Capitalism at Its Best

Change the Game™ Podcast

Developing Employees is as Important as Strategy

Posted by Jim Sliker and John Williams on Feb 15, 2022 11:00:00 AM
Jim Sliker (CEO of Central States Manufacturing) and John Williams (Great GameTM Coach) talk with Steve Baker about strategic planning is a process, not an event, that developing people is as important as strategy, and outline the three-step plan to leadership success.

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CTGP78 - John W. and Jim S.

 

Episode with guests: Jim Sliker and John Williams

Central States Manufacturing and Elucidate Resources LLC

(This episode was recorded in February of 2022.)

 

Key Episode Take-Aways:  Show notes

1. Creating culture is one thing, but sustaining it is another. (click to jump to this topic below)  As far as sustaining that that early on culture, you know, because creating that culture is one thing sustaining it just is a different thing. And the one thing that Jim did very well, when he came on, I think, Jim, was it 2013? I believe? That's right, yeah. He actually defined it. And he got us to think about it and got us to write it down. So that as the company was growing, and you had more locations, then new people coming on would understand what that is.

2. Developing strategic goals and plans is easier when they are tied back to the company's purpose and values. (click to jump to this topic below)  the one thing we always are reminding ourselves when we're looking at strategic evolution is, hey, where's true north? And for us true north is our purpose. Okay, we always got to remember that anything we do, or driving towards a target has got to be in line with true north, our purpose of the company. You know, and once we're grounded on that, we say, based on true north, what would be some medium-term strategic objectives? What are we trying to accomplish? Okay, on a time horizon, and I'm not so critical about, it's got to be five years or seven years, but a medium term, you know, it's not something 30 years from now.

3. Workforce availability is a business constraint you need to get ahead of now. To create the workforce of tomorrow, you need to be intentional. (click to jump to this topic below)  And that is this idea about workforce availability, and demographic decline. That could be a constraint that we as businesses have to deal with forever. And I would just encourage you to recognize that and start right now, this is something we started last year, to create the workforce of tomorrow, you cannot rely on the market to bring it to the you have to take intentional actions, do things that are out of the box.

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Announcer 0:43

Welcome to the "Change The Game" Podcast, where we share stories of open-book management and highlight capitalism at its best. Thank you for tuning in to this episode of the change the game podcast with special guests, John Williams and Jim Sliker. In this episode, John and Jim talk about how strategic planning is a process, not an event that developing people is as important as strategy and outline the three-step plan to leadership success. Here's your hosts, Rich Armstrong, and Steve Baker.

Steve Baker 1:13

Welcome to the "Change the Game" Podcast where we are highlighting stories of doing business differently. That's changing the game and that is capitalism at its best. I'm Steve Baker with the Great Game of Business. And I am thrilled to have two very special guests with us today. First of all, Great GameTM Certified Coach, John Williams. And also, we've got Jim Sliker, the CEO of Central States Manufacturing. Central States produces metal roofing and siding material, which is reused in construction of top-quality metal roofs, industrial complexes, self-storage facilities, and even agricultural buildings. They're also 100% employee-owned, we love this. And it really helps them keep up with their credo at Central States. It's done right on time, every time. Gentlemen, welcome to the podcast.

Jim Sliker 2:04

Hi, Steve. It's a pleasure to be here.

John Williams 2:06

Hey Steve. Pleasure to be here.

Steve Baker 2:09

Well, I'm really excited because I've gotten the chance to actually go down to Arkansas, when John was still with the company and get a tour and see some of the things that were going on in the manufacturing side. And, you know, I just was so impressed by what you guys have been doing. Let's talk about that first. So Central States has seen a ton of growth over the years, multiple locations. If I'm right, you've got 1100 employee owners, and you're making a huge impact in the metal roof and siding industries. Sounds like you're making a dent. I know. [Laughter] We may cut that out. But maybe you could tell us about yourself and Central States?

Jim Sliker 2:51

Well, sure, you know, I was fortunate enough to join Central States in my position in 2013. Before that, I spent my entire career actually in the automotive industry, specifically in automotive engine, cooling and air conditioning. And I'm an engineer by training and spent much of my career in project management and sales and operational management. And I worked for tier one automotive suppliers that provided air conditioning engine cooling to all the big OEM automakers. And you know, I had a good job. I thought I'd retire there someday. And one day I got an email said one line and an attachment it said, hey, great opportunity. Do you know anybody? And I must have been having a bad day. I clicked on the attachments. And I heard about this company Central States, which was 100% employee owned, I thought it was interesting, didn't know anything about it. Doing business in an industry that was so far from the auto industry was intriguing. And as I read through it and understood a little bit about how they did business and their culture. I said, hey, why not? Six weeks later, I ended up accepting a job and it's been a blessing ever since.

Steve Baker 4:11

Amazing.

