Manufacturing
Package deal
How John Mellott built Storopack with a sharp focus, a solid team and by setting a winning tone
By Meredyth McKenzie
Smart Business Cincinnati | April 2008
John Mellott once bought a company on a handshake.
There was no signed contract or phalanx of lawyers, just two
men and a lot of trust. Mellott and the owner set a price parameter, and the seller trusted Mellott enough to sell him his business
and close up shop before the paperwork was finalized.
“He said that in his 40 years of business, he had not dealt with
anybody he would have that kind of trust in,” Mellott says.
Trust, integrity and passion have been the cornerstones of
Mellott’s long career.
He’s also been told he is hard to keep up with, and even though
he is set to retire as president and CEO of Storopack Inc. in
September, he still has a passion and energy for the packaging
materials industry.
In 1978, Mellott founded the U.S. headquarters of Storopack, a
member of Storopack Group, the world’s largest manufacturer,
converter and recycler of expandable polystyrene packaging
materials, and has spent much of his life building the business
during the last 30 years.
Mellott took the company from one employee to 300, from one
location to 17 locations nationwide and from no sales to 2006 sales
of $130 million.
Here’s how Mellott has conquered the challenges of growth to
lead Storopack to new levels of success.
Build for the future
Mellott says building a business requires preparation and staying
focused.
“Set down your objectives and keep a focus,” Mellott says. “It is
easy to lose your focus as you start down the path. Figure out what
is the service you’re trying to provide and focus on being the best
you can, as opposed to trying to serve all masters or build the company too broad.”
Keep your focus by communicating your goals to everyone.
“We communicated it with our vendors and, in some cases, our
customers and, most importantly, our staff,” Mellott says. “They
knew our focus and could make input to modify that focus. They
were part of developing it.”
A business plan not only needs to be focused but flexible, as
changes will come up along the way.
“You need to plan but don’t overthink it,” Mellott says. “Don’t try
to write an absolutely perfect plan because you can’t. Tomorrow
morning something’s going to be different.
“Sometimes it’s easy to look straight down the road, but you’ve
got to look around corners. It’s the, ‘What if? What if that doesn’t
work? What if you have overlooked something?’ Have the ability
to be flexible and adjust your game plan. A plan is like a road map,
but it’s not a bible. You don’t exist to fulfill the plan; the plan exists
to guide you as you go down the road.”
He says to look at what your customers are doing and to stay on
top of your industry to make sure you are not passing opportunities up.
“Don’t get so bound up that you have blinders on, but keep your
eyes open as to what’s going on,” Mellott says. “Look outside the
box, but focus inside the box because that’s where the business is.
It’s OK to be thinking outside the box, but, at the end of the day,
you better focus back inside because that’s what you do.”
A solid business plan not only keeps your goals in focus, but it
also gets everyone working as a team.
“Everybody is working for a common objective, and it promotes
not only camaraderie but helps build synergy within the company,”
Mellott says. “People understand that this is the focus and this is
how my job fits into the accomplishment of that and why I am
important in meeting those objectives.”
Staying focused also allowed Mellott to develop close relationships with everyone in his industry, including competitors. Much
of Storopack’s growth came through a series of 28 acquisitions,
most of which came from those relationships.
“We made a practice out of having a dialogue with those people
with whom we competed, so as they matured and decided to step
back from the business, we wanted to be their first phone call,” he
says.
“We had always been careful about our integrity, so they understood that we were like them, we were in business to serve an
industry but that we wanted to do it in an ethical and fair manner.
That allowed us, when they were ready for sale, to sit down, talk
and negotiate a sale as opposed to them being afraid to talk to us.”
Mellott says the road isn’t easy, and you will fail at times, but it’s
important to learn from those failures and not let them hold you
back.
“You have to focus forward and use the past as an example of
what does or does not work, but don’t dwell on it,” he says.
Mellott says start at the top, and if you focus forward instead of
backward, employees will do the same.
“Everybody makes a mistake once in awhile, but your approach
to that will help build the concept of looking forward not back,” he
says. “Tell them, ‘OK, you made a mistake, but that’s behind us; let’s
not do again. Let’s keep going.’ If you keep bringing that mistake
up, you get people focused over their shoulder. They’re looking in
the rearview mirror rather than forward.”
Hire the right employee
Successful growth comes not only from having a good plan in
place but also hiring the right people and putting them in the right
positions.
“That’s what makes the company progress; that’s how the company grows,” Mellott says. “You can have outstanding people, but
if you have them in the wrong job, they’re not happy and not contributing to the company.”
Storopack used an industrial psychologist to develop a profile of
the top 20 employees in the company and the characteristics it
wanted in future employees. Mellott looks for people who are
extroverts and are not afraid to share responsibility and credit
once a goal is accomplished. Potential employees are also interviewed by several different people so the person is exposed to the
company as much as possible.
