Gary Fails

At age 49, Gary Fails went back to school. Eighteen months later, in August 2002, the president of City Theatrical received his Masters of Business Administration degree from Columbia University. Continuing to run his company while going to school, Fails admits it was a tremendous challenge, yet recommends it to anyone in business today. Armed with his new acumen, Fails takes a look at how an MBA looks at the lighting industry.

Ellen Lampert-Gréaux: How did you get into the lighting business in the first place?

Gary Fails: By chance really. I dropped out of Columbia University in 1971 and got a job working for Alan Funt, who was making a movie called It's Only Money. That led to my next job at Dance Theatre of Harlem. The secretary in Funt's office was married to the technical director there and they needed someone to drive a truck. When we went on tour to Europe, everybody else had left so they named me lighting designer, carpenter, and stage manager. Shortly after that I met Steve Terry, who joined the company as an electrician. We traveled all over the world together for several years.

ELG: Where did you go from there?

Fails: I went out on the road with touring shows, including Beatlemania and Dancin'. Then I came back to New York City in 1980 and worked as an electrician all over Broadway, and started working at Four Star in the Bronx. They put me in the sheet metal department making top hats and other lighting equipment. I urged them to expand into more manufacturing, but they didn't want to. I could see the need for it, so I started City Theatrical in the South Bronx in 1986. In the past 16 years we have expanded into four additional buildings on the same street. We now have a staff of 20, with eight in the office, including sales, and 12 in the shop. We actually have a factory and make our products right here. We punch and bend sheet metal all day.

ELG: What made you decide to go for your MBA?

Fails: I had run a business for a long time, but the defining moment came a few years ago when Inc. magazine gave me an award, the Inner City 100, for the fastest-growing small businesses working in inner-city areas in America. They sent me to take some seminars at the Harvard Business School. One of those was a strategy seminar taught by Michael Porter, the strategy guru. And it hit me really hard. It was like an epiphany, how little I really knew about business. We were growing very quickly, so I decided to go back to Columbia and get my MBA.

ELG: Did the lack of a degree stand in your way?

Fails: No, they just asked me to take the GMAT exam and I scored above the class average. But I was the only one in the class without an undergraduate degree. They all knew my story, and I was among the older (but not the oldest) students there. It is a great program and really teaches you the skills it takes to run a business. It will benefit us enormously.

ELG: Are there other MBAs in the entertainment technology business?

Fails: I know of Mark Engel at Rosco and I'm sure there are others at some of the larger companies. But I believe I am the only one with an MBA and 30 years of experience in the lighting industry. It is a unique combination and gives me a unique perspective on the industry.

ELG: Does the lighting industry function differently than other industries?

Fails: It is true that our industry is small and has a history of low profitability. Other businesses have other degrees of profitability. An MBA might want to make changes based on other industries, but it wouldn't work. We have certain dynamics and practices we live by. Yet I think there are big changes coming up in terms of growth and competition.

ELG: Can you be specific?

Fails: The industry is not growing the way it used to. I see a period of increased competition. This is a climate where growth is uncertain and you can't grow as fast as you might want, so you have to worry more about profitability. You need to price more carefully and try to manufacture at a lower cost.

ELG: Do you think China will play a role in our industry?

Fails: Absolutely. China will have the same impact on our industry that it has had in every other area of business. We will see sweeping changes in the next few years with a larger percentage of our products made in China. There are more products from China at every trade show. You can't avoid it and have to react accordingly.

ELG: Based on your new knowledge, do you have new strategies?

Fails: We'll always be innovators. That's what we've always done, stay ahead of the curve. Now I need to apply profitability. That's the biggest thing they teach you. And you have to look at it every day. That's how an MBA thinks.