Prioritize Character in Your Hiring Process and Protect Your Culture
Running a business in Alaska’s travel industry is a unique challenge. Here at Alaska Riverways we operate tours on traditional sternwheeler riverboats and offer guests an experience that allows them to discover the rich history of travel, trade, and discovery in Fairbanks and the surrounding area. It’s a highly seasonal business; we flex from 15-20 full time employees year-round up to over 200 for the summer season. Operating boats in Alaska and Canada has been my family’s way of life for over 125 years and five generations and that experience and history have shaped Alaska Riverway’s identity since 1950. Despite the specificity of our operation, we still face many of the same challenges that most businesses do. Maintaining culture is one that, as an Evergreen® business, is of the utmost importance, but also one that can be particularly challenging with the ebb and flow of a seasonal workforce.
In the years before 2020, when I was a member of the executive team and then company president starting in 2019, we began addressing the question of culture. Since we bring in so many new employees year after year, we must pay extra attention to this. We have been lucky in that, over time, we have had a very high return rate for our summer employees – 60%-70% – and our culture was strong and positive. But we noticed that every year, despite our careful hiring process, we nevertheless had a certain number of employees who ended up not being a match. Most of them didn’t make it through a full season. Although the number wasn’t high, we wondered if we could do better.
The positions we hire for in the summer include entry level hospitality jobs like retail associates, reservationists, tour guides, food servers, dishwashers, kitchen assistants, and deckhands. Our workforce tended to be quite young; most averaged in age between 18-23 and were college students or college-aged students. Because we are so grounded in the culture of Alaska (and because housing is so challenging in the Fairbanks area) we sought to hire primarily from our own community, or at least from Alaska. Historically, our interviews were fairly standard, and we looked at things like work and life experience and education as a big part of our evaluation of each candidate.
When we decided to review our hiring process, we started at the beginning and asked ourselves, what makes a good Alaska Riverways employee? Conversely, what kind of employee doesn’t fit us? It became clear that it mostly came down to culture; people who were friendly, authentic, and engaging were a great match, and those who weren’t, were not. As a result, we decided that we would re-work the interview process to focus exclusively on character, rather than experience. In answer to the question, what makes a good Alaska Riverways employee, we narrowed it down to four traits: nice, outgoing, optimistic, and enthusiastic.
Our new hiring plan was different, but it was fun! We created a long list of questions that got at those four characteristics – questions that would allow us to understand who the candidates were as people and how they saw the world. We asked, for example, “How would you explain the color yellow to someone who is blind?” This was aimed at gauging the empathy of a candidate and finding out if they were nice. We asked, “Say you have a wonderful time at a party. Is this because everyone was friendly or because you were friendly?” This is intended to gauge how outgoing a candidate is and to what extent they take responsibility for their own happiness. A lot of the questions may sound silly, but they helped us measure each candidate against the four traits we had identified as core to our culture. We even did some group interviews for the second round where multiple candidates came in together and collaborated on a task to see how well they worked together in a group.
Finally, we instituted an improved post-season analysis, to see how well we had done in hiring the right people for the jobs. And if an employee scored high initially, but didn’t perform as expected on the job, could we learn something from that experience? After a couple years of iteration and calibration, we were starting to notice that fewer people were leaving, and it seemed to be working. Then covid hit.
During the first year of covid, we shut down completely. We had to withdraw our offers to the people we had hired for the summer, and had to furlough most of our full-time staff. We kept just a few people to keep the lights on and we hunkered down. The following year, we were only able to open on an extremely limited basis, so we hired very few people in comparison with our usual surge. Finally, moving into the 2022 season, we were ready to scale back up again, and we realized we had a big problem; we had lost all of our culture keepers – all of the people who tended to return for two, three, or even five seasons. We had to start over, rebuilding our pipeline and with it, our culture.
An additional challenge we faced, which I expect many others have been facing for a few years now, is the shift in the talent pool. Demographics are such that the pool of qualified candidates for just about any role in any company in any industry is shrinking, often drastically. This means that the college kids suddenly have better paying and more professionally oriented opportunities. As a result, the candidates we had previously seen entering our pipeline weren’t applying for our jobs anymore. We solved this problem by hiring younger employees; now the majority of our summer staff are 14 to 17 year old high school students. Even without the work we had done pre-covid to reorient the hiring process toward character, it would no longer have made any sense to look at experience at all. These kids are often walking into their very first job! So, we leaned heavily into our revamped hiring process and continued to focus exclusively on character.
