Chicago chapter CEO has navigated scandal to rebuild public trust
When Steve Bernas took over as CEO of the Chicago region's Better Business Bureau, the only employer he's ever known as a professional, it was a baptism by fire.
Bernas was being groomed to take over, but he only took the reins in 2007 because his longtime mentor at the bureau, who had been there more than 40 years, died.
Then, early in his CEO tenure, Bernas endured the greatest crisis of trust the 100-year-old BBB nationwide ever faced, which is a big deal for an organization whose lone currency is trust. Embarrassing evidence arose that a Better Business Bureau in the Los Angeles area was allowing paying members, including fictitious ones, to receive unfairly high ratings.
About the same time, Bernas and the national organization entered a standoff. National threatened to eliminate the Chicago chapter by revoking its charter because Bernas refused to implement a new letter-grade system of rating companies. He thought it was unethical because the system gave higher grades to paying members. (The national BBB eventually changed the ratings system to the way Bernas wanted, and the Chicago chapter is in good standing.)
All this happened amid a sea change in how consumers complained about companies and researched them, moving away from the household name Better Business Bureau and turning toward newer online names such as Yelp, Angies List, Facebook and Twitter. Perhaps the only thing that could hurt the BBB more than a crisis of trust is irrelevance.
Roy Spencer, chairman of the BBB board of directors, called that time "a tremendous period of transition."
"Steve handled it with such aplomb," said Spencer, who is also president of Perma-Seal Basement Systems Inc. in Downers Grove. "He carries that calm professionalism even through the most trying times. That was a real potential crossroads for the bureau."
Despite the challenges, Bernas is credited with modernizing and remaking the Better Business Bureau of Chicago and Northern Illinois, while forging relationships with consumers, Chicago-area businesses and consumer agencies, such as the state attorney general's office and the Federal Trade Commission.
The keys to his success, observers say, are his limitless energy, uncompromising principles and dedication to helping consumers and businesses get along. He has managed the delicate task of boldly advocating for consumers even as his organization is funded by businesses.
Today, Bernas, 47, is the face of the 86-year-old BBB in Chicago. He's a regular media guest on television and radio and is frequently quoted in print articles talking about consumer issues. During a typical day, the husband and father of two teen daughters leaves his house in Naperville at 5:30 a.m. and returns at 8:30 p.m.
He's an energetic speed talker whose brain seems to work faster than his tongue; he tends to speak in half-sentences while somehow still communicating effectively.
Last year, his 68-person BBB offices — in Chicago and a small one in Rockford — handled about 50,000 formal complaints. He and his colleagues are often referees in disputes between outraged consumers and Chicagoland home contractors, auto dealers and retailers.
Every day, 55,000 people visit the Chicago BBB website to look up information on businesses. All told last year, the local chapter was contacted some 20 million times, including Web visits.
Because of his office's enormous reach and connection with consumers, Bernas has become valuable to the legal system when pursing scam artists, rogue contractors and unethical advertisers.
"He's just so easy to work with," Illinois Attorney General Lisa Madigan said. "Steve's just a good guy. He's very engaging and very personable and very committed to the mission of the Better Business Bureau."
A child doing unto others
Born into a religious family in the Brighton Park area on Chicago's Southwest Side, Bernas attended Catholic school, including high school at Quigley Preparatory Seminary South. There he was required to perform volunteer work in hospitals and homes for disadvantaged and disabled youths.
"That's where I felt the joy of helping people, those less fortunate who cannot help themselves," he said. "It's that feeling that you can give and it doesn't cost you anything. … I fell in love with it."
He graduated from Loyola University with a degree in psychology. Does that come in handy when dealing with feuding businesses and consumers? "Every single day," Bernas said, laughing.
Fresh out of college in 1987, Bernas intended to be a probation officer, even attending a training session. But the governor at the time cut the state budget — and the probation officer jobs. So he regrouped and visited the job placement center at Loyola. There, a counselor was opening mail from employers who had available jobs.
"She just handed an envelope to me as I walked in and said, 'Here.' I looked at it and knew the name but didn't know what they did."
