Critical Numbers™: Profit Before Taxes
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Critical Numbers™: Profit Before Taxes
Laron Incorporated provides industrial project- management, construction, and repair services to power plants, utilities, global mining companies, and other heavy-industrial organizations. The business, which now operates out of four locations, was originally started in 1975 as a machine shop. But when Glenn Thoroughman bought it in 1985, he renamed it in honor of the two men he bought it from: Larry and Ron. Laron, which was owned by its ESOP since 2005, was acquired by Ohio Transmission Corp., in January 2020.
Laron is made up of seven different business entities spread across four locations. Plus, much of the staff, based in the field, works on client sites—which creates challenges in keeping everyone inside the company on the same page. The company also had to find a way to weather the 2008 recession just as it had taken on significant debt from acquiring another company.
Use The Great Game of Business® (GGOB) to help get all of the associates working toward the same goals, while learning to reduce costs and manage cash. One significant change was to switch up how it structured its bonus plan where each business unit has its own bonus goals. But, as a way to get everyone playing together, bonuses will only get paid out if the company as a whole is profitable.
Playing GGOB helped engage Laron’s employee owners through tough times. “We proved that even though the financial outlook may be bleak, our people were willing to ‘bet on themselves’ when they knew they are seeing the whole picture,” says Chief Operating Officer John Hansen. In early 2020, Laron was acquired in a stock sale by a much larger company. And a big part of the appeal was Laron’s culture. The employee owners were able to “cash out” at a very attractive multiple of their shares. “The Laron employees, all of whom have been asked to continue with Laron, are now asking how they can improve their performance and open new avenues for bonus and incentive pay,” says Hansen. “Our long experience with Great Game™ is ‘pointing the way’ and demonstrating the necessary strategies to open those doors and opportunities.”
“GGOB has been the perfect platform to allow our people to learn, teach, and share their knowledge about what makes business prosper and thrive. This also carries into their personal lives and business as well.”
~ Glenn Thoroughman, CEO
Just like the Laron team relied on GGOB to get through tough times in the past, it is leaning on The Game’s principles and practices to get through the current downturn as well. “We continue to use GGOB as our compass to navigate through tricky waters,” says Hansen. “It remains our guide to let us know if we’re progressing or losing ground, or where the truth lies.” Hansen says that Laron’s new corporate parent has been particularly impressed with how Laron continues to post accurate forecasts even in the middle of the downturn. “The GGOB philosophy has permeated our whole organization and it has helped create such a great culture as a result,” he says. “Even when we’re struggling, GGOB gives us the ability to block and tackle on the fundamental things that will eventually make us successful.”
“Since Laron started using The Great Game of Business, we always have shared our financial numbers with our employees (good or bad). And I can say that without that knowledge and direct site of winning and losing, the people and myself would not have the drive to fight every day to be better than we were yesterday. This is a great company today and will be a great company for many more tomorrows because of that drive to win that The Great Game of Business has instilled in us all.”
~ Brandon Vest, General Manager Kingman Laron
As the Laron team developed and matured their overall game play and processes over the years, managers became more and more adept at singling out targets for improvement and using the information from their systems to allow their team members to get and stay on track with MiniGames. “We were always impressed by SRC team-members who could reliably speak to their efficiency and of their contribution to the success of the ‘bigger picture,’” says Hansen. “It is very rewarding to the management team of Laron to see our own employees and team members who have followed in the footprints of the SRC example with the ability to understand and ‘own’ their contribution to our own business.”
Despite being acquired, the Laron team hopes to continue playing Great Game well into the future. “It is the hope and intent of Laron’s leadership that the new ownership will be able to embrace The Great Game of Business and continue/reinforce its practice,” says Hansen.
“In my role as CFO, GGOB helps serve as a reminder to me (and I believe others as well) of the importance of trying to convey to my fellow team members how what they do impacts the profitability and risk management of our business (including help with understanding of the importance of the latter). Our management team generally seeks input from others before putting these policies and processes in place, rather than simply handing them to our people with no opportunity for input. Our day-to-day decision-making process includes reaching out for input to those involved in the task at hand and taking the time to explain the background and reason for what we’re trying to accomplish. This process of inclusive decision-making takes time and hard work. It’s much easier to avoid the time and effort to provide these explanations, then listen and respond to feedback, but it’s a part of what has made Laron successful. These philosophies have become habit, and I see as an important part of our culture at Laron.”
~ Gary L. Maclay, Chief Financial Officer
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