In so many ways, we are fortunate that we undertook this shift before we found ourselves with a problem to solve. It’s not perfect; recruiting and hiring this way is more time consuming than the way we used to do it. It would be easier to hire the first people who show up, especially given the number of jobs we look to fill each season, but it’s clear to us that it’s worth it to do it the hard way. And it seems to be working; we are starting to see our return rate move back up. We are at 55% from last year for this year, which is a huge improvement!
A real advantage we have in this work is that despite recent challenges, we have a strong history of generations of happy employees we can lean on. Working for Alaska Riverways for the summer is quite a memorable experience. We have alumni groups that stay in touch and get together for reunions. Our network is so strong that we are now seeing children of former employees applying to work with us.
However, just because something is good, doesn’t mean it can't be better. And it doesn’t mean it shouldn’t be protected, because time can erode just about anything if you don’t pay attention. For decades, we didn’t talk about culture much or work on it overtly because we were so nose to the ground just running the business and getting it all off the ground for each new season. We can’t grow and continuously improve if we don’t pay attention to such an important aspect of our business. It’s one of the things I have learned as a member of Tugboat Institute® – the power of learning from others. I’ve come to see that while it is harder to do it this way, it’s critical, especially if you are an Evergreen company for whom company culture is the bedrock of your People First environment.
How is this relevant to non-seasonal companies? Well, you could say it’s an extreme example of managing fast growth in any company. It’s more compressed and the candidates are from a specific group, but the bottom-line concerns are the same – how to identify the right people and increase your chances of success in maintaining culture, so you can stay strong, retain your people, and attract the best team members for the long term. In lots of businesses, skill and experience matter more than they do for us, but it is also true that not every candidate who is qualified from a skills perspective is a good fit for the company. Ultimately, the best strategy is to make sure your company is an absolutely great place to work. To be Evergreen. To make sure your employees are happy, so they return or stay, depending on your structure.
Managing Success: The Art of Persevering Through Upturns
Perseverance is one of the Evergreen 7Ps® principles and it’s critical for any Evergreen® company’s survival. Contrary to what many assume, however, it doesn’t just come into play when times get tough. In my time as President & CEO of MCG Explore Design, an Architecture and Interior Design firm based in Alaska, my team and I have gained insights into the importance of persevering through both downturns and upturns. MCG has weathered storms and soared to new heights in the more than 30 years I’ve been with the firm. Through the vagaries of the past few decades, there have been several pivotal moments that have driven home this important truth.
I joined MCG straight out of graduate school. I started drafting and moved into my current role 25 years ago. Like any company that intends to endure for the long term, at MCG, we expected that the road to success would not be a straight line, and right from the start, put some strategies in place to enable us to get through the downturns that were sure to come. Early on, for example, we adopted a ‘distributed leadership model’, in order to foster equal opportunity through independent agency, accountability, and shared success among the leadership team. This approach not only empowers individuals but also fosters super-collaboration and innovation, leading to exponential-paced growth for our company.
One specific outcome of this leadership structure has been reducing our vulnerability. Each of our seven leaders has complete freedom to pursue projects and clients on their own. The intended result has been to create a diversity of ‘lines of service,’ each on their own timeline and following their own cadence. As we move through any project, we “roll on” in the early stages and as we near completion, we “roll off.” The rolling off on the backside is where we are making the most profit, as bills come due and are paid and work closes out. This creates a sine wave of work, billings, and income with each 'line of service.’ By creating space for multiple lines of service, each driven by their own engine and following their own plan, we end up with multiple sine waves that move at a variety of frequencies; as we are rolling onto one project, we are rolling off another, and so on. Overlapping sine waves create a median between high and low waves that is a line that is nearly flat, indicating economic stability. This means the money is coming in more or less steadily and we avoid periods of drought where we could become vulnerable to unexpected costs or expenses.
This is just good hygiene; it is part of our plan to level ‘Booms’ and ‘Busts’ both locally and nationally. It helps us stay disciplined and gives us the courage to take risks when the right opportunities arise. It also reduces the feeling of having lots of ‘extra’ cash that might cause us to become careless if it all came in at once.
Another strategy we employ that helps us stay poised for opportunities and avoid unanticipated consequences is a deep look at long term management and success. Like any strong and successful company, our strategic planning includes looking out ten or even 15 years, and doing what we can to create lines of service that will start to prosper in that timeframe; this process of assessing the now and lensing into the future is essential for cultivating a generational company. We need to keep imagining what is coming next, knowing that what makes us competitive today will not suffice tomorrow. A current example of this is our initiative in construction management; we will open a construction management line of service later this year which will, over time, allow us to compete with the larger companies offering industry specific expertise with nuanced, clever stewardship. It will take time to grow it to maturity, but we see this as an area where demand will be high in the future, and we want to be ready to be super-collaborators when that time comes.