Jim Sliker 4:13

Yeah, in you know, Central States. You know, to give you a little bit history, a guy named Carl Carpenter started the company in 1988. He was an entrepreneur; he bought a piece of equipment. And he started doing business in the metal buildings components industry. And, you know, he really, you know, started the company as I understood from the longtime employees that hey, we're just going to be a high integrity company. We're going to be easy to do business with and we're going to try to focus on customers. And you know, at the time in the industry, it sounds pretty basic, but it wasn't the norm for a lot of the suppliers in the business. So, you know that formula started the company and very much part of who we are today. In 1991, Carl very much believe that you know if I give people skin in the game and stake in the outcome, they're going to do better work for our customers in the company and, and he started, he established an ESOP in the business. It wasn't 100% ESOP, but he's definitely started the ESOP for the employees. And you know, if you fast forward 20 years later, at the end of 2011, his son, Rick Carpenter as part of an exit strategy that decided he would sell the business to all of the employees, and we became 100%, employee owned, which is really, really a cool thing. You know, now that I'm part of it, and watching the power that has for our people, I think it's fantastic. And at the end of 2011, we were a $250 million company, and we had five plants. And we were off to the next phase. And so, so where are we today, at the end of 2021, we're a $700 million company, we have 11 locations, and you are correct, we have about 1100 people in the business. So that's the company I think, I think what makes us a little different, it's really who we are and what we're all about. And, you know, if I start with who we are, and why we exist, you know, the company's purpose is to provide wellbeing, financial freedom for employer-owners and their families. That is our why statement. And, you know, what does that look like on a wellbeing so, you know, it's everything foundationally, starting with safety and compensation and benefits, training and developments. You know, and we never want to take ourselves too seriously, we want to have a good time in the company. And most importantly, we want to be a company that doesn't view people is just a business asset. You know, we want to be very relational. In our company. We like to say the Central States family, and we like to care about each other. That's part of that wellbeing. And then on the financial freedom side, you know, the ESOP, that is our primary lever for how we achieve financial freedom for our people and their families. You know, our special sauce in the business? You know, what do we do you're right, we provide metal building components and packages. We sell and manufacture and distribute those things. But really, our special sauce is how we behave. And we say we behave three ways one is owning it. And that's not just because we get shares in the business, it's really starts with that commitment to customer company, and each other before self. We are pursuing a high degree of reliability and excellence in our individual work, our teamwork, and the overall company performance. And we're certainly not perfect, and we're not afraid to fail, we just hope to fail fast, fix quick, and learn from it. And that's part of owning it. The second can do we want to be positive by nature. We are not afraid to change. I don't want to say we always like change as humans, but we understand the need for it. And you know, as we get bigger, it's easy to get complacent. And we never want to be complacent. So, we want to strive for continuous improvement. And then the last is, is acting in love, acting in love. Steve, are you married?

Steve Baker 8:11

I am, still married 32 years.

Jim Sliker 8:14

That's awesome. So, you know this act and love that word love is not the feeling in the belly that you had when you met your met your wife for the first time. And I'm sure Steve still has today.

Steve Baker 8:23

100% baby!

Jim Sliker 8:25

100%. Yeah, it's that act of love for us. That's, you know, we have an opportunity every day when we work together, that we interact with a lot of people and each day, we get to make a choice how we treat each other. And, you know, we start with humility, and we treat each other with patience and kindness, and respectfulness and care and self-control and forgiveness. Those three things own it, can do, act and love that that's our special sauce. That's our DNA. And that is our culture. And honestly, that is what I am most proud about in our company. So

Steve Baker 8:59

I love it, man. And Jim, let me just say that first of all, to have a founder who had the vision to put in an ESOP in the 80s when they were brand spanking new. I mean, that's a lot of that shows you those three things owning it can do act and love in so many different ways. But to keep it up over the all those decades. That's incredible. So, I'm curious, did you come into the organization and these this special sauce was already there? Was this part of your leadership? I'm curious, because I wanted to know as a leader coming into it, if that's the way it happened, that's one set of circumstances if you helped create it, that's another set. So, was it there before or after?

Jim Sliker 9:46

Yeah, you know, I by no means I think from the very beginning this company was special with the culture they created that that idea of employee ownership created foundationally some of those inherent values, some of those inherent values and culture. And when the company was small, you know, you could see everybody, when I got here unified around that, and focusing on the customer making raving fans out of our customers is the primary vehicle to accomplish our purpose. You know, certainly as a company gets bigger and bigger, you know, we have I don't want to say redefine, tweak the definition of what our culture is a little bit. But certainly, one of my primary roles in the organization is not only trying to provide a vision, setting a course, providing the resources and evaluating pivoting when we need to, but it's very much protecting the culture, because that's what makes us unique, and that's what made us successful. So, I view that as a primary role, along with just being a servant leader, and serving every single employer in this company. So

Steve Baker 10:54

Love that! It seems like you've kind of inverted the leadership triangle, if you will, instead of being at the tippy top of the pyramid, you're at the bottom of support. I really love that approach. And then just, you know, want to point out that the folks listening to this podcast, get a unique view of leaders like you, which there's just not that many of you out there. So, I'm really pleased about that. Let me shift over to John for a second. So, John Williams, you know, what, you've been a coach for a long time, in my view, because you've always been very much, someone who had the patience, and the, I'll just use the word love again, you know, the, the way you treat people is good, and you're always wanting to develop people around you, you've had the opportunity to walk hand in hand with a lot of different companies who get into the great game of business journey. But you have a deep history with Central States. Will you talk about your history and your time with Central States?

