When Randy Herrel was a kid growing up in Evansville, Ind., he built rockets that successfully launched living cargo – mice – hundreds of feet in the air and returned safely back down. A constant tinkerer, he liked to see what made his homemade rockets work, why they sometimes didn’t and how he could improve them. That’s been the story of his professional life, too. As an engineer at Douglas Aircraft in Long Beach, he saw his company lose big orders to competitor Lockheed because of better business practices, not better engineering. That spurred him to turn toward the business world. After earning a Stanford M.B.A., he worked as a management consultant at Touche Ross and as chief financial officer at clothing company Quicksilver Inc. before helping turn around golf apparel maker Ashworth Inc. During his 10-year tenure, that company grew revenue from about $75 million to more than $200 million. After taking a year off, Herrel accepted a new challenge five years ago: help Catalina Island return to its former status as a premier Southern California attraction. Since coming to the island, he’s overseen the development of new attractions, hotel renovations and a gentrification of some Avalon restaurants – and the number of visitors is on the rise. Before catching a ferry to Avalon one recent morning, Herrel met with the Business Journal at a Long Beach coffee shop to talk about what brought him to Southern California, how he splits his time between Avalon and Newport Coast, and how Eastern Airlines pushed him into business school.
Question: So your first job after college was here in Long Beach?
Answer: I came out to work for Douglas Aircraft in Long Beach, and here we are. I’d never been west of the Mississippi until I got in the car and drove out here.

You went to college at Purdue. Are you from Indiana?

I grew up in Evansville, Ind. – small town.

Why Purdue?

A long time ago, I built rockets. I wanted to be an astronaut. And I figured out Purdue was a top school where actual astronauts graduated, if you work it backwards: Neil Armstrong, all those guys. That was one of the places to go.

But you never made it into space.

My only miscalculation was if you’d ever seen the original seven astronauts, they were very short. I’m 6 foot, 3 inches. They’re not going to put a 6-foot, 3-inch guy into a capsule if they can put a 5-foot, 7-inch guy in and save hundreds of pounds and a lot of space. That and contact lenses finally did me in.

So you went the engineering route instead?

The next best thing was getting into aerodynamics.

How long were you at Douglas?

I was there for several years. During that time, I said I’d like to get an M.B.A. They provided support when you worked at Douglas, but they said I really needed to get a master’s first. An engineer who gets an M.B.A. is typically going to leave. So I said OK.

Where’d you get your master’s?

Northrop University, up by LAX. It was a spinoff of the Northrop business. They had law school, and aeronautical and astronautical engineering. They allowed me to go to school at 7 a.m., take one class, then go to work, then two classes at night. I’d get home at midnight. I did that three days a week for two years.

Sounds pretty grueling.

It cut into your social life. It was a grinder, but I was single at the time and I was very focused on getting that master’s because I really wanted to get an M.B.A.

Why?

I needed to learn something in business outside of aeronautical engineering. Douglas Aircraft had the DC-10, and we were bidding against Lockheed’s L-1011 with the old Eastern Airlines. Eastern picked the L-1011 even though our plane performed better, had better range, better fuel economy.

How did that happen?

Lockheed arranged a financing package that was unbelievable. At that point, I said there’s something more than just being the very best in your discipline. You need to understand all the rest of the world in business. I still love engineering, but the business of the business is just as important as being the best engineer you can be.

So then you went to business school?

Around that time, I got married. My wife is also from Indiana. Someone called me back in Lafayette, Ind., and had a manufacturing plant. They wanted me to come back and be chief engineer.

How long were you there?

A couple of years. But the whole issue of depreciating this asset or expensing this, the whole marketing thing – I started applying to business schools. I applied to Harvard and Stanford, got into both. I was probably the geographic diversity admit. I was also an engineer, and they probably thought, “We need to have one of those in our M.B.A. program.”

What was an important lesson you learned at Stanford?

I put my name in a hat and had the good fortune to have lunch with the CEO of IBM. I asked him, “What do you do every day when you go to work?” He came back with three things: one, as CEO you set the vision for the company. Two, you hire the best thoroughbreds you can find. Three – and this was the most surprising – you’ve got to keep your thoroughbreds from nipping at each other. It’s true.

How did you meet your wife?

At Purdue, in undergraduate. Carol’s a year older than I am. We were in student union – it’s the group that puts on activities on campus. I was a sophomore, she was a junior, and I worked for her silk-screening posters. We made the posters for when the Beach Boys came.

So you started dating in college?

Actually, no. We stayed good friends. She graduated and went east; I graduated and went west. She sent me a Christmas card and said, “Gee, I’d like to call you sometime.” She was a teacher in D.C. and had a good friend that worked in the Capitol building, so she’d meet her friend and make long-distance calls on the congressional line.

When did it become more than phone calls?

