For the past few years, I have enjoyed the immense privilege of leading the transformation of our companies from a small, industrial upstart in 2006 to a portfolio of operating businesses passionate about revitalizing American manufacturing. We have endured some difficult seasons (or phases), each with their own set of challenges and victories, ultimately leading to a new era that we are now just entering.
Soon after launching P1 Industries in 2006, we spent the next decade investing in plant, people, equipment and processes. This was our “infrastructure building” season. We invested $11M+ into real capital equipment and physical assets while growing revenues 42% a year over the following decade. We had serious customer concentration issues and consequently, as a strategic imperative, shifted our focus into “diversification” mode. The next three years were difficult and often scary, requiring us to take a few steps back in revenues in order to diversify our customers, products and holdings to create a stronger company.
We entered the diversification phase as a stand-alone operating business with about $18M in annual revenues but emerged as a diversified portfolio of industrial technology companies with our own product lines, a strong position in emerging markets and revenues approaching $30M. We built new partnerships, added new engineering and product development capabilities, invested in state-of-the-art technologies and even launched a new industrial focused software startup.
Looking back on the last 13 years and two seasons we have endured, I have come to understand several things about myself and the building of companies. First, I am an Entrepreneurial Leader. This is distinctively different from being a corporate leader and vastly different to being only an Entrepreneur. Entrepreneurs are incredible idea people with an infectious ability to energize teams, create buy-in to their visions and are able to get things into motion. They are culture builders and good at early execution. Corporate Leaders are masters at managing and leading in bureaucracies, often with effective communication skills, are able to navigate complex organizations and can affect lasting change broadly.
Entrepreneurial Leaders, I have come to learn, can effectively navigate the early stages of ambiguity while monetizing their ideas. They build teams and energize stakeholders. They can also face extreme setbacks and difficulties, facing trials of all kinds, while shifting and transforming their companies and teams to adapt to new strategies and paradigms in order to become healthier and more valuable.
Our last three years at P1 and our portfolio of companies – the diversification stage – was fraught with reinvention, adaptation and change. We were forced to transform our very identity and business model, learning to generate value in new and creative ways. We faced that inevitable “revenue plateau” where many Entrepreneurs get stuck.
However, our team successfully navigated the transition with discipline and focus, and as a result, I was baptized into becoming an Entrepreneurial Leader.
Pursuing our next season
As we entered 2019, our company was growing again in ways we never could have imagined. Now diversified in customers, new products and our corporate holdings, we had developed new capabilities in every facet of our company, from engineering to sales and marketing, manufacturing and investing. Our core team was intact, new members were adding tremendous value and margins were beginning to scale.
We had entered the next season of our business: the optimization or excellence season. This is where life starts to get interesting for me. I had always considered myself an Entrepreneur but discovered that I was an Entrepreneurial Leader as we broke through the revenue plateau the last few years. There is little more rewarding than accomplishing something significant while being surrounded by an amazing team of persevering people with focused dedication. That diversification season helped me realize this identity, but it also shifted my perspective dramatically on what it takes to transform your company and to build something enduring.
The simple lesson is this: excellence must be the pursuit of every culture, in every way, every day.
Prior to 2019, I was known for preaching that strong cultures had strong identities rooted in shared values. That culture was a function of environment which, for example, can include activities like paintball, consistent celebration and always rooting for one another. These practices are important but aren’t the main impetus for what creates a healthy, vibrant culture that can withstand the tests of time and create breakthrough performance.
When we initiated and executed our diversification strategy from 2017 to 2019, we lost nearly 2/3 of our original revenues from 2016 but replaced most of it (grueling!) and never dipped below $15M in revenues. It was a painfully necessary transition. We initiated it. We went quiet in our community, put our heads down and executed as a team. We became focused in our mission to diversify and the team persevered magnificently. Not a single person voluntarily left the company. We kept our core team and pursued the transition with passion.
We were honest and transparent with the whole company through monthly all-hands meetings. We cast a vision of diversification and experimented aggressively. In down years, we invested. We built new partnerships and relationships, entered new markets and designed new product lines. Our Suppliers were amazing partners (more on that in another post). My long-time friend and business partner, Tony Leone, stepped up and took on the Presidency of our operating businesses, helping us navigate the choppy waters.
Tony taught me a very valuable lesson during this time. One that only seasoned wisdom can teach. He told me to stand up in front of the company and give them the brutally honest truth, show them we have a plan, then ask them all to join us in executing on that plan. And he told me to do it every 30 days, in person with extreme patience and most importantly, with excellence. I had learned about this in MBA school, but there is often a great divide between theory and practice. And Tony is the master of practice. This was scary for me despite knowing in my gut that it was the right thing to do.
Sometimes you just need a nudge from the right people at the right time.
