Born leader

Tommy Bagwell has tried to replace himself as CEO several times over the past 10 years. But despite his efforts, today he remains CEO — just as he has been for the past 34 years — of American Proteins Inc., an animal byproduct rendering company.

“I’m right now functioning as a super overly involved chairman of the board or a president who has retained the CEO title, because if I don’t, it seems like every time I’ve decided that I might let go and hire someone at that level, the first thing they do is try to get rid of me,” says Bagwell.

Although some might consider Bagwell too picky in his search for a successor, he wants to ensure that he does right by the company that his father, Leland Bagwell, started in 1949. So today, Bagwell is no longer involved in the day-to-day operations of American Proteins, but he still controls the direction of the company he has helped build since he was 14 years old.

When Bagwell became CEO in 1972 after the death of his father, the company had about $10 million in annual sales and about 50 employees. Today, American Proteins is a $250 million company with 650 employees.

Bagwell credits his success to three key business philosophies.

Hire talent that fits your culture
One of the most important things that Bagwell learned is that you can’t be everything to everyone, and you can’t know every single thing that is going on in the company, no matter how hard you try.

“You can’t know everything, so you better get good people,” says Bagwell. “Then you need to know and learn how to manage them.”

But just because an employee is intelligent and talented doesn’t mean he or she will be a good fit for your organization. Personality and beliefs play a large role in whether a person will succeed.

After hiring a potential new CEO who was qualified for the job but who clashed with the company’s culture, Bagwell now uses personality profiling and stresses the importance to his hiring managers of getting to know a potential employee on a personal level.

“Somewhere about 10 to 12 years ago, I hired someone who was actually running a $1 billion division of another company, and we thought we were going to be a good fit,” Bagwell says. “I really admired the man, but I totally missed it, however. His intellect was fine. His business judgment was good, but the culture didn’t fit at all.

“He came into a family-owned business that you could argue is justifiably too paternalistic, and all of a sudden put out an edict that nobody could have family photographs on their walls or desks.”

What stunned Bagwell the most is that not one of his employees, even the ones who had known him his entire life, told him. And that is when Bagwell knew he had to do more due diligence with his hires.

It wasn’t enough that they have the skills and abilities to do the job; Bagwell needed to find out more about a potential hire as a person. Today, he suggests that if you have contacts who can tell you more about a job candidate, use them.

“I knew the industry quite well that he came from and knew a lot of people,” says Bagwell. “I didn’t talk to some down-the-line managers that had worked under him. It didn’t work out at all. It was a total disaster.”

Now Bagwell gets to know people before he hires them. He invites them to dinner with his family, or takes them fishing, and this, he says, has led to better hiring decisions, because you can learn a lot about people if they cheat on a golf game or are overly competitive.

Avoid miscommunications
Communicating is an important skill, whether you are taking part in a negotiation that could affect the company or having a casual conversation with an employee. But communicating isn’t as easy as it seems.

“When you speak, you speak through a filter between your brain and your feelings and your mouth,” says Bagwell. “You’re filtering everything you are going to say and presenting it a certain way. If it’s bad news, you’re presenting bad news and trying to put a little less harsh spin on it. A person receiving, on the other hand, is listening through a filter.”

So although everyone communicates, not everyone communicates well, which can invite huge problems when you are leading a company.

“My position on it, and I’ve told people here time and time and time again, is when I die, I don’t care whether you burn me or bury me, just put up a little plaque that says, ‘The whole darn thing was a misunderstanding,’” says Bagwell. “A good communicator has to recognize that they are on one side of the table, and they’re putting a spin on it. What somebody’s telling you, you’re hearing it somewhat differently than they intended.”

To improve his communication skills, Bagwell makes an effort to look at himself the way the person he is communicating with looks at him. He anticipates questions or concerns they might have and has an answer ready.

“You have to put yourself mentally on the other side of the table, because … you already know what you want, what you’re trying to do and how everything looks from your side of the table,” says Bagwell. “You have to know and understand how it looks and feels from the other side of the table, and also, you have to think like that person to know how to address their needs and concerns.”

Once you think you understand what the other person is trying to say, repeat it back to them to see if you are both on the same page. And if it is an important conversation, put it in writing, which formalizes the conversation and removes the possibility of he-said she-said down the road.

“I’ve tried to practice that,” says Bagwell. “I’ve actually done it so much that I’ve had people come in and say, ‘Tommy, this is what you were just saying. I just wrote it down that this is what I understood. Would you sign this? I’m getting ready to move on this, and I want to make sure that I’m not going to get in trouble.’ And that flatters me.”

Bagwell also has employees play games in which they have to put themselves in someone else’s shoes, such as a customer’s. Then they have to come up with everything they think that person might say and why. Not only does that lessen the chance of a misunderstanding, but it builds relationships because employees start to realize where that other person is coming from.

Although communicating carefully is important during meetings and negotiations, Bagwell says CEOs also have to be careful while making small talk, because everything they say is closely examined.

“Especially when you’re the boss, avoid, if you can, water cooler management meetings,” says Bagwell. “That’s what I call them. I go down through here and someone hasn’t seen me in three or four days because I travel a lot. I come in, they catch me at the water cooler, and I get lured into making some kind of observation that might just be a minor suggestion.

“And the next thing I know, people are acting on it like we’ve had a board of directors meeting and we’re doing a new initiative. Don’t let people act on water cooler conversations. I’ve seen that lead to huge problems.”

Know when to delegate
Bagwell says he enjoys being the boss and doesn’t like giving up responsibility. But there is no point in hiring good people if you’re not going to let them do their jobs.

The company will be better off in the long-run if the CEO takes a step back and delegates some responsibility.

“I’m so used to being the boss, but I try very hard not to change the behavior of what someone is doing if they’re not my direct report,” Bagwell says.

To keep himself in check, Bagwell tells employees that even if he tells them to do something, they shouldn’t do it unless they check with their direct supervisor first.

He also stresses that an important part of delegation is giving employees ownership of an idea so they buy in to it. One of his favorite quotes is, “There’s no limit to what you can achieve if you don’t mind who gets the credit.”

“If you can bury your ego, you need to make it their idea,” says Bagwell. “If they feel like a big part of this is their idea, they’ll work harder.”

Bagwell also tries to reinforce this idea in his management team.

As the years have passed, Bagwell says he has gotten much better at delegation and doesn’t feel the need to be in the office every moment of every day. But he has never been a CEO who works long hours or brings his work home with him, and he believes that he is a better leader because of that.

“When people overwork and overwork and overwork, they’re going to burn out and they’re not going to be doing a good job,” says Bagwell. “You don’t need to be working 70 hours. If you’re working those hours, you need to be delegating.”

Many people fall in to the trap of thinking that no one can do the job better than they can. But there are lots of talented people out there, and the company won’t fall apart if you don’t do everything yourself.

“If you have to work 70 hours a week, you can hire some help,” Bagwell says. “One monkey doesn’t make the show. There are a lot of fine managers.”

Bagwell says the problem is that people get greedy for money, and it ends up hurting them in the long run, both personally and professionally.

“If I could work 40 hours a week and make half a million, I’d take the half a million,” says Bagwell. “Don’t sacrifice your health, don’t sacrifice your time with your family trying to get those things. If you do, you’re going to be a failure, you’re probably going to die earlier and you’re not going to be doing a good job.”

HOW TO REACH: American Proteins Inc., www.americanproteins.com