John Williams 11:51

I do and I'll comment a little bit on I think Jim's contribution.

1. Creating culture is one thing, but sustaining it is another.

As far as sustaining that that early on culture, you know, because creating that culture is one thing sustaining it just is a different thing. And the one thing that Jim did very well, when he came on, I think, Jim, was it 2013? I believe? That's right, yeah. He actually defined it. And he got us to think about it and got us to write it down. So that as the company was growing, and you had more locations, then new people coming on would understand what that is. You know, in words, and not just feeling or are talking to somebody, or whatever. So, I think that's one of the best things that Central States has done is to find that culture, redefine the values, I don't think we really changed them, even though we changed the words and stuff, but I think just further define them to where people can really understand them and see how they fit within that. So. So I started with the company in 2006, January 30, 2006. I remember very well, and if you've got a great game.com/blog/author/johnwilliams, I have a blog on there that said, that's titled How a Book Report Changed My Life. And on January 30, 2006, the lady that hired me, Donna Leger, who, who retired and Jim took, took her place, before I showed them my social security card before I filled out any benefit paperwork. She sat down and said, I want you to do two things. She said, I want you to read this book. And I want you to write a book report on it. Okay, she said, Hang on, there's one more thing, I want you to give a presentation to the leadership team on what this book means to you. And that book was The Great Game of Business. And that was my introduction to not only Central States, but my introduction to a lot of those values that Jim just spoke about. And those values are inherent in that great game of business, but I believe they share a lot of qualities that SRC does as well. Now that company was founded. So, I, when I started with the company, there were three locations to kind of give you some idea around 250 employees and around 110 100 and 15 million. So as Jim spoke or $700 million company 11 locations, and all of that so I'm kind of setting that stage there to talk about that. Because, yes, the, the industry has been good. Yes, you know, timing and everything that happens in business, you know has to happen. And whether that's a local, regional, or national economy or whatever that is. But I think without those key principles without that ownership, culture, without, you know, all it can do and act and love, and all of those things, I don't think the success would be near as great as what all of the employee owners has experience. But the other thing about that, there was always a plan. And I know, we're going to get into that here in just a few minutes when we talk about strategy and strategic planning. So that's the one thing that Central States has focused on. And there's always a plan. And, and it's very important and how that plan is built and who and who's involved with that plan. But I spent 14 years with a company retired at the end of 2019. To do what I do now, which is help as many companies and help as many employees feel the way I did at Central States. And that's why I do what I do. So

Steve Baker 16:30

That is an awesome way to put it. I love that John, and for our listeners, I just want to say, I don't really know that I can count how many times and Jim don't hate me for this. But how many times had an employee on a ship conference? I would have lunch or dinner with John and I would be courting him saying when are you going to retire? What are you going to retire? So, but it just, uh, you know, it's the kind of people right, it's just like Central States is, you know, we're trying to align ourselves and surround ourselves and intertwine with good people who are like, Jim, you said, high integrity and easy to do business with. I mean, that's a simple business formula. But it's like common sense. It's just not that common. So, I really love that about you. And thanks for bringing me up to date. Now. Central States has been transparent, since kind of the beginning. Is that right? I mean, teaching people about business. And, you know, I would say using a lot of the practices and principles of the great game of business, since your founder, Owner, read the book. You all have learned a lot yourselves and brought other best practices in that sort of thing. Can you talk about? And this is for Jim, talk a little bit about your overall strategic plan for Central States? what's your what's your vision for the organization?

Jim Sliker 17:51

Yeah, you know, as John mentioned, we've historically had a plan. And you know that I'll call it a medium-term plan. And, and you know, that's a plan that we regularly refine, as you have to, you know, and if we look like we'd go back six or seven years, we set our next medium-term target. Now medium-term target was to get to a billion dollars and 1500 people. So, you know, that billion dollars, why? Okay, it's a big number, it was a milestone. It's seemed pretty far away six or seven years ago, we're a lot closer now, probably than we anticipated. But the most important number, those two growth targets is really the 1500 people. Why is that? Well, if you think back to our purpose, you know, of providing wellbeing financial freedom for our people, the better we can accomplish. Our purpose is by hiring more people. How do you hire more people, you keep growing. So, we set that target. And really, we developed five aspects of the plan that we wanted to formulate in detailed strategies and actual items against these five aspects. And those five aspects. One of them was geographic saturation. And that was for us to attack more markets, building more facilities and building service models that would allow us to penetrate more geographic locations in the country. Okay, market share growth. That way, the second was expanding our product offering product offering, continue to evaluate the market, try to add more and more value and introduce more products that would be valued by our customers and their customers in the business. The third is growing our premium. Yes.

Steve Baker 19:38

I wanted to ask a question for clarification, when you talk about expanding the product offering is a good example of that, looking at the marketplace and saying wow, Americans love to buy and store stuff. So self-storage is a big growth industry. And then and you looked at that and said we can provide material for that. Is that what you're talking about when you talk expanding the product line?

