Stephen Hightower hasn’t had to stress over challenges faced by many during the recession, but that’s not to say he doesn’t have business challenges. He is just facing challenges of a better kind — growing pains.
In the past three years, Hightowers Petroleum Co. has grown by more than 25 percent a year — and it’s still growing. As president and CEO of the $227 million petroleum distribution company, Hightower has had to decide how best to ensure the longevity of the organization.
“We’ve had exponential growth over the past four to five years where we’ve grown anywhere from $50 million to $60 million a year over the last three years and we’re anticipating that kind of growth again this year,” Hightower says. “That has obviously offered management challenges as well as organizational challenges to maintain the integrity and the quality of the day-to-day performance while absorbing the new additional business on a daily basis.”
What makes this growth and the decisions that come with it more challenging than usual is the fact that Hightowers Petroleum is a family-owned business. Decisions as to where to steer the company are not always easy to make.
“We started as and still are 100 percent family-owned,” Hightower says. “As a family-owned, three-generation company, that has its own set of unique issues as it relates to culture, keeping that family feel while growing into a corporate atmosphere is always thoroughly challenging.”
While the family certainly has a say in how the company grows, it is ultimately up to Hightower to make the final decision as the 100 percent stockowner and CEO. Here’s how he has positioned the company to reach the next level.
Keep up with growth
Gasoline is a fuel that has to be available to its users. It is crucial for Hightowers Petroleum to be able to keep up with customer demand. To do so, the company stays focused on its core business.
“Never take your focus off of the current business,” Hightower says. “Make sure as you grow and you do alternative activities that your core is well taken care of and not distracted. Add to your organizational support as you bring on new business without sacrificing the core because if you lose business as you gain business then you’re not going to grow.”
One key to the company’s ability to keep pace with its growth has been its decision to be ISO certified.
“When you first put a quality system in place, it literally is no more than a manual that someone has written,” he says. “It takes two or three years of being tested and actually being forced to utilize