It was a job posting from the Better Business Bureau, his employer for the next quarter of a century that still allows him to satisfy his penchant for helping people.
Bernas was hired at the BBB as a management trainee in the automotive services division, mostly settling disputes between dealers and consumers. That's where he learned you can't paint everyone in a profession with a broad brush, even auto dealers.
"There are some good businesses out there in industries with bad apples who ruin it for everyone else," he said. "I quickly realized there are men and women (in the business community) who really want to do it right. I found that really enlightening."
Bernas rose through the managerial ranks at the BBB and became heir apparent to Jim Baumhart, who was highly regarded but ruled the BBB tightly and stuck to old-fashioned ways.
Through the years, Bernas made improvements where he could. For example, when Bernas started at the BBB nobody had computers on their desks. Handling complaints was a paper-driven, laborious process. One of his jobs as manager of computer services involved getting all the BBB data out of file cabinets and on computers.
"We automated the office, which was a godsend," he said. He later helped the national BBB advise other chapters on how to digitize their data. It eventually led to joining all that information into a national database, today the backbone of the national BBB website.
"That's what Steve likes to do, drive innovation," said Tom Joyce, vice president of marketing and public relations for the Chicago BBB, who has worked with Bernas for 11 years.
Taking mentor's place
After 20 years with the BBB, Bernas saw grief and opportunity come knocking at once.
The death of 66-year-old Baumhart from cancer in late 2006 left a void at the BBB, but one that Bernas, as chief operating officer, was trained to fill.
"He was my leader and my inspiration," Bernas said. "I learned everything I know about consumerism from him. I learned how he handled people, how he handled an organization but also the advocate side, doing what's right for the consumer. …
"There's not a week that goes by that I don't think, 'What would he have done?'"
Yet the disparity in management styles between Bernas and his predecessor was stark, Spencer noted. Bernas had a collaborative style, seeking the opinions of board members rather than viewing them as a rubber stamp for decisions already made.
"The difference has been night and day, and to the benefit of the bureau, which has really blossomed under Steve," Spencer said.
The 20.3 million people who used the Chicago-area BBB last year is up 46 percent from 2010, which was also a record year. The local chapter has some 100,000 reports on area businesses. His office covers 19 counties.
But the stat that Bernas is more proud of is that the office received 10 percent fewer complaints last year. He likes to think that's because his No. 1 priority, educating consumers, is working.
His fundamental message? Check out companies before you do business with them or sign a contract. That way you avoid problems that eventually lead to complaints to the BBB.
"The misperception is when people see us as a complaint agency only," Bernas said. "If they saw us as a referral agency or an educational agency, they would be in the driver's seat.
"But they call us after (they have a problem), and that's one of the most frustrating things in my 25 years. I don't want to be a complaint agency. I really don't."
Consumers should regularly check out businesses, because you can't identify dishonest businesspeople just by meeting them, even if you're a 25-year veteran of the BBB.
"You cannot tell," Bernas said. "I've been across the table from criminals. … I've been fooled. They're everyday people."
After one especially heated mediation meeting with a crooked businessman who made Bernas angry, he asked the man, "How do you sleep at night?"
"He turns to me and says, 'I sleep in silk sheets. How do you sleep?'
"Now he's in jail in Ohio. I hope he enjoys the sheets in the jail cell."
A cooperative spirit
Among his accomplishments, Bernas counts maintaining good working relationships with other consumer protection groups, including government ones. He has worked with the state attorney general's office, the FBI, the FTC, the city of Chicago and the Chicago Police Department. He sits on the FTC Task Force for Consumer Fraud and the attorney general committees about automobile advertising and charitable trusts.
"We all have a relationship that I have fostered over the years," he said. "When I started 25 years ago, all the government agencies would sit in a room and wouldn't talk to each other." Each was territorial and sought credit for their own organization.
But now, it's more common to work together. That has meant more than a feel-good atmosphere in consumer-protection circles. Consumer agencies now share information and can quickly agree on which group will take the lead. That produces quicker action against scammers and unethical business owners.
