Discovering Evergreen
As most of you are aware, Dave Whorton and I have written a book about Evergreen® businesses—or rather, more precisely, about Dave’s discovery of the Evergreen way of building and running a company. Until then, the Evergreen companies had been completely unrecognized as a business phenomenon, not to mention a critical component of the American economy.
I had been introduced to Dave by his erstwhile partner Chis Alden, who had approached me about attending the second Tugboat Institute® Summit in 2014. I was the co-founder of the Small Giants Community, based on my book titled Small Giants: Companies That Choose to Be Great Instead of Big. Alden thought some members of the community might be interested in attending the conference. I couldn’t make it, but I was fascinated by the concept, especially given its unlikely origin in Silicon Valley, the last place you’d expect to find any interest in private companies that eschewed venture capital and never intended to be sold. I resolved to find out more and possibly write about it for Inc. magazine, where I was editor-at-large at the time.
Toward that end, I introduced myself to Dave and met him at his office in Palo Alto in mid-December 2014. We chatted about the Evergreen companies in his institute. They sounded a lot like some of those I had met through Inc., including one in particular, SRC Holdings—formerly Springfield Remanufacturing Corp.—of Springfield, Missouri, with whose co-founder and CEO, Jack Stack, I had written two books. During the meeting, I suggested that Dave read the first of those books, The Great Game of Business. A couple of weeks later I was surprised to learn that not only had he read the book right after our interview but he’d arranged to visit Stack in Springfield.
I continued to do research for an article. Among other things, I attended the next Tugboat Institute Summit in Sun Valley, Idaho. I had recently published another book, this one titled Finish Big: How Great Entrepreneurs Exit Their Companies on Top and, at Dave’s invitation, had agreed to give a brief talk about it. The experience at Summit gave me a better sense of the organization he was building and the business leaders he was attracting. I was most struck by their determination to build companies that would last much longer than they themselves would be around to participate. I decided to make the companies’ longevity the focus of my article for Inc.
My editors loved the idea, and I thought they would make it the cover story, but—as the publication date approached—I was told that the magazine had a big “scoop” that it would have to give priority on the cover instead.
The “scoop” turned out to be what my editor described as an “exclusive” interview with Elizabeth Holmes, the founder and CEO of Theranos, manufacturer of a supposedly revolutionary new blood testing system. Sure enough, the October 2015 issue appeared with Elizabeth Holmes on the cover portrayed as “The Next Steve Jobs.” Also mentioned was my story about building companies that would last 100 years or more. Two weeks later, the Wall Street Journal published the first of John Carreyrou’s exposés about Elizabeth Holmes and the Theranos fraud, for which she was ultimately convicted and sent to prison. My article about Tugboat held up considerably better.
Thereafter I continued to follow Dave Whorton and Tugboat Institute, attending Tugboat Institute Summit every year. I was very impressed by the company leaders whom I met there—the lengths that they went to support their people, the role that they played in their communities, their attention to the quality of the products and services they offered their customers. I included several of their companies in the monthly column I was then writing for Forbes.
It occurred to me that many more people would like to hear the story of Tugboat Institute and how a former venture capitalist wound up starting it. I had been writing about business for almost 40 years, and I had never heard or seen any article or business school course about companies that followed the Evergreen 7Ps® principles (Purpose, Perseverance, People First, Private, Profit, Paced Growth, and Pragmatic Innovation) that Dave had identified as the defining characteristics of Evergreen companies. I could see they constituted an important part of the economy that had heretofore completely escaped the notice of the wider business world. When Dave happened to mention that people had suggested he write about the subject, I jumped at the chance to volunteer my services. And that’s how this book came to be written.
We did it with long interviews that I arranged to have transcribed. Then I worked with the transcriptions to produce a draft that Dave would change as he saw fit. What interested me most in working on the book was the opportunity it offered to examine two totally different concepts of business—or actually three, if you consider that Kleiner Perkins exposed him to two ways of building companies with venture capital. All of them can produce significant companies. The approach people prefer depends in large part on their values and goals. Dave Whorton thought that the best businesses would do what Bill Hewlett and David Packard had done with their company, Hewlett Packard—that is, build a community that not only makes great products for customers but fosters better lives for the people who do the work required. Dave Whorton’s experience gave me new insights into how it is done and specifically how the Evergreen companies go about it, which is the subject of the book.
My hope is that readers will appreciate the role of those companies play not only in shaping our economy but in enriching our world. I also hope that readers who start their own businesses will see the Evergreen model as one worth pursuing themselves.
Transforming Compensation Practices as a Foundation for Growth
My wife and I founded Home Science Tools in 1994 when we discovered, through personal experience, how difficult it was for parents homeschooling their children to find good resources for teaching science. We launched Home Science Tools, and it grew steadily; there was indeed a demand for this service! By about 2015, we had grown to a $6 million business with 30 employees, and we were starting to face growth-related challenges. We had ideas about how to grow further, but our structure and team at the time did not seem poised to take it to the next level. We knew something had to change.
There were many reasons we struggled with growth at this stage, but we soon realized that, at the heart of it, was our approach to taking care of our team, and specifically compensation management. We had tried versions of benchmarking salaries, worked toward ensuring fairness, and strived to create clarity for employees about their growth and earnings potential. But ultimately, we realized nothing could change until we embarked on a thoughtful overhaul of our pay structure that could solve internal administrative headaches and also strengthen employee trust and satisfaction. It had to start with a scalable, transparent compensation system.
Like many small businesses, the first thing we realized we had to address was Human Resources. Especially on small teams, HR functions often fall to multiple team members, who juggle many responsibilities. At Home Science Tools, at this stage, we lacked dedicated HR resources, and this was the start of some of our recurring problems. Chief among them was how to benchmark compensation effectively.
Up until this point, in an attempt to attend to this issue, we had participated in benchmarking surveys, but the data often didn’t fit our positions. Further, on some of the surveys, the midpoint for a role would jump or drop significantly from one year to the next. The issue was compounded by the small sample size of local surveys. Data inconsistencies—likely due to the variety of industries represented in our region—created more questions than answers. All of this combined to make us question how accurate, reliable, and applicable the data was.