Jim Sliker 20:01

Yeah, that's a certainly an example. It's a couple areas. For example, the thing you just mentioned several years ago, we started when we saw that happening, we started a division of ours called Building Services Division. And one of their primary package offerings is storage systems, where we design and detail and saw manufacture a full storage unit. So, storage units. So exactly that is how can we diversify by adding more value-added products as well, where we can do packages, providing engineering, more highly engineered parts, as opposed to just components or for the components we're selling? Can we introduce new innovation, whether it's new paint colors, and new product designs, or just products that we haven't brought to certain territories. So, all of that wraps up, and that expanding the product offering,

Steve Baker 20:51

So, is geographic saturation, expanding the product line, and I interrupted you right, as you started to go into number three,

Jim Sliker 20:57

The next one's a big one. And that's growing our premium customers. You know, one part of our brand promise is that we care about our customers business as much as we care about our own. And we're committed to be good extended enterprise partners, where we are trying to find ways to improve their business and improve their customers experience. And you know, what growing premium customers looks like for us is finding business solutions that we can bring to them either through tools or technology, or integrated systems, so that it strengthens their business. Now, for example, we launched several years ago, and we've been refining it, in fact, we're getting ready to go to next gen this year, the first online business solution integrated system for our customers called Central link. At the time, there was nothing else like it, okay, it was just a small example, a huge lever, we've introduced tools that will help our customers quote jobs faster, right? Because that's a lever for them in the industry. So, it's really providing this integrated business solution using our resources, our big body, to grow our customers business, good for them, and return good for us. Right. And that's our commitment to our customers. That, you know, the next area is market diversification. You know, we certainly in the spirit of getting growing, but also mitigating risk, we want to be well diversified. And it's not just in the current industry are where we're diversify between agricultural sector and commercial sector. But it's also looking at, can we go in other places, never sacrificing our brand promise, right and keeping our special sauce where it'll work. And we're looking to now into some markets we've never entered before using our current capabilities, to just de risk some of the portfolio because we're in it for the long game, right? We're not in it for the short term, we're in it for the long game. So that's another key pillar. And then the last is really managing our end customer experience. So right now, we don't sell a lot, almost nothing to any customers, you know, Joe and Sally that want to put a new metal roof on or want to have a metal building in their backyard. We're primarily selling to distributors, and then contractors. Well, we want to start thinking about managing that, that in customer experience, where how can we use technology and our resources to educate and inspire in customers, Joe? And Sally, how can we provide them resources to understand what those options are? Imagine what would be possible with their projects and give them tools and technology where they can get information, maybe an initial quoting, and then we can use that to leverage our customers business, you know, so that's another area we're trying to grow. To hit that target. I mentioned that $1 billion, but more importantly, to 1500 people.

Steve Baker 24:01

That's cool. You actually are making your customer the hero in the story, which is awesome.

Jim Sliker 24:09

Yeah, that's the goal. That's cool.

Steve Baker 24:11

I do you love that. So, you when you said market diversification, I just want to point out, everybody that listens to this podcast hears me talk about the benefits of employee ownership all the time. I just want to point out market diversification. I love it when the company is talking consistently about diversifying because I want my stock price to go up not to ever be tied to one industry that goes through some cycle and then oils or stock prices down. You know, I got too much gray hair for that. So that's good to know. Well, speaking of you know that bigger vision and having an eye on the long game as you put it, I think, let's talk about planning and we talk a lot about high involvement planning here on this podcast and the great game of business. This, your strategic planning process is a perfect example of how companies who really play at a high level can perform and succeed. Jim, if you could go a little bit deeper, whatever you're comfortable with your talk to us about the process that Central States and you, as a leader of the organization use to build, not only your sales strategy, but your growth strategy overall. Bottom up, how do you involve people in the process?

Jim Sliker 25:28

Sure. You know, I think, if I really start from the beginning, you know,

2. Developing strategic goals and plans is easier when they are tied back to the company's purpose and values.

the one thing we always are reminding ourselves when we're looking at strategic evolution is, hey, where's true north? And for us true north is our purpose. Okay, we always got to remember that anything we do, or driving towards a target has got to be in line with true north, our purpose of the company. You know, and once we're grounded on that, we say, based on true north, what would be some medium-term strategic objectives? What are we trying to accomplish? Okay, on a time horizon, and I'm not so critical about, it's got to be five years or seven years, but a medium term, you know, it's not something 30 years from now. Although we're driving towards that, but it's got to be something we can measure progress against. Okay. And, you know, when we did that, we set about six hard objectives that we were trying to drive towards the medium term in line with our purpose, starting with some safety goals, employee owner engagement goals, certainly revenue and volume growth goals, customer service, you know, level targets, have, then two foundational facts that are super important with us is one, we never lay anybody off, we've never laid anybody off in 33 years. And that's hard to stay in the construction sector. And we never want to do that. We're not a company that verbalizes headcount to gain profitability. Okay. And then last is ESOP health, you know, you know, that that's when you're in an ESOP, you have to be very intentional of managing your ESOP health. And that is a big priority for us. So, we kind of set these medium-term targets. And then we use the organization to start developing right from, you know, the lower levels, the organization, because they're the experts in the business, you know, they're seeing and touching our customers, our products, our drivers are hearing a lot of things happening in the market. So, we start with that SWOT analysis, understanding our strengths, weaknesses, opportunities, and threats. And we look at that both inside the business, what is that inside the business, and we look at external factors, right, the market, the industry, the competition, and we develop kind of that, that, okay, here's our current state. Now we've got our medium-term targets where we're trying to go, and then we got to turn that into strategy formation. And really, that's where we're talking to people in the organization, really, sales is a big piece of this, where we're evolving our sales teams, we're involving our division, leadership's that are out in the territories with their customers. And we're saying, Okay, here's where we're trying to go, here's where we are, let's develop strategies that can capitalize on our strengths to take advantage of the opportunities and also repair or put in improvement plans against our threats and our weaknesses, right. And we just go through that strategy formation starts with brainstorming, no bad ideas, we get those all on the table. And then we start, you know, evaluating them somehow ranking them somehow about benefit versus, you know, effort and other things. And then we convert those into projects, projects and action plans that are living in the company living in the company that we can drive. And that's where we're mobilizing project teams that the horsepower in the business, and that's including sales and operations and logistics so that they can understand, own those strategies, refine those as the experts in the business, and then dry them to where we're trying to get to these five different areas of our current plant. And that's what we do. And that's what we do in our planning process.