Bernas has worked repeatedly with the Illinois attorney general's office on such issues as unscrupulous debt-collection practices and cramming, or unauthorized charges on phone bills.
"If I have 20 complaints, he usually has two to three times more complaints," Madigan said. "So, he's a real good check on, 'Is this really a big problem?'
"It's just imperative that we partner. … Sometimes we call him; other times he calls us about something that he's seeing that's potentially a problem."
In the five years that Bernas has led the Chicagoland BBB, he's endured his share of crisis. The most dire instances were related to a new letter-grading system the national BBB wanted to implement nationwide.
Before the grading system was entrenched across the country, a Better Business Bureau in the Los Angeles area was exposed for improving ratings on companies that each paid several hundred dollars in membership fees. For example, it showed a fake company called Hamas, the same name as the Palestinian political party, got an A-minus rating from the BBB after it paid $425 in membership dues.
It seemed to confirm critics' harshest allegations: that the BBB was akin to a protection racket, in which companies received protection from bad ratings if they paid membership dues. BBB officials repeatedly denied those allegations.
Bernas was left to defend the honor of the Chicago-area BBB by talking to the media about how the scandal did not involve the local chapter.
"I felt personally attacked by what they did. I was very angry by what I saw. I read the report (about the incident), which is not public, and I almost wanted to cry. I was at a point where I put my heart and soul into this organization, and it took one opportunity to take away trust. We regained it, but it took some time."
While some of the most egregious examples of impropriety were uncovered in the Los Angeles-area BBB, the group's grading system of companies came under fire nationwide.
In January 2009, the BBB changed from a simple satisfactory-unsatisfactory grade for companies to a system of giving letter grades A through F, with pluses and minuses. The new system gave extra points to paying members, the argument being that accredited businesses were already checked out. Businesses that didn't pay, no matter how consumer-friendly, could not get the highest grade of A-plus.
"I thought that was inherently wrong," Bernas said.
The Council of Better Business Bureaus was mandating the new grading system nationwide. Bernas balked. He lobbied his board of directors to decide that the Chicago-area BBB would refuse to implement the system, which would put its charter at risk.
Bernas did not get immediate support from his board, which wasn't sure this was a fight worth fighting.
"He kept challenging us, saying, 'I really think this is important,'" said Spencer, then an executive board member and now board president. "He really showed some courage and conviction to principles. He just felt it was wrong and put himself at risk.
"It would have been a lot easier for Steve to say, 'Well, we have to do this because they're going to pull our charter.' Most people would have done that."
Bernas said he knew he was out on a limb, although he was joined in protest by a few other BBB chapters across the country. In the end, he convinced his board. "After hearing his passion, we said, 'We're going to back you on this,'" Spencer said.
In hindsight, it was the right call.
The national BBB began proceedings to revoke the Chicago chapter's charter, but before that could happen it agreed to change the grading formula nationwide, removing the extra points for being a BBB member.
"Steve's had numerous opportunities to compromise on ethics, principles — I'm sure he gets them daily — and I've never seen him fail," Spencer said.
gkarp@tribune.com
Steve Bernas, CEO, Better Business Bureau of Chicago and Northern Illinois
Family: Lives with his wife, Patti, and daughters Brittany, 16, and Bridget, 14, in Naperville.
Education: Graduated from Loyola University with a degree in psychology.
Job as a youth: Gas station attendant.
Entertainment: Jazz to relax but mostly listens to news and talk radio. Reading "The Tipping Point: How Little Things Can Make a Big Difference," by Malcolm Gladwell."
Hobby: Golf. "I'm not a good golfer, but I like being out in nature."
Favorite sayings: "There are always three sides to a story: the business side, the consumer's side and the truth." Another is a tip from Bernas to business owners, which resonates with some and not others: "Yes, this is your business, but consumers allow you to keep your business."
Key to resolving disputes: "So many times, businesses hide behind the phone system, voice mail and email, and they don't really talk to consumers. Consumers really want to be heard. … Most of the time it's miscommunication."