For employees, this uncertainty sometimes resulted in their feeling undervalued. For managers, whose primary role was not HR to begin with, it was a time-consuming and frustrating process of sifting through conflicting reports.
While the trouble started with benchmarking, it spilled over into adjacent areas as well; we struggled with defining pay ranges for our growing list of roles and determining how to position employees within those ranges. Without a formal compensation philosophy beyond paying slightly above market, decision-making became inconsistent. We had no structure, it was haphazard, and everyone felt it.
Once we had identified this core issue, we had to figure out how to solve it. In 2018 or 2019, I came across Payscale (now called PayFactors), a compensation management tool that has proven to be transformative for us. The platform offers access to a vast database of salary information and uses algorithms to tailor data to specific geographic areas and company sizes. Through Payscale, we were introduced to the concept of salary ranges set at the company level. We could slot positions into these ranges and adjust them annually based on market trends. And thanks to their rich database and sophisticated algorithms, we were able to make compensation decisions with great confidence, as opposed to under our previous method.
Through this work, we created an ascending salary scale with defined grades. At the same time, we developed a comprehensive compensation program document, outlining the philosophy, purpose, and policies guiding our new approach.
Once we had addressed compensation, we were able to tackle many more issues effectively. Recognizing the importance of career growth, especially as an Evergreen®, People First company, we created high-level career paths. While we didn’t draft job descriptions for every hypothetical role, we outlined clear paths for advancement within the company. This provided employees with a clear understanding of their next steps and gave them specific goals toward which they could work.
The result? A system that was easier to administer, more transparent for employees, and adaptable to the company’s growth. Our work succeeded in improving both internal processes and the employee experience. We gained a great deal of confidence in our pay structure, which has allowed us to attract and keep better people. Conversations about performance and raises are now grounded in a structured system, which fosters trust and alignment between leadership and staff. Importantly, our compensation program document is accessible to all employees, further reinforcing transparency.
Since implementing the new system, Home Science Tools has seen significant growth. Revenue doubled from $6 million in 2019 to almost $12 million in 2025. While employee headcount has increased more modestly—to 42 employees—the streamlined processes have allowed the company to scale effectively.
When I look back on this process, and specifically on how our work around compensation has affected our overall success, I see it as one piece of a larger puzzle. While compensation was never the loudest or the most obvious problem, I now realize the extent to which clearly showing employees how much we value them and their growth can, in turn, affect overall performance and company growth. Making room for openness about pay and career opportunities has brought about a key cultural shift. By aligning employee aspirations with company goals, the system supports both retention and engagement.
Looking forward, I know our work is not done. (It never is!) We are approaching 50 employees, and I anticipate that additional HR complexities lie ahead. While we have been able to rely on tools like Payscale for compensation management, eventually, a full-time HR professional will become necessary. For now, the structured compensation program continues to serve as a scalable solution, enabling growth without overburdening the team.
I’d say the overall lesson here is that small businesses looking to grow need to adopt the perspective of seeking and implementing scalable systems early. Our compensation challenges were probably typical of a small but growing company, but through a wider lens, they represent a great example of a system that was not scalable, and then became scalable. If you wait until your growth objectives demand it, you have to wait until the problem is solved to move forward and you can lose time. If you get out in front of it, you will miss fewer opportunities as you grow.
It's also a great example of how you can solve a problem in the period after a certain expertise becomes necessary, but before you have the ability to bring it in house. Whatever challenge you are facing, there is a good chance that a tool like Payscale exists to help you solve it.
Finally, it’s a reminder of the power of valuing your employees and truly putting People First. As we have heard many times, take care of your people, and they will take care of the company. Together, you will be poised to succeed.
EJ+ Launched Last Week at Tugboat Institute Gathering of Teams
Last week, our members and their leadership teams gathered in Nashville, Tennessee for our sixth annual Tugboat Institute® Gathering of Teams. Many aspects of our week echoed the first five Tugboat Institute Gatherings of Teams in structure and format, but there were some exciting innovations as well. This is appropriate, since this is a big year at Tugboat Institute.
In our eleventh year, we are unlocking the second part of our original vision. While continuing our foundational, important work of sharing inspiration, best practices, and wisdom between our members, we are now creating new ways to spread the inspiration and know-how of Evergreen® companies far and wide. An important announcement that we shared at our gathering marked this step forward, about which you will read below.
To kick off the week and set the tone, we welcomed Charles Duhigg, author of the bestselling Supercommunicators and The Power of Habit. Charles introduced us to the why and the how of making deeper interpersonal connections through thoughtful and intentional communication. With the tone of authenticity, vulnerability, and curiosity set, we dove in.
As always, the centerpiece of our experience was our impressive slate of speakers. We were treated to five Tugboat Talks and one panel discussion, all of which offered rich learnings and insights.
Marianne Lewis is Dean and professor at the Carl H. Lindner College of Business at the University of Cincinnati. She is also the co-author of Both/And Thinking, which explores the power of creative tensions. She shared wisdom around how to shift our perspectives on priorities that appear to conflict with one another, such as Profit and Purpose, or Purpose and Pragmatic Innovation, for example.
Tugboat Institute member Ford Mennel gave us insight into the fascinating history of his family’s 140-year-old company, Mennel Milling. He then shared some of the creative ways he has found to grow and innovate in one of the world’s oldest industries – flour milling.
Michael Horn, co-founder of the Christensen Institute and longtime friend of mine and of Tugboat Institute’s, shared a talk grounded in his recent book, Job Moves, in which he explores how and why so many employees are experiencing job dissatisfaction which leads them to make company changes that they later regret. Although the book is aimed at job seekers, his talk offered a perspective into the minds of potential employees and insights into ways companies can attract, hire, develop, and retain talent.
We heard from another Tugboat Institute member and leader of a multi-generational family business, Jayne Millard. Jayne is the fourth-generation leader of her family’s company, Turtle & Hughes, which is a leading electrical and industrial distribution, logistics, and supply chain solutions provider. In addition to sharing the rich history of her family’s company and four generations of leadership, Jayne shared her past experience in the arts and how she was able to meld that passion and experience into her leadership of her firm.
