By Charles Loewen.
I often say that I won the ovarian lottery. Many of us did. We were born into prosperous times, in a stable and well-educated nation, to good parents, in healthy communities.
Some individuals spend years, or decades, navigating the labyrinth of educational opportunities and career pathways — many even retire before discovering their true passion.
I, on the other hand, was born into mine. The great-grandson of a sawmill operator, our family business has always been rooted in manufacturing. The products have changed, absolutely. But after 110 years, to see the Loewen name — now synonymous with premium windows and doors — still woven into the fabric of Steinbach, Manitoba, is a testament to four generations of entrepreneurship, innovation, and pure, old-fashioned hard work.
Our family members, however, could not have done it on their own, and neither could have I. Whether you’re fabricating windows or washing machines, doors or duck decoys, all manufacturers share one, universal input that has a disproportionate bearing on the success of any venture: Human capital. People.
Sometimes that input takes the shape of an employee; other times, it may be a confidante on the other side of a computer screen offering you advice.
Manufacturing is people. And if there’s one lesson I’ve learned after decades as a CEO and investor, it’s that surrounding yourself with the best people you can afford is often the sharpened edge between business growth and bankruptcy.
As the saying goes: As hire As and Bs hire Cs. You almost invariably can tell the quality of businesspersons by the quality of people they hire. So here are seven of the most important As that every manufacturing leader needs to have in his or her corner:
Accountants should proactively advise you how to both save and make money. Having that expert understanding of finances and taxation allows you to spend less time working in your business, and more time working on it.
If there’s one place not to be thrifty, it’s here. When your books are in chaos, everything else falls apart.
A good lawyer should not pride himself or herself at being skilful in court — a good lawyer is there to keep you out of court.
It’s paramount that you as an executive trust and are open with your lawyer. They cannot help you effectively unless they are fully informed, so spend the time and money to build a trusting relationship, and arm them with the information they need to do their job.
3. Dealers (or distributors)
One of the best business decisions I made was to chase the top-tier dealers. That comes at a price: Territory exclusivity (which you shouldn’t be afraid to give), higher margins, and lots and lots of time.
In fact, if you have a great dealer, you may find yourself saying no regularly — because they’re that demanding. And it’s okay to be demanding of them, too. It is, after all, a partnership. But be sure to never become reliant on any one dealer to a point where you cannot afford to lose them, or fire them, if necessary.
I’ve seen many businesses develop an adversarial relationship with their lenders. And, more times than not, it’s because the business does not understand the limitations of the bank, or banker, on the opposite end. If you think your industry is overregulated, try theirs.
Make sure your relationship is, instead, built on collaboration. Use your banker as a source of insight — they see more types and scales of businesses than so-called ‘expert’ consultants (and how much do you pay them?). They are also willing to share those experiences, and their advice, for free!
Suppliers are as much a part of your business as your customers. Be sure your suppliers know how vital they are — they can be invaluable sources of competitive intelligence as well as product and process improvement.
When you’re a CEO, think of it as being in a capsule. You are frequently consumed by what’s going on within your walls, and you cannot always see the trajectory of where you’re heading.
That’s why I implore manufacturers to lean on a board for support, whether that’s a formal board of directors or, as often the case in smaller companies, a board of advisors. You’ll be surprised by the calibre of people willing to give you advice (just use their time wisely).
7. Nice, well-paid staff
Wal-Mart Founder Sam Walton was once famously asked during an interview how he determined what type of people to hire, and he replied simply: “I hire nice people.” I’ve found that nice is not sufficient in itself, but it is necessary. You can always train skill, yet you cannot train attitude. That’s not to suggest your staff should be smiling wallflowers, either. Hire key people with a little bit of edge as well — that’s how limits get pushed and businesses move forward.
Finally, when it comes to your staff, pay them well. Pay your people so well that, when you write the cheque, you feel like pulling it back. You should then feel just fine about expecting a lot. It is unfair to have high expectations without the compensation to go with it. Having that approach provides you the bandwidth to surround yourself with people who have been where you want to go.
Charles Loewen is the former CEO and current chairman of Loewen Windows, as well as an honoured member of the Manitoba Manufacturers’ Hall of Fame.