Our distributed-leadership model and our strategic planning are examples of safeguards against vulnerability in tough times, and they’ve been remarkably successful, to date. A final, important way we guard against complacency and vulnerability is our commitment to smart growth; it’s an essential tenet to success.
Both 2012 and 2017 were tough years for us. We didn’t have our lines of service where they needed to be, and we had to reduce overhead. I had to make some hard choices and let a few people go, including one person who had been with us for 20 years. It was awful. Eventually, we started to move back into better territory, won some great contracts, and were feeling like the rough patch was behind us. In the last four years, in fact, we have had our biggest years ever – one after the other.
This created pressure to ‘staff-up’; I started hearing, “We’re doing really well – maybe we should look at hiring a few people?” But our experience in 2012-2017 taught us that this is not good discipline. We learned that a nimble, light, and quick super-collaboration suits us best. We leverage each other to turn the corner and accelerate to success together. In response to the calls for renewed hiring, therefore, we had to tap the brakes on that and re-center the conversation. We spent some time thinking about the impact on our overhead. Were these new lines of service going to endure? If so, what did we need to do to support that? If we’re not sure yet, we wait.
Over-hiring during upturns is one of the biggest mistakes we made in the past. In general, when it comes to growing the team, we choose instead to stay nimble, light, and quick. We use consultancy to add resources where we need them and to do the heavy lifts we can’t manage. This is not only a strategy for avoiding layoffs in downturns; this also keeps us, the core of the company, involved in important areas like client relationships, business development, and strategic thinking.
More is not always better. Maintaining this discipline during upturns can be challenging, because when you are feeling flush, there always seem to be easier, faster ways to resolve tensions. Perseverance here is critical; if done right, it will help lessen the need for extreme perseverance during the next downturn!
The key lies in being cautious with success. It's about not resting on your laurels and leveraging opportunities wisely. Instead of succumbing to overconfidence during boom times, we aim for strategic, Paced Growth, we evaluate risks meticulously, and we stay prepared for unforeseen circumstances.
I’ll leave you with a metaphor I like to use that I believe is relevant. In my mind, everyone is either leaning in or leaning over, at all times. ‘Leaning in’ declares “I’m here to help you” but I have discovered that ‘Help’ and ‘Control’ are the same word – a shocking realization actually. When we are leaning in, we are not listening, collaborating, or really engaging with our interlocutor at all. Agency is lost because it is usurped by a leader’s efforts to ‘help.’ When we are ‘leaning over,’ on the other hand, we are looking in front of us to shine light on what needs to be done, all while preserving the agency of our interlocutor, who retains full rein of the outcome. Both people involved in the interaction have their eyes wide open, focused on the task at hand and on what lies ahead. Leaning over is like Inception.
Our energy is trained forward, and we are ready for anything. As a business leader, no matter how flush you feel or how impressive your success, the moment you start leaning in more than leaning over, you lose the perspective of agency and trust. This can be the first step toward the precipice where you are no longer ready for what lies ahead. Lean over at all times, and you will be ready to persevere through whatever lies ahead be it challenges or opportunities. We are all creatives and need to embrace ‘Our Design’.
Transitions Either Happen to You…or Because of You
Change is uncomfortable, especially when we did not seek it and when it sets us on paths we would never have chosen. How we choose to deal with the inevitable surprises life has in store for us is where we really find out who we are and what we are capable of. This is true in our everyday lives, as well as in our jobs and careers.
In this talk, Tugboat Institute® member Elizabeth Glasbrenner shares her story of dealing with change. Elizabeth co-founded her company, Smiley Technologies, with her brother after their father sold his own company and they perceived a window of opportunity. Over the following years, as she started her family and worked on the business, she encountered several twists of fate she had not planned for at all, both at home and at work. As she faced the huge changes that presented themselves, she realized she had a choice: to let change happen to her… or to choose to embrace it and make it work for her.
Watch and be inspired by this extraordinary story to choose to be an agent of change, rather than a victim of it.
A 77 Year-Old Startup
Building a multi-generational business is hard and it is rare. About 13% of U.S. family-owned businesses are passed down successfully to a third generation, while just 3% survive to a fourth generation (Businessweek.com, 2010). Information on successful transitions of fourth-generation family businesses is rare, making it evident that sustaining success across multiple generations is a formidable challenge.
However, there are exceptions. I am President of Capitol City Produce, a fourth-generation family business that has thrived for over seven decades since its founding in 1947, just two years after the end of World War II. How have we managed to beat the odds? In short, through relationships and innovation, and through consistently embodying the spirit of a startup despite our decades-long legacy.