Modern philosopher, Ryan Holiday, author of The Obstacle is the Way and The Daily Stoic, brought forth the wisdom of the ancients, and specifically the Stoics, in his talk. His encouragement to view obstacles not as something to avoid, but as an opportunity to understand and address challenges with creativity and perseverance, resonated with our audience.
Lastly, we enjoyed a panel discussion with Bo Burlingham and me, moderated by Tugboat Institute member Mel Gravely. The topic of the discussion was the book co-authored by us, Another Way: Building Companies That Last…and Last…and Last. This book, which publishes on May 6, 2025, represents perhaps the most important step forward in our push to raise awareness of, and appreciation for, Evergreen companies broadly.
Most of these talks will be available to readers through our Evergreen Journal® in the coming months in both video and audio formats so please keep an eye out for their release. And this bring us to our exciting new initiative, which was launched this past week in Nashville: Evergreen Journal Plus (EJ+).
EJ+ is an upgrade to our Evergreen Journal free subscription and contains our entire library of eleven years of content, which includes over 200 Tugboat talks and 300 Evergreen Journal articles and is growing every week, in a new and vastly improved format. Our library contains a treasure trove of Evergreen wisdom; collected over more than a decade, it includes inspiration, stories, best practices, challenges, and wisdom from Evergreen leaders and thought leaders to help current and future Evergreen company leaders, founders, and owners be more successful. It’s a rich store for anyone interested in learning more about capitalism at its best. Your paid subscription to the EJ+ also includes periodic live events with Evergreen leaders and thought leaders, a curated list of recommended books from me, and much more. As a current EJ subscriber, we invite you to upgrade now to the EJ+ at a discounted price of $99 for the coming year HERE.
By extending the Tugboat Institute experience and know-how to our broader Evergreen community through Another Way and the EJ+, we hope to both elevate Evergreen companies and provide ideas for Evergreen leaders to further improve their companies.
We are grateful and humbled to serve such an incredible community of leaders that make such an important contribution to our communities and society.
Don’t Just Do the Thing Right, Do the Right Thing
Today, at Tech Systems, Inc., we are proud to affirm that when we have a choice to make or a job to do, we do the right thing. Always. No matter what. However, we were not always driven by this commitment. To understand how this has evolved and how we have become the Evergreen® company we are today, we have to go back to 1995.
We are security integrators. In 1995, we were fairly small and, like all security integrators in town, we were continually chasing projects. The low dollar always got the job; we won some and we lost some, just like all of our competitors. When it came to service contracts, after a purchase, we provided a service contract that basically listed all the exceptions to what we agreed to provide. “You pay us X dollars and here are the things this contract does NOT cover. We can do that, but you have to pay us more.” That was standard protocol in our industry at the time. We thought of ourselves as pretty customer service driven in those days, but then something happened that changed us, and set us on a course to become who we are today.
We had been in business for about eight years, and I had become the sole owner of the company. Our largest client called on the Saturday of Labor Day weekend and said, "Hey, all my cameras are out in our parking deck." The service person on call said, "We'll be there the next business day, which is Tuesday, because that's what our contract says." Our client didn’t protest and that was the end of that. I happened to talk to this service person shortly after the call, and he shared the conversation he’d just had with our client. My initial thought was, "Well, that's the way it's structured, that’s the way it's supposed to work."
I was only about a mile from the facility when I spoke to him, so I decided to swing by and see if there was anything I could do. It was still within an hour since the initial call had been placed. I walked in and greeted the guy at the security console, and he said, "Hey, don't worry about it. We got all the cameras up and running." It turned out they had just blown a simple little fuse, and they had been able to diagnose and fix the problem themselves. I thought, what a great resolution.
A couple of weeks later, my contact at the same client called and asked for a meeting. I figured they wanted to talk about a new service or some other new business opportunity. To my complete shock, once we sat down, she announced that they were going to end their relationship with us. They fired us. I was stupefied. We talked it through, and she brought us back to Labor Day weekend. She said, " I know what the contract said, and I know you guys did the thing right, but you didn't do the right thing.”
She explained that they had a bunch of employees, mostly women, working in a call center. They had 34 cameras out in the parking deck, which created a false sense of security. If they went to their cars and somebody was attacked or something, that would be a huge liability for their company. As much as I didn’t like it, I had to admit that she was absolutely right.
Coming out of losing our biggest client, and of realizing what kind of situation we’d put them in, we committed to making a change. We had to do better, and we had to do the right thing, first and always.
It took eight or nine months and more than one iteration. We started by making a list of commitments we were ready to make to all our clients. There were only about 20 of us in the company at the time, so we sat in a room and we brainstormed: we're going to guarantee our response time; we're going to get there within four clock hours around the clock; if we don't do that, we're going to give the client a $250 credit memo, because we're not going to profit on failure. It was an all-inclusive agreement; they pay one price per year, no exceptions. There were lots of other details in there, all aimed at always doing the right thing by our clients.
When we laid this all out and adopted it, we knew it was a financial risk. We were small and not at all sure we could afford this, but we took a leap of faith. Of course, we stubbed our toe several times getting started, but in a very short period of time, it started to become contagious throughout the organization. The team became fanatical about hitting these performance metrics, because frankly, at that time, we couldn't afford to give up $500 of credit. It was all hands on deck
On the other side of this work, we finalized and implemented what we now call F.O.C.U.S – “For Our Client’s Ultimate Satisfaction.” It has made us into an entirely new company. When we implemented F.O.C.U.S, we thought for sure our competitors would copy us and we’d have a new fight for business on our hands. But they haven’t, at all. In fact, ours is an industry where many of our competitors are public, and beholden to their shareholders, and the ones who aren’t are now being rolled up by Private Equity. Neither of those structures have room for an agreement like F.O.C.U.S. We have remained unique in our commitment to complete, consistent, and excellent service.
As a result, we have been able to grow the company an incredible amount, from about 20 employees in 1995 to 515 today. We have clients throughout the US, Canada, and Puerto Rico and 90% of that growth has been purely organic, based on client referrals. Our clients see us as the guys who do a fantastic job understanding who they are and meeting their service needs. It makes all the difference in the world and has become our greatest competitive advantage by a huge margin.
