In my opinion, a good company has an annual budget meeting once a year and keeps to its budget. It also meets annually to create a three-year plan, and it executes that plan each year as directed. It hits its goals and makes money. A great company sets goals and exceeds them. One goal I believe […] 

By Jerome Knyszewski, CEO of HeavyShift

 

In my opinion, a good company has an annual budget meeting once a year and keeps to its budget. It also meets annually to create a three-year plan, and it executes that plan each year as directed. It hits its goals and makes money.

A great company sets goals and exceeds them. One goal I believe in is creating a company environment where people leave better than when they came. You create an environment where when employees leave the company, they’re smarter, more educated, and more employable. They have more money in their bank account or have achieved whatever “better” means for them.

 

 As part of my series about the “How To Take Your Company From Good To Great,” I had the pleasure of interviewing Randy Carr.

Randy Carr joined his father’s company, World Emblem, in 1983. He has done everything from running embroidery machines, to customer service, to his position today as president and CEO.

Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?

My father had his own company making embroidered emblems. I had started school at the University of Hartford in Connecticut. I had gone only for one semester when he called to tell me I had to come home and help run the business. So I went to work for him.

Can you tell us a story about the hard times that you faced when you first started your journey? Did you ever consider giving up? Where did you get the drive to continue even though things were so hard?

One of the hardest tasks my company faced was developing the proper vision for the business. I read “Vivid Vision: A Remarkable Tool for Aligning Business Around a Shared Vision of the Future” by Camron Herold.

I remember a time when me and my team were thinking about this and trying to figure out the difference between a “vision” and a “mission.” We couldn’t figure it out. This was probably 2007.

It wasn’t until 2015 that we sat down and wrote a clearly articulated outline of where we were going to be by 2020. In a five-page document, we broke it down into pieces.

We did good job of sharing it with my staff, and that’s one thing we did we can clearly say was a solid driver to aligning 1,200 people. That’s a hard task with only 50 people.

Another hard challenge was measuring and tracking accountability within the company. We ended up using a cloud-based strategy execution software platform called “Rhythm.” https://www.rhythmsystems.com/patrick-thean

This system cascaded achttps://www.rhythmsystems.com/countability from my desk all the way down to the lowest position in the company. We’ve been using them for about eight years now.

Rhythm is about creating alignment and accountability. So the first task was getting our goals aligned across the business. What I like about it is it’s very data driven and focused on KPI (key performance indicators).

It’s one thing to read about having accountability, but it’s another thing to implement it in your business and then push it all the way through. It took us three or four years to get to the point where we really understood the difference between a KPI, setting priorities, establishing themes, and similar tasks.

The third piece to the puzzle that was “hard” was defining the core values of the company. Not having core values defined resulted in hiring people, including senior executives for a quarter-million dollars a year, who did damage that it took years to fix.

When you’re clear on who you are, you hire to that. We’re a very intimate business. We’re easy going with our staff. With the right people, it’s easy to have open-ended conversations and discuss things with the team.

We have built a really good team. There are still elements that are missing, but by having the right set of values, everyone knows what needs to be done when they come to work.

I signed up with Rhythm on the advice of my first controller who informed me that the company was a mess. This was back in 2004. At the end of one of the first meetings, the rep pulled me aside and recommended firing some of the people in the meeting. It took me about six months to understand what he was saying.

But, we ended up doing everything he recommended. We learned that defining your core values is more than going to Google to look some up and then adding them to your letterhead.

One practice that was instituted about 30 years ago was asking employees from all levels of the company to write a story or highlights of how the year went for them.

I got the idea from the fact that when my Dad passed away, and I took over the company, there was so much I didn’t know about what happened in the past. For example, what had happened to parts of the business that were dropped or why a key employee left.

So if something ever happened to me, my sons would know what it took to build this business. I decided to create a book that would document all that went on in the company over the course of a year written by the people who were doing it.

I started reading the stories and picking out common themes. One example was the value of staying positive. I probably have 1,000 stories now of things employees have done throughout the year.

