Moguls With a Mission

Tim and Diane Mueller are king (and queen) of the mountain. They run one of the country's most admired independent ski areas: a resort with a devoted following that maintains close ties to the community and -- surprise! -- makes money in a notoriously unforgiving business.

Tim and Diane Mueller got a warm reception as the new owners of Okemo Mountain Resort -- too warm. In their first season, back in 1982, it rained during the all-important Christmas week, and there was no natural snow to speak of until mid-January. The weather was a harbinger of bumps to come. The Muellers -- both 32 at the time -- had mortgaged their home, cracked open their nest egg, and spent $600,000 to buy a controlling stake in the ski area in southern Vermont. The resort was near bankruptcy. The surrounding town, Ludlow, was still reeling from the shutdown of a GE plant that had served as its employment engine. And later that winter, Okemo's lifts began conking out one by one, disrupting operations so badly that at one point, a crowd of skiers marched toward Tim's office, shouting, "We want Mueller! We want Mueller!"

What a difference 20 years (and $100 million worth of investments) make. Today, the Muellers run one of the most admired independent ski areas in the country, a resort that makes money and racks up more than a half-million skier visits a season. Last year, Vermont governor Howard Dean spoke at a dinner honoring Diane. "They [the Muellers] gave new life to a town that was completely devastated," he declared. Adding to Dean's plaudits was Connecticut governor (and Okemo skier) John Rowland, who proclaimed a "Diane Mueller Day" in his state.

In an industry where most of the publicly held giants are tumbling in an avalanche of red ink, the Muellers have turned Okemo into the kind of business they had always dreamed about -- and the kind of place they would want to ski. The cafeteria workers and lift operators are friendly, the mountain wins awards for its finely groomed terrain, and every season, there's a major enhancement for customers to look forward to. This past December, Okemo unveiled Jackson Gore, which features seven new trails and a high-speed lift. "When we make decisions," says Tim, sitting with Diane in his office overlooking Okemo's base area, "we do it for strategic and business reasons, not because we're a public company and we have to do whatever it takes to grow. We're lucky to be able to run the kind of business that we want to run."

Since recovering from the chaos of their first season, the Muellers have managed to achieve a balance between their business and the kind of life they want to lead -- although when they hit the slopes, it's still more likely that they're helping load chairlifts than taking a few runs on their own. "We never could have imagined how much time and energy it would eat up," says Tim. "But we never envisioned how big Okemo would be and how much this business would do, not just for us, but for our people and the community."

The Okemo Difference
If the ski industry used its own trail-rating system to gauge how hard it is to make money, the ski industry would qualify as a double black diamond. Ski areas are capital intensive and weather dependent -- a combination that keeps most operators (big and small) buried in poor earnings and debt. Of the three largest ski conglomerates, all of which went public in the late 1990s, none was trading above its IPO price at press time. One, Vail Resorts, sought bankruptcy protection in 1991 (although it later emerged from it), and another, American Skiing Co., is currently experiencing rough financial sledding.

The Muellers weren't particularly savvy businesspeople when they bought Okemo. They weren't even avid skiers. They simply wanted a business of their own and reason to return to Vermont from the Caribbean, where they'd been helping Diane's parents develop a resort. The couple had already built a home in Chester, near Ludlow, and were eager to live there full-time. (Twenty years later, they still live in the same house, although they've added on to it.) Their second child, Erica, had just been born, and they wanted her and her brother, Ethan, to grow up in Vermont. "Kids can be kids here," says Diane. "They can go out in the yard and dig for worms. And other people look out for them."

After purchasing their controlling stake, the Muellers were left with something like $30,000 to start the first season -- and because of the mountain's past financial problems, banks were reluctant to lend much additional money. "We were young and naive enough to think that we could make something happen," says Tim. Adds Diane: "We never talked about what would happen if it didn't work."

The lack of resources put a premium on quality and execution. So the Muellers focused on delivering better service and lavishing time and attention on snow making and grooming. "We needed to show people that we could deliver a better skiing experience," says Tim. "And the two ways that we could effect that without making big investments at first was by improving both the [conditions] on the hill and the way you treat people in the parking lot, in the ticket line, in the cafeteria."

These days, the Muellers can afford to make major improvements, such as the 18-hole golf course that opened in 2000, the Jackson Gore expansion that debuted last month, or this season's purchase of a grooming device, called a Zaugg Pipe Monster, that will render Okemo's snowboarding park that much more radical. "They've been gradual improvements," Tim says. "You can't spend $10 million in one year and expect enough people to show up and pay for it instantly."