To bring this story full circle, I have one more story to share. About eight years after we were terminated by our client, we had deployed F.O.C.U.S. and it had begun to gain momentum. We hosted a lunch-and-learn presentation in Atlanta where we invited many local security professionals to show them our new products and new technology, but also to talk about F.O.C.U.S. We did a presentation on F.O.C.U.S. and the lady who had terminated us in 1995 was in the audience. After the meeting, she said, "That's incredible. I wish you guys had had that then. We wouldn't have fired you." I replied, "If you hadn't fired me, we wouldn't have it today." They hired us back.
Now at Tech Systems, the spirit of doing the right thing is so deeply ingrained in who we are that it has become the lens through which we make all our decisions, including engaging new clients. If we have a current or prospective client who solely values the lowest price over a long-term service relationship, we will decline their business or even terminate their contract. It’s not common, but it’s an easy decision when it happens. Do the right thing, first and always.
When I look back to 1995, I see clearly that the worst thing that ever happened to us became the best thing that ever happened to us; it allowed us to become the industry-leader we are today. Even though it takes time and can cost more along the way, it pays to not just do the thing right, but to do the right thing.
Eliminate Silos and Improve on All Fronts
Nussbaum Transportation Services is an employee-owned trucking company based in Hudson, Illinois. Founded in 1945 with deep roots in faith and integrity, Nussbaum operated as a family business for many years. In 2018, we transitioned to an Employee Stock Ownership Plan (ESOP), giving each employee a personal financial stake in the company’s success. We’ve grown steadily throughout our nearly 80-year history, but the past 15 years especially have seen significant growth. In 2010, we shifted our focus from short-haul transportation to long-haul, and it was the right decision—but not without growing pains.
For a long time, the entire company worked in one building. Getting to know colleagues or sharing ideas was easy—they were all right there! But as the business grew, we outgrew our building. So, we moved to our new campus in 2012 and added additional office space in 2020. The team is now spread across three buildings—relatively close, and all sharing a common breakroom space—but far from the small, intimate office we knew previously.
As an Evergreen® company, our culture is very important to us. As we entered this new chapter, we still wanted our employees to feel that close-knit connection when they came to work. So, the question became: How do we foster a culture of engagement and communication with a larger group in this new setting? And how do we prevent the building of walls between departments?
These walls (or “silos” as they are commonly referred to) are a serious problem for any business. Less communication can lead to less cooperation, which can stifle innovation, efficiency, and ultimately, the bottom line. One example at Nussbaum was a disconnect between Sales and Billing that resulted in incorrect bills, issuing refunds, and general tension between the two teams. Aiming to address the conflict, we set up weekly touchpoints between the frontline team members to talk through recurring issues and identify solutions. Sales and billing managers also met monthly to share concerns on behalf of their teams, and in the end, the two departments renewed their sense of connection. Ultimately, it reinforced our belief that culture and communication are worthwhile investments.
Many of the solutions we implemented centered around relationships—an essential aspect of culture and beating silos. One classic example is Food Day—a longstanding Nussbaum tradition where employees bring a lunch dish to share and enjoy a meal together. In the “old days,” it happened organically. But in our new office, we established that individual departments would “host” a food day and provide lunch for the entire company. This way, everyone would have the chance to build new relationships, and the host team would get to know one another as they planned and executed the event.
It's been a smashing success—though we realized partway in that department members already spend their days together, so one extra team assignment doesn't really accomplish what we intended. So, we made the simple but effective decision to reorganize. Now, Food Days are hosted by a cross-departmental team with no more than one representative per work group. Everyone still enjoys a community gathering for lunch while the host team forms new connections with coworkers they may not otherwise know.
A second initiative to foster relationships is “The Network Lunch,” hearkening back to the intimate setting of the first Nussbaum office. One of our executives hosts a catered lunch for a small group of employee-owners; anyone may sign up, but no more than two from a department may attend the same lunch. Employee-owners can build relationships with each other and with our leadership team in a more relaxed environment than hosting a Food Day.
That’s great—but what about the “department” that doesn’t work onsite? We’re referring, of course, to the drivers. How do you include them in the broader company? And give them opportunities to build relationships?
One answer is Nussbaum’s Certified RED—a voluntary continuing education and certification program for professional drivers. It helps drivers connect with office staff via hands-on training sessions, mentoring calls, and in-person job shadows. Upon graduation, drivers are publicly recognized at a companywide ceremony, allowing them to see their entire support group! Likewise, the office staff gets to hear the drivers’ stories and learn more about their backgrounds. It’s a win-win! Furthermore, Certified RED training positions the driver to mentor and develop future drivers and create more meaningful connections.
Another small but helpful innovation to improve office-driver connection is Connect Accelerator, a proprietary Nussbaum app. When a driver calls in, the app opens to display their picture on our computer screens. This helps the office staff put names with faces, especially for drivers who rarely come through the terminal.
Our executive team believes that investing in culture is the right choice for our people and the business. We want employees to be on the same team, driven by a shared purpose, and naturally collaborating. Of course, this starts from the top, so our leadership team works hard to model these qualities and make themselves visible to all employees. Our technicians and IT group are two teams in particular that tend to get isolated, so certain executives have intentionally spent time in their spaces, getting to know them and keeping the door of communication open. It makes a difference. Being in front of your people is the first line of defense against silos.
Nothing we’ve done is especially earth-shattering—most of it is simple. The key is a regular, intentional investment. Time, thought, and upkeep are essential. But the dividends—happy, productive employees who drive industry-leading results—is well worth it. As an Evergreen company dedicated to living out our faith, our people will always be the number one priority.
As our founder used to say, “If you take care of your people, the rest will take care of itself.”
Can Affiliates and Influencers Help Drive Sales? They Have for Tacony
Pragmatic Innovation is one of the Evergreen 7Ps® principles, but it’s not new or specific to Evergreen® companies to continually seek innovative ways to expand their reach and drive sales. What is new, especially in the age of digital marketing, is that the pace has picked up quite a bit. While we may be a 78-year-old company in a traditional industry – we are a manufacturing and distribution company that provides the world with better solutions for sewing, cleaning, and home – we’ve embraced the power of social media and online platforms to expand our reach and drive sales.