What I learned, along with my team, is there are events that exemplify and go beyond the day-to-day stuff of what makes a company excel. Our stories are what helped us identify our core values. It all goes back to hiring the right people. Once you have your core values, it makes it easier to identify people who have them, and you make the right hires.

The other benefit is it reminds me of where we came from. And I don’t want to get too far away from that. We are still doing a lot of the same things we did when we started, we’re just going them on a much greater scale.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘takeaways’ you learned from that?

Honestly, I don’t find any of my past mistakes too funny.

Hiring the wrong people would be a big one. It’s usually the cause of most of the downstream issues. Not making the decision to hire the right person upfront and then allowing it to continue for two or three years unbridled. Examples include not making a decision to hire a chief technology officer and the right person to be in charge of a department.

This mistake was compounded with under-investing in technology and fragmenting our tech investment, rather than having a holistic strategy. We did not have a clear idea of where we wanted to go, as far as our technology was concerned, and how we were going to get there.

So what happened was there were nine people going in nine directions, and we ended up with nine standalone applications, except, it was more like 50 standalone applications. As the world becomes more dependent on the cloud, integration and data center models, it became unbelievably more complex.

There were all these different systems with none of them talking to each other, and it almost put the company out of business. Around 2014, as the business started to expand, we had software breakdowns throughout the company as well as hardware malfunctioning. It was a disaster.

The company is still dealing with it to this day, but now we’re in a much better place.

So the biggest lesson was not having a clear handle on what we needed out of our tech group and not understanding what we wanted from the business. Once we did understand that, we made sure we had the technology to support it.

In our attempt to resolve our issues, at first, we compounded it by making two more mis-hires.

Finally, the stars aligned and somebody gave me a referral for someone I knew from 20 years ago. We hired him and three people from his old company. And from the first day he walked in the door, our entire business turned around.

That was a lucky break for the company. I knew the guy, hired him on the spot, and paid him exactly what he wanted (we got a deal). He’s the benchmark for my next hire.

So, we know there’s people out there, we just need to find them. We also know we need to be clear on what we want from the business. If we don’t want to stay at 10 million dollars a year, we need the infrastructure to grow and expand.

What we learned was it’s unfair to put somebody in a position working for a 10 million dollars company who’s not capable of setting up an infrastructure for a 100 million dollar company, but expecting that from him.

What do you think makes your company stand out? Can you share a story?

One thing that makes us stand out is what we do. We do a 100 million emblems a year, and 50 million of those 100 million are made same day they are ordered. Of the 100 million emblems, all of them were made within four days. Everything is custom. No minimums. And 99% of the business is done over the internet.

We have a 500,000-square-foot facility in Aguascalientes, Mexico. We are set up to support almost any job or project anyone can imagine as far as branding with emblems, badges, stickers, labels and heat transfers. We offer a unique ability to manufacture in Mexico while doing the final construction and decorating in the United States. And we’re positioning ourselves to be even stronger in third-party logistics and fulfillment.

By “final construction,” I mean application of decorations to garments, coolers, headwear, cups, etc. Anything anyone can possibly think of.

Our face masks are a perfect example. With certain customers, they’ll give us five or six million masks. We’ll make emblems in Mexico, ship them to our place in Houston, apply them and ship to our customers. We’re the only end-to-end provider.

When COVID hit at the end of February, my team had some tough decisions to make to keep the company afloat.

As part of the decision-making process, I assembled my team to assess the budget and see how low sales could go and still survive. Our business was down 30%, but we looked at what would happened if business dropped anywhere from 40% to 70%. At 50%, things got really dicey.

We were never planning on waiting on PPP (Paycheck Protection Program) from the government, we needed to go as deep into the business as we could not knowing there would be a subsidy. We didn’t want to count on it. I wanted to keep our gross profit relatively consistent and cut so deep into overhead that it hurt. Then, if we had to use the subsidy, we’d have that as a buffer.

