In this, the second part of our two-part Leading With Courage℠ conversation with
Paul Darley, the CEO of W.S. Darley & Co., we dive into how the 109-year-old manufacturer of firefighting and emergency equipment continues to bring aboard new generations successfully, while minimizing family friction along the way. We also examine why it’s so important for leaders who seek long-term credibility to communicate the bad news in a transparent fashion to the organization just as much as the good news.
Leading With Courage℠ Academy:
We’ve been talking a bit about 360 reviews and surveys in which the management within W.S. Darley will sit down with different groups and address a variety of questions given to them anonymously.
While some managers may be fearful to expose themselves to this process, you say that you welcome it, which is refreshing to hear. But surely you’ve encountered other executives who feel they’ve reached the summit of their careers and don’t want to hear anything that’s contrary to their set of beliefs.
Paul Darley: Yes, that can be a problem. You read a lot about that in family business succession books. For me, I’m always looking to improve. As our company’s CEO, I’m a humble servant and a steward of this business. Our generation is just here to cater to its needs and pass it to the next generation so that they can love, cherish and grow it just like we have.
Craig Duchossois (of The Duchossois Group) had a great quote like that when we talked to him – that the family is there to serve the business, the business isn’t there to serve the family.
We use that line all the time. Another one of our lines we’ll use is: A Stronger Family, A Stronger Business. At our family retreat this summer in Lake Geneva, we’ll have all kinds of team building and communication exercises.
That’s perfect and just what you want to hear, really, isn’t it?
Absolutely. It’s interesting, I’ve had this discussion with some CEOs who have privately-owned businesses who will ask, “So how much information do you really share with your employees?” I’ve come to see that a lot of these CEOs share everything when things are going poorly but when things are going well, they don’t share much.
Within our environment, I’m sharing exactly where we stand from my perspective relative to our market, to our business, to where we're on budget and more. I always try to motivate people but at the same time, I’ve got to tell it like it is. That’s part of being authentic.
It’s sharing the good news and the bad news alike.
Yes. Part of being an authentic leader is that you can‘t be up there saying something that’s untruthful or not really what you truly believe.
Did you ever run into the issue of bringing an outsider into the company but later learn they’re not respecting the culture? That’s got to be the golden rule – honor the culture you’re coming into.
Yes, and I think we cut bait on those pretty quickly. However, this isn’t to say that just because we have an incredibly strong culture that it isn’t going to change. Cultures evolve and change over time – that said, there had better be an alignment within our current culture and if there isn’t, well, this isn’t the place for you.
Have you noticed any challenges to the values of the culture as the next generation of the family comes in and you bring in Millennials? Do they see things a little differently and want to reshape it in a significant way?
Good question. I would say that they embrace most of our values. But, look, every generation criticizes the generation behind them, right? Soon enough, the Millennials will be criticizing Generation Z.
A lot is written about family entitlement issues and things of that nature in family businesses. We address those kinds of issues head on and early. The next generation also helps us address one of our core values – innovation, which is one of the hallmarks upon which we were founded.
I look at what our next generation is bringing now in terms of innovation such as a new the fire fighter website we launched called smartfirefighting.com. It’s really a platform website for new technology. When a younger generation comes in and really embraces things about our strong heritage and our culture, that’s a wonderful thing. And it’s OK when they gently challenge us in certain areas because when they do, it’s always with an eye toward improvement or our success in the future. All family members have the company’s best interest in mind, from their vantage point.
Another problem that we see executives, or really anyone has, is attempting to do too much. Either they are trying to do too many things themselves, are not comfortable with delegation or they have too many strategic imperatives. How have you figured out how to navigate through that?
When it comes to delegating, my Dad gave me some great advice probably a year into the business. He said, “Look, Paul, if you ever find yourself doing something that anybody else in the organization can be doing – particularly if they are being paid less or they can do just as well or perhaps better than you – then you shouldn’t be doing that task.”
I always ask: What can I be shedding? Take emails, for example. Like some people, I get 350 to 400 emails a day. I touch them once. I delete them, delegate them, respond to them or file them for a follow up. I don’t leave my office until I can see the bottom of my “in basket” every day. It’s those types of things that help you focus where the bigger more strategic areas are. Clean out the clutter quickly. That way, you're not getting into the email rat race all the time.
I’d love to say that I only look at it a couple of times a day. If I’m working on a project, I still find myself opening it every 90 minutes or so. I often find that someone has save me the time by responding on my behalf.
Another way we’ve found to save some time is to let your people know you won’t be responding to emails you are “copied” on. You treat these as informational and not as something requiring a response. This has the added benefit of reducing the number of politically-motivated or “CYA” messages you receive.
When you’re at the level you're at, everyone here looks up to you and knows who you are as the head of the company. However, they may be afraid to tell you the truth. What do you do to encourage them to come forward and not just tell you what you want to hear but want you need to hear?