The first and most critical ingredient to our success over the years has been our unwavering commitment to nurturing relationships—with both customers and suppliers. As an Evergreen® business, we have a People First orientation, and this extends beyond our team to all the people in our universe. We exist to serve them, and we are driven by a profound focus on understanding and engaging with them as often as possible. Importantly, this is not just a strategy; when we approach a customer and ask how we can improve their experience, it has to be about them, and it has to be genuine. We interact with our suppliers and customers all the time, traveling around to visit them in person to be sure we have a solid understanding of their experience, their pain points, and what we can do to improve our service to them.
Here is a concrete example of what this looks like. In Louisiana, in early Spring we boil a lot of seafood. It’s a big family and social thing here. It’s also a big deal for our retail supermarket customers to provide all the seasonings for boiling season. We created a new product for boiling season; we took all the produce seasonings that go into a boil, the garlic, onions, lemons, potatoes, etc., and we put it all in one bag and marketed it as a “boiling bag”. Some members of our team were talking to a supermarket customer who loved the idea, but remarked, “I love it, but I don’t know how I am going to display it to my customers.” Our team listened. In Louisiana they have these traditional Cajun boats called pirogues. We found a custom pirogue builder and engaged him to build a miniature, custom pirogue. We presented it to our customer and said it would be great for displaying the boiling bags to his customers. He was stunned. Like many of our customers, he was waiting for the part where we said what we wanted out of the interaction, but it never came. We just did it for him. His comment was simply “Wow, I can’t believe y’all did that”. This is what valuing relationships looks like to us.
With a diverse customer base spanning food service and retail supermarkets, comprising over 3,000 customers, listening and tending to our customers’ needs and wants is a big project, and it is driven by a singular strategy: envisioning the future through their eyes. We want to align with our customers as we build toward the future. What do they value most? What will they need from us? This is where our attention to relationships joins together with our attention to innovation.
In thinking about how to best serve our customers’ ever-evolving needs, we felt that we could adapt in tandem with them, in a harmonized way, if we truly were to understand their perspectives about the future of their business and their future challenges. We wanted information that was unique, deep, proprietary, and attained through trust that would foster a unique candor. To expand the population of perspectives, we reached out to a respected industry peer serving additional markets in Houston, Dallas, and Austin. We collaborated to create a “Customer Insights” dialog questionnaire that was used by both companies to hold discussions with each of our top customers. The “Why” was explained to customers like this; we want to better understand how exceptional supply partners should evolve over the upcoming three-year horizon. We explained that we wanted to understand their specific perspective, so that we could plan to evolve our business with keener insights.
Once we had collected insights from forward-thinking key customers across six major markets, the leadership from Sales, Operations, Finance, and the Executive leadership of both companies met in person to distill the key insights from each customer. The insights were validated through the multi-company and multi-markets approach. This initiative strengthened customer relationships, engaged key sales leadership in learning, developed foresight, changed viewpoints, and influenced the service culture of both companies. A specific insight that stuck was this; “You are an exceptional supply partner because you show that you care more than you should! I feel like when I am talking with your team, they are wearing my company’s shirt.” Three years later, the key insights are still on my office whiteboard.
Another pivotal moment came during a conversation with a leading sports bar and restaurant customer expanding nationally. We had great ideas for new technologies and were considering how we might deliver these technologies to them. We explained what we were thinking, and they replied, “Our future employees are going to want to have everything they need right on their phone. Don’t develop something new and proprietary – just engage with them on their phones.” This insight revolutionized our approach. We shifted our focus to not only developing cutting-edge solutions but also delivering them in a manner that resonated with our customers. One example of a change in path was to text “Where’s My Truck” delivery commitments to our customers vs. requiring a mobile app to be opened (download, login, password, etc.) to get the information.
All of this work and attention has a very simple focus: taking care of people. Our customers and suppliers have a choice. We need to give them a reason to choose to do business with us. We have a saying at CCP – the Wow Zone. It’s from a visual we use to onboard new team members titled “The Depth of Effort for Long-Term Customer Retention.” A certain percentage of our efforts should be expended in creating Wow Zone customer experiences where they are pleasantly surprised by an innovation, an idea, or a solution. That’s where a customer engages with us and the levels of attention and service they receive cause them to say, “Wow. You’ve got to be kidding. You’re willing to do that for me?”
Ultimately, I think a possible reason many multi-generational businesses fail is closely tied to the reason we are able to continue to operate like a start-up, even after 77 years. Companies that manage to be successful for more than one generation can be tempted to slide into ‘complacency mode,' where they sit back to enjoy the success they have achieved. That can be the first step toward the end.