As I sit here writing this post, I am frankly amazed at what we have accomplished. I’ve learned something hugely important about teams, people and transformational journeys. Excellence must always be our pursuit. Cultures rooted in high performance and a clear mission, with a unified team focused on excellence are able endure hardship and challenges over time. And succeed beyond what they imagined.
Excellence in honest, high frequency communication. Excellence in including everyone on your team. Excellence in creating value for customers. Setting high expectations for performance and driving towards excellence in all that we do. Excellence, in of itself, is a culture. Excellence challenges everyone to embrace change and become what I call “the highest and best version of yourself”. Excellence is rooted in every interaction from the shop floor to the sales call. Excellence is reflected in market share and margin. It is rewarded with repeat customers, raises, bonuses and opportunities for advancement. Excellence isn’t mass-marketed but meticulously mastered in all the small things that we do … every single day.
One of my employees expressed this very important principle to me during our tough years: “…we don’t need all the fancy celebrations and perks … we just need to know that we are doing a great job, have the opportunity to grow and advance and that the leadership team is guiding us down the right path … give us the opportunity and resources to perform, and that’s enough.”
I was floored. After all the perks and fancy incentives, our people just wanted the opportunity to perform. That was it. They demanded excellence and the rest would take care of itself.
Excellence in our personal lives
As important as the lessons outlined above were for me the last few years, I would be remiss if I didn’t share how important our personal lives are when it comes to pursuing excellence at work. Excellence at work is only achievable when we pursue excellence in our personal lives. Our public positions are only as strong as our personal commitments. During our transformational journey, I had to strengthen several things in my personal life, seeking excellence in everything I was and did. I owed it to my team, my family and our community. Here are several personal pursuits I implemented in my daily life.
First, personal excellence. I devoted myself to spiritual discipline, reading the Bible daily, praying and journaling. I directed my prayers toward other people. Excellence shifted my perspective from being self-focused to “others-focused”. My professional pursuits were no longer about me but about my team, their families and our customers. This made me more selfless and helped me recognize the needs in others better, thereby facilitating excellence at work.
One our employees was dealing with a major medical setback. He missed over 4 months of work – the longest stretch in more than 42 years. I included him on my prayer list, daily reminding myself his situation. We called his wife, paid for his medical bills and kept him on full salary over his entire time away from work. It lifted a burden during a difficult time. Every Friday, at 10am, I spoke with his wife to get updates, and now that he’s back and more engaged than ever, I realize that being others-focused is rich in and of itself. It breeds excellence.
Second, excellence in my marriage. This is our greatest commitment in life. A strong marriage makes for a strong message. Choosing to serve my wife and honor her made me pursue excellence in our relationship, which then flowed over to our business. It taught me to honor others above myself. To put their needs and expectations before my own. To never be contemptuous but always caring. By pouring into my own marriage (by God’s grace, it’s been 19 years), it made me appreciate the relationships our employees have outside of work so I can help them prioritize those.
We had another employee who has been with us since 2009. He was extremely close to his mother and unfortunately, she was dying of stage 4 cancer. This was the spring of 2019 and I could see the hurt and pain on his face every morning. Knowing how important families are and how the pursuit of excellence in those relationships means more than anything, I pulled him aside one morning and said “…go home and take care of your mom … sit by her side and don’t leave her … you have one mom and one life with her … don’t worry about work, no matter how long, we have your back.”
He was absent from work for over 45 days. We paid him in full, the team stepping up and working the extra hours, in addition also signing up to bring him and his family meals during this difficult time. When we attended her wake, his entire family embraced our team in tears and thanked us for making her final moments more peaceful. Excellence in our personal lives pours over to excellence at work.
Third, excellence in fatherhood. As a father of four, I have always been an engaged and active Dad. I stepped down from every extracurricular activity, every board and every professional organization that did not enhance the life of my family and our kids over the last few years. I traveled less. I focused my time and devotion on their development in an excellent, intentional way. I poured myself into their school, our church and their activities. Prioritizing fatherhood made me prioritize my own leadership and be cognizant of my own management style, appreciating that any distraction taking away from the team is not one worth pursuing.
This is the great lesson I have learned: excellence should be the pursuit of every person and every company.
Excellence in keeping our word. Excellence in integrity. Excellence in prioritizing the right relationships and responsibilities we have both at home and at work. Excellence breeds performance and the ability to endure anything. And often, excellence is not advertised. It just happens every moment of every day.
Our team has a long journey ahead of us in pursuing excellence in all that we do. We have so much that we can be doing better. We need to pay our suppliers faster and communicate better. We need to hit deliveries for our customers with more certainty and do what we say we are going to do. We must continue communicating with high frequency and transparency. I have to learn to stop over-promising. In some respects, I feel like we have come so far and achieved so much. At the same time, I understand that pursuing excellence is not a strategy or a season – it’s our culture. It’s who we are.
There’s a time for celebration and a time for perks … but excellence is a lifestyle that pervades every relationship and every decision … every day.