Growth
Taking flight
How Ronald Weinberg got HAWK Corp.’s sales to soar from $24 million to $212 million
By Kristy J. O’Hara
Smart Business Cleveland | October 2007
Running a business is often like navigating through a “Choose
Your Own Adventure” book — there are constant decisions and
changes, and you’re hoping you’re making the right choice.
Throughout his career at HAWK Corp., Ronald E. Weinberg has
faced many decisions in his adventure. In the last two decades,
Weinberg, chairman and CEO, has done a lot with his business —
from focusing on high growth through a series of acquisitions,
resulting in years of 30 to 40 percent revenue growth throughout
the 1990s, to adding product lines to going public and multinational. He even got HAWK successfully through the aftermath of the
Sept. 11 attacks by focusing on cash flow. Most recently, he decided to sell off the powdered metal division of the company and
focus on friction products. Additionally, he faced the challenge of
moving one of HAWK’s plants from Brook Park, Ohio, to Tulsa,
Okla., which also meant making management changes. No matter
the obstacle, he maintains a long-term focus of what’s best for the
company.
“Great companies don’t get built by taking a ruler and a graph
and building straight up,” Weinberg says. “You’re going to have
some variation. It’s just an overall statement that we’re building toward a longer-term value.”
Despite all the twists and turns during his business adventure, Weinberg has succeeded in growing HAWK from $24.6
million in 1992 to $212 million in net sales last year, which was
a 16 percent increase over 2005.
Unlike the actual adventure books, where you can peek
ahead to see where each decision may take you, you don’t have
that option in business, so Weinberg shared some of the strategies that have helped him successfully mold HAWK into the
business it is today.
Move people to the right spots
Sometimes it can be tough to change people around in your
organization, but it’s important to evaluate if people are in the
right spots for the company to be the most effective it can be.
Weinberg says that switching people into different positions
in your company can benefit not only the business in getting
strengths in the right areas, but it also helps develop your people and makes them stronger employees.
“I think people benefit from internal change and moving people around within a company to give them different functional
capabilities and giving them different levels of experience,”
Weinberg says. “I think that’s particularly attractive to people
younger in their career. Everybody starts somewhere, and it’s
the only way you avoid management getting labeled, ‘Well, he’s
a sales guy,’ or, ‘He’s just a shop-floor guy.’ The more you move
them around, the more experienced they are, so the best salesmen could well be the guys who were engineers or manufacturing guys.”
When employees gain experience in multiple areas of the
business, it helps them improve the company, as well.
“Taking a controller and moving them into some other function, they really understand the numbers,” Weinberg says. “If
you find people that have the flexibility and depth of talent and motivation to do that, you can get some real winners, so we try
to do that.”
During the process of moving its Brook Park plant to Tulsa,
Weinberg had to make personnel moves that he called “Project
Castle.”
While it may sound to some like a top-secret spy mission,
Project Castle was actually a crucial part of ensuring the Tulsa
plant succeeded by moving a few leaders into different positions.
“If you’re a chess player, when you castle, you’re moving the
rook over here and the king over there,” Weinberg says. “That’s
what we did. We moved two people. We executed Project
Castle, and that was putting two business leaders in their best
spots for what the business needed.”
Weinberg looked at where the company was at this time last
year, and he looked at two leaders of his businesses and saw
what he thought the Tulsa plant needed.
“It was my belief that the business in Tulsa really needed a
very detailed operational focus,” Weinberg says. “The other
business, which was running nicely, would benefit from someone who had strategic vision and execute the vision and provide great leadership.”
When he looked at the people he had, he didn’t have to do
long, in-depth interviews for the positions or study in great
detail whether the switch he wanted to make would be effective. He just knew it would be.
“I know them,” Weinberg says. “I work with them every day.
That’s part of my job. When you work with people, you know
them well. You really do. You see how they make the most
important decisions in their life. Next to their family, there’s
nothing else as important as their business decisions, seeing
their style, what do they deliver in terms of results, and it’s a
judgment based on those things. When you know someone
well and see them every day, it’s not as mysterious as it may
sound.”
It was easy for Weinberg to get upper management buy-in for
this decision because he included them in the discussion.
“Frankly, it was just a candid, open discussion,” he says. “I
believe in just being open. I think that openness is an important part of management, and when managements trust each
other and can be open with each other and know they’re not
being BSed — when I say something, and you know I’m not trying to cover up for something else — that builds the kind of
trust that lets the CEO make things happen.”
It was a challenging situation because each executive was well-liked and respected in the areas he oversaw, so when the switch
was made, people questioned the decision, but Weinberg had
faith that the two would easily settle in with their new people.
“When you take two great people, each one was liked by the
ones he left, people that were liked where they were, chances
are they’re going to be liked when they settle in, and that’s
what happened,” Weinberg says.
Hire correctly
If you want to grow a company, you are going to need a talented team of people you can trust.
It may be easier to delegate things like hiring to others, but
Weinberg says it’s important to not only be involved in the
process, but to take your time to make sure you hire the right
person to fit with your organization.
“You can never be sure,” Weinberg says. “There are no guarantees when it comes to people, but people are important to us
— it’s one of our core values, so we spend a lot of time personally interviewing people at surprisingly entry-level-type
positions.”
For example, when the company decided to hire a summer
intern, Weinberg wanted to meet the potential candidate so he
could try to gauge her character and give himself an idea of
how well HAWK’s hiring process was working.