By directing our focus not just on our business today but on what our business will look like in the coming years, we stay on our toes, we stay agile, and we stay energized. Our Evergreen grounding in relationships and focus on Pragmatic Innovation give us the tools to connect the past to the future, and to make our energy actionable. Through a combination of technological innovation and personalized service, we have not only retained existing customers but also expanded our market presence significantly. Furthermore, our ability to adapt and respond promptly to customer needs, as quickly as a one-minute response time for chats, has been a key differentiator. It distinguishes us from competitors and solidifies our reputation as a partner that is reliable, agile, and a quick adapter.
We know that the success of our business lies in the future, not the past, and not even the present. We have opted to continually embrace change, and thus, we stay young, we stay relevant, we remain curious, and we continue to believe we are a start-up.
The Secret Sauce: A Culture of Connection = A Thriving Organization
Tugboat Institute® member Kirk Aubry leads Savage, a transportation company based in Utah that moves and manages critical materials. In the years he has led the company, they have seen impressive growth. Rather than simply sit back and admire their success, Kirk asked himself, why? He spent dedicated time and effort exploring this question, and has reached a clear conclusion: connection.
In this Tugboat Institute talk, Kirk shares his belief that connection is, in his words, “The Secret Sauce” that has allowed for Savage’s success and growth. Connection amongst team members, with their customers, and with their community. This realization is, in many ways, a great confirmation of the Evergreen® model and mindset, because creating connection starts with communication, care, and a focus on People.
Watch and be inspired to examine and improve connection throughout your organization.
Redefining an Industry
Last week, our Tugboat Institute® members made the trip to Omaha, Nebraska, for Tugboat Institute @Supportworks to learn about this exemplary Evergreen® company, reconnect with value-aligned peers, and enjoy a taste of Omaha. Dave and Dan Thrasher, who are brothers, co-owners, and leaders of their second-generation family business, put together a remarkable program and experience for our group.
On Wednesday morning, Dan and Dave welcomed us all to their beautiful and impressive campus, where Supportworks, The Thrasher Group, Thrasher Partners, and their newest business, Hello Garage, are headquartered. We opened the first day with a fireside chat with Dan, Dave, and Tugboat Institute CEO Dave Whorton, during which they shared the story of their parents bootstrapping the business slowly, over three decades, before handing the reins to their sons. Dan and Dave dug in and grew it from a $4.5M business in 2004 to an over $400M revenue business this year. Although the business remained relatively small in the 29 years Greg and Nancy Thrasher ran it before their sons returned, that period was critical to its later growth and success. In those first three decades, Greg and Nancy moved their business to Omaha to serve a larger market, added foundation repair to their original basement waterproofing business, and learned how to be a dealer of another manufacturer’s products and later that same manufacturer’s distributor to other dealers. During this period, they built a local brand that was deeply trusted by their community based upon always doing the right thing by their customers and employees. From there, Dave and Dan shared how they founded Supportworks, scaled both it and the original Thrasher business, adopted M&A to respond to the entry of private equity into their space, and key lessons they learned in scaling the overall enterprise at over 20% annual compounded growth rate for the past two decades.
In the second talk of the morning, Dave Thrasher dove into the evolution of their business strategy, breaking it down decade by decade and highlighting critical milestones and decision points along the way. Amanda Harrington, President of Supportworks, took the stage next to share the story of the companies’ journey toward codifying, articulating, and integrating their Purpose, Redefine Our Industry, across the entire organization and in all strategy, planning, and business processes. Finally, Dave returned to the stage to end the day of talks with a deep dive into the catalysts for growth through acquisitions with their Evergreen M&A playbook.
Before we left the campus for the day, we were treated to a tour of their impressive shared headquarters with both Supportworks and Thrasher Group employees as our guides along the way. We could see the incredible attention paid to every detail, from the design of the office space to the layout of their warehouses. It was clear from the way their employees talked about their work that they are deeply dedicated to their Purpose, take pride in their work, company, and team, and enjoy and support each other.
On day two, Dan and Dave collaborated on a presentation about their recent experience launching a new vertical, Hello Garage. They were candid in sharing not only how they selected this vertical for expansion and their successes with this venture, but also the mistakes made along the way and the lessons learned. Next, Amanda Harrington returned to the stage to share how People First comes to life at all the Thrasher companies and shared the details of their essential people programs and processes. She offered numerous specific, actionable ideas that attendees could take away, tweak, and implement in their own businesses. The last formal presentation of the day was from Dan, who shared what it means to them to create and sustain a remarkable customer experience. He cautioned that CEOs should not delegate responsibility for making sure that it remains remarkable and that it’s a never-ending process of continuous improvement for the team. Anything less than fierce attention to this aspect of the business, Dan warns, creates significant risk to longevity.
