J.D. Ewing is writing COE Distributing’s next chapter

J.D. Ewing has a history of doing things himself. He was the only employee of the family’s office furniture and supply wholesale business, bearing the load the first few years after his dad offered him the chance to take over the ailing aspect of the family’s retail operation. Then 19 years old, he loaded and unloaded trucks, made deliveries and sales calls, and worked to grow the business.

At the end of the first year, in 1989, when Ewing closed the books, the company had done about $200,000 in business. He was hearing criticism — not for a meager year but for leaving Penn State University to have a go at making the wholesale business successful.

“There wasn’t anyone in the family, outside of my dad, who felt this was the right decision, walking away from school and coming and working in a business that wasn’t generating much income,” says Ewing, now president and CEO of COE Distributing. “And if I think back, there probably wasn’t a lot of data for me to stand on and say, ‘Well this is why.’ It was more of a gut feel of, this is what I think I should be doing, and it felt like the right decision. And so that adds to the fear of failure. It’s a good motivator because you want to prove people wrong and you want to make sure that the decision you made was the right one.”

Two years in, Ewing’s dad gifted him half of the business and he shouldered its growth, soon extending its reach to about a 750-miles radius of Pittsburgh. But the company, and the lessons he ultimately learned, would grow beyond that.

Doer vs. delegator

Ewing took an aggressive approach to growth, pushing ahead knowing that the business had to get bigger to be successful. He took on all of the company’s responsibilities the first few years but soon recognized he couldn’t continue doing everything himself. He had to grow the business big enough to be able to hire someone so he could grow it even more.

After doubling the size of the business, he made his first hire — an office manager to answer the phone, manage inventory and do the billing while Ewing was on the road selling, making deliveries and managing the warehouse. Adding his first employee, he says, brought relief, but also anxiety.

“I’ve got this person’s livelihood in my hands,” Ewing says. “And if it was not successful, I’m going to disrupt their life.”

As the 1990s progressed, the business passed its first million in revenue and grew steadily from there. He added a salesperson before the decade ended, and within six months, the new hire had amped up the company’s growth even more.

The company grew to around 70 employees by the early 2000s. Ewing, however, continued to work alongside everybody else. His wife, whom he met through a customer account, was deeply involved in the business. They started a family — three children under 5 years old — and added a second location for the business in Charlotte, North Carolina.

Ewing was hiring, but he hadn’t fully transitioned into management — to a position where he was a delegator, rather than a doer. The business was growing steadily, stacking revenue. And with everything humming along, Ewing, now in his 30s, was approached in 2006 to sell the business. So he did.

From buyout to bankruptcy

The decision to sell came about primarily because, having received an offer from a strategic buyer, Ewing believed he might not ever get another one. It was a chance to stay in the business while taking some risk off the table and create a liquidity event for his family.

So, COE Distributing became part of a rollup with other regional wholesale office furniture distributors. Although it was the smallest of the three that were purchased at the time, COE Distributing became the largest division within the group and continued to grow.

But that chapter soon ended. By May 2009, the acquirer ran out of cash, and Ewing’s business suffered.

“They’re not paying our vendors. We’re not getting shipments,” Ewing says. “We’re an asset-heavy business. If we don’t have inventory, we then become unimportant to our customers and prospective customers. And we became unimportant pretty quickly when we weren’t able to fill orders and get inventory.”

Through the course of 2009, things got worse until the acquirer ultimately filed for bankruptcy. That’s when Ewing, another former owner and the company’s largest supplier bought COE Distributing out of bankruptcy in a cash deal, and reopened the business shortly after. Back in the driver’s seat, Ewing set out to repair the trust of the customers that had been burned.

“We had some pretty upset folks,” he says. “We didn’t create new customers. The customer base was essentially the same — we knew who they were, they knew who we were — and we didn’t treat them well, as a vendor to a customer, for almost a year because of the situation that the company was in. So, we had a lot of tough conversations — getting yelled at, screamed at. My customer service reps were being told, ‘You guys are no good. There’s no way I’m going to buy from you.’”

Ewing and his team, over the course of about six months, countered customers’ objections and ultimately won back the business of its 600 active customers, only walking away from one.

Winning back customers so quickly and blowing out its three-year revenue projections in just the first year after regaining control showed Ewing that COE Distributing had a bigger opportunity to be successful than maybe he thought possible. It also marked another step in Ewing’s progression as a business owner. It was around that time that he began to recognize the importance of culture and that people had to be the focus for the company to continue to grow.

One book after another

COE Distributing had managed a serious growth trajectory, largely by Ewing’s force of will. People were added to plug the holes Ewing couldn’t fill as he did his best to keep everything together and moving forward. But that approach, he came to recognize, led to a turnover problem.

“It was equally annoying, expensive and exhausting to have to fill roles that were hired six months ago, and you’ve got to backfill them because it didn’t work out,” he says.

That’s when Ewing recognized that culture had to drive the company.

“I had to start on the inside, and I had to start at the top,” he says. “So, I really started on a journey that put us in a position to manage growth in such a way that, from my perspective, I never thought was possible.”

That journey started with a book. That book led to another book, then another, and another. His reading eventually led him to discover the topgrading interview method. Previously, the interview process at COE Distributing had no clear design. It was more or less an exercise of checking the necessary experience boxes and gut feel. The topgrading method — structured, repeatable and focused on whether the candidate was a cultural fit — led to a 70 percent drop in turnover.

The company had also rolled out other employee engagement efforts. It improved the way it went about quarterly employee recognition and started a feedback system called start, stop, continue. That system offered a way for employees to tell management what they thought the company should start to do, stop doing and continue to do. And management acknowledged every answer with a reply.

Other programs were implemented to keep employees informed, interested and focused on the business. These activities, Ewing says, have engendered pride among employees in their employer. They have also affected Ewing.

“It certainly gave me a sense of pride of knowing what we’re doing is the right thing to do as an employer, and as a human, to help other people,” he says.

Ewing’s role in COE Distributing changed. He was no longer shoulder to shoulder, carrying the physical load with employees. Instead, he became focused on developing the culture because, he says, it’s critically important to the success not just of the company, but to each individual. Those cultural investments, he found, paid off in the face of one tremendous challenge.

Engaged and contributing

In March 2020, COE Distributing wrapped up its most successful quarter ever. But by the first week in April, when the pandemic was firmly on U.S. soil, business fell off 65 percent from 2019.

COE Distributing immediately went to work digging itself out of the hole. The company adapted to its clients’ needs, stocking its inventory with PPE and acrylic barriers, moving from concept to sellable products in less than 30 days.

Through the pandemic, Ewing committed to keeping all employees and maintaining wages, and approved additional PTO for any employee whose family was impacted by the virus. Those moves, as well as others, he says, gave employees the confidence that the company was strong and could support them — and that they could focus on taking care of customers.

The impact of these steps wasn’t visible immediately in the company’s revenue. But by August and September, it was seeing record numbers.

There’s a lot of credit to give to Ewing, who’s grown COE Distributing’s revenue nearly 500 times from what it was when he began. But he is eager to credit the continued success to his employees.

“We would not have achieved what we achieved without them, particularly over the last 12 months, just taking a short-term view, with the pandemic and the challenges that we, as a business, faced, given the segment,” he says. “Our business is furnishing offices, and this last year, office occupation was down 85 percent. Yet we still remain viable and important to our customers. That doesn’t happen without the efforts of everyone, and everyone being engaged and contributing.”