Brewing an Evergreen Company
I was bitten by the beer bug years ago while traveling in the U.K. I picked up an odd job looking after the beer barrels in the cellar of a pub. It was fun, but it also made me realize I loved beer much more than as just an after-hours drink — I wanted to make beer my life. So when I moved back home to Australia, I found a job working for a big brewer, and eventually relaunched a craft brewery for Foster’s. While the work was rousing, I wasn’t a big fan of the corporate life, so in 2008, I started my own brewery, Stone & Wood, with three partners.
Right away we wanted to build a sustainable Evergreen business that wasn’t just about the founders living their dream. It had to be more than that. We wanted to grow a team of people who would help us create value for all stakeholders, and with whom we would share the upside.
It took a few years for us to get to the point where we could make that happen, but in 2013 we launched our employee share program. It’s a customized program where we make an annual offer to all employees who have been with us more than a year. They receive a number of shares, which are issued through an interest-free loan (paid down by dividends). Through annual valuations, these shares have grown fivefold since our first offer four years ago.
This is the cornerstone to putting our People First. By making our employees our partners, we set the stage for growth that will benefit all of us. Which is why every year, we take a group of employees who have hit their five-year-anniversary mark on a trip to Germany.
This trip isn’t just about drinking beer and having a good time — although of course there is plenty of that. The real goal is for them to see the Mittelstand — small- to midsize German multigenerational family businesses — which tend to take more of a custodial approach to their operations. One of our favorite breweries in Tettnang is run by a man named Fritz Tauscher. Fritz’s father, Fritz, inherited the brewery from his father, Fritz. This small business is very much part of the community, and it will most likely be a sustainable brewery for many more Fritzes to come. They imbue their employees with a real responsibility to make sure the business is in as good a shape as possible to pass it on. They leave it healthier than it was.
This mindset spreads to the community. In a highly fragmented market, most pubs in German towns sell only one brand of local beer as an expression of intense loyalty to these local companies. This creates a sense of pride in both the community and the owners who don’t want to sell their breweries that have been in the family for generations. We understand that pride and want our employees to feel it too.
I’ve worked at big corporations where we were driven to grow at all costs. Multigenerational businesses don’t have that pressure. They are making decisions for the long term and not for growth’s sake. On the annual trip, we like to see our employees meet with our eighth-generation malt suppliers so that they can feel this energy, this satisfaction in long-term sustainability. This, in turn, helps them take a longer view of our business, which changes how they adapt to trends and how they view the relevance of our brand. After their tour in Germany, our employees come home with a lot of stories and experiences that provide a greater understanding of what we are trying to build here.
We have grown rapidly to become the second-largest private brewer in Australia, and therefore there is a significant legacy to sustain. The four families who own most of Stone & Wood are currently working through a succession-planning process so that we can pass the torch to the younger generations.
But by putting our People First and taking a long-term view of capital investment, I think we’re going to be in good shape. And I hope that Australia views us as a family business that has long established its Evergreen roots and is a source of pride for everyone who works here and who enjoys our beer.
Jamie Cook is Co-Founder and Executive Chairman of Stone & Wood Brewing Company.
Safety in Numbers
Ever since I was a junior in high school and took my first accounting class, I’ve loved working with numbers. And just as numbers line up for me with predictable ease, I knew from a young age that I needed a clearly articulated career path. I received my accounting degree from the University of Mississippi in 1989, and I immediately sought out jobs that helped me grow my career as a professional. According to plan, I worked in public and industry accounting for a number of years and eventually for a series of companies cleaning up accounting messes.
By 2001, I teamed up with a partner and we struck out on our own with Venturity Financial Partners, doing outsourced accounting in Dallas-Fort Worth. We identified a need in the marketplace and tackled it by mapping out a plan. We would do accounting for small businesses, and our company would follow the typical accounting hierarchy with teams of accountants working in siloed spaces on their own accounts. I also wanted it to be a compelling place for people to work by investing in training and structuring a clearly articulated career path that was so beneficial to my early career.
We started off with just the two of us working out of our homes (and later trading beer for office space, but that’s another story), but quickly grew over the next few years, adding several teams. I loved the idea of investing in our staff long term and helping them shape their careers. I really thought I was facilitating lifelong learning, one of our core values, just by hiring them and providing a safe and steady work environment.
Yet something wasn’t working. About five years ago, we were having trouble attracting and retaining team members, and we struggled with profitability. We realized we weren’t going to win by just paying a lot because the services we offer aren’t a high-margin business. We needed to offer something more than just a competitive salary. But we didn’t know what to do.
Then I attended a conference at which Bo Burlingham spoke about his book “Small Giants: Companies That Choose to Be Great Instead of Big.” At that same conference, I saw one of Jack Stack’s lieutenants speaking about the Great Game of Business (which promotes transparent management and collaborative problem-solving through “open book” sharing of financial information). In particular, GGOB planted a seed in me to consider treating my team members like owners rather than employees. However, I felt like I could never share my financials with my people; it just felt too private, and frankly I was worried what they’d think when they saw our marginal financial performance.