Finally, as is our custom at our Tugboat Institute Exemplar visits, we finished the day with a Q&A with both Dan and Dave, moderated by Dave Whorton. The candor and transparency that had characterized the entire experience extended through this conversation, during which Dan and Dave addressed questions pertaining to their operations, as well as ownership succession, governance, family harmony, their working relationship, and the future of the company.
After each of our busy days, we gathered for celebration in some of Omaha’s most iconic spots, including, of course, a steakhouse on one night and the historic and breathtaking Durham Museum on another. Dan and Dave proudly shared their beautiful city with us, and our community reveled in the support, friendship, trust, shared values, and love that exemplify this extraordinary group of Evergreen leaders. Thank you, Dan and Dave, for a wonderful and powerful week of connection, inspiration, learning, and growth.
Culture is not Enough: Evergreens Need Strategy to Survive and Thrive
Jeff Patterson is the CEO and founder of Gaggle, an EdTech software company that exists to protect students in schools. As a company founder, he has fought hard to create and build Gaggle, and along with it an entire industry, and he has remained committed to the Evergreen® path throughout. However, as committed as he is to the Evergreen 7Ps® principles, he has had a nagging feeling for years that he needs more than a wonderful culture to survive for the long term.
In this Tugboat Institute® talk, Jeff shares his own journey toward creating a meaningful and effective strategy for Gaggle. After searching in vain for the “right” strategy, he embarked on his own learning journey, reading many books and talking with many leaders about the ingredients of an effective strategy. Here, he shares his learnings and explains why, in his eyes, culture is important, but without a strong strategy, it’s not enough.
Watch and be inspired to dig deeper in your efforts to create a strategy that is just right for your company.
The Power of Patience: Our Long-Term Talent Strategy
The years following the pandemic brought with them the tightest labor markets we’ve seen in decades. If you are paying attention to demographic data and the outlook for the coming decades, you know that this is not likely to abate soon. The quest for talent stands as a perpetual challenge; the pursuit of individuals who not only have the skills and experience we seek but who also bring fresh perspectives and untapped potential is a mission critical endeavor. At Force Factor, the global health company I founded 15 years ago, we have been tackling this challenge through an exciting and evolving initiative: robust internship programs and leadership development initiatives.
At Force Factor, we develop and sell nutritional supplements and formulas whose efficacy is founded in scientific research. However, we do not manufacture our own products. We are asset light, which has its advantages, but which also means that our people and the processes they help us create and maintain are, by far, our greatest asset. As an Evergreen® company with strong People First values, it is part of our strategic vision to build our company with our team. Our team is everything.
At 15 years old, Force Factor is still relatively young, but we have moved out of the beginning phases of company building. We have achieved a level of stability that allows me to lengthen my time horizons as I think and plan for the future. We compete against some giants, such as Nestle and Unilever, as well as a great many companies that have been acquired by private equity. In this competitive landscape, therefore, I am always asking myself, what is our greatest competitive advantage? Our greatest difference from most of our competition is our ability to think in long time horizons.
Because of our Evergreen orientation and because our people are paramount to our success, culture is critical. Paying attention to building culture is a long-term initiative. As a part of this, onboarding, training, and developing people is also something that takes time. There are advantages to hiring in people with deep experience in a specific area of leadership, and sometimes this is the right way to build out the team. But where possible, I find it is powerful and critical to building a strong culture to hire people early in their careers and invest in them, over time.
Like many companies, we have long had a summer internship program. As we considered strategy for team building and the future of our company, we have doubled down on this program, expanding its scope and objectives a great deal. Force Factor's internship ecosystem now includes four entry points tailored to various stages of academic and professional development.
At the core of this program is the summer internship program, providing college students with hands-on experience and exposure to the company's operations. This is our third year of scaling our internship program and it has grown significantly each of those three years. Last summer we had 11 interns, which was a jump from the year before, and we expect to see that number increase again this summer. We are a company of just under 50 employees, so this is quite significant. Our focus is hiring locally, because we figure these students had a college experience heavily impacted by covid and have spent quite a lot of the past few years online. We think the in-person experience is powerful for them, and it is easier to teach them the business when they are here with us. We are fortunate to be in Boston, which is home to a lot of great universities, so the pool we are drawing from is deep.
