, Cobb says, “We just misjudged the power of the place as a symbol in the community.”

Lesson number two: Flexing political muscle. Two weeks prior to the general election last November, Cobb sent a letter labeled “Vote Alert” to Greater Louisville Inc. members who live in the district of Jefferson County Commissioner Russ Maple, who was up for re-election. The letter urged those members to contact Maple in an effort to change his vote on a pending measure that would have authorized $225 million in tax-free bonds for Alliant Health System, a prominent member of Greater Louisville Inc.

Maple expressed dismay that Greater Louisville Inc. would be trying to pressure him that way, especially since the commissioners voted to fund the agency with $500,000 for its part in assuming the county’s economic-development efforts. For Maple, the issue was twofold: It showed poor political sense to bite the hand that feeds you; and as a civic — albeit private — organization, such political pressure conflicts with Greater Louisville Inc.’s designated role as a partner with local government in economic development. Cobb and Greater Louisville Inc. need to answer to local elected officials, not threaten their re-election campaigns, Maple says.

“That is the issue — not so much whether they have power or have too much influence but how well they respond to those of us who hold public office,” Maple says. “If they’re going to take public money, they’re going to have to respond to people who hold public office, not just business people. If you take public money, you can’t eat at the Pendennis Club. If you take public money, you have be responsive.”

Cobb agrees that he and Greater Louisville Inc. need to be accountable to elected officials who fund the agency. But as Greater Louisville Inc. prepares to participate in crucial public-policy debates — such as merging local governments and expediting construction of two bridges — blanket acquiescence will not be a part of the deal, he says.

“We’re accountable to the elected officials, as we are to all of our contributors, for the quality of the job we do in the work they’ve hired us to do,” he says. “The city and county governments make contributions under contracts that call for us to perform certain duties for them, and I think the question is whether we do those things well or poorly.

“We’ve always been an active part of making sure the point of view of the business community is heard by elected officials and week going to continue to do that. We’re going to continue to make sure our members are informed about issues going on in the community and we’ll assist them in becoming active if they want to take positions on those issues. I don’t see those things being inconsistent.”

In any case, Cobb’s name is likely to remain prominent in the news in the coming year, at least, and he will have a unique opportunity to affect the outcome of some crucial public issues. Whether or nor he chooses to capitalize on that name recognition by seeking political office remains to be seen.

Cobb’s name first started popping up as a prospective candidate early in the 1998 campaign for mayor of Louisville, even though he lives in Anchorage. His political aspirations are something of a foregone confusion around the community. Virtually everyone assumes — or at least has heard — that he is positioning himself for public office. But while he acknowledges having considered a run at county-judge executive seat in 1998, he says now that his experience in the glare of public life this past year has made him think better of seeking an office in the future.

“I don’t think there is any chance (of running for office),” he says. “What I want to do is do this job as well as I can for as long as it is necessary for me to do it, and then I’ll go back and start a company or invest in some companies and go back in the private sector. I think this job is teaching me everything that I want to know about public life and public service. It is really hard. It’s much nicer to be just a guy running a company.”

Of course, Cobb wouldn’t be the first person to forswear a political future only to appear on a ticket in the next primary. In fact, it is perhaps the only answer he can give at this point, considering his need to build coalitions between the business community and local government officials and his participation in the imminent campaign for a unified metro government.

But if Republican Party chairman Stone has his way, Cobb will be one of the Republicans’ best hopes for capturing major offices in Kentucky in the next decade. Stone says he and Cobb often talk informally about the need for new leadership in Louisville and in Kentucky, and that he has tried to convince Cobb to step forward. “He has the total package,” he says. “He’s the kind of guy who could conceivably become a governor some day. He could be a Republican governor some day.”

But before that’s even a possibility, Cobb has to make his mark on Louisville.

“Louisville has been a city that does not like overt challenges,” Stone says. “Doug may mace some people a little uncomfortable. But nothing worthwhile is ever easy. You can’t accomplish change and do great things without upsetting some people and Doug has the courage to upset some people.”

Copyright Louisville Magazine Inc. Feb 01, 1999

Provided by ProQuest Information and Learning Company. All rights Reserved