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Paul Darley, President & CEO, W.S. Darley & Co. and Leader With Courage -- How He's Building His Family's 109 Year-Old Business (Part I)

 

As the head of a 109-year-old company, Paul Darley strives to build upon the

proud heritage of W.S. Darley & Co. (now four generations of Darleys) by manu-

facturing a superior line of firefighting, emergency and special operations equipment.

 

Darley recently took some time for a Leading With Courage℠ conversation with us that highlights how his company has sustained a culture of success for over a century while forging strong relationships with firefighting organizations around the world.

 

Leading With Courage℠ Academy:

Paul, you’re in the process of transferring or transitioning the business to the next generation of your family. To help us learn about that, what have you done that you can share with others that you’ve found successful?

 

Paul Darley:  We’re on-boarding the next generation now – the fourth generation – I often reflect back on the time when I went through my own transition to became a fairly young President. It was 1997 at the time and I remember seeing the role as a daunting challenge. I really had four main thoughts in my mind.

 

First, I was trying to earn the respect of my co-workers, those in the industry and suppliers. I noticed at the time it seemed like there were a lot of people inherently rooting against me. Like they’re waiting for you to fail.

 

Second, I wanted to make sure that I stayed humble.

 

Third, I focused in on the key areas of employee engagement, cash flow and customer satisfaction. These concepts came from my studying Jack Welch, being the CEO guru that he was and have become our hallmarks at Darley.

 

My last and final thought, especially where I was at the time taking over the company was: Don’t screw this up! We had a lot of people within the company, a long history, much success and a great deal of inertia. I needed to help us get past that inertia, which I’m proud to say we have over the past 20 years.

 

However, in the last 10-12 years, we’ve really reinvented our business because of this new generation coming on now.

 

Had you worked in the family business for your whole career?

 

I did. I started off literally coming to the office with my Dad when I was probably eight or nine years old. I’d come in on Saturdays and then work there all through any spring, Christmas and summer breaks.

 

I was working in the shop, working in our office, even making collection calls when I was 11 and 12 years old! Can you imagine getting a call like that from a little kid? The values and sense of the family business was very much instilled in me early on.

 

Boy, you must have been the envy though of your friends. A kid working in a fire truck company?

 

It was a pretty cool business. We would have field trips to our plant from grade schools and friends would like to come and check it out.

 

Do you have brothers or sisters that are in the business?

 

Yes. Right now, the business is owned primarily by my generation, which is the third generation. There are 15 of us, 11 of whom have worked in the business at one time or another. As we reflect back on it, our dinner conversations were about the business and many of our family vacations were centered around trade shows.

 

I came into the business right after college. Today, we require the next generation to work outside for three to five years. We follow a lot of best practices in terms of our family participation plan: They are paid market rate, held to a higher standard, expected to work outside the family business first and then apply to work at the company. There is no obligation for them to come and join us. There’s also no obligation for us to hire them.

 

You probably know Craig Duchossois (CEO of The Duchossois Group) – we found his approach during our Leading With Courage℠ conversation with him to be very similar as far as bringing in the next generation and requiring them to work outside the business.

 

Yes, we have very detailed guidelines and rules like that. You have to document and codify all that to minimize family disputes, even though you’re bound to have a few. In fact, my daughter Audrey and I have given talks titled Family Business Dynamics and Pitfalls at Northwestern and the University of Dublin.

 

Well, you have gotten to 109 years and several generations of ownership for a reason.

 

True – and there are a lot of things against you, so you’ve really got to make sure that you’re taking those best practices and learning from other family businesses out there. When you adopt the best practices that seem to work into your business and apply them, you increase your chances of survival.

 

That segues into another question, which is, as you were developing your leadership skills and style, what were some of those defining moments? What did the company do to help you develop? You were probably in YPO (Young Presidents’ Organization). Was and has that been beneficial?

 

YPO was huge for me. It had a profound effect to have mentors and I should say other CEOs who mentor each other in a very non-judgmental, confidential manner.

 

It was also important when I went back and got my MBA at the executive program at Northwestern at Kellogg. That was a big moment for me that really gave me the confidence I needed and the knowledge to succeed. I got the best tools or at least I got all these things in my toolbox that I’m aware of that I can use. That was really an eye opener.

 

I’ve also been blessed with some incredible mentors in my life who have really helped to guide me. Those three things in particular were influential, with the fourth being our Board of Directors.

 

You’ve got outside board members?

 

Awesome outside board members, I would say. A Harvard business professor, an admiral from the Navy and Sam Skinner, who was former chief of staff for President Bush 41. Just to name a few. It’s an incredible board and incredible advisory board as well for our defense area, which is made up of command Sergeant Majors and Generals. All of these people are looking to help our company as we go through these paths and I’m truly humbled by it.

 

In fact, we offer every individual on our advisory board a minor stipend but we’ll also offer to double their stipend and give it to the charity of their choice. I can tell you that every single one of these people selects the option to put it to the charity of their choice. It’s amazing.

 

Let’s move over the nine behaviors that we’ve found can de-rail the progress of a leader, such as failing to align with the culture or coming in with the answer. You’ve probably encountered some of these or all of these, correct?