The next program we are piloting is called the Coop Program. The Coop program is something that has existed at Northeastern University for a long time and it is powerful and unique. Students at Northeastern are strongly encouraged – even required in some majors – to spend two to three semesters of their time in college doing a Coop, or an internship, for a company. The university has built an incredible network over the many years it has been doing this, and has partnerships with companies in Boston, across the US, and across the world. Students work full-time, are compensated, and receive college credit for their work. We’d been talking about participating in the program for a long time, and we finally jumped in. Our first three Coops started this winter. In a lot of ways their experience is similar to the summer interns, but it affords some advantages the summer positions do not. Coops are here for longer than the summer interns since they spend the whole semester with us. While the summer interns love being part of a large cohort, there is something powerful in the focus we can maintain on this much smaller group of Coops while they are here. We’re really excited about this and expect to see it develop in the future.
Beyond the internship and Coop programs, Force Factor also participates actively in recruiting recent college graduates. We do on-campus recruiting and hire for full-time positions. The students will graduate in May and start working with us in August through what we call our Leadership Development Program (LDP). For these hires, we have created a rotational program across six different functional groups, and all hires move through all six over the course of one year. They spend about two months in each one, and at the end of the first year, the have gained an education in the company that has both depth and breadth. At the end of that time, the hope is that there is strong Venn diagram overlap between a student and a department where they have really thrived and contributed. If this goes in both directions, we move that person permanently into that department. We are in the process of doing that now with the five hires from last year. We are refining it as we go, but basically, after completing the program, the new hire will come into their permanent department one level above where they would have if they had been just hired off the street straight into the job.
Finally, our fourth entry point is aimed at bringing in people who are a little less green. We are actively hiring people out of MBA programs for specific positions within the company as well. We have just hired two, one of whom has already started and one who will start at the end of the summer.
We have been paying attention to retention of the young people who come in through these various programs. The programs require a lot of time and investment from the current team and from the company. The idea is that many of them will come back and become full-time employees. We want to be careful not to become a school, where people come in, learn powerful lessons, and then say, “Thanks!” and head off to work somewhere else. We had this in mind as we designed the programs, and we work hard to give them an experience that will make the right ones want to come back. It’s early still, but it’s looking promising. The woman on our talent acquisition team, for example, who is working right now to hire the next class of interns, was our intern two years ago.
There are other tweaks and improvements we have made and will continue to make as we go forward, but we are getting better at this. The first hire is the hardest, and after that, as you take lessons from your experience, you learn and refine. For example, we hired a few people who, based on their resumes, looked like they were skilled in Excel, but they were not. We learned that it was important to control for specific skills that are important to us, so we have implemented a simple Excel test, and now we don’t have that problem anymore. Most importantly, as we gain experience and as a few intern cohorts pass through the program, it gains renown and popularity, which helps draw even better people the next time around.
While the immediate returns on hiring recent graduates may seem modest, and the cost and effort may not seem worth it to every company, the compounding effects over time are profound. By nurturing talent from the ground up, we not only instill our People First culture but also harness the potential for exponential growth. Moreover, with an emphasis on meritocracy and diversity, internship programs serve to inject fresh perspectives and innovative thinking into the organization. If you have an urgent problem and need someone with a specific skill to fix it, this is obviously not the best way to get there. But if you can operate with an Evergreen mindset and be patient, this could pay dividends over time. We are counting on it!
Hidden Champions: Success Lessons of the Most Secretive Global Market Leaders
When he was still researching and teaching at university in Germany, Professor Hermann Simon undertook to study the landscape of market leaders in exports around the world and in different industries, with the goal of identifying the characteristics of the companies that managed to find their way into that selective group. What he discovered surprised him; it was not the giants he expected who occupied the top spots. It was, instead, predominately middle market companies who remained relatively unknown who were the clear leaders. Many of them came from Germany.
In this Tugboat Institute® talk, Professor Simon shares key learnings from his work on his subsequent book, Hidden Champions: Lessons from 500 of the World's Best Unknown Companies. The Hidden Champions are different from Evergreen® companies, but they share some important and interesting characteristics. Professor Simon went a step beyond simply articulating his theory on Hidden Champions. Following publication of the book, he left the university and founded his own company, Simon-Kucher, which, following the steps he outlined in the book, he has grown into a Hidden Champion itself.
Watch this talk, consider the characteristics of the Hidden Champions, and see if any of them might help your company.
Passion Drives Industry-Changing Innovation
Even if you don’t own one, I imagine you are familiar with the KitchenAid mixer. It is a beautiful product: sleek, durable, made from highly recyclable materials, and built to last for a long, long time. I have had mine for about 35 years. Although I am CEO of ECRS, a company that specializes in retail automation for grocery store technology, such as point of sale, self-checkout, inventory, and supply chain, as well as the software that runs on a deli scale, one of our most important innovations in recent years was inspired by this product outside our industry – the KitchenAid mixer.