About two and a half years ago, led by our Director of Marketing, Tracey Wiltshire, Tacony Corporation began to explore collaborations with influencers and affiliates. For ages, our primary channel for selling our products was through independent retail and brick-and-mortar stores. It had become clear that, in order to stay competitive and drive sales, it was time to try something new. So, we leaned into leveraging the power of social media and online platforms.
Our first step was to understand exactly what influencers and affiliates were, how they worked, and how they might help us move our products.
Influencers are individuals with a significant social media following who can help promote the brand's products, often through sponsored content. They excel at creating brand awareness and engaging with a broader audience, though they may not always generate immediate sales. To make this process more efficient, we’ve partnered with platforms like LTK, which allows us to reach a wide network of influencers on one centralized platform. By using LTK, we’ve streamlined our influencer efforts, enabling us to manage multiple influencers at once in a cost-effective way.
Affiliates, on the other hand, are participants in programs like ShareASale or Awin, who promote products through unique links, earning commissions for sales generated through their referrals. This method is considered low-risk and was a great place for us to start; businesses only pay affiliates after a sale is made, making it a cost-effective strategy. This is where we have focused our efforts for now.
Working with affiliates can get complicated, as there are many different types. As we set out on this new journey, we explored partnering with various types of affiliates, such as coupon and deal sites, content creators, and loyalty and reward programs. These affiliates help drive traffic, often through special offers or cashback deals, to our improved e-commerce sites. In advance of this initiative, we did a lot of work on our sites, making sure we were prepared for the increase in traffic and that they were set up to maximize conversion rates when people landed there.
Another way to understand how all this works and why it is effective is to look through the lens of the customer. Understanding the customer journey within affiliate marketing is key. While consumers may be unaware of the complex mechanisms behind the scenes, they often encounter loyalty programs or special promotions while browsing online. For example, a consumer might find a Tacony promotion on Rakuten, which leads them back to the brand’s site. This cross-platform exposure drives traffic and builds brand awareness.
Publisher sites represent another critical aspect of a successful digital marketing strategy. These are platforms where companies can feature their products, through lists like "Best Stick Vacuums,” for example, or other similar rankings. While getting featured on these sites often requires additional budget allocations, the exposure can be invaluable. For example, at Tacony, our commercial floor brand, Powr-Flite, recently saw a single, significant $13,000 sale from an article featuring their product as a top pick for tennis court cleaning. Sometimes the investment is minimized when these publisher sites, driven by good content and well-maintained accounts, seek out products to feature. This can result in organic traffic and sales without any investment at all.
We are still refining our approach, but we are gradually expanding our affiliate programs, exploring new platforms, and adapting to the dynamics of digital marketing. The initiative is still in its early stages, but the results so far have shown promise, especially in reaching new customers and driving online sales in a cost-effective manner.
As much as we have seen success with these initiatives, this strategy is not without challenges. Getting listed on these sites requires not only financial investment but also a deep understanding of how the affiliate marketing ecosystem works. As I think I have made clear, it’s complicated! It's about striking the right balance between visibility and cost-effectiveness, a delicate dance that my team is doing a great job mastering.
If you have not stepped into this world yet and are considering it, the first critical step is to make sure your online platform is ready for the traffic that you hope will be coming your way. No number of affiliates or influencers will help you if your site is not ready to convert your visitors into sales. The next strongest recommendation I have is that you make sure you have someone on your team like Tracey, who is willing and able to dive in and become fluent in this new language. She has been instrumental in this work, and it’s complex. If you are looking to start an affiliate program, I can’t emphasize enough the importance of researching competitors to understand the market standards for commissions and offers. Fit can vary widely. For instance, in the sewing industry, we’ve found that 10% is the standard commission, with some outliers like Joann’s Fabrics offering as low as 2% due to their volume. Understanding these intricate dynamics allows our team to set competitive and sustainable commission rates from the outset.
Once you have taken the leap, managing your relationships with affiliate programs requires constant attention. Regular communication with affiliates is critical to ensure they have the necessary tools, such as landing pages and promo codes, to effectively promote products. This proactive management is crucial for maintaining a healthy conversion rate, which has been the most meaningful metric we track.
In terms of how this is affecting our bottom line, like I said, the early results are promising. We set a goal to grow e-commerce sales to 20% of our entire portfolio. When we undertook this initiative, we were basically at zero and today, a year and a half later, we are at about 14%. Some product lines are selling at higher volumes online than others, but 14% is the average across the board.
Embracing affiliate marketing has been far from simple. We’ve learned that it requires a blend of strategy, constant oversight, and adaptability to the digital landscape, which evolves at a dizzying pace. Yet, as Tracey and the team have demonstrated, with the right approach, it can be a powerful tool to expand a brand’s reach, increase online sales, and build lasting consumer relationships.
The CEO's Dilemma: When and How to Hire a President
A couple of years ago, I was attending a Small Business Association (SBA) class that was specifically designed to prepare the CEOs of government services companies to graduate from being a small business and enter “no man’s land,” as described by Doug Tatum. As the conga of CEOs who had successfully navigated the “too big to be small, too small to be big” waters talked to us, one made a comment that was not, as I saw it, directly related to main topic of the class. But it struck me square in the forehead. He said, “if you wait until you’re already tired to transition out of your CEO role, you’ve waited too long.” It wasn’t long until I realized that the comment was, in fact, quite directly related to the topic at hand.
When I started AVIAN in 2006, I was my own first employee. I worked eight-hour days in support of a government customer, and spent my nights and weekends working on the company trying to make it grow. I worked non-stop. It took five years to reclaim my evenings, seven years to get my weekends back, and a decade to find some semblance of work-life balance. By year 12, the company was running smoothly, allowing me to spend more time with my family. It felt like I had “broken through,” we had made it, and the company was secure. Then came year 17, and the realization that small business graduation was fast approaching.
We found ourselves thrust back into start-up mode. I was working 16-hour days, nights and weekends, only I was 20-years older. When people asked how things were going, my answer was ‘sporty.’ I thought back to the SBA class and I realized I was already tired.
Approaching the end of your tenure as CEO is always difficult, but I think founders have an extra challenge, having worked so long and hard to raise their company up from nothing. But when you run a business, hard work is the norm, so how can you tell when the time has come for real organizational change? When grit and perseverance are no longer the keys to finding your way out of a tough spell? It’s not easy, but here’s what it looked like at AVIAN.