“Is she really going to be good, and is she motivated?”
Weinberg says. “I interviewed her just as a litmus test or touch
point in how well our hiring is going.”
In addition to getting to know people in the interview
process, HAWK uses other forms of testing to gain insights into
a candidate’s emotional intelligence and leadership maturity.
“To me, one of the most important attributes of all is motivation,” Weinberg says. “Someone who really wants to succeed
and be competitive and win, chances are they will.”
Weinberg says to look at someone’s past track record to see
if they’re competitive and have that will to win.
“Someone who succeeded in school or was a competitive
athlete, it’s not like we recruit like a coach, but it’s surprising
how many of our people did play competitive sports of some
sort, ranging from just high school stuff to we have an Olympic
silver medalist,” Weinberg says. “Those are gauges. You talk to
people, you can see — do they really want to win?”
Often people hire employees they think will make their business team succeed and soon find out otherwise. When those
situations arise, Weinberg says you have to recognize them and
address the problem instead of ignoring it.
“So often, one of the mistakes businesses make is not being
willing to accept the fact that someone is not performing,” he
says. “You have to identify that and what can the business help
them do to perform. Maybe they’re in the wrong spot, and
maybe someone’s really not suited to sales, if that’s where
they’re at.
“We have six core values that we work from, and the first one
is integrity, and with integrity, it also means intellectual integrity — not kidding yourself. ‘Wait a minute — it wasn’t the
weather that caused that business to do bad last year — it wasn’t delivering. What do we have to change?’”
Use caution with acquisitions
Acquisitions provide one avenue to growing your business, and
with more than 10 acquisitions under his belt, Weinberg has
learned his way through buying and integrating companies, but
it’s important to maintain perspective when going through that
process.
“It’s easy to get caught up in the excitement of the moment if
you’re a buyer, and we tend to be careful about that because
the idea that we’re so smart and we’re going to go in and make
every business that much better is a bit misleading,” Weinberg
says.
The key is focusing, and Weinberg has criteria he looks for and
doesn’t just buy anything that’s up for sale. He conducts market
research and compiles a database of all the companies he thinks
HAWK may be interested in purchasing. Then he pulls out the
magnifying glass to look at those businesses a bit closer.
“Especially right now, is it a fit?” he says. “It should be related to something we’re doing or interested in — friction-related
or related to our customer base — so we’re not going to buy a
furniture manufacturer. It has to have some fit to the segment
we’re in.”
If an acquisition fits with the core of your company, then you
have to next look at the company closer.
“Does it have a reason for being?” Weinberg says. “Does it
have a proprietary position? Does it have good management?
Do they have good know-how? What makes it different than a
company that’s just going to get beaten up in the marketplace?”
Additionally, he looks at the company’s financial reporting and
the quality of their equipment. The combination of looking at
several aspects of the business helps him make an informed and
intelligent decision of whether or not to buy.
“There’s no one formula,” Weinberg says. “If there were,
every acquisition would be great.”
Communicate to remove fear
Whether you’re going through acquisitions, instituting a
minor change or not doing anything differently from the status
quo, communication is crucial to the growth of the organization.
“People are always wary when there is an acquisition,”
Weinberg says. “Even if nothing is intended to change, it’s a
tense time, and our goal is to make it as smooth and easy as possible. Communicate, be realistic, be open with them.”
Whether or not changes are being made, you have to tell people of the plans or lack thereof.
“If you did have plans to relocate, you tell them,” Weinberg
says. “If you don’t, you tell them that, too. You’re never going
to stop somebody until they get to know you and you prove out
what you say, but our intention would be just to be open with
them.”
The communication factor is important to remove the fear of
the unknown.
“The biggest thing that frightens people about change is the fear
that they don’t know what’s really happening or what’s going to
happen,” Weinberg says. “If there’s communication, I think that’s
the best way. Not every change is going to be welcomed by every
person because that’s difficult for people, but if it’s communicated
and there’s a sense of teamwork in making it happen, those are the
two keys.”
To make sure people really understand what you’re telling
them, you have to repeat the message.
“(They need) a lot of it — and candor, and not assuming that
just because you put out a notice and it’s on a bulletin board
somewhere, whether electronic or physical, that that’s all it
takes,” Weinberg says. “People want a chance to ask questions,
and they want a chance to really understand it, and I think
those are the keys.”
Weinberg and all the managers at various levels have meetings
to give people those opportunities to better understand changes
and the processes behind them. Weinberg also has what he calls
“skip meetings” where he skips certain levels of management
and goes to lower levels of people and meets with about 10 of
them at a time so they can ask questions and give their feedback.
“You get a lot of good ideas that way, too,” he says. “The notion
that everything from on top and directed down, some of the best
ideas, especially when it comes to making changes about what
the business is all about, comes from the people closest to it. The
salesman knows best what the customer wants. The guy on the
shop floor will have the best ideas of how you can be more efficient.”
Weinberg says if you’re not asking them questions and letting
them ask questions of you, then you’re never going to know the
problems facing them and the concerns they have.
Beyond gaining valuable feedback and ensuring they understand changes, it makes employees feel valued, which gains
their buy-in to the company and its adventure.
Says Weinberg: “It’s a good feeling to be heard, and they genuinely do give good ideas.”
HOW TO REACH: HAWK Corp., (216) 861-3553 or www.hawkcorp.com