New initiative: Posting verified consumer complaints on the BBB website in addition to company ratings. The Chicago BBB will likely begin that next year.
Bernas was being groomed to take over, but he only took the reins in 2007 because his longtime mentor at the bureau, who had been there more than 40 years, died.
Then, early in his CEO tenure, Bernas endured the greatest crisis of trust the 100-year-old BBB nationwide ever faced, which is a big deal for an organization whose lone currency is trust. Embarrassing evidence arose that a Better Business Bureau in the Los Angeles area was allowing paying members, including fictitious ones, to receive unfairly high ratings.
About the same time, Bernas and the national organization entered a standoff. National threatened to eliminate the Chicago chapter by revoking its charter because Bernas refused to implement a new letter-grade system of rating companies. He thought it was unethical because the system gave higher grades to paying members. (The national BBB eventually changed the ratings system to the way Bernas wanted, and the Chicago chapter is in good standing.)
All this happened amid a sea change in how consumers complained about companies and researched them, moving away from the household name Better Business Bureau and turning toward newer online names such as Yelp, Angies List, Facebook and Twitter. Perhaps the only thing that could hurt the BBB more than a crisis of trust is irrelevance.
Roy Spencer, chairman of the BBB board of directors, called that time "a tremendous period of transition."
"Steve handled it with such aplomb," said Spencer, who is also president of Perma-Seal Basement Systems Inc. in Downers Grove. "He carries that calm professionalism even through the most trying times. That was a real potential crossroads for the bureau."
Despite the challenges, Bernas is credited with modernizing and remaking the Better Business Bureau of Chicago and Northern Illinois, while forging relationships with consumers, Chicago-area businesses and consumer agencies, such as the state attorney general's office and the Federal Trade Commission.
The keys to his success, observers say, are his limitless energy, uncompromising principles and dedication to helping consumers and businesses get along. He has managed the delicate task of boldly advocating for consumers even as his organization is funded by businesses.
Today, Bernas, 47, is the face of the 86-year-old BBB in Chicago. He's a regular media guest on television and radio and is frequently quoted in print articles talking about consumer issues. During a typical day, the husband and father of two teen daughters leaves his house in Naperville at 5:30 a.m. and returns at 8:30 p.m.
He's an energetic speed talker whose brain seems to work faster than his tongue; he tends to speak in half-sentences while somehow still communicating effectively.
Last year, his 68-person BBB offices — in Chicago and a small one in Rockford — handled about 50,000 formal complaints. He and his colleagues are often referees in disputes between outraged consumers and Chicagoland home contractors, auto dealers and retailers.
Every day, 55,000 people visit the Chicago BBB website to look up information on businesses. All told last year, the local chapter was contacted some 20 million times, including Web visits.
Because of his office's enormous reach and connection with consumers, Bernas has become valuable to the legal system when pursing scam artists, rogue contractors and unethical advertisers.
"He's just so easy to work with," Illinois Attorney General Lisa Madigan said. "Steve's just a good guy. He's very engaging and very personable and very committed to the mission of the Better Business Bureau."
A child doing unto others
Born into a religious family in the Brighton Park area on Chicago's Southwest Side, Bernas attended Catholic school, including high school at Quigley Preparatory Seminary South. There he was required to perform volunteer work in hospitals and homes for disadvantaged and disabled youths.
"That's where I felt the joy of helping people, those less fortunate who cannot help themselves," he said. "It's that feeling that you can give and it doesn't cost you anything. … I fell in love with it."
He graduated from Loyola University with a degree in psychology. Does that come in handy when dealing with feuding businesses and consumers? "Every single day," Bernas said, laughing.
Fresh out of college in 1987, Bernas intended to be a probation officer, even attending a training session. But the governor at the time cut the state budget — and the probation officer jobs. So he regrouped and visited the job placement center at Loyola. There, a counselor was opening mail from employers who had available jobs.
"She just handed an envelope to me as I walked in and said, 'Here.' I looked at it and knew the name but didn't know what they did."
It was a job posting from the Better Business Bureau, his employer for the next quarter of a century that still allows him to satisfy his penchant for helping people.