We had hit what Les McKeown calls the "whitewater" stage in Predictable Success. Operations within the company became increasingly complicated as we were preparing ourselves to start competing with billion-dollar giants versus other small businesses. The fun part of scaling was over; I was back to the grind of working nights and weekends, but this time with far less energy and enthusiasm.
I thought back to the SBA class again and realized the time had come. I was CEO and president and there was too much ground to cover. Between running AVIAN, integrating a recent acquisition, and launching a startup, I couldn’t focus. I couldn’t concentrate on strategic growth while still managing daily operations. I needed help. It was time to bring in a president to handle the day-to-day, so I could refocus on vision and long-term strategy.
Once I decided it was time to promote my Chief Operating Officer (COO) to president, I took the idea to my board. My COO, a retired U.S. Navy Commander, had been with AVIAN for over a decade, proving himself a very capable business leader, so he was the natural choice for the president role. The board agreed, but they wanted a detailed plan for how it would work in practice, a concept of operations.
Together with my COO, soon to be COO/President, we mapped out the new organizational structure.
As two retired Navy Officers, we were meticulous in our planning—clarifying reporting relationships, defining responsibilities, and even considering the cultural shifts this change would bring. I was to fully transition into the CEO role, focused on growth and strategy, while my COO would fully manage the operational side as president.
In the CONOPS design, we agreed to one critical element; if my COO was to be president, I must fully allow him to be president. He re-designed the company’s organizational structure the way he wanted it to operate, and put in place a whole new leadership team, hiring one new key position, and promoting four people into leadership roles. He had a few asks of me: refrain from making any decision on his behalf, not attend his leadership team meetings, and let him be in charge. I had one ask in return: to shield me from issues that don’t really require my attention by creating some sort of screen or filter and not distract me from my new role. Symbolically, I even moved my COO into my large president’s office and myself into a small corner office on the other side of building to make it clear to everyone who was now in charge.
I was immediately ecstatic. So many items from my habitual to-do list vanished, as they shifted over to the new president. After the shift, we established a drumbeat of meeting fortnightly to make sure the transition was going smoothly and the CONOPS was working as designed. We called it the Same-Page meeting. And then slowly we began to witness cracks in the new construct; as with any major change, it turns out it wasn’t quite so easy.
Despite our careful planning, one of the biggest surprises was the innocuous cultural resistance to this shift. I’d underestimated how deeply my presence was embedded in the company’s culture. Even as I tried to step back, employees kept looking for me to be a part of things and comments like, “you’re missed when you’re not here” started to creep up. Don’t get me wrong, the new president was doing an amazing job setting his own strong, caring culture, but letting go of the old takes time. More time than you think.
Another issue was the overlap in roles. Our new president retained his COO title while stepping into the president position, which created confusion about responsibilities, especially among his fellow C-Suite. This blurred the lines in our leadership structure—a mistake I now realize needed to be addressed.
The last was my own understanding of my new role. As the CEO, I am a visionary who never met an idea I didn’t like, but that comes with consequences when I break the new organizational structure lines and start sending opportunities directly to the business development team who feel compelled to act. It’s not a pleasant feeling to hear your senior leadership team talking about ‘reeling in Kevin,’ but it’s to be expected and properly managed.
We are a year into this transition and AVIAN is in a decidedly better place, but we’re still experiencing some growing pains. My president runs the company effectively, giving me the space to focus on strategic initiatives like partnerships and long-term growth. We meet every other week to stay aligned, and I’ve managed to step back from the operational details.
I expect that once we better settle into this structural shift, life is going to improve. I feel closer to reconnecting with the passion and excitement that characterized the periods where we burst through a growth period and felt successful. The company IS in great shape, and we are most of the way across no man’s land; now I just have to finish the work of making sure it stays that way long after I am no longer the CEO.
Are there any universal lessons here for CEOs, and especially founders, contemplating a similar move? Here’s what I’ve learned. Know when it’s time; don’t wait until burnout forces your hand. Plan meticulously, but stay flexible; you need a clear CONOPS, but be ready for the unexpected—especially when it comes to company culture. Clearly define roles; avoid overlapping titles or responsibilities. Respect the cultural shift; transitioning leadership isn’t just a structural change, it’s an identity shift. Employees need time to adjust, and the new leader needs space to grow into the role. Finally, don’t underestimate symbolism; small gestures can significantly impact how the transition is perceived.
Transitioning from a hands-on President & CEO to being a strategic leader isn’t easy, but it’s necessary for sustainable, long-term growth. As with all phases of company growth, the rewards are preceded by challenges, and nothing is as easy or smooth as you would hope. But if you have reached this point, and especially if you are an Evergreen® leader, you have been doing this long enough to know that the best outcomes are worth the hard work and the struggle.
Another Way in 2025
Dear Friends of Tugboat Institute®,
On this New Year’s Eve, I am happy share that in 2025 we are making several big steps forward in supporting the broader Evergreen® community, of which you are a part.
Since our founding, our vision has been two-fold. First, that Evergreen companies will go from being underappreciated to being broadly celebrated for what they are—attractive employers, partners, suppliers, customers, and community members that can be counted on to be trustworthy, fair, and reliable for the long term. Second, that Tugboat Institute will be the unrivaled resource for Evergreen CEOs and their businesses, providing a values-aligned support network unlike any other with additional, valuable services that evolve and grow along with our members and the broader Evergreen community.
For most of our first decade, our Pragmatic Innovation efforts were designed to support our members directly, whether through trusted peer experiences, unique content from members and Evergreen thought leaders, insightful biannual member surveys, intimate forums, or programs that go beyond the member experience, such as our Certified Evergreen® program and Tugboat Institute Gathering of Teams. This work will never cease; it has been and will always be critical, and it will be our honor to keep working toward this goal forever (for 100 years or more!).
Now, just over a year into our second decade, we are excited to extend in more deliberate ways what we have learned over the past decade to a broader, global audience of Evergreen leaders, founders, thought leaders, students, and supporters. We would love to help all Evergreen companies–regardless of size, location, industry, ownership type or background—become even stronger, more mature Evergreen companies to the benefit of their teams, customers, suppliers, owners, communities—and society.