Using this kind of hiring practice helps you get quality employees
who are right for your company.
“It’s expensive to hire and train people, and then have them
leave,” Mellott says. “We want to do the best we can to hire people who fit the company and are going to be happy here. You’re
not wasting resources training people who are only going to be
with you for a short period of time.”
After hiring, you can find out if the person is in the right position
through his or her attitude and job performance.
“When a person comes in every morning with a smile on their
face and they’re excited about getting to work, there’s a good
chance they like what they’re doing,” Mellott says. “Some people
come in with a sour look, and they may do a good job, but they’re
not excited or happy about what they’re doing.”
If the person is not in the right position, find out what would be
the right position for him or her.
“It’s not unusual that an employee doesn’t truly understand what he
likes to do,” Mellott says. “They aspire to do what they think is best for
them financially, or whatever, rather than what they like to do. Help
them through testing and feedback and tell them, ‘Here are the things
you do well and are comfortable doing.’ Then they understand their
strengths and weaknesses and likes and dislikes.”
When you have the right people in place, you know to whom
to delegate. With 17 plants scattered across the country, delegation has been a key to Storopack’s success.
Mellott says to monitor employees to make sure you picked the
right person for the task.
“If you picked the wrong person, you need to be ready to step
in and take care of that but not too quick,” he says. “It’s not wrong
for somebody to fail, as long as they don’t continue to do it and
make the same mistake. When you delegate, you will always
have some failures, but catch those failures early and help the
employee correct it.”
Have confidence in yourself and your employees so you
know the task you delegate will get accomplished. Mellott says
you find out your strengths by living up to the same standards
you set for employees.
“You know your thought process and if you made the best
result,” he says. “We are our own best critics if we’re honest
with ourselves. We know when we did something we could
have done better.”
Mellott says it’s important to be thickskinned and not to be
afraid to seek feedback from others when something has gone
wrong.
“Invite the feedback of the people who work for you,” he
says. “The more honest atmosphere you create with them, the
more they will come to you with honest feedback. You’re not
looking for people who will come back and tell you, ‘That was
perfect,’ but tell exactly what they observed and what could I
have done better. Don’t be afraid to be criticized, as long as it’s
constructive.”
Lead by example
Mellott says setting a good example helps create employees who
are successful and excited about coming to work.
“That enthusiasm spreads, it’s obvious to your suppliers and
customers, and it helps a company grow,” he says. “Most people
like to work with somebody who’s excited. They want to associate with people who are positive and excited about what they’re
doing.”
Mellott lets his passion and energy come through during meetings with employees, and then watches to see how employees
spread that enthusiasm throughout the company.
“Don’t preach it, don’t tell them to do it, but watch what they do,”
he says. “Watch the enthusiasm and energy with which they
approach things. It doesn’t mean that somebody has to work 20
hours a day, but when they work, they approach it with vigor and
an enthusiasm that spreads.”
The way you act influences how employees act and how they
view your commitment to the company.
“If you have a boss who’s enthusiastic and talks and acts that
way, it sparks that within you,” Mellott says. “If you have a boss
who’s always down, it sparks that within you, too.”
Integrity is another key quality that Mellott has emphasized
throughout the company. He says integrity is being honest with your
employees and customers and doing what you say you’re going to
do.
“Employees will follow,” he says. “If you’re telling them to lie to
a customer or a vendor, it becomes a part of their thinking. Build
with your employees the integrity in saying, ‘Look, we made that
mistake; let’s get it corrected, but let’s not be afraid to tell them we
made a mistake.’ Rather than trying to fix responsibility for the last
happening, you’re trying to prevent the same activity from happening in the future.”
Mellott says being upfront with customers not only sets a good
example for employees but also builds loyalty with customers.
In a large and growing organization, it’s hard to get to know every
employee. But Mellott says it’s important for employees to know
you care about them, even if it’s just in small gestures.
“When you’re in front of employees, walk around and introduce
yourself,” he says. “Walk up and ask them, ‘How are you doing?
How’s this or that?’ Or just say hi. But communicate, say hello, be
friendly. With a smile on your face, greet them and say thank you.”
Although Mellott is preparing for his retirement, Storopack will
continue to grow because of the foundation he has put in place
through a forward-thinking business plan, the right employees and
a good example he has set for them. Mellott says you can be a successful leader by having integrity, staying focused and being willing to make mistakes.
“Leaders who make mistakes stand up and say, ‘We made a mistake. What can we learn from it? Let’s go,’ as opposed to dwelling
on it.”
HOW TO REACH: Storopack Inc., (513) 874-0314 or www.storopackinc.com