So instead we tried on our own for three years to incentivize the team by sharing limited information with them about their own team’s financial performance. We offered bonuses to each team if they hit a certain gross margin target. The end result of three years of effort: nothing. Gross margin and profitability were right where we started. In fact, we were worse off than before because a few teams hit the gross margin target and were getting bonuses, but the majority were just giving up. We were now paying out bonuses to a limited number of team members, but with no improvement in profitability or morale.
So I turned back to GGOB. I finally sat down and read the book and I thought, “This really could be the answer.” As Jack says, “People believe in what they help create,” and everything we had been doing up to that point was top-down, what we told them they “should” do. In early 2017, we opened up our companywide financials to the whole team, brought in a GGOB coach and put together an internal team to implement GGOB. The change was almost immediate.
With GGOB, everyone owns a line item on the profit and loss statement. When they do things to improve profitability and gross margin, they can see the overall health of the organization improve — and suddenly they care about the finances in a way they didn’t before. And they have a true “stake in the outcome” (part of the Great Game) through bonuses that they all earn together through the improved performance of Venturity, not just the profitability of their individual team. Now we are not only winning, we are winning together.
We have weekly huddles to report out our budget versus actuals. Each department has to report on revenue and expenses. We go over all our numbers together. That’s been awesome: If there’s been a change in an estimate or a difference from the previous week, we discuss it. It’s the story behind the numbers that’s powerful. This has built an incredible understanding of the drivers of business. We’ve gone from 37 percent gross margin every year for the last five years before GGOB to 43 percent gross margin our first year playing the game. And in the first quarter of this year, we hit 46 percent. This has improved profitability, allowing us to reinvest in our team and our culture. And we haven’t lost a single team member in the last year to another company.
Venturity now has a team of 45 stateside team members, a support team of 25 in India and 130 clients generating revenue of $5 million a year. And we plan to implement the first phase of our ESOP (employee stock ownership plan) in January 2019. In addition to a short-term stake in the outcome through our GGOB bonuses, our team members will also have a long-term stake in the outcome through their ownership in Venturity. This will give them the opportunity to grow their long-term wealth, over and above short-term bonuses, helping them secure their own financial futures.
Not that it’s all roses. In January we were getting a little burned out because so much new work was coming in and our hiring fell behind. We were financially successful, but at the expense of our emotional success. So since February, we’ve been having conversations about how to maximize both financial and emotional success. What’s a good metric for emotional success? How do we maximize both? Whatever the answers are, we’ll find them together and take a big step toward being a well-rounded, truly sustainable, successful Evergreen company.
Prior to GGOB, it felt like I was pushing a boulder uphill 365 days a year. But by implementing the Great Game, now there are 45 of us pushing it, and we’re unstoppable together. We have a term, "career stewardship", that refers to the fact that we want to be good stewards of people’s careers and their lives during their time with us, and GGOB and employee ownership are the crown jewels of that. It’s our new and certain path to an Evergreen future.
Chris McKee is the Managing Partner of Venturity Financial Partners
Leadership for All
My applied-ecology firm works throughout the world in ecological restoration, conservation planning, and regenerative design. It takes a lot of effort and teamwork to make sure our planet’s vast ecosystems, including forests, prairies, and wetlands, are healthy. And in the 35 years since I’ve founded Biohabitats, I’ve learned that Evergreen companies need just as much care, nurturing, and collaboration to be sustainable.
One person — or even a small group of people at the top — should never be fully responsible for the decisions that will affect everyone in the company. This is why seven years ago I launched a Leadership Council. It’s our community garden where we cultivate leaders and grow a culture of empowerment and equity.
The council evolved out of my long-standing business philosophy. Since I started my Baltimore-based company straight after college in 1982, I have believed decisions within a company should be made collectively. I’ve never been a fan of a formal board of directors (although we do have one from a legal perspective). Instead, we view all of our team members as important decision-makers. To that end, we share our financial information (everything but the salaries) with our 75 team members in six offices across the U.S. and have quarterly companywide meetings to share our performance and future outlook. And every five or so years, we hold a strategic planning retreat with the whole company as a way to collect ideas, set a future course, and align our values.
This was the idea I’d always led with, but about eight years ago, I felt something was missing. Our team members were well-aware of what was happening in our company — but didn’t really have the power to make changes. When we co-sponsored a series of emerging-leaders workshops with like-minded organizations, a light bulb went on: We needed a body to make strategic and business decisions on behalf of our organization.
We started by developing a six-member Leadership Council, which anyone in the organization could sit on for a two-year stint. To ensure diversity on the council, we set it up so there would always be at least two Practice Leaders, one Bioregion Team Leader (the person who leads each office), and one shareholder participating. That left open two other seats to which anyone in the organization (administrative assistant, ecologist, engineer, landscape architect, communications director, etc.) could be nominated or nominate themselves.