An important first step in this direction has, in fact, been in the works for five years now—a book. After many years of urging from friends and Tugboat members, I finally sat down in 2019, and talked it through with my dear friend Bo Burlingham, of Inc magazine fame. It has been a true labor of love for both of us, and it has been my privilege to work not only with Bo, but also with our senior editor Scott Berinato at Harvard Business Review Press. I’m thrilled to announce that Another Way: Building Companies That Last…and Last…and Last will publish on May 6, 2025, and is available for pre-order now at your favorite online bookstores and at this link. Your early orders help support greater distribution of the book at launch.
A second and third step forward are coming soon and here is a sneak peek at each.
Ten years ago, we launched our free, weekly Evergreen Journal® (EJ) newsletter. Today, after publishing a new article or video every week for over a decade, we have huge library of timeless, invaluable content. This past summer, we surveyed this community to learn more about your interests. Based upon that feedback, in February 2025, we will launch the Evergreen Journal+ (EJ+), a subscription-based platform that will provide access to our entire library of almost 300 articles and over 200 videos with unique filters and search capabilities, alongside new tools like live online conversations and my book list. Stay tuned for more details soon.
Later in 2025, we will officially launch the Evergreen Growth Navigator by Tugboat Institute (EGN) on our website—our third initiative that has been two years in development. It’s a powerful, yet affordable tool for CEOs and presidents to assess their company’s performance across the Evergreen 7Ps® principles and identify the highest potential areas of improvement.
To our Tugboat members, thank you for urging us forward in this work. For everyone in our Evergreen community, we are so honored that you have chosen to be part of our Evergreen movement, and we look forward to serving you in better, more meaningful ways in the coming years. We hope Another Way, the EJ+, and the Evergreen Growth Navigator will all be new, valuable resources in your leadership learning journey.
As we continue to build this important movement together – company by company, leader by leader, founder by founder – we welcome your participation and your feedback!
Here's to 2025. It will be a big one, and we can’t wait!
Warmly,
Dave Whorton
Founder & CEO, Tugboat Institute
Turning Values into Action
Great Lakes Dental Technologies has been a fixture in the orthodontic and dental lab industry for decades, since long before I joined as President & CEO in 2022. And, I’d venture to say, it has been Evergreen® since its founding in 1967. Our co-founders’ commitment to our industry and their staff led them to sell the company to the employees, creating a 100% Employee Stock Ownership Plan (ESOP) in 1990. Great Lakes is an industry leader, and a wonderful community in itself; for all these reasons, when the opportunity to join the team was presented to me, I jumped at the chance. It matched my desire to transition away from companies that were building to sell. Some of them were great companies, but something was missing for me without the long-term, Evergreen mindset. However, just because a company is already Evergreen doesn’t mean it’s perfect, or right where it needs to be.
Great Lakes has a simple vision statement: “Delight our customers. Respect and help our co-workers.” I love the simplicity of that, and I never want to change it. It’s so straightforward and effective. The great company culture and long-term decision-making created strong employee loyalty, with some employees staying over 46 years. However, despite being deeply grounded in strong values, the company has seen the development of some poor habits over time. While longevity and culture are strengths, they can also lead to complacency if not paired with ongoing discipline and intentional efforts to continually align values with specific, teachable behaviors.
Coming in as an outside CEO, one advantage I brought with me was the ability to see things with fresh eyes. I could see things that the long tenured team could not. I saw this as an opportunity – find a way to get back to best practices and increase the power and impact of the values and vision that were already ingrained in the company and the people. But I wanted to be careful to do it in a way that didn’t alienate or disempower the amazing team that had been at the company for so long.
To tackle this work, I enlisted the help of an organization called CultureWise. They provided a helpful framework and process for achieving our goal: match our great values with specific behaviors that will allow us to easily and clearly take the values off the walls and put them into action. CultureWise taught us that ritualizing and ingraining a finite number of behaviors in your team is what really reinforces the transfer of the value to a behavior. That made a lot of sense to me, because the values were already in place.
We started by creating a group to work on this that consisted of team members from a variety of departments, in a variety of roles, and with a variety of tenures at Great Lakes. The first exercise we walked through was to have everyone reflect and share the ‘Great, Great Lakers’ who most exemplified the best of our company and its values. Once we had the brainstormed list on the whiteboard, we started talking through why each person had nominated their choices. It got powerfully emotional, actually, with one long-time employee talking about a new HR Director and how profoundly she had changed his life in the laboratory. It was extremely meaningful, and it was completely sincere.
Our next task was to connect these great stories to qualities and values. This took some work, and in the first few versions, some sounded too journalistic, while others sounded too “gotcha.” For each value, we then connected them to a behavior; what would it look like to act on that value? We ultimately identified 27 fundamental behaviors that encapsulated the company’s values. It was so great because at the end of the exercise, I looked at the list and realized that these were the values that had existed since 1967. All we had done was document them.
27 behaviors may seem like a lot, but we wanted to get granular and to be extremely clear in articulating what it looked like, for example, to “embrace all perspectives” or “invest in yourself.” We didn’t want to run the risk of any of it being too abstract and therefore ineffective.
The list is not ranked, but at the heart of the 27 fundamentals are three core behaviors that are essential to Great Lakes’ success: Think and Act Like an Owner, Never Compromise on Quality, and Do What’s Best for the Customer.
Think and Act Like an Owner: This behavior is about instilling a sense of ownership in every employee. We are an ESOP company, we own our building, and we own our land. We have no debt. When we recruit somebody, we make it clear that this is our place. If there’s a snowstorm, we come dig out. This is ours.
This sense of ownership extends beyond physical property to include our reputation and relationships with customers. Employees are encouraged to take initiative and make decisions with an owner’s mentality, reinforcing a culture of accountability and pride.
Never Compromise on Quality: As a medical device company, Great Lakes serves a highly demanding clientele—doctors who expect nothing less than perfection. We like to say that we treat the customer like we would our own child in the chair. This commitment to quality is non-negotiable, and employee-owners understand that their work directly impacts the well-being of patients.