We conduct an annual employee survey where our team tells it like it is. This includes 360 feedback in terms of what can we be doing better. We get great scores and have over a retention rate of over 95%. I also personally interview employees who leaves and they don’t need to hold back then.
I also have an open-door policy, so anybody can come up and talk to me at any time. I’m very approachable. I don’t think there is a person in the company who would feel any hesitation in approaching me with just about any issue. If they did, maybe they would go to their boss. We give direct feedback among our executive team and our 16 members management team who would hesitate to tell me exactly what they feel.
That’s excellent. Without this kind of input, I must assume it would feel rather lonely at the top.
I couldn’t agree more. In a family business, I feel it’s important that the management mirror the ownership. It’s important to know that as a 3rd generational business, we run our business as what’s called a “cousin consortium.” While I’m Chairman, CEO and President of the business, my family entrusted me with this and we have an executive team that consists of myself, my brother and two cousins who each represent each of the three ownership families of the business.
We make a lot of decisions collectively, which are significant decisions as an executive team. There is not a day when a lot of communication isn’t going back and forth, but the major issues are deeply vetted collectively in this group and then presented to the Board of Directors.
Our experience with family-owned companies is there is always some friction that happens. Any advice on how to minimize that or what you’ve done to avoid that?
It doesn’t matter if you’re a million-dollar family business or a ten-billion-dollar family business. I think that the reasons for success or failure are pretty much the same in all of them. If I can pick one area why I’ve seen family businesses fail, greed or jealousy would be the #1 thing that comes into play. It often comes from the spouses or at least from the spouses saying, “Jeez! Look at what John and Betty over there have! How come we don’t have that? They’ve got a bigger home than we do and are taking fancier vacations than we are. How come?”
I’m not blaming it on the in-laws and the spouses by any means, and this is not the case in our family business. But I am saying that if there is one area that can ultimately take down the business, it’s probably greed or jealousy.
Interesting. Outside of greed and jealousy, is there a close second culprit to the cause of family friction?
Yes. The element of communication. I constantly communicate with our family, in a recent family survey, 85% said the amount of communication they were receiving was about right.
As you begin to onboard the next generation, that opens a whole can of worms potentially or opportunities for potential issues to take place because now it’s just not my brothers, or my cousins, it can easily be perceived as my kid versus your kid. And if there is criticism of a next generation employee, those types of things can become very emotional.
Our generation developed our family constitution when all our kids were young, so that it wasn’t personal. It says we’re held to a higher standard, paid market rate, required to work outside before you join here and we’re going to be run by the best management whether family or non-family. Just because your name’s Darley doesn’t mean you’re going to be taking a significant role. You’re expected to be held to a higher standard, no matter what.
From the leadership standpoint, one of the other de-railers you’ve mentioned before is “Coming In With The Answer.” Can you elaborate on that?
Too many CEOs feel like they’ve got to have the answer every time. The longer I’m here, the easier it is for me to say, “I don’t understand that.”
There are markets I know very well, like the fire market. I’ve been exposed to it literally since I was five years old. But as we go into new markets whether it’s water purification, defense drones, residential fire sprinklers, or marine firefighting these are all new markets that we just entered in the last 10 years and we have limited market knowledge, we must make sure that we surround ourselves with great employees and advisors. That’s when I find myself saying to the managers, “What do you think we should do?”
As we wrap up, give us the 109-year-old secret of success – or a piece of it.
There’s more than one, but I think if there’s one mantra we live by on the customer service front, it’s that you’ve always got under-promise and over-deliver in everything that you do. When someone opens a package from us, they’ll also see box of candies and a little written note, that says, “If we haven’t exceeded all your expectations with this order, we’d consider it a pleasure to be notified.”
I say the same thing on my business card – “if you know anybody who is unsatisfied with our goods and services, I’ll consider it a privilege to be notified.” It’s a standard of relentless customer service. In fact, our advertisements of this company feature my home telephone number. The newest ad has my cell phone. Anybody can get a hold of me.
You put your cell phone on the ad? Did you get many calls?
You bet I did. People couldn’t believe it was really my number, but it certainly got the point across that we don’t have anything to hide. We have great quality and loyal customers. In those few occasions where we have issues, we nip them in the bud right away.
It’s about taking care of things to the customer’s complete satisfaction, but also to the point where they are getting a lot more than what they expected. Those are the opportunities to turn the lemons into the lemonade. So, we really empower everyone in the company to take care of that customer on the spot. It pays and continues to pay huge dividends.
When gaps in communication between levels of management occur, the ensuing friction can permeate through the culture. Whether that’s between generations of family members or toward non-family emerging leaders.
Don’t let it get that far – or, if you’re already in the midst of struggling with that, there’s still time to turn it around with a Leading With Courage℠ Academy workshop. You’ll be amazed by how we can help you build a more collaborative and transparent culture where high potential leaders feel more empowered to contribute to the company’s long-term planning and success. Call us at 312.827.2643, explore our interactive road map or email LWCAInfo@LWCAcademy.com.