A big challenge was finding the right balance between being ready when the crisis turned, while making sure the company had enough cash. And that involved staying in touch with the bank to discuss delayed payment of financing fees and leases.

For example, while one day might be spent evaluating cash flow and budget, the next was deciding what to do about marketing. I told the human resources director to start recruiting for a new marketing manager now. She questioned me on that and I said, “We need to be recruiting now because in a month, we will be ready to hire someone.”

Another of my strategies was to shift manufacturing capabilities into products most needed at this time. Despite facing the possibility of losing as much as 50% of my traditional sales, I made the investment in equipment to start making face masks and personal protective gear.

We started making face masks, hazmat suits and other protective apparel on Monday, March 30 in our plant in Mexico. It’s was a huge investment, when nobody had any money, and we were doing it at a time when nobody had any clue what the global economy looked like, but we were trying to pivot where we thought we could have the most economic and social impact.

The face masks went up on the website a week later, Monday, April 6, and we broke our highest sales goal by tenfold. We had to temporarily shut down the website. Since the start of COVID-19, we pivoted hard, and because we added the hazmat suits, medical gowns, plastic face shields and gloves, we were inundated with work from the start.

Although the recently added products took off, shifting gears did not come without its headaches. World Emblem had been poised to diversify with approximately 10 million dollars invested in 2019 in new equipment and technology. Then, I got a disturbing phone call from my Mexico managing director at midnight on the second day of the hazmat suit production.

My MD told me, “Covid lockdowns are being enforced, and we will have to close for a month.” This is not what you want to hear when 65% of your sales come from Mexico. So, our entire game plan was flipped on its head in literally two hours.

After phone calls and deliberations, the company finally got permission to remain open for another 30 days.

We had a record month in March due to the company putting a ton of money into new products that were starting to take off. We know once this pandemic ends, business will turn around for us. But it’s going to take a little longer than originally projected.

A number of factors allowed World Emblem to be in the sustainable position that it is.

We don’t believe in putting all your eggs in one basket. While the industrial laundry business has been a steady, thriving niche, we were not comfortable with it representing 60% of the company’s business.

We want to be very aggressive on our diversification strategy.

So for the past five years, my team has purposely done research and development to come up with new products and markets to tackle. Our vision is to build one new business annually that does 10 million dollars a year in sales in 10 years. These “incubator” companies have come about in the form of stickers, pens, name badges and now face coverings.

Another opportunity fell into the company’s lap as a result of being a member of the YPO.

A member was looking for a cut-and-sew manufacturer who could make robot covers. After researching the necessary equipment and labor, we decided to make the capital investment to add what was needed. While this capability was added about six months before COVID, it put World Emblem in a position to make the hazmat suits and face masks that were just added.

One of the best decisions we made a couple of years ago was to define, as a company, what we were best at. Now we go through this process every quarter. We sit down together for two days and ask ourselves this question.

And the answer was not making emblems. We discerned it was the ability to do quick turns on small orders. Previously, we were limiting ourselves to thinking it was emblems and badges. With our new definition, we have been ready when opportunities have come our way.

Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?

There are times where I really dislike work.

But yes, I have things I do. I meditate 20 minutes a day. I exercise twice a day. I belong to YPO, both the Miami and the Atlanta chapters.

Keeping your sanity is about the people you surround yourself with. I’m serious about my work, my life, and my family. I think getting into YPO and surrounding myself with these people has really helped me in my career development.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?

My wife and kids, but that’s the obvious.

I would say the biggest one has been my accountant, who has given me full support since before my father passed away. Every time I feel that something’s not right, I pick up the phone, and he has the ability to call me out within three seconds. He is that guy, and he’s been around forever.

There’s an art to making something that is complicated, less complex. And he has an ability to do that no matter how complicated the problem is. He gets right past the emotion and goes right to the heart of the matter quickly.

My leadership team right now is really solid. If I were to look back, I’d have to say that the leadership team I have now is as good as any I could ever have ask for. I credit their input and hard work for our company’s success.