Steve Baker 29:15

I think it's wonderful, because it's one thing to provide lip service, your employee owner, great job, but it's another thing to say, Hey, you're an owner, you have a responsibility here. So, I love it when I hear stories of people in the field. And you mentioned drivers who better than someone delivering the product is going to hear a salary coming in. Right. So, treating people with respect and trust enough to involve them in planning. I think you probably get better data. The more through the years that people go Yeah, it matters. I am heard people they need to know back in the office, what's happening out here. I just love that. John, I'm curious if you have any. We're going to talk about kind of your Three step plan to leadership success. But before we get off this topic of Central States, I know that you've had different roles at Central States when you were there. Anything to add to what Jim said about the HIV process or anything like that, how things went?

John Williams 30:18

I would ask Jim, for those leaders and other organizations, who may feel like this takes a long time to do when you involve salespeople. And they may say, how, how can I let a sales person set their own sales budget? Or their own target? Or? Or how do I involve them, and it's much easier for, for me and the CFO to set in a room and increase the budget by percent, we can have it done in a day versus doing all of this, and especially a larger organization like Central States. So, Jim, what would you tell those leaders in those companies?

Jim Sliker 31:02

You know, first, the first foundational thing, I would say, you have to do it, in order to do a plan, effectively, you have to do it. And here's why. Because no involvement, no commitment in the people that are going to ultimately have to own the strategies and the actionable projects that are coming out of the plan, you have to have their commitment. So, you foundationally need to be committed to say, hey, I have to get their involvement, I have to get their involvement to well define this plan. Otherwise, I'm not first probably going to have the best plan because they are experts. And secondly, it's going to be a lot harder to execute, because they're not committed, you know, strategic planning can seem like a big project. And I'll tell you the foundational difference, which I'm firmly have learned over my career, a lot of companies and I used to work for some of these companies, where we would do strategic planning every year. And guess what that strategic plan, you do some sort of leadership meeting, a couple days session, maybe facilitated? And the goal of that session was to come out of there, feel good talk a lot, and you'd have a PowerPoint presentation. Okay, then guess what, you'd leave the meeting, it'd be forgotten. And you'd come back the next year, and you'd start the process again? Well, that can be very, very heavy, that it can feel very, very heavy or non-value added. Because it's not a living plan. I'm, you know, one of the things that I'm proud about in Central States, as you mentioned, John, we've always had a plan. And what we're doing is we're not, we're not redefining the plan every year, which would take a long time, we're refining the plan, not redefine. And so, we set a course we're on a plan, and then we're continually evaluating, first, our performance against the plan, but also what market conditions are changing what new information is happening, what new technologies, what new, competitive landscape, so that we can pivot and make good refinements. And when you're in that mode, and constantly communicating with people, it doesn't feel as heavy a process. So those would be my two recommendations involve the people because you have to take the time to involve the people to get their commitment. And secondly, don't think of strategic planning is constant redefinition, it's taken the time on the front end to invest in a plan, monitor the performance, deploy it, and talk about it and talk about it and talk about it, be measuring it, and then refine as you go.

Steve Baker 33:36

I love that. Yeah, that's very cool. And it sounds to me like it's more of a process. It's not an event.

Jim Sliker 33:44

That's right.

Steve Baker 33:45

For you know, folks are listening to this while Jim was speaking so intelligently and thoughtfully. And with all the x's experience when he was describing the executive retreat, I did have golf swing, you know, visually, here's a look at No, that's usually we have a lot of these kinds of planning meetings go is that, you know, you go off, you solve the world's problems, play a little golf, and then you come back and no one cares. And, and I love how you're saying, you know, it's about no involvement. This is what I heard no involvement, no commitment, no execution. And that's that line of sight we really have to go for when we're talking about real true high involvement planning. That's awesome. Thank you for that.

John Williams 34:25

You mentioned that, you know, some companies doing it once a year and then not looking at it. Again, and I know Central States, you know, they have three off site type leadership meetings to talk about and, and, and to, to update the strategy update the performance, but how often does Central States and the leadership look at the strategy and see how they're doing against it? And then how often are you communicating to the employee owners on how they're performing and updates on the strategy?