Bernas was hired at the BBB as a management trainee in the automotive services division, mostly settling disputes between dealers and consumers. That's where he learned you can't paint everyone in a profession with a broad brush, even auto dealers.
"There are some good businesses out there in industries with bad apples who ruin it for everyone else," he said. "I quickly realized there are men and women (in the business community) who really want to do it right. I found that really enlightening."
Bernas rose through the managerial ranks at the BBB and became heir apparent to Jim Baumhart, who was highly regarded but ruled the BBB tightly and stuck to old-fashioned ways.
Through the years, Bernas made improvements where he could. For example, when Bernas started at the BBB nobody had computers on their desks. Handling complaints was a paper-driven, laborious process. One of his jobs as manager of computer services involved getting all the BBB data out of file cabinets and on computers.
"We automated the office, which was a godsend," he said. He later helped the national BBB advise other chapters on how to digitize their data. It eventually led to joining all that information into a national database, today the backbone of the national BBB website.
"That's what Steve likes to do, drive innovation," said Tom Joyce, vice president of marketing and public relations for the Chicago BBB, who has worked with Bernas for 11 years.
Taking mentor's place
After 20 years with the BBB, Bernas saw grief and opportunity come knocking at once.
The death of 66-year-old Baumhart from cancer in late 2006 left a void at the BBB, but one that Bernas, as chief operating officer, was trained to fill.
"He was my leader and my inspiration," Bernas said. "I learned everything I know about consumerism from him. I learned how he handled people, how he handled an organization but also the advocate side, doing what's right for the consumer. …
"There's not a week that goes by that I don't think, 'What would he have done?'"
Yet the disparity in management styles between Bernas and his predecessor was stark, Spencer noted. Bernas had a collaborative style, seeking the opinions of board members rather than viewing them as a rubber stamp for decisions already made.
"The difference has been night and day, and to the benefit of the bureau, which has really blossomed under Steve," Spencer said.
The 20.3 million people who used the Chicago-area BBB last year is up 46 percent from 2010, which was also a record year. The local chapter has some 100,000 reports on area businesses. His office covers 19 counties.
But the stat that Bernas is more proud of is that the office received 10 percent fewer complaints last year. He likes to think that's because his No. 1 priority, educating consumers, is working.
His fundamental message? Check out companies before you do business with them or sign a contract. That way you avoid problems that eventually lead to complaints to the BBB.
"The misperception is when people see us as a complaint agency only," Bernas said. "If they saw us as a referral agency or an educational agency, they would be in the driver's seat.
"But they call us after (they have a problem), and that's one of the most frustrating things in my 25 years. I don't want to be a complaint agency. I really don't."
Consumers should regularly check out businesses, because you can't identify dishonest businesspeople just by meeting them, even if you're a 25-year veteran of the BBB.
"You cannot tell," Bernas said. "I've been across the table from criminals. … I've been fooled. They're everyday people."
After one especially heated mediation meeting with a crooked businessman who made Bernas angry, he asked the man, "How do you sleep at night?"
"He turns to me and says, 'I sleep in silk sheets. How do you sleep?'
"Now he's in jail in Ohio. I hope he enjoys the sheets in the jail cell."
A cooperative spirit
Among his accomplishments, Bernas counts maintaining good working relationships with other consumer protection groups, including government ones. He has worked with the state attorney general's office, the FBI, the FTC, the city of Chicago and the Chicago Police Department. He sits on the FTC Task Force for Consumer Fraud and the attorney general committees about automobile advertising and charitable trusts.
"We all have a relationship that I have fostered over the years," he said. "When I started 25 years ago, all the government agencies would sit in a room and wouldn't talk to each other." Each was territorial and sought credit for their own organization.
But now, it's more common to work together. That has meant more than a feel-good atmosphere in consumer-protection circles. Consumer agencies now share information and can quickly agree on which group will take the lead. That produces quicker action against scammers and unethical business owners.
Bernas has worked repeatedly with the Illinois attorney general's office on such issues as unscrupulous debt-collection practices and cramming, or unauthorized charges on phone bills.