Eventually, we decided we ought to get together and just do something. I said, “Why not come out to Los Angeles?” I was living in Seal Beach at the time.

What did you end up doing?

I picked her up at the airport and we went to the Hollywood Hills that night. We had dinner at Yamashiro’s, which overlooks all of Los Angeles. It’s a great setting. Then the next day, we went skiing, then went to Disneyland and the beach. Then she was like, “I’m not sure I want to go home.” We got married about a year later.

Sounds like quite a first date.

There was a lot of research done on where to go – on what would be impressive.

How did you get to be chief executive of Ashworth?

I had been at Quicksilver for a number of years and the company was looking to acquire Ashworth. We walked away, but the chairman and CEO called me up and said, “Randy, we need somebody to come down and help us.” When somebody tells you, “Come on in, tell me what you want” and all that, it’s probably worse than they say it is. And it was worse than they said it was.

What was going on?

There must have been 20 family members in the company, mostly running major parts of it. Wall Street was on them to improve. I stayed there 10 years, we tripled sales. The company was about $70 million in revenue, when I left it was at $225 million, in a tough industry.

Why’d you leave?

After 10 years, I came home late one night and my kids said, “You know dad, you’re not having any fun.” Your kids can sometimes read you better than you can read yourself. I’d been in public companies for 17 years. That’s every three months releasing earnings to Wall Street. I didn’t want to quit doing things and running things, but I also didn’t want to die at my desk of a heart attack.

What did you do in the year between resigning from Ashworth and starting with the Island Co.?

We got in the car and drove from Southern California back to the Midwest. We went to Mount Rushmore, drove through Yellowstone – that was in the winter, which wasn’t the smartest thing. Then I got back and volunteered for everything, from the homeowners association board to helping some startup people.

Sounds like you stayed busy.

I was getting home at 8 at night and getting up at 7 in the morning, then realized, “This isn’t as fun as I’d thought.” Then a couple people started calling. The Island Co. was one.

What was attractive about the job?

I’m a consumer-products, brand-turnaround, grow-a-company kind of guy. That’s what I like to do. I like to fix things and grow things.

Where do you think that comes from?

I think it’s in my DNA. All along, I liked to take things apart and put them back together and make them better, from building rockets as a kid and seeing how they worked. We got to the point where we could launch mice and still have them live.

What was wrong on Catalina? What have you been trying to fix?

The hard part was the culture. This is an over 100-year-old company, and a family-run company, which is a good thing. But there was a culture for quite a while when I came in of, “Have we thought about doing this? Oh no, that won’t work. We tried that 10 years ago.” There was not a lot of innovation.

You’ve brought in some new attractions and done some renovating around Avalon. Is it paying off?

We’ve grown the bottom line something like 100 percent a year over three or four years. Financially, the company is performing, getting better and better. The cross-channel traffic is returning. It’s keeping it going that’s the challenge.

The Island Co. is the biggest landlord in Avalon, so you’re a pretty recognizable guy around town. Does that get old?

Most CEOs don’t have to worry about the Chamber of Commerce or local politics or business leaders who aren’t in their industry. This job requires someone who can listen and understand and take their input and build it into the equation of how you run a business.

Right. I imagine the CEO of JPMorgan doesn’t have to interact with the hotdog vendor outside.

But the hotdog cart guy is going to tell you a whole lot. I learn more walking down the street and talking to people than sitting in an office. Customers and the guy that sells hotdogs, they have a lot of access to data – that’s my engineering talking – that you don’t have.

You split your time between Avalon and Newport Coast. How often are you on the island?

Most weeks, I’m there five days.

Does your wife go with you?

Typically, when I’m in Avalon she is too.

Do you have your own boat or do you take the ferry?

No boat. I take the Catalina Express.

I imagine that’s been a big adjustment.

Yeah, you’re operating from a lot of different places. You don’t meet people on a Wednesday night. You could, but you’d be up at 4 in the morning to catch the 6 a.m. boat. That’s a toughie. But it’s fun. It’s certainly different.

Has it gotten easier now that you’ve been doing it for a few years?

You learn a couple shortcuts. Instead of getting to the boat a half-hour ahead of time, you get there five minutes ahead of time. You don’t worry as much about missing the boat and missing a meeting.

How important is it that you’re on the island so much of the time? Isn’t there an office on the mainland?

No, but we’ve discussed having an office somewhere on the mainland. We’ve going through the process of figuring out how to balance managers’ work life and family life.

Is that a recruiting problem for you?

Attracting and retaining people and finding the right housing for them is a real challenge. We have looked for a head of marketing for over a year. We’ve looked for project managers for over a year.

What are you working on now?

You have to be building now. You have to completely design and be ready to go with contractors by now to be open by May. There’s a new restaurant coming in and a spa coming in 2014. But we’re really thinking about 2015 to 2020. When you’re a 100-year-old company, you’re not just thinking about the next quarter.