Jim Sliker 35:14

Yeah, it's a great question, John. And I would say it's kind of a layered communication approach. So, it's true that we, as a leadership team, we will do, I'll say, three focused meetings a year, which kind of pulls us out of that the business and really reflect, Hey, how is the strategy going? How are the projects going? How are the market and the external factors going? Do we need to refine we need to add resources, you know, looking at that holistically, stepping back out of the business, and then making adjustments where we need to. The way we keep that mobilized in the organization more frequently, is once we've converted those strategies, we basically launch projects that we're now going to launch a project, for example, to start making this new product development as part of our, you know, introducing new products to the market, we're going to start a product development. And those projects, we're actually monitoring formally, on a monthly basis with a project team, we're meeting with them, we're understanding how the projects going, what we're trying to achieve. Are we on time, are we on plan? What resources of support you need? So, we're driving projects? No less free? Are? No, yeah, no less frequent than monthly. Okay. And that's how we keep it real and living in the organization. And, and we give people monthly updates on all employee owner meetings that we have every month, we're giving them updates on some of those projects, they're active in the business. Okay. The other place we communicate to our employee owners strategy, which is more bigger picture to longer range is in our shareholder meetings. You know, we do once a year, a shareholder meeting with all employees. In fact, I'm just coming from our last one, a yesterday where we went to all 11 locations, we pulled all the employer owners in at that location in the same meeting. And we talked to him about the business. How do we do last year? What's our priorities for this year, and here's all the update on our medium-term plan and our strategic plan. So, we kind of have that layered approach, keeping everybody informed to The Big Vision. And then as those big vision items, formulate into key projects that are active with actual items, giving them regular monthly updates on how all of that's going.

Steve Baker 37:39

That's fantastic. Thanks for outlining that, Jim. Now, I promised that I would ask John, this question, John, let's shift to leadership. Let's talk about your three-step plan to leadership success, will you walk us through that?

John Williams 37:55

And I don't know that I would call it my three step because I think everything that I know, is a product of what I've done or been involved with. And, and a lot of a lot of what I've done that I've seen work, you know, was what was done at Central States. And I see there is a large gap and other companies that I work with as well, between the amount of time they put on strategy, and planning versus the amount of time they spend on developing their leadership. Because you can have the best strategy in the world, you can have the best product development plan, you can have all of that if you don't have the leadership to execute that, then it's not going to happen. It's not going to happen. So, one thing that Central States has done over the years is they spend just as much time talking about people and leaders in the company, and I mean leaders at every single level, from the frontline leadership all the way to the executive leadership. They spend just as much time talking about that as they do the project, the plan, the strategy, that performance itself, because all of those strategies, you know, have a face behind them. You know, just like we talked about a great game, every number on that financial sheet, every number on that P&L has a face behind it's a result of something. Yeah, and it starts with leadership. So, the three the three items are really what a company needs to do is they need to make this leadership succession planning part of their strategic planning, which Central States does and they usually have that in their first I'll call first trimester meeting. And the first step is and that is you evaluate the current leadership. You know that they have in place. And I define leadership as, as anybody that has that's responsible for at least one other person in the company. But it's not just those who also have these up and comers, right, these people that you see have those three values that Jim talked about. But based on being a current leadership position, you want to pay attention to those as well. So, you need to evaluate them using a set of competencies, not only professional competencies, but transversal. And that's what Central States does today. And they have these listed, and defined where professional competencies are, pertain more to the job itself, where transversal is what all leaders possess, every single one, they're the same for all leadership, they may be communicating our problem solving our, our servant leadership are those types of things, those type of qualities, you could even rank them in the three values that Jim talked about, and can do, and own it, and act in love. You know, you can actually define what that looks like, you know, and give examples. So, you need to evaluate this current leadership and see where you're currently at right now, then the next thing to do is identify the gaps in your current leaders, you know, the gaps and where they are now, and where they should be, you know, not only on their professional competencies, but in their transversal, as well. And once you do that, you establish a leadership development plan for those individuals, to give them a roadmap to fill those gaps and get to where they need to be to not only be successful in their current positions but be successful in other positions of the company as well. And this gives you really a visual roadmap of do I have all the leadership in place to accomplish the strategies and the strategic plan of the company? And if I don't, I either have to fill the gaps of the current ones, or I have to go outside and hard. And so that's an important part in all of this, and just as much time should be spent on that, as spent on product development, geographical growth, new equipment, those type things, because if you can buy millions of dollars’ worth of equipment. If no, if there's nobody there to press that button, it doesn't come on. It doesn't work.