As an Evergreen® company, we are dedicated to Pragmatic Innovation and are always looking for opportunities to do what we do better. In this case, as is often true, innovation began with a seed of dissatisfaction, a spark that ignites a desire for change. I saw room for improvement, both in quality and sustainability, in the industry standard with which we had been working for years. Thus began the story of our AutoScale™ Max.
The most common point of sale products for grocery stores, whether they contain scales or not, are made from plastic. The standard labels have a backing to them because they must be adhesive, which means they produce a significant amount of waste. The standard scales we have used for ages, which we’ve typically bought from partners in China, are therefore able to hold a roll that will last maybe three days. They tend to run out when you are at your busiest, and it’s a pain to change them. For a long time, this was our reality; we bought the scales from China, loaded our software on them, and sold them to our customers. But I knew we could do better, and I found myself thinking about that KitchenAid mixer. I wanted something to match that in design, elegance, quality, and capacity.
As I started to imagine the product I wanted to build—one that would be the KitchenAid of scales—I knew a few things had to change from the norm. I wanted to build it to last, and it seemed that building it out of metal rather than plastic was the best bet. I also didn’t see why we couldn’t design something that could hold a bigger roll of labels. Not just a little bigger, but much bigger. Working with partners, we found a special label that didn’t require backing, so we were able to increase efficiency and reduce waste that way, but why couldn’t the roll in the scale be twice as big as the normal ones? Or bigger? I set the goal to develop something that could hold a roll of labels that was ten inches thick. That would represent an 11x increase in length and a very significant time savings for customers.
I was fixated on creating something excellent and I was willing to do whatever it took not just to build a product, but to revolutionize it. Design, functionality, and sustainability drove our team's quest, but our path was not without hurdles. Initially, we engaged a design firm whose work was terrible, and ultimately resulted in setbacks. The first prototype they created that could contain the ten-inch roll was much larger than competing scales, which was not the point at all. That phase of the project was frustrating and caused us to lose quite a bit of money. If I hadn’t been driven by such an intense passion to succeed, we might have given up. But we didn’t.
As we regrouped after the first failed design attempt, we happened to discover a local designer right here in my hometown of Boone, North Carolina. In terms of his experience and skills, he was younger with much less experience than our original design partner, but something stuck out to me: his passion. He seemed as excited as we were by the project, and thanks to our shared enthusiasm and expertise, we started to gain momentum.
One of the keys to our eventual success was the fact that our new design team had the brilliant idea to incorporate the Microsoft Surface Tablet into our new design. It is embedded into the scale and it’s extremely fast and powerful. Because of this integration, we tapped into Microsoft’s supply chain, and because they are making millions of these, the cost came down – something we had not necessarily expected. In the end, we managed to produce a gorgeous looking piece of equipment that is built like a KitchenAid mixer. It fits seamlessly into a deli, holds a ten-inch roll of labels, and is faster and more powerful than anything else out there—and built more cost-effectively by developing it with our own in-house team!
Once we innovated the machine itself, we were able to simply insert the software we had already developed into it. The software in the AutoScale Max is almost identical to the software we used in our other machines, meaning we hardly had to spend any money on the coding side of the innovation. Before the AutoScale Max, we mostly sold point of sale software, which is extremely similar to the scale software. Now, we can sell products for point of sale and scales. If a customer, for example, has ten point of sale lanes, we can sell them products for all ten and we can also sell them the ten scales they need. We just doubled our sales! That fact, combined with the lower cost of the new machine, has resulted in savings for our customers, increased sales, and thus increased revenue for ECRS to reinvest in more innovative solutions that continually serve our customers.
As an additional outcome of all this, this innovation has significantly reduced our dependence on China. This was not necessarily one of our initial goals, but because of increasing concerns over supply chain vulnerabilities and ethical considerations, this turned out to be an added bonus. Our relationship with our Chinese suppliers was not problematic, but it was primarily driven by concerns of cost, convenience, and efficiency above all else. With this innovation, we find that we can maximize all of these, and at the same time, bring production right back here to home.
What is the lesson here? What drove this innovation process? First, when I look back at the road we travelled from the idea to the finished product, I realize that it would not have happened without my own almost obsessive passion for it. And the fact that our second designer shared that same passion was key. The rest, honestly, was just great problem solving. The integration of the Microsoft Tablet was fortuitous, but that is just another example of hitting a roadblock and looking around for a creative way to overcome it. The answers often lie in unexpected places and are not always as hard as you think they’ll be. It’s funny how passion can drive a team to make hard things easy.