My YPO forum also lends a lot of support.

But honestly, there are so many people, it’s unfair for me to leave anybody out.

Ok thank you for all that. Now let’s shift to the main focus of this interview. The title of this series is “How to take your company from good to great”. Let’s start with defining our terms. How would you define a “good” company, what does that look like? How would you define a “great” company, what does that look like?

In my opinion, a good company has an annual budget meeting once a year and keeps to its budget. It also meets annually to create a three-year plan, and it executes that plan each year as directed. It hits its goals and makes money.

A great company sets goals and exceeds them. One goal I believe in is creating a company environment where people leave better than when they came. You create an environment where when employees leave the company, they’re smarter, more educated, and more employable. They have more money in their bank account or have achieved whatever “better” means for them.

Based on your experience and success, what are the five most important things one should know in order to lead a company from Good to Great? Please share a story or an example for each.

So the first thing I’ll say is to be humble. You don’t know anything, and there’s no one who knows everything.

Surround yourself with great people and a great supporting cast.

Know where you want to go, know what your core values are and make sure you know what your key numbers are.

In times of crisis, be honest with your situation. Have the tough discussions early on, and pivot to stay relevant.

Treat customers the same way you want to be treated.

Extensive research suggests that “purpose driven businesses” are more successful in many areas. Can you help articulate for our readers a few reasons why a business should consider becoming a purpose driven business, or consider having a social impact angle?

We have a Hands-On Deck group within our company, and the committee for that identifies charity causes and ways our employees can participate in giving back if they so choose.

When World Emblem converted its manufacturing capabilities to personal protection equipment, a commitment was made to donate a portion of the proceeds to The CDC Coronavirus Response Fund. This money was used for fast-emerging needs related to the virus.

With the donation period ending on Labor Day, we contributed 23,590 dollars to the CDC in October 2020.

Hands On Deck has done all kinds of projects in addition to donating money. They’ve done work for gardens, painted houses and helped homeless shelters in Atlanta. We did a car washing fundraiser for stray dogs. So we do a whole bunch of different things.

What would you advise to a business leader who initially went through years of successive growth, but has now reached a standstill. From your experience do you have any general advice about how to boost growth and “restart their engines”?

Every business goes through ruts. In one instance, we had a revenue issue. The way we pulled ourselves out was to find another service. So we asked ourselves the question: What are we best at in the world? A very simple question, but important to make your pivot.

And the conclusion was we are the best at quick manufacturing/fast turnaround at high volumes.

Over many discussions, this morphed into developing a third-party logistics business, but others might call it fulfillment. It works like this: A customer will give us a container of garments from their manufacturers, or we manufacture and stock the blanks. We inventory the apparel or goods on their behalf. They order from us, and we pull their goods from consigned inventory, decorate them and ship orders to their customers.

Generating new business, increasing your profits, or at least maintaining your financial stability can be challenging during good times, even more so during turbulent times. Can you share some of the strategies you use to keep forging ahead and not lose growth traction during a difficult economy?

The main strategy was pivoting quickly to shift our manufacturing to the most-needed products at the time, which was personal protection gear. We saw an opportunity, and we struck it very early and very quickly. When I say quick, it was like within two days.

We made a significant investment to do that. In order to decorate the masks, we bought every digital inkjet printer of the brand we use in the entire country of Mexico. That put us in the position to immediately supply face masks to the world at a time when they were in desperately short supply.

That move was in keeping with our vision and company mission to have a diversified product and customer base. If you are relying on only three or four products in one market and that crashes, it gives you little space to adjust.

We had these same planning discussions year after year, and we forecasted for years ahead. If you are suddenly hit by a bad economy, it’s too late. But for us, diversifying our products and customers permeates throughout our entire company incessantly.

Buying up all of those printers may have seemed risky, because at some point, face masks will no longer be selling, but we knew that when the personal protection niche goes south, we could use those printers for other areas of our business. So they didn’t pigeonhole us into only one product.