Do What’s Best for the Customer: This behavior encapsulates the company’s customer-first mentality. We refer people to our competitor if they’re better at something than us because we expect to work with these doctors 25 years from now. Our long-term perspective ensures that employees always prioritize the customer’s needs, even if it means foregoing short-term gains.
27 behaviors are far too many to memorize, so you may be wondering how a list of this length can be effective. To ensure that these behaviors are not just words on a wall, we have ritualized them into the daily routines of its employees. After we implemented our fundamental values, for 27 weeks, I wrote a piece every Monday morning, each focused on one of them and shared it with the full team. These pieces were often deeply personal, and each aimed at illustrating the importance of each behavior. Once I had made my way through all 27, the leadership team took over, and now one of them highlights one fundamental behavior each week.
The fundamentals are also incorporated into meetings and performance reviews. I don’t start every meeting with a behavior, but I often do. I also start every board meeting with a story illustrating a behavior. When we have monthly all-company meetings, I get a volunteer to talk about that week’s fundamental behavior.
These rituals serve as constant reminders of what Great Lakes stands for and how employees are expected to behave. They also provide a common language for employees to give and receive feedback, making it easier to address issues and celebrate successes.
One of the most powerful outcomes of this approach has been the empowerment of employees, especially those in leadership positions. We recently promoted seven technicians to supervisory roles. They are now managing their former peers, which can be a challenging transition. However, the fundamentals provided a language and a framework for giving constructive feedback and coaching. They can say, for example, “Hey, how are you being relentless on improvement? Maybe you can be a little more exacting.” This approach has also helped create a more open and honest culture, where employees feel comfortable discussing difficult topics. “Speak courageously” has moved us forward on this front a great deal.
I’m happy to report that this initiative has moved the needle and has brought the values, which were already excellent, back to life in the day to day of each employee-owner at Great Lakes. The sense of ownership is at the heart of what makes this all so effective and powerful. It extends to every aspect of the business, from the quality of the products to the relationships with customers. It’s a model that has stood the test of time and, especially now that we have moved through this exercise, will continue to drive Great Lakes’ success long into the future.
Be the Buffalo: Why an Optics Company Opened a Preschool
It always surprises me how often an opportunity presents itself as a problem.
In 2018, Vortex moved to a new location with adjacent space we owned and that was built to be a preschool. We were merely the landlord and leased the space to a new tenant. However, it quickly became clear that the school had issues. Feedback from employees and the public highlighted significant operational challenges, and because the school was connected to Vortex, we knew we had to make a change.
Initially, we thought the best option was simply not to renew the lease. But upon reflection, we realized that having a preschool on site had real advantages. Our team trends young, and many have children. We realized it would be wonderful for them, and therefore for us as a business, to offer childcare services on site. Of course, we had zero expertise in running a preschool, so we knew there would be problems. The path forward wasn’t clear, but we committed ourselves to finding a way.
Today, the Little Buffalos Preschool is thriving. By providing subsidized, high-quality childcare, we’re saving parents on our team both money and time, while making it easy to keep the most important people in their lives close by.
Here’s how that preschool got its name, and in the bigger picture, the story of how Vortex does business today.
ONWARD, INTO THE STORM
Like many of you, I’m constantly searching for stories that challenge and inspire me as a leader. When I read Rory Vaden’s book Take the Stairs, I was struck by the metaphor of the buffalo.
In short, when storms approach herds of cows, the cows will turn away, moving with the storm to lessen the suffering they face in the moment. Buffalo, on the other hand, charge directly into the storm, facing it head on. In the short term, they face more intense pain than the cows. But in the long run, they get through the storm quicker and suffer less. This metaphor of facing challenges resonated deeply with me. When we undertook to rework our core values a few years ago, we decided that ‘Be the Buffalo’ captured the spirit we were trying to articulate the best; we adopted it as one of our Core Values.
In practice and at the most fundamental level, one of the most crucial applications of ‘Being the Buffalo’ is having difficult conversations. Engaging in difficult conversations is uncomfortable, but it is essential for growth and improvement. Most people, including myself, can be cows, avoiding problems and challenges. But effective leadership means facing these situations head-on.
With the development of Little Buffalos Preschool, we saw a problem and had to address it directly. That involved ending one preschool to start another, a long conversation that was far from easy. Further, as an optics company, we’d never done anything like opening a preschool. We had to learn new skills, hire the right people, and build the right facility. But together, our team not only faced the problem; we turned it into an opportunity. We chose to be the buffalo, so we gave the preschool that name.
THE BUFFALO IN OUR DNA
As a CEO, I benefit from the guidance of great leaders, including my father. In fact, under his guidance, I’ve realized that Vortex has been thinking like a buffalo for years.
Take our VIP Warranty, which promises to repair or replace any Vortex product free of charge. When we introduced this policy years ago, we didn’t yet have the data to back its financial viability; it was a huge risk.
We went ahead because we were a young, small company up against giant competitors who had a lot of advantages we simply did not, including far more experience in the field. The one thing we had was the ability to choose to do the right thing for our customers. Without knowing it, we decided to be the buffalo, and prepared ourselves for whatever challenges we might face to make our dream work.
If we dismantled the VIP Warranty now, our profitability would go up in the short term. But what we’d lose in terms of culture and customer loyalty would be significant, and those losses would start to show up in the long term. Like all businesses who are part of Tugboat Institute®, we’re not here for short-term gains. Even in 2024, the VIP Warranty is still one of the things our customers tell us they appreciate the most.
LITTLE BUFFALOS, BIG IMPACT
Every day, I have the pleasure of driving past Little Buffalos on my way to work. I get to watch my team dropping the most precious people in their lives at a preschool that is safe, caring, and completely dedicated to their happiness. In seeing the Little Buffalos’ name, I am reminded of the challenges we initially faced in getting the preschool up and running, which were painful in the short term. But, as with our VIP Warranty, the long-term benefits for the people we care about far outweigh the initial discomfort.
Today, Little Buffalos receives overwhelmingly positive feedback from our team and the public, and it’s now the top perk for our employees. We’re proud to say that at least in this one small way, our Little Buffalos are being cared for and nurtured in a place that encourages them to face the challenges in their lives head on, turning problems into the opportunities that will shape their futures.