All key decisions are taken up by the Leadership Council, but the process we follow is a bit more nuanced. We are transitioning to an Advice Decision-Making (ADM) model. ADM means that anyone in the organization, regardless of their role, can make any business decision regarding the organization, as long as the decision supports Biohabitats’ core values and they seek advice from the people that the decision will impact. This allows our team members the freedom to seize opportunities and make decisions for the collective good of Biohabitats. Yet it also ensures that decisions take into account other team members’ voices and past experience. Team members are not obligated to make a decision if they feel uncomfortable with the responsibility. They may elect to pass a decision to their Bioregion Team Leader or to the Leadership Council for consideration. The Bioregion Team Leader is empowered to make any decision on behalf of the bioregion (including hiring and firing, strategic initiatives, etc.) using ADM, or may elect to pass a decision to the Leadership Council.
The Leadership Council typically addresses organizational issues, including strategic and operational initiatives, assistance with recruiting and hiring, culture building and financial planning. Final decisions do not have to be by majority, although they may be if the person bringing the issue to the table wants to share responsibility for the outcome.
As CEO, I would never override any decision unless I, or any corporate officer of the company, believed the decision put the company at extreme fiduciary risk, jeopardized the safety or welfare of our team members, clients or business partners, or threatened the viability of the company to persist into the future. In those rare cases, we can intervene — although it has yet to happen. As we continue to build a culture that is centered around values, self-management, wholeness and evolutionary potential, we are attracting people who not only enjoy the freedom this approach allows, but who also recognize the responsibility and accountability it entails.
We meet every other week for about two hours, and for those who can’t meet in person, we use Microsoft Teams or other online platforms to communicate. We post a recording of our meeting on the Commons, our internal SharePoint intranet that all Team Members can access.
In the six years we’ve been doing this, we’ve made two big, surprising decisions for the entire company: We implemented unlimited leave time and did away with meaningless employee titles. I actually suggested the unlimited leave time. It was a really scary idea at first for the Leadership Council, since we bill for our time on an hourly basis. But after doing some research, everyone ended up supporting it because it makes people more responsible and accountable for how they spend their days.
The titles decision came about because our industry is littered with firms boasting employees with nearly nonsensical titles. After some reflection and much dialogue, we realized we’re better off being true to who we are and what we represent. Rather than come up with an artificial hierarchy based on a top-down model of power, we have instead decided that everyone plays a critical role in what we do and who we are. As a result, we encourage every Team Member to invent their own title, as long as it’s true to their role in Biohabitats and their vocation.
We’ve had to make some tweaks to the process. We now stagger Leadership Council appointments so there’s overlap — it was too difficult to have an entirely new Leadership Council come on at exactly the same time. We now also onboard members, especially the ones who have had no prior business experience.
It’s been interesting to see people come in without business experience and recognize what it takes to operate a business — people just didn’t see the complexity or layers of work you have to do. They’ve become a lot more respectful and patient — a cultural shift that usually takes a lot of time to evolve.
Our Leadership Council ties into everything about being Evergreen. We want to be around 100 years from now. We’re socially and environmentally responsible and profit isn’t our ultimate motive. Our mission and core values are what we’re all about.
The power is within everyone, not just a select few, and this is how our Evergreen company will flourish.
Keith Bowers is President of Biohabitats, Inc. an applied ecology design build firm focused on conserving biodiversity, restoring ecosystems, and regenerating resilient communities throughout the world.Originally from Baltimore and the Chesapeake Bay Bioregion, Keith and his family now reside in the Lowcountry of Charleston, South Carolina.
Giving Joyfully
When you become a millionaire at an early age — in my case, at 30 — it’s easy to let it go to your head. That’s exactly what I had done. By 1984, I was living the dream ... until, in 1984, the homebuilding market went bust and I lost it all. I promised myself that if I were given a second chance, I wouldn’t screw it up.
It wasn’t that I wanted more fancy houses or cars, though. I wanted my success to truly mean something. I wanted a second chance so I could make a significant difference by giving back to the world. Years earlier, I had seen author Stanley Tam (“God Owns My Business”) give a rousing speech on offering 50 percent of one’s earnings to charity. His words lodged in my mind as I began to envision an Evergreen company.
Thanks to an expansion to other markets outside of Houston, where my company is headquartered, my business bounced back. By 1992, David Weekley Homes was once again financially stable and generating a revenue of roughly $300 million a year. I remembered the pledge I had made and decided the time had come to give back.
Refocusing on charity brought a new energy to my life and my work. I established the David Weekley Family Foundation that same year and began to learn how a nonprofit business operated. I hired a competent COO to run David Weekley Homes and eventually stepped aside so he could be CEO (he has since helped grow this to a $2 billion company). For my family, I banked enough money to cover my three children’s college educations and enough to cover family emergencies, and then decided that 50 percent of my time and salary moving forward would go toward charity.
For the first 10 years, the David Weekley Family Foundation focused on providing assistance to those in need here in the United States. We often use our construction skills in addition to providing partners with grants for youth development, education and spiritual leadership. After a few years of involvement in traditional U.S. nonprofits, I needed a new challenge.
I started learning about giving on an international scale. It’s so much more difficult to give smartly in other countries where you don’t know the legal systems, the language, the economics or the cultural norms. I set off on an exploratory trip in 2008 and went to every continent — eventually deciding to expand our efforts to Africa. I thought the continent had the greatest need and the least opportunity because of a lack of infrastructure and stable government.
