INDUSTRY INSIGHTS | SPRING 2010 EFFECTGrowing a Family Business From the Garage Up
by Chris ShimekI was lucky enough to be raised in a small, entrepreneurial family that began a manufacturing and distribution company in our basement garage. The year was 1975, and I was 10 years old when my dad and his three brothers started what would become Heat-N-Glo, an entity that built fireplace units, and grew to approximately $200 million in annual sales over the course of 21 years. My father Ron was the inventor and chief technologist. He did everything from building prototypes to fixing the company truck which was also our ride to baseball practice. In 1996, the business was sold to a group that became Hearth & Home Technologies, which developed into a $610 million operating company.
The Shimek brothers pictured from left to right: Gerry, Steve, Dan, and Ron
Colleagues and associates often ask me what it was like growing up in that environment and how my dad and his brothers succeeded. I learned many lessons from them, and I still draw on them today.
Build the right culture
I remember my father telling me a story about their first shipment of fireplaces. The units were scheduled to leave on a Monday for Denver. Ron and his brothers were going through the finishing phases, and the units were lying in the backyard sun, to help dry the paint. Unfortunately, one of my uncles ran over two of the pieces with his car. The hoods were dented and scratched but not beyond repair. Together the four of them pounded out the dents, sanded the scratches, and re-sprayed everything in time to still meet the delivery deadline.
That can-do spirit became part of their culture and as the company matured, the guys reinforced this message by rewarding hard work. For example, they increased the opportunities for those that took initiative and calculated risk. And they recognized these efforts in the form of a public pat on the back or by taking people to lunch and thanking them for a job well done.
People were also rewarded for trying to do the right thing even when they discovered those efforts weren’t working. This often meant saving failed prototypes and displaying them on the wall, which also helped everyone visually learn what didn’t work or how not to do things. Taking these risks became an institutional norm and evolved into their motto: “Fail fast, learn from it, and move on.” The culture gave people the confidence to take some risk, and that confidence helped individuals grow.
Help people grow by giving feedback
While people blossom from positive feedback, they also develop from constructive feedback. However, if you are upset with someone, I would not recommend throwing a partially completed hearth across the garage floor toward your brother, as I remember one of my uncles doing in frustration very early on.
By working on the shop floor, the brothers had direct contact with their employees, giving them the opportunity to provide coaching and development in the moment. This management style gave them firsthand knowledge of who was ready for the next assignment or challenge. It also helped them see the strengths and weaknesses in the organization overall so they could identify future leaders.
People were also rewarded for trying to do the right thing even when they discovered those efforts weren’t working.
Plan for ownership succession
To be proactive about the future transfer or sale of their business, the brothers met regularly. The discussions took place in the boardroom, on the golf course, in the fishing boat, and on occasion over a beer or two at the local sports bar. They relied on each other to provide “checks and balances” in the succession planning process.
In these conversations, my dad would ask direct questions like, “Who can be our quality inspector? Who can manage the welding area? Who can run the shipping department, and who can develop the jigs and fixtures to make products faster and more consistently?” They would challenge each other by asking why they felt a person was ready and how much support the individual would need to assume greater responsibility. Most importantly, they pinpointed who would act as a player-coach for the employee to lean on and to ensure individual and business success.
Through these efforts, general managers were born and groomed to eventually run five world-class manufacturing plants—two of which were recognized with Shingo Prize awards. In addition, Heat-N-Glo built a national distribution and service network that generated material turns of 40 plus times a year. At one point, the plants reduced lead times from 10–12 weeks to a five-day cycle in which products were ordered on a Monday and installed on Friday anywhere in the country.
The same cultural principles that encouraged hard work, risk taking, open feedback, and succession planning could help any entity go from a checkbook business or garage start-up into a scalable world-class organization that is process driven and delivers consistent, predictable results. Knowing and growing your team and implementing a structured farm system that gives people opportunities and support will develop players and accelerate growth. Just try not to drive over your products. But if you do, take my father’s advice: don’t dwell on it and get back to work.