EMG chief defends lavish courtship of Balto. Co.


Gail Richardson is courting Baltimore County schools, and he's good at courting.

The entrepreneur whose Arizona-based company is seeking a $5 million no-bid contract in the county has already spawned a successful day-care chain and two educational technology companies -- selling all three to large corporations.

When the affable founder of Educational Management Group Inc. talks, he distills the subject of technology to how his daughter, a ninth-grade English teacher, might use it. He impresses clients by remembering their first names. And he flies them out to training seminars before they buy his product.

That marketing style, however, is just what has sparked an ethics controversy in Baltimore County.

County school officials are under fire for letting EMG pick up the tab for 70 school employees to travel to Arizona and Florida, trips that included stays at a four-star hotel. On Aug. 8, the school board may vote on the EMG contract, which would expand the company's role in county schools.

Dr. Richardson makes no apologies for his marketing approach.

"I don't know how you show people a new kind of technology or new concept in any big way without this kind of effort," he said of flying educators to EMG's headquarters in Scottsdale, Ariz. "People need to see what they're getting into. Most people can't see whole new ways of doing things without being immersed into it."

That system includes a fax, video camera, monitor, computer with CD-ROM, scanner, color printer and phone. Via satellite, students can hook up live with experts from around the world, with EMG acting as a sort of electronic switchboard. In addition to standardized programs EMG offers, teachers can make individual requests for information and speakers.

Dr. Richardson, 56, started EMG with four employees in 1988, and built corporate earnings by an average of 25 percent a year, a spokesman said. He sold the company to New York publishing giant Simon & Schuster in February for an undisclosed amount, but remains chairman. The company, which now has 140 employees, says it reaches 1 million students in 3,500 schools nationwide.

Before becoming an entrepreneur, Dr. Richardson was a teacher. He married a teacher, and they raised four children, two of whom are teachers. Another is vice president of EMG.

He started EMG, he said, for teachers.

"I'm not a technology nut -- I don't much care about it, to tell you the truth," said Dr. Richardson. "But we're interested in helping teachers to release their energies and be more effective. We were looking for a way to support a great master teacher."

The schools in Florida's Orange County hired EMG five years ago, said Orange County schools administrator Vicki Brooks.

"They're very people-oriented," Ms. Brooks said. "I have never had the president of another large company actually take the time to come see people, ask me if there's anything he can do to make my job easier, give me his personal phone number and say if I needed anything to call, 24 hours a day."

She met Dr. Richardson for the first time in Arizona last January.

"Then I saw him [in April] in Washington, D.C., at a conference where he was speaking," she said. "I ran into him in the hall. And he said, 'Hi, Vicki.' He remembered my name. I will never, ever, forget that."

Dr. Richardson grew up in Southern Illinois, received a master of arts and doctor of education degrees at Indiana University and eventually became schools superintendent in rural Mattoon, Ill.

In 1969, he founded the La Petite Academy, an academic day care chain, and sold it in 1970 when it had eight centers in central Illinois. La Petite has grown to 800 centers nationwide, including six around Baltimore, its president, Robert A. Rodriguez, said from the company's headquarters in Overland Park, Kan.

"I think Gail is a progressive, avant-garde thinker," Dr. Rodriguez said. "To be thinking about early childhood education in 1967 or 1968, he was ahead of his time."

In 1975, Dr. Richardson founded Prescription Learning Corp., offering public schools computer-based programs for teaching reading, math and language arts.

By 1986, Prescription Learning caught the eye of Jostens Inc., known widely for selling class rings and yearbooks. Jostens, eager to get into educational technology, bought the company and formed Jostens Learning Corp., keeping Dr. Richardson on as chairman for another two years, when he left to form EMG.

"Prescription Learning was well known for their service organization, more than anyone else," said Leslie Eicher, director of public relations for Jostens Learning in San Diego. "They had a huge organization . . . to go out and hold the teachers' hands, show them tricks and how to implement the technology."

An influx of federal money in the 1960s for educating low-income students had created a new market for companies that could package graphics and eventually computers for public schools, said Kenneth Komoski, who directs the nonprofit Educational Products Information Exchange Institute.

"A lot of these companies did their marketing with the approach of getting a few school board people or the entire school board to travel to Salt Lake City or wherever they were headquartered, and lay over for a ski trip," Mr. Komoski said.

In the 1980s, when everyone was flush, it wasn't unusual for companies to fly out large groups of employees, he said. The trips built an esprit de corps among co-workers, making them more likely to lobby their school boards to buy, he added.

Ski trips, for example, were part of visits to Wicat Systems Inc. -- since bought by Jostens -- once headquartered in Utah. IBM has flown school administrators to Atlanta. Jostens brought them to San Diego, although Ms. Eicher said Jostens has cut back on such trips, out of a concern for expenses and ethics.

Such marketing costs are passed on to the customer, Dr. Richardson conceded.

But the benefit is that customers know how to use EMG's product, he said. "I've watched schools buy lots of things, and the people were never taught to use them."

Baltimore County officials are considering the contract with EMG without soliciting competing bids. They say no other company offers the kind of interactive video and live feeds that EMG will provide.

EMG's custom services -- such as sending teams to a tropical rain forest -- and the live interaction are unique, Mr. Komoski said.

"I just wonder how valuable that is," he said, noting that most of the information is available on CD-ROM, prerecorded but much cheaper.

CD-ROM technology doesn't provide the live interaction so valued by his customers, Dr. Richardson said. "About 30 or 40 percent of our young people quit asking questions by third or fourth grade because they know the questions are not going to be valued, or their teachers don't have time to answer them."

In EMG's promotional video, the first six minutes are packed with quick cuts of classrooms, technology and computer graphics.

In the last minute, Dr. Richardson simply talks into the camera. He tells teachers to focus on a couple of students in whom they can really make a difference.

"If you would do that, touch these two lives, one might turn out like you and one might turn out like me," he says. "And public schools have been pretty good to both of us."

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