In Africa we partner with programs or services that have a unique and well-defined mission, a three- to five-year strategic plan and a clear path to measure results. Our intention is to make an impact by improving people’s livelihood, education and health. I have one person at the foundation whose job is to travel to all of our African charities to inspect our work and make sure our funds are being well-used.
Five years ago, I realized that I was robbing my employees of the joy of seeing the positive charitable results of their hard work upon which this company is built. So we set up a CARE council in each of the 20 U.S. cities where we have offices to bring our Purpose of Building Dreams, Enhancing Lives to life. These CARE councils receive funds from the foundation, but each group can decide which local charities they want to work with. Employees volunteer to join, and each group makes local donation decisions. They’ve served meals, stocked food pantries, and held fundraising drives, cancer walks and other activities that enhance both their lives and those whom they serve. Often they pitch in on construction, such as wheelchair ramps for needy people or a new kitchen for a homeless shelter.
Giving back to the community is a strong part of our company culture and I believe it is one of the reasons we have been named to Fortune’s list of “100 Best Places to Work For in America” 12 times. Our CARE program has been a real motivator for our team members, and for people wanting to join our company.
I highly recommend that any Evergreen CEO considering adopting a philanthropic outlook find like-minded people to learn from and work with on a regular basis. It’s been incredibly helpful for me over the years to bond with peers here in Houston who share the same beliefs. It keeps me motivated and reinforces my hope that I am on the right path.
My next task is setting up an organizational structure for the next generation: I am setting things up for one-third of our stock ownership to go to the Weekley family, one-third to employees and one-third to charity. I endeavor to leave a blueprint so that this Evergreen company and its good deeds will continue to flourish for decades to come.
The mechanics of giving money away is easy. The hard part is changing one’s mindset. We shouldn’t measure our success by how much we acquire, but instead by how much we give. It is joyful to make a determination of what is “enough” and give generously of yourself and your money during your lifetime, and beyond.
David Weekley is the Founder of David Weekley Homes.
Embrace Innovation By Hiring Millennials
Our Evergreen company is 67 years old. If we didn’t continually embrace innovation, it would mean the end.
Maybe this sounds a little dramatic, but the strength of our company, Metalcraft Inc., rests on our ability to move forward with ideas, especially around technology. And we’ve found that the best way to find these new ideas is to hire the next generation. This is why six years ago, we took a young staff member’s suggestion to create an Innovation Team.
Metalcraft Inc. is a manufacturer of identification nameplates and labels such as metal bar codes and property tags. More specifically, we produce durable serialized bar code and RFID (radio-frequency identification) products for fixed and mobile assets including returnable containers, access control and OEM applications.
For the first 35 years of the company’s existence, our product line was limited. That changed when we expanded to bar code technology solutions in 1985, and then made the decision to provide greater value for our customers with RFID technology in 2001. To understand how revolutionary RFID technology is, think about a trip to the grocery story. At checkout, you have to wait while the cashier scans each bar code individually. With RFID tags on the products, a network can tell where each labeled item is at any given time, and you could simply be charged for each item you carry out of the store.
Although we’re not quite there yet, we realized early on that we had to be big players in RFID. But we also realized that making this leap into new technology (even beyond RFID) meant we needed to attract workers who would embrace innovation. That’s easier said than done when you’re based in northern Iowa, two hours from any major city.
In 2012, we found our solution in a young member named Kyle Bermel. He suggested we create an Innovation Team. Kyle felt that by putting together a group of team members to discuss objectives and goals on a regular schedule, it would help push forward new ideas and create excitement among the staff. It would also reflect Metalcraft’s willingness to be cutting edge — and perhaps attract the millennials we knew were the future of our company.
We went for his plan. Kyle determined that the Innovation Team should be by invite only and no larger than six or seven people who meet the criteria of being collaborative, creative and open-minded. We invite people to join if they seem like the right fit. They gather every week for an hour or two to discuss ideas generated from the team and from the rest of the company. In fact, just recently they implemented a quarterly Innovation Rewards Challenge where they ask all members for suggestions on certain topics and then any member may vote on these ideas.
The team members are a mix of millennials and Generation X. We’ve rolled out about six or seven key ideas from this team. They’ve run the gamut from moisture sensors to adding a ping-pong table to the office.
Not every idea works out, and that’s OK. One big failure was when the team got too excited about creating hog sensor tags; they didn’t do all the necessary research before attempting to push this idea through. While it was a great idea, hog farmers rejected it — fortunately before we spent a lot of money on making the product — as being too expensive.
The Leadership Team, which I head, must ultimately approve any ideas the Innovation Team generates. However, the only time I step in as a leader is to pull back the reins if their enthusiasm and love for an idea is too strong. If you fall in love with an idea before it’s properly vetted, you’ll say it’s successful even if it’s not.
But for the most part, we feel we need to let them pursue these ideas even if they might not work. If we don’t give them this freedom, the spirit of innovation will die.
The Innovation Team has changed our whole culture. They’ve created camaraderie in the office and made this an exciting place to work. And word is getting out. Since Kyle started our Innovation Team, we’ve established a reputation as a place where people want to work. Millennials want to make an impact fairly quickly; they don’t want to sit back for five years learning the ropes. We’ve created an avenue for them to make that kind of impact.