Steve Baker 42:51

Exactly. You know, one of our big things that we learned from Jack years ago, and I say it, I don't know how many times a day, but the company is the product. In other words, it's not the stuff we make. It's not the service we provide. It's we're building value in the business. And I was talking to Tom Hilmes, this morning, another one of our coaches here a Great Game, and he just did a speech for a manufacturing organization. And that was his point, John, just exactly what you said. Because if you don't have the people to make that happen, he said, What if you just turned everyone over 100% turnover tomorrow, all new hires, would it be the same company. So, it really stretches your mind a little bit to say the company is the product, because within it, the people are the company. It's that culture, it's the promises we make to one another. It's the promises we make the customers, et cetera. And it's all that development in between, as I am interpreting this, what you're saying is, we've got to know where we are now, where we want to go. And then close the gaps, whether it's in the people and their skills, or people that we don't even have yet or you know, all those others, I just think it's that human thing. And like Jack always says, numbers are just stories about people. So, there's that connection between companies, the product, and the people are everything. I love that

John Williams 44:09

And that I can say this about Central States, even at the executive level, they were very involved in the entire process, even with frontline leadership, you know, they knew and they understand this, and, and some leaders of companies when asked me, you know, in a company that size, we don't have time to do that. So, well. Your most important level of leadership in the company, is the people that are leading the people that are closest to the product are closest to the customer that Jim talked about the truck drivers, so the executives better be involved in that level of leadership. So

Steve Baker 44:50

That's really good. That is really good. So, there's incredible growth. I think you guys have covered it really well and the diverse of the business and you continue to grow and grab more market share. It's just amazing. I, Jim, what's next for Central States? What's on the horizon? You know, you talked about mid-term and that sort of thing. Tell me, what do you see?

Jim Sliker 45:15

You know, you know, it's funny, we come out with a thematic goal every year. And for 2022, we just released ours. And probably that this is right now our priority in the business is getting everybody realigned on this, you know, this, this thematic goal. And let me let me tell you, you know, over the last, really 18 months, there's been a lot of disruption. Right? There's a lot of disruption in business, there's a lot of disruption in the country, there's a lot of disruption, you know, everything from, you know, workforce to supply chain, to you name it, okay. And what we have worked so hard in 2021, that will never show up on the P&L necessarily, of last year, is we have now put ourselves in a position through not being afraid to change, aggressive attacking and working on projects that we sit here today, where our mantra coming into 2022 is there is no new normal in this company, no matter what society is telling us. What the country is telling us what media is telling us, we are returning to normal as we sit here today, we have all the inventory we need, we have no supply chain issues, we've stabilized our production workforce through you know, innovative things we've done last year, we've invested foot on the gas all last year with, you know, our financial means on capacity and equipment, we opened another plant that wasn't even on the radar screen. So, we are loaded to bear. And as of today, we are back to normal in this company. And we're going to leverage our brand as a differentiator. Because now you know, whether it's restaurants, whether it's products you buy, you know, everybody, it seems we're now a society that that talks about excuses on this company, we say we're thermostats, not thermometers, we're not victims of our surroundings, you know, we're not a company that leads with excuses. We are solutions, providers, and that's our mantra coming in this year.

Steve Baker 47:23

I love it. And that is so powerful. I think everybody could benefit from just take it by the horns, man. I love it. Well, guys, this has been so fun for me, I think I could talk for hours about these different elements, leadership and strategic planning and how people are so important to our organizations, and the value of culture. But I do have to wrap things up. And when we do, we always like to ask one more question. Since I've got two of you. I'm going to start with Jim, what's the question I should be asking you to?

Jim Sliker 47:56

You know, maybe what I would say is this. And I'll piggyback off what John talked about. You know, I think there is one trend that has happened over the last 18 months, it could be a new normal in terms of business constraints.

3. Workforce availability is a business constraint you need to get ahead of now. To create the workforce of tomorrow, you need to be intentional.

And that is this idea about workforce availability, and demographic decline. That could be a constraint that we as businesses have to deal with forever. And I would just encourage you to recognize that and start right now, this is something we started last year, to create the workforce of tomorrow, you cannot rely on the market to bring it to the you have to take intentional actions, do things that are out of the box. You know, we just launched on a trial basis, a new shift pattern in manufacturing, to allow more autonomy for a younger demographic in manufacturing, and it's working. So, you got it, go after it and create a workforce tomorrow either through succession development, planning, internal training, hire for heart, train the head, that would be my encouragement to everybody out there.

Steve Baker 49:06

Hire heart, train for head. I like that. Good deal. So, John, what questions should I be asking you?

John Williams 49:15

Well, you know, I know people are going to see this and think, wow, I'd love to have a company like that. That sounds pretty easy. You know, it's not easy, it is hard. It's hard work and plans don't always go like you like you want them to, you know, sometimes. But Jim saying about, you know, be a thermostat, not a thermometer, you know, control the situations that you could control. Don't try to be don't try to hit the highs and hit the lows so much. Just know that if I do this one thing, if we as an organization live by a purpose to live by values and take care of customers over the long run, we will be fine. It doesn't matter what President, it doesn't matter what pandemic, it doesn't matter what supply chain. If we do those things, we will be fine. Yes, there will be ups and downs. But if we concentrate on that, everything else will take care of itself. That's we won't be victims.

Steve Baker 50:24

No, can't be victims. I love it man. If we could just run you guys as president and vice president, you'd have to choose which might be better off.