 

Definitely. When I came aboard the company, my Dad did a phenomenal job running the business for 50 years. I was able to take it on, debt-free and still be a debt-free business. A lot of successful, established family businesses are that way and I think that’s one of our reasons for our success – a very conservative approach to finances, business and strategy. Yet at the same time, you’re taking calculated risks.

 

One of the things I will say he didn’t do a lot of was communicate with our employees. I’m different in that way. Every 90 days, I make sure that I’m in front of all our employees with a company address in addition to a monthly video address that they get. There’s a lot of regular communications via email and other methods.

 

When I took over, I wouldn’t say we had very organized or process-driven strategic planning. We didn’t have succession planning. We didn’t have a formal set of core values and a laid out vision statement, mission statement and strategic direction.

 

These days, all of those things are on the back of a laminated card that fits in any employee’s pocket. So everybody knows exactly where we're headed as a business.

 

What’s the single largest tool or step you’ve made to impact your employees?

 

Without question, it’s the involvement of all of them in the process of developing our core values. We continue to do that. Every five years, we evaluate and reset our strategic direction. We involve all of our employees who want to participate. Actually, we just started the second year of our five-year plan. We had over 50 employees raise their hand and say, “I want to be involved in this strategic planning process.”

 

I find people support what they help to create. So no matter who we bring into the process, whether it’s our factory workers or the janitor, they’re all on board with it. They help to propel the idea that nobody moves our company forward alone.

 

What are a couple of those primary core values?

 

Integrity and passionate customer focus – in that order too. We recently had a case where passionate customer focus was put above integrity. We could quickly point to this and say these are hierarchical, prioritized core values. I realize you’re trying to take care of this customer, but if you did it at the expense of our company’s integrity, that can’t be accepted.

 

When you're faced with major decisions, whether they are HR decisions or a “do we go and buy this new company” decision, if you can look down at your laminated card to view those core values or our strategic direction, usually the answer is right there. That makes the decision-making process very easy.

 

From there, it’s about making sure that’s constantly communicated to and viewed by our people.

 

How do you ensure that your people stay aligned with your vision, your values and what you’re doing?

 

Communication plays a big part. All of the company addresses are sent in advance. With employees on five continents now, they all get a copy of the video address as well as paper copies.

 

While there is a formal five-year strategic plan and a business plan, each division has their own individual plan that is aligned with that company plan. It’s about constantly feeding and having them drink the Kool-Aid to understand exactly what your message is.

That’s being true to yourself and it’s authentic leadership. They get it and they also see we vet people out of here very quickly. Outside of retirements, we have an employee turnover rate of less than 2% after a six month period. We can know really quickly whether or not somebody is going be a Darley team member.

 

Another one of the nine behaviors to de-railing a leader we’ve seen among executives is: Don’t stick with under-performers too long. It’s very hard for them to cut the ties this to an under-performer or someone that isn’t following the values.

 

That’s interesting because I first became President of the company, my message was: We have a lot of under-performers in here!

 

My message to our team during my company addresses was: If you don’t like it here, get the hell out. If you’re unhappy, life is too short. Don’t do it. We had a lot of people leave.

 

In fact, we even sustained a period of time where over 100  employees in our plant in Wisconsin walked out on strike. We brought back less than half of them, but it was a challenge at the time. Today, we employ engagement surveys in which we get the highest rating - a B+ rating from our employees, including those in the union environment, who give us a B+ overall.

 

In 2016, we received the highest scores ever from our employees as well as from our customers: A+.

 

That’s great. We do client loyalty assessments at Leading With Courage Academy and encourage companies to do employee engagements. Still, it’s a challenge for them have the courage to ask their clients and internal folks, “What do you think?”

 

That’s the easy part, actually. The courage comes from saying “OK, here is what we're going to do or here is what we’re not going to do,” because after all these meetings and surveys they complete, the managers sit down with the 15 different groups they support and address every single question – every one of which comes in anonymously.

 

If we can’t take action on a question, we let our people know exactly why we can’t take action. That’s really the hard part. We also do 360 reviews. Frankly, I’ve seen some managers who don’t take suggestions for improvement very well. But I’m one of those who loves it because I actually am constantly looking for ways to improve and one of the best ways you can do that is from a 360 survey.

 

 

In the continuation of our conversation with Paul Darley, we’ll talk further about the challenges of transitioning from one generation to the next, including protecting company values, preserving a mindset for innovation and building a culture that consistently plays to the strengths of your people.

 

By the way, do you find yourself struggling with some of these issue in your own environment as a leader? How about some other difficulties you’re having in helping your new and emerging leaders thrive?  In those cases, we needed to talk about a Leading With Courage℠ Academy workshop yesterday.  

 

In less than two days, you’ll have the structure you need to help the next generation of potential leadership capitalize on the opportunities before them. Could that help your business last for over 100 years like Paul Darley’s? It sure couldn’t hurt.  

 

Call us at 312.827.2643, explore our Road Map, or learn about four of the tangible take aways from our Workshops by viewing our newest infographic.

 

 

 

 

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