Since implementing the Innovation Team, we’ve grown from 81 employees to 101. Our revenues have gone up nearly 50 percent, and I believe this team has had a great impact on that.
We now have an aura about us. As an employee here, you have the ability to add value and be rewarded. We never rest on our laurels — we’ll continue to innovate for the long run.
Steve Doerfler is the President & CEO of Metalcraft Inc.
Pursuing Purpose in Chile
I had a midlife crisis at age 32. Working 80 hours a week as a healthcare consultant in a messy industry left me miserable and completely burned out. Every day, I’d watch a co-worker, Ted, gallop into the office with such enthusiasm about his job, it made me feel even worse about my own ennui and dissatisfaction. It struck me that I needed to do something in my life that made me feel like Ted. I needed a Purpose.
So I quit my job. In 2003, I uprooted my wife and myself from Maine and moved to Chile, where I launched a thriving adventure travel company.
Of course, this didn’t happen immediately. At first, we were there simply for a respite. My wife provided the inspiration, as she had studied in South America and spoke fluent Spanish (which I did not) and she wanted to show me the country and culture. I just wanted to ski and bike and get out of my head for a bit. So we planned a seven-month trip from Chile to Ecuador.
By the end of the trip, though, we felt so free and unplugged, we couldn’t go back to New England. We decided to settle in Santiago, Chile, because it’s safe and the economy is very stable by South American standards. Also, it’s right next to the Andes, which have some of the best ski resorts in the world. Since I craved being outdoors after my years cooped up in the corporate world, I decided to work in the travel industry as a guide. I figured someone would hire me to take travelers hiking, horseback riding, skiing or fly-fishing.
Turns out, no one wanted to hire a guy who was new to Chile, who had never been a guide before and who didn’t speak Spanish.
Undeterred, I decided to start my own guide business called Santiago Adventures, based on my own experiences as a traveler in the region. It was perfect timing because in 2003 Santiago was emerging as a new business hub. Many large corporations were moving into the area and suddenly there was an influx of foreign visitors, including Americans.
While skiing, I met a lawyer who helped me set up shop. It’s not terribly difficult to start a business there, but in Chile, you need someone with a social security number in the system. As an outsider, you usually have to pay someone local to be your representative, and this guy volunteered to be listed as our company’s rep until we could finally establish residency three years later. (Yes, I realize I’m very fortunate he wasn’t a scam artist!)
Within about 15 days of getting his name in the system, we were open for business. Through word of mouth, we had our first customers in early 2004. I built our website, which I loaded with rich stories about the area and things to do, and set up six tours around the central region of Chile. Pretty quickly, we were getting great Google reviews for tours.
For the first year, I worked as our sole guide. Then I started hiring freelancers. I realized travelers wanted to interact with a Chilean who could speak English — someone with professional tourism experience. I also hired local Chileans in the office to help figure out business operations for travel and to contact suppliers to build our network.
Culturally, being the gringo is a double-edged sword. Chileans have a supportive interest in what you’re doing as an outsider, but I did have to be careful. I came at this endeavor implicitly trusting people, asking lots of questions and hiring people based on a handshake.
I only got burned once. Chile has a strict tax-monitoring system, and an accountant we employed took advantage of our ignorance. He told me that I would end up in jail if I didn’t do things his way. We lost a bit of money to him, but I wised up and hired a staff accountant. I figure it’s the cost of learning to run a business, especially in another country. This experience did make me hyperaware that we always need to do right with the rules and regulations and ethics. We don’t want to cut corners, and this includes paying people decent wages and on time.
In 2006, we branched out to Argentina with a big wine tour group. Being on both sides of the Andes has been great, because while Argentineans have a rivalry with Chileans, they have no problem working with an American guy. In 2011, we added Uruguay to our destinations.
Over the years, we’ve had a few mishaps, but never having to do with the regulations. For instance, in 2010, there was a terrible earthquake that left a few of our customers stranded. We solved all the travel issues for them, but the country took a tourist hit — our phone didn’t ring for six months. But we kept promoting Chile, and by 2011 we were doing tours in the entire country, not just in the Santiago region.
After we spent 10 years in Chile, my wife and I finally moved back to New England so that our son could grow up around family. It was really hard to leave my 12 employees and my adopted country. I still own the company, and I am still the CEO, but on the whole our move back to the U.S. has been better for its growth and progress. I’m a micromanager, and this distance has given me the opportunity to think in broader ways and look at new opportunities, partnerships and clients.
In 2015, we relaunched the company as Upscape. It has doubled in size in terms of employees and tripled in terms of revenue. We are the local supplier for big American tour operators — to speak the language on both sides makes us very trustworthy. We have a reputation for taking care of anything on the ground and for providing new and innovative experiences and destinations.
I still travel to Chile every other month to keep an eye on things. It took me seven years to learn the language. I need to keep up my fluency! And even more important, Chile is where I found my Purpose by building my life around this Evergreen company.
Thanks, Ted.
Brian Pearson is the Founder and CEO of Upscape
Maintaining Sanity in the Family Business
Running a family business is not for the weak.