John Williams 50:36

Well, that's it. I think I'm good. Yeah,

Steve Baker 50:39

I will. Now John, you might know this, Jim, I don't think you know this. But I often will, at the end of each podcast, I try to take what I've learned, and sum it up. And so, this is not meant to be a regurgitation. It's more of an interpretation. So, you tell me if I get any of the big points wrong. Okay. So, first of all, I love how we started out talking about high integrity, easy to do business with. It's a simple business formula. But like common sense, it's not that common. So, it's a differentiator for you in your business. And I think everyone can really take a lot of value out of that. Providing wellbeing and financial freedom to your employee owners, even if you're not employee owned, you can still do those two things. Financial literacy is a life skill, you can use it everywhere. And I love that. Jim, I don't hear this very often. But I heard you say something to the effect of the CEOs job is to protect the culture. Because your special sauce is a honing it can do act in love. This is where you're a bunch of weirdos, aren't you? That's what I'm hearing and defining your values and your culture. John, you said put it into words. And then to kind of bring it all together, it was sort of a we can align to a true north, and know that there's always a plan, we behave better, we behave in the right ways. And we keep moving forward. Around planning, I heard that medium term planning is regularly refined, not defined. I'll come back to that in a moment. You're, of course going to set revenue and volume targets, employee engagement, customer service safety. But really, beyond all that you're like the ESOP health. This is very strategic, because it isn't just, well, let's see what the stock price is. It's absolutely strategic. But this is my favorite one. No layoffs. Dude, nobody but you and Jack stack say that. I mean, no one has the guts to do it. Because his article What if something happens? So, kudos to you? That's what we need to hear that strength. And I love that there's always a plan and jobs are that the last thing to go? You start with a SWOT from a frontline perspective. In strategic formation, you've got evaluation and ranking of different ideas, you convert those things into projects that are living in the organization. Sounds like a lot of work sounds hard. But don't get hung up on the time that it takes. You've got to do it. Because if you don't have the involvement, no commitment, no execution. I'm pausing there because I'm only partway through is this good so far.

John Williams 53:15

Sounds great. Have you probably said it better than I did?

Steve Baker 53:18

Well, I know I'm only doing a condensing because this is exciting stuff. And we'll put this in the show notes so people can grab some of those really good nuggets that you provided. The other thing that I really liked, the way you put was the strategic high involvement planning isn't constant redefinition of a plan. It's constant refinement. And so that's where I extrapolated and said it's a process, not an event, and that you have this layered approach to formal planning, you've got three focus planning meetings on strategy every year, you mobilize that those results into the company as projects, I mentioned that before monitoring progress all the time and giving monthly updates to the employee owners. And then of course, there's this kind of big wrap up and vision forward at the annual shareholder meeting. I love that you do it at all locations that makes everybody feel part of the family. We're not an extended, you know, remote workforce here we're actually we're all in the same family love that. Also love that you plan dollars and people those are two separate targets. It's like hey, we've got to plan both, you don't get one without the other. And then one of the things that I highlighted here that was a big one for me was spending as much time talking about developing people as developing strategy and planning that is powerful. You did outline your, your big plan, graphics saturation, expanding the product line growing premium customers, diversification in the marketplace, and managing in customer experience, which I think is really powerful because you don't even play with them. It's making the people in the middle your customer actually is the hero because you're making them look good to the customer. by giving them all those resources, that's awesome. John, you talked about the big gap that we often see in leadership and that you said if you can make succession planning and people planning as important as strategic planning in the process, you're better off identifying, evaluating, making sure you can see the gaps in leadership and where we are now, where do we need to be establishing and development plan to close those gaps. And my big, big takeaway from what you talked about John was your most important level of leadership is next to the people doing the job. Because nobody knows the job better than the people doing the job, we'd better be bringing up our leadership throughout the organization. And I guess the way to wrap this up for me is to go you know, it's such a powerful stance to say we are back to normal, having a thematic goal that says we are not victims. And for everybody listening out there, I just want to reiterate, my favorite thing from this whole conversation was be a thermostat, not a thermometer. We are not victims. Let's take it by the horns live by your values and long-haul things will work out and be fine. And go out and create the world and the workforce that you want. And need because it is not going to come to you hire for heart, train for head. And guys. That's about all the notes that I have for you. Does that cover it?

Jim Sliker 56:21

Yeah, sounds great. Sounds great.

Steve Baker 56:24

Well, guys, thank you so much. Jim Sliker, CEO of Central States and John Williams, Elucidate Consulting and Great Game coach and good friend of the game for many years. Thank you so much for being here.

John Williams 56:37

Thank you, Jim. Thanks, Steve.

Jim Sliker 56:38

Thank you. Thanks, guys.

Steve Baker 56:42

Alright folks let's keep the conversation going. Send us your questions, your stories, your best practices, ideas, challenges, and of course your victories because that is capitalism at its best. Thanks for joining us and we'll see you next time.

Announcer 56:56

The "Change the Game" Podcast is produced by the Great Game of Business. To learn more, visit greatgame.com.

Topics: Company Culture, Employee Engagement, Leadership, Transparency, esop

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Hosted by Rich Armstrong and Steve Baker the Change the Game podcast highlights true life stories of organizations influencing positive change by doing business differently. They’re teaching people how business works and closing the gap between the haves and have-nots. It’s capitalism at its best. Inside each episode, you’ll discover stories of entrepreneurs who are Changing the Game.

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