Leading A Family-Owned Business With Courage: Part II Of Our Conversation With Joe Poehling
In the continuation of our conversation with Joe Poehling, Chairman and CEO of First Supply, LLC., we ask this Leader With Courage what it takes to navigate the potentially treacherous waters of doing business with family. Joe is well versed in this territory as the 4th generation leader of First Supply, a regional wholesale distributor of plumbing, heating, cooling, municipal, waterworks, builder and industrial supplies.
Value Drivers: Joe, practically every CEO I spoke with for my “Leaders With Courage” book struggled with sticking with an underperformer too long. I’d have to believe this is immensely difficult when it involves a family member, correct?
Joe Poehling: Yes, I’ve been guilty of occasionally sticking with underachievers for too long but again, that’s where I’m thankful to have a strong Board of Directors. It’s good to have people near you that you can trust to tell you, “Look, you have to make a change.” It’s human nature to give people the benefit of the doubt and hope they come around. However, once they’ve underperformed a few times, you really should think about making a change. Everybody makes mistakes now and then. It’s more when they show a pattern of consistent underperformance, you likely have people in the wrong seats on the bus and a change is necessary. But on a positive note, sometimes moving them to a different seat helps them take off like never before.
For many a CEO, it can be tempting to stick with the status quo for too long and become blind to innovation. How have you overcome that challenge in a family business where things have been done a certain way for decades?
As our CEO, I really view it as my job to understand the latest changes happening so we can not only know where the industry is going but we can be ready for it. That’s why in addition to my role at First Supply, I’ve been President of the American Supply Association, which is the national association for wholesale distributors in our business. That enabled me to visit with other people in our industry all over the country. No matter how big or small their companies were, I could always find something they did that I could apply back to our environment here at First Supply.
In a way, we have no choice but to be progressive because that’s our reputation. We opened the first consumer-facing, independently-owned plumbing company in the country five years ago. That was very different approach for a plumbing store to take. Now they’re starting to take off strongly. We also have a strong online arm. Whether an initiative has been successful or not, we’ve learned powerful lessons from every one of them.
How do you align the company around your vision while maintaining engagement of the family members in the business?
What we’ve learned is that we need regular, consistent communication among all family members who are stakeholders in the business, whether they will be eventual owners or employees. That’s a huge element of being a CEO that every leader needs to remember in a situation like this. Even after you think you’ve communicated everything you possibly could and so many times to the point of where you’re tired of saying it…you have to communicate it again. It can never be enough communication.
To this end, we’re sitting down with 5th generation family members one-on-one to discover how they’d like to be communicated to and what their long-range goals for the company are. Once we have all of that data, we can build better alignment and if necessary, bring the parties together to be on the same page as far as direction.
New executives have a tendency to overpromise gigantic results and as a result, they don’t always deliver. What’s your experience been with that?
I’m admittedly an overly optimistic person and I should probably be more skeptical than I am. Still, as a leader, you have to let your people make a certain amount of mistakes so they can grow as well. When they go down a path, give them the coaching to think about all angles as long as you know it’s not going to be a fatalistic error. I do allow some mistakes in that regard. If something is 5-6% of your business, you may have some flexibility.
What else can you recommend to the newly minted CEO to increase their chances for long-term success?
We spoke about communication among family members but this applies to communication to every level of the company. From the entry-level employees to your superstars, you can never talk to your people enough to acquire general knowledge and to acknowledge their efforts too.
Remember to build yourself a deep enough bench of talent to prepare for growth – we’re talking about a bench you’ll need three or four years from now, not just the one that helps you succeed today.
Do you have what it takes to be a Leader With Courage like Joe Poehling? Have you struggled with how to approach performance issues among family members in your business? Take the first step with our free Leadership Self Assessment from Value Drivers, an in-depth look at how four attributes can shape your success as a leader. Upon receiving your detailed report, let’s talk about how you can bridge the gaps where needed and help your family business thrive. Call Value Drivers at 312.827.2643.