Our company is Evergreen to its core. It started with a businessman with a visionary idea who wanted to create something he could hand down to his children. Through Perseverance the company has flourished, and we children are now at the helm. But our most consistent struggle over nearly 25 years has been balancing our very different skill sets, leadership abilities and temperaments. I guess we can say we succeeded because we still want to spend time with each other outside of the office.
My father, Claude Chevalier, founded Bio-K Plus International, a Quebec-based company that develops probiotics, in 1994, when I was a young teenager. I had a brief moment of wondering why my father was giving up his superstar status as the president of the Dairy Bureau of Canada to found a startup that would be manufacturing and selling a fermented supplement that tasted like spoiled milk (this was long before probiotics was a household term). But based on Claude’s vision, and the knowledge supplied by his scientific partner, François-Marie Luquet, of this soon-to-be-multibillion-dollar category, I quickly became an eager supporter. My sister, Isabèle, and I were high school students at the time, but we spent our nights and weekends helping our parents. I started out officially as a clerk in the warehouse, folding boxes and doing deliveries.
My sister and I were free to explore a variety of tasks. I discovered a love for sales, marketing and anything IT and had a knack for distribution. Rather than attend university, I spent years traveling to drum up new business and find enthusiastic reps. Isabèle gravitated to higher-level administrative duties, so we never argued about our places in the company. As Bio-K Plus grew, so did we in our responsibilities.
But when you start working for your parents at a young age, there’s a blurred line between work and home. What’s always been difficult for my sister and me is knowing if we’re talking to our dad, who at 69 still runs the company, or to our CEO. Understanding the hierarchy and expectations is the hardest thing in a family-run business, especially when dealing with a parent who is a majority shareholder like my father. Whatever he says goes, which can stir up a lot of emotions.
It’s an issue we’re all aware of, and over the past 20 years, we’ve worked hard to maintain open communications, trust and emotional stability. Eight times a year we bring in a family business moderator who helps us talk through our differences in a way that is good for both the business and our personal lives. Our four immediate family members attend the four-hour meetings off-site at my parents’ house. We blow off some steam, share our worries and get alignment on the state of the business. The moderator helps us sort out issues around roles and responsibilities, and how to create the space for open, respectful communication. It’s a wonderful way to regularly make sure every family member has a voice and a place to share concerns. These meetings are the key to our ongoing strength as a family unit and a company.
As I’ve risen in rank at Bio-K Plus, I’ve made an effort to talk to other family business owners to learn about how they handle challenges. Generational clashes are pretty typical in family businesses. The parent starts a company and most of the time has a hard time ceding authority to these children who once toddled around their home. Public managers generally don’t have any such memories of their employees. Our regular family forums have helped me and my family members learn how to check our egos at the door and work through problems before they do any damage.
Something else that has been good for us: Traditionally my parents, sister and I gather up our families and travel together on a vacation. The rule on this vacation is to never discuss work. It’s a very special time that brings us joy and reminds us that we are more than colleagues.
In 2012 my father named my sister and me co-presidents. I think he struggled with what to do with two very bright, very ambitious, very deserving kids and settled on an equal share of titles and duties. Isabèle and I work well together and our strengths offset each other, which is why she acts as CEO and I run the commercial division. Recently we hired a COO to better manage internal process due to ever-increasing growth. It was a smart way to handle that situation: Always surround yourself with the smartest people around.
But we’re still continuously learning how to better run this company, which now sells products all over the world. Who do I need to be to lead this Evergreen organization and what are my values? I strive to somehow find common ground with my dad and sister. As my sister and I take on more responsibilities, we will be implementing our own best practices. My philosophy is that you’re better at owning your business than running it — hire the best talent. Of course, in a family business, that is tricky. Isabèle and I each have several children who may someday wish to be involved.
We are already having these discussions in our forums to ensure that they will be well-prepared and motivated to rise to the challenges their generation will face in an Evergreen family.
François-Pierre Chevalier is president of the commercial division at Bio-K Plus International Inc.
Success Forced Me to Change
For the past 20 years, I’ve steadily grown my family’s Evergreen company, Hello! Destination Management, by being flexible and making changes as needed to promote growth. But what I didn’t realize until just a couple years ago was that this also meant my leadership style — the one I had practiced and clung to for decades — needed to grow and adjust. That’s been a tough mental adjustment for someone with a nasty control streak and a tremendous fear of failure.
My first job upon returning to our family business was driving a cab for my father’s Orlando-based company, Mears Transportation Group, in the early ’90s. My father had inherited what was originally a cab company from his father (who founded it in 1939) and expanded it into all forms of passenger ground transportation and destination management — providing services like tours, team building and special event planning to corporate meeting planners.
After I’d put in a convincing stint, my dad released me from my taxi-driving job and I was recruited to various positions within the company. I helped him grow the business first as a sales manager and later as director of convention sales. In 1998 we purchased Hello! Florida, the leading destination management company in Orlando at the time. Following the integration of our destination management division into Hello! Florida and the untimely departure of a key leader, I became the president of Hello! Destination Management and put my micromanaging skills to work while adding employees and opening new offices.
As a conscientious third-generation manager, I felt deeply responsible for protecting the investment and making the new business succeed. I put incredible pressure on myself to make sure it didn’t fall apart. And it didn’t. In fact, we grew like crazy over the years, adding offices in Florida and Arizona. Even through 9/11 (when people stopped traveling for many months) and the recession of 2008 (when our revenues were down 45 percent), we remained aggressive but prudent.
By 2011, we had five offices total, all located in popular meeting destinations such as Orlando, Las Vegas and Washington, D.C. Each of these offices had between six and 60 employees and a general manager who communicated with me regularly, sometimes multiple times a day. My day-to-day responsibilities were very tactical. I was the answer guy. I talked to every GM about whatever problem they encountered: whom and when to hire, what the financial plan should look like, unique needs of customers, how to refer a client from one office to another.
But it was like these offices were each little independent businesses — they didn’t share a coherent, fully developed strategy. I’ll admit I kind of liked it this way. It was working financially, and I enjoyed the hustle and hard work. I loved making thousands of decisions a week that created the foundation for the culture of the business.
Then two years ago we opened an office in Dallas. It was a tipping point for me. It was just too much work for me to handle. Suddenly emails and phone calls were not being answered on time. I just couldn’t keep up with everyone’s demands. People were waiting on me — and I hated that feeling. I realized I was slowing down my general managers’ progress. The requirements of my job had grown beyond my ability to serve them quickly enough.
My dad (who is still CEO) had always told me that if you create an environment where you are making all the decisions, your business will never be very big or great — in that case it can only be as big as your own reach and as good as your own talents. You have to attract and retain talent and give them autonomy if you want your business to thrive.
While I thought I was following his advice, I really wasn’t. I realized I had to change my leadership style. I needed to focus on larger-picture strategy, pursue new opportunities for our business and get better at delegating responsibility. I needed to put my People First, and have more trust in my leaders.
I promoted someone internally to executive vice president and asked all the GMs, except the one in Orlando, to report to him. I promoted another longtime employee to head up creative services nationwide, an area with great opportunity perfectly suited for his talents, not mine. Those two men created the foundation for a steering group of five key leaders to further delegate responsibilities and innovate — and to disagree with any decisions I might throw in there because I sometimes act like a dictator. This steering committee has been a wonderful addition.
This shift in operations has been great for the company but tough on me. It’s taken me two years to really adjust to letting go. I hate feeling like I’m removed from the front lines, so I’ve had to find a balance. It took a while, but I am now intimately involved in business building. I went from working primarily in the business to working on the business. Since I am no longer tied to my desk answering emails, my time is dedicated to key client relationships, new office openings, acquisitions (two), launching a national sales team, and collaborating with our leadership team rather than issuing directives. And I still have the GM in Orlando report to me because this is where I live with my wife and four children. I think staying close to the details in one office helps my perspective … or maybe that’s just an excuse to satisfy my weakness!
All of this has paid off tremendously. We now have nine offices and our revenue will exceed $110 million this year (last year it was $96 million). We have about 215 employees. There is no way we would have had this kind of growth if I hadn’t handed off my responsibilities and empowered my managers.
It’s not easy to change your leadership style after so many years. But I sure didn’t want to disappoint my colleagues who had a great vision for our company. And I didn’t want to be the one to make this 80-year-old Evergreen company grind to a halt because I was stuck in my ways.
Paul S. Mears III is the president of Hello! Destination Management
Finding Our Core Values
Since 2002, year after year, my company’s sales were robust, profits were up and my executives were aligned. On the surface, everything looked great. But I recognized that I was facing a significant long-term problem: time. It was marching on, and most of my executives would be retiring within the next 10 years. I had to figure out a way for new hires to understand and embrace the core values that helped us grow and prosper.
As luck would have it, I met Dave Whorton at an employee ownership conference in Colorado.
It’s hard for me to describe the sense of relief and excitement I felt when hearing Dave talk about the meaning of an Evergreen company. I thought, Wow, that’s us! And for the first time, I didn’t feel weird. I felt at home with a like-minded executive. When he went into the details of the seven P’s, it all made perfect sense to me. I was thrilled that he asked me to join the Tugboat Institute and, shortly after, I applied for Evergreen Certified status for Life’s Abundance.
I had been at Life’s Abundance, which sells premium wellness products, for more than two decades. Over the last several years, I had been thinking we needed a way to explain our beliefs both internally and externally — but that proved to be a lot easier said than done. We certainly had values essential to our core since the very beginning. Dennis and Carol Berardi co-founded the Florida-based company in 1998 to enhance the lives of people’s families, including their four-legged members. They wanted to develop and sell products with healthy ingredients in a transparent, private and sustainable manner.
I joined the team just a year after its founding, in 1999. I loved the idea of creating and selling small batches of healthy pet food and human supplements to health-conscious consumers. Early on, I suggested we stay online so that we could maintain control of the product, have a more personal relationship with each buyer and keep our team members well-informed.
In 2011, three years after I became CEO, I started fiddling with this idea that our core values needed to be spelled out in order to be effectively shared. Until this time, it seemed like we didn’t really need such a thing. All the founding members of the company were still part of the team. We were a tight-knit group with a similar value system. But I just couldn’t figure out how to share this feeling with newcomers.