"If I have 20 complaints, he usually has two to three times more complaints," Madigan said. "So, he's a real good check on, 'Is this really a big problem?'
"It's just imperative that we partner. … Sometimes we call him; other times he calls us about something that he's seeing that's potentially a problem."
In the five years that Bernas has led the Chicagoland BBB, he's endured his share of crisis. The most dire instances were related to a new letter-grading system the national BBB wanted to implement nationwide.
Before the grading system was entrenched across the country, a Better Business Bureau in the Los Angeles area was exposed for improving ratings on companies that each paid several hundred dollars in membership fees. For example, it showed a fake company called Hamas, the same name as the Palestinian political party, got an A-minus rating from the BBB after it paid $425 in membership dues.
It seemed to confirm critics' harshest allegations: that the BBB was akin to a protection racket, in which companies received protection from bad ratings if they paid membership dues. BBB officials repeatedly denied those allegations.
Bernas was left to defend the honor of the Chicago-area BBB by talking to the media about how the scandal did not involve the local chapter.
"I felt personally attacked by what they did. I was very angry by what I saw. I read the report (about the incident), which is not public, and I almost wanted to cry. I was at a point where I put my heart and soul into this organization, and it took one opportunity to take away trust. We regained it, but it took some time."
While some of the most egregious examples of impropriety were uncovered in the Los Angeles-area BBB, the group's grading system of companies came under fire nationwide.
In January 2009, the BBB changed from a simple satisfactory-unsatisfactory grade for companies to a system of giving letter grades A through F, with pluses and minuses. The new system gave extra points to paying members, the argument being that accredited businesses were already checked out. Businesses that didn't pay, no matter how consumer-friendly, could not get the highest grade of A-plus.
"I thought that was inherently wrong," Bernas said.
The Council of Better Business Bureaus was mandating the new grading system nationwide. Bernas balked. He lobbied his board of directors to decide that the Chicago-area BBB would refuse to implement the system, which would put its charter at risk.
Bernas did not get immediate support from his board, which wasn't sure this was a fight worth fighting.
"He kept challenging us, saying, 'I really think this is important,'" said Spencer, then an executive board member and now board president. "He really showed some courage and conviction to principles. He just felt it was wrong and put himself at risk.
"It would have been a lot easier for Steve to say, 'Well, we have to do this because they're going to pull our charter.' Most people would have done that."
Bernas said he knew he was out on a limb, although he was joined in protest by a few other BBB chapters across the country. In the end, he convinced his board. "After hearing his passion, we said, 'We're going to back you on this,'" Spencer said.
In hindsight, it was the right call.
The national BBB began proceedings to revoke the Chicago chapter's charter, but before that could happen it agreed to change the grading formula nationwide, removing the extra points for being a BBB member.
"Steve's had numerous opportunities to compromise on ethics, principles — I'm sure he gets them daily — and I've never seen him fail," Spencer said.
gkarp@tribune.com
Steve Bernas, CEO, Better Business Bureau of Chicago and Northern Illinois
Family: Lives with his wife, Patti, and daughters Brittany, 16, and Bridget, 14, in Naperville.
Education: Graduated from Loyola University with a degree in psychology.
Job as a youth: Gas station attendant.
Entertainment: Jazz to relax but mostly listens to news and talk radio. Reading "The Tipping Point: How Little Things Can Make a Big Difference," by Malcolm Gladwell."
Hobby: Golf. "I'm not a good golfer, but I like being out in nature."
Favorite sayings: "There are always three sides to a story: the business side, the consumer's side and the truth." Another is a tip from Bernas to business owners, which resonates with some and not others: "Yes, this is your business, but consumers allow you to keep your business."
Key to resolving disputes: "So many times, businesses hide behind the phone system, voice mail and email, and they don't really talk to consumers. Consumers really want to be heard. … Most of the time it's miscommunication."
New initiative: Posting verified consumer complaints on the BBB website in addition to company ratings. The Chicago BBB will likely begin that next year.
Copyright © 2012, Chicago Tribune