Diane still emphasizes the importance of customer service each fall, when she indoctrinates more than 1,200 seasonal employees into the "Okemo difference." Her message: It's everyone's job to exceed the expectations of their guests, whether that means offering help to a skier who's deciphering a trail map or recommending a favorite soup to someone lingering in a cafeteria line.

But the Okemo difference isn't just about beyond-the-call-of-duty customer service. It's also about attention to detail when it comes to taking care of the mountain itself. The Muellers try to keep their entire grooming crew on the payroll year-round so that they can retain those who know the terrain intimately. And the Muellers allow the groomers to go over trails two or three times until they're perfect. "We don't just want the snow to be great in the morning," says Tim. "It has to hold up during the day." This year, Okemo was ranked the best-groomed mountain in the East for the fourth year running by the readers of Ski magazine.

On busy winter weekends, the Muellers demonstrate the Okemo difference themselves. "When the place is swarming with skiers, it does a lot for morale to see Tim working in the rental shop and Diane making sandwiches," says Bruce Schmidt, director of operations. "It's hard for people here to say, 'That's not my job.' "

The couple has tried to leaven all of the work with a sprinkling of fun. Office pranks (like decorating a manager's office with Christmas trimmings in the middle of summer) are ingrained in Okemo's culture. Each spring, there's a competition for the most outrageous Easter bonnet -- which Diane often manages to lose, according to long-standing tradition. (It's not unusual for bonnets to be kidnapped and held for ransom in advance of the judging.) The snowmaking crew has been featured in a series of parody posters, including one that pictures them as an '80s glam-rock band, "Guns and Hoses," and another with them in cowboy hats and dusters as "The Fastest Guns in the East."

A Business (and Life) That Works
What difference does the Okemo difference make? The result is a ski area that draws a devoted following -- and that buttresses real-estate values in the Okemo area. On a tour of trailside property, Dan Petraska, an Okemo manager who worked with Tim even before the Muellers bought the mountain, points out a three-bedroom townhouse that recently sold for $805,000. When it was built in 1997, the selling price was $265,000. "If you want prices to go up like that, you have to make sure that people still want to come here to ski," Petraska says, "and that's something that Tim and Diane really care about."

Unlike many ski areas, Okemo has avoided major conflicts with environmentalists and its home town, even as the resort has grown. Instead of fighting over how much water Okemo should be allowed to take out of the Black River for snow making, the Muellers spent $1.5 million to build a 73 million - gallon retaining pond to store water during the spring, summer, and fall. Each November, Okemo plays host to a community gathering, showing Ludlow residents what's new for the upcoming season. An annual fund-raiser that Diane started has collected nearly $1 million to support Vermont's Special Olympics as well as technology and art programs for schools. Diane also serves as vice chairwoman of the Vermont State Board of Education. "You feel responsible, being the largest business in the community, first to do well and sustain the vitality of the area," says Tim, "and second, to give back."

Despite the all-consuming nature of running a ski area, the Muellers never pushed their children to get involved with the family business. "We didn't want them to hate skiing," Diane explains. Ethan has held a series of jobs at Okemo, starting out as a "tray kid" in the cafeteria, moving on to become a boot fitter, and later working as a junior instructor to save money for his first car. Today, he oversees Okemo's snowboard parks. And Erica, who attends the University of Colorado, Boulder, chose not to work at the mountain this season. Instead, she focused on winning a spot on the Junior National Snowboard Team.

Nowadays, with a team of veteran managers and 150 full-time employees, the Muellers have a little more time for outside pursuits than they did in 1982. Diane paints watercolors and squeezes in a four-mile run most mornings. Tim likes to pull over at one of the ponds that he passes on his drive to work for a short stretch of duck hunting. But the ski and snowboarding gear that Tim keeps stashed in his office closet still doesn't get much use. "I'm lucky to get out once a week, and that's mostly to check on the operations," he says.

The Muellers' schedule seems unlikely to change. In 1998, they began operating the state-owned Mount Sunapee ski area, in New Hampshire, and last year, they signed a $92 million contract (now tied up in litigation) to buy the Steamboat Ski resort, in Steamboat Springs, Colorado, from troubled American Skiing Co. Why not just take it easy and kick back with an Irish coffee from the lodge? "We're entrepreneurs," Diane says. "We can't stop ourselves." Adds Tim: "We just like to see things grow and make things happen."

Contributing editor Scott Kirsner (kirsner@att.net) spends much of his time during the winter months strapped to his snowboard. Learn more about Okemo Mountain Resort on the Web (www.okemo.com).

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