Every once in a while, we gathered to try to come up with ways to describe how we work together with so very few disagreements. Nothing ever felt or sounded right. We even brought in outside consultants, but what they suggested never captured it. By last year, panic over this set in. Our core team members were starting to retire. I realized that I was going to lose 120 years of combined experience and culture over the next few years if we didn’t have a core set of values to maintain. I started feeling like I was on the brink of a serious culture problem.
Thankfully I met Dave, and soon thereafter I had the opportunity to attend the Tugboat Institute Summit. When Robert Glazer, founder and managing director of Acceleration Partners, spoke about the importance of core values, I was motivated. He said that you don’t need a company mission statement to communicate your vision and core values. You simply need three words that represent them. It was a watershed moment for me, and immediately I knew that Evergreen was the first core value. Now I needed two more. To produce consistently great work, it’s important to focus on the recipients of our work (both inside and outside the company) rather than ourselves, so I chose empathy as the second core value. And because it takes energy to avoid being mediocre and to innovate and lead, that became our third core value.
Rolling these values out to my team has been a lot of fun. We have established a blog where we talk about each of the core values and how we can put them into action. We update this blog several times a day — and I can keep track of how often people are reading the articles and watching the videos. They can also post content. We have a growing wall of sticky notes where people can throw up ideas relating to core value action. And every week, I have a presentation where I discuss one core value and elicit feedback and stories pertaining to that value.
So far, the results have been amazing. People are sharing a lot more and their language is starting to change. For instance, teammates are starting to talk about the Energy it takes to get a job done or how they had Empathy when speaking to a customer earlier that day.
These core values have been rolled into our hiring processes and have affected what kinds of questions we ask people. They’ll be very helpful in determining the types of characteristics we want in people who exemplify our core values.
I am incredibly inspired and excited by the results, and I look forward to our next step: communicating our core values to the outside world.
Lester Thornhill is the CEO of Life’s Abundance
Surviving Death Valley
In 2011, my co-founder and I had the kind of moment that most business owners dream about — several buyers were sniffing around our 15-year-old specialty-chemicals company, Essential Ingredients. But while a sale might have ushered us off to early retirement with bags of money, we worried that our employees would suddenly be jobless.
So instead we formed an employee stock ownership plan (ESOP), which gives ownership of the company via stocks to the employees. Since we had always made People First a priority, the ESOP seemed like the greatest way to provide our team with job security as well as a healthy retirement fund. We made the exciting announcement at our next big employee meeting. As our employees cheered, we felt sure we had made the right decision.
And then almost immediately the company went into a financial nosedive.
We call those first few months after forming the ESOP “Death Valley.” We were never able to determine any one thing that caused it, but this was the lowest point in our company’s history. The most stressful part was the fact that the company had just taken on significant bank debt (for the first time ever) to finance the purchase of the employee shares from my partners and me.
We (the original shareholders) were used to using our private assets as guarantees against small loans or lines of credit we had with the bank. However, we had never been under a bank covenant, which requires a banker to review our finances and results quarterly (which soon became monthly). This oversight put us under a whole new level of stress as we were now beholden to an outside party. Previously, if we had a bad month, we would be disappointed but we would adapt and adjust. Now we had outside eyes offering a cold critique of the numbers.
I found myself meddling a lot in sales matters, pushing our sales team for quick short-term results, working to cut costs and, in essence, regressing to running the business the very way I hated — by the numbers rather than by our values. It was a horrible experience. I remember meeting with our banker during this time over coffee, and he asked me that dreaded question, “What keeps you up at night?” I laughed and told him, “YOU do. When I close my eyes at night I see your face!”
When we realized this behavior was impacting our culture and the way we were driving the business, the original partners and I used closing funds we had received, reduced the bank debt and converted that to additional seller notes. This allowed us to dial back the financial pressure and run the business the way we always had, focusing on long-term results and working according to our mission.
The good news is that we were able to turn things around while staying true to our values. Today, our balance sheet is strong. We’ve enjoyed double-digit growth over the last several years, and sometime in the fourth quarter of 2018 we will be crossing $100 million in annual sales for the first time. While we rely on a bank for our credit line, we have no long-term debt and don’t plan to have any ever again. I won’t allow us to go back to working under that kind of unnecessary stress.
We’ve also been able to enhance employee engagement and financial understanding by adopting open-book management (based on the Great Game of Business). While we were building the business back up, we learned that, as an ESOP, there was no way for our people to truly feel like shareholders unless they had exposure to the numbers and the results on a regular basis.
Our employee-owners today feel more closely connected to the results because they assist in the construction of the plan and receive weekly updates on our joint progress. Almost everyone from the day of that announcement is still with us, and we have gained approximately 25 more employees. Our company shares have gone from $2.25 to more than $55 since the fall of 2011.
Times of crisis test one’s values and character, and significantly shape people and businesses. If things are going easy, there’s no reason to ask the hard questions. We Persevered through “Death Valley,” and I like to think enduring this trial only strengthened our resolve and that this strength will serve to sustain Essential Ingredients for many years to come.
Kris Maynard is the CEO of Essential Ingredients