We were careful to make sure everything we bought; we would be able to reuse when the market shifted back to our core.

In your experience, which aspect of running a company tends to be most underestimated? Can you explain or give an example?

It depends on your market, but in general I think it’s technology. This is going to be even true more in the future than it is now. If you’re not willing to make the investment in technology, then you need to shut your business down.

And whatever amount you think is “right” to invest, plan on spending double, because the truth is it needs to be the right amount. You could spend 10 million dollars a year, and it might not be right.

I get into discussions with people about why they are not making an investment in technology. They are thinking of buying a personal toy vs. investing in their infrastructure. I believe that’s huge, and I think that’s where people are going to win in the next five years.

You have to make sure you’re doing it in a smart way. For sure, if you hire the wrong people or don’t spend enough, it can be traumatizing.

As you know, “conversion” means to convert a visit into a sale. In your experience what are the best strategies a business should use to increase conversion rates?

Limit people’s options and respond quickly. How quickly do you reply to a lead and convert it into a sale? People’s attention spans are short.

The other strategy is to build relationships. We handle most of our transactions on the internet, but a lot of our sales process and development is done over the phone and face to face. We’ll develop a relationship with somebody that will take three or four years. Then, once trust is developed, and customers turn into clients, they’ll interact with us through our online platform.

Of course, the main way to increase conversion rates is to create a trusted and beloved brand. Can you share a few ways that a business can earn a reputation as a trusted and beloved brand?

Do what you say you are going to do. And for us, it’s to be predictably consistent about it.

Great customer service and great customer experience are essential to build a beloved brand and essential to be successful in general. In your experience what are a few of the most important things a business leader should know in order to create a Wow! Customer Experience?

It’s mostly simple things like answer the phone fast, reply to emails, and reply to people’s problems quickly.

Companies like Amazon have really set a benchmark for the rest of us. We’re trying to develop a self-serve environment. We’re fast at what we do. The ongoing challenge is that we customize everything. So when there’s a big spike in orders, we could run behind, so we have to have additional capacity to support spikes.

The other habit to establish is to over communicate when things are wrong. Err on the side of overcommunication vs. under. Repeat your message over and over.

What are your thoughts about how a company should be engaged on Social Media? For example, the advisory firm EisnerAmper conducted 6 yearly surveys of United States corporate boards, and directors reported that one of their most pressing concerns was reputational risk as a result of social media. Do you share this concern? We’d love to hear your thoughts about this.

We’re not very good at this. There’s no question we need to be posting more. We need to be a little more vulnerable and share what we are doing.

We got caught off guard after COVID because our company mainly focuses on business to business. But with the face masks, we were selling directly to the consumer as well. We were not prepared for all the consumer comments on our social media pages. It was a nonstop barrage, and the posts were brutal.

So, the lesson learned was if you’re going to interact socially online, you need to make sure you have a solid plan. You’re either on it or you’re not. We never put anyone behind it, but we are now. We are hiring a social media manager and that’s part of our whole marketing rebuild.

What are the most common mistakes you have seen CEOs & founders make when they start a business? What can be done to avoid those errors?

The simple answer is that too many times CEOs work on the urgent at the expense of the important.

President Eisenhower said it best. “What is important is seldom urgent, and what is urgent is seldom important. Look up the four-square method to prioritizing your work.”

Thank you for all of that. We are nearly done. You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂

We need to develop a quality and social responsibility team. We have the bits and pieces of this throughout the company; however, I’ love to engage a full-time resource to manager to head up the project.

As far as outside the business, the political divide is incredible in the United States, and it is going to take years to heal. Regardless of the election results, we cannot have another four years of what has gone before. It’s my hope we will end up in a better place.

How can our readers further follow you online?

Website: www.worldemblem.com

Facebook: World Emblem

Instagram: Worldemblemintl

LinkedIn: World Emblem

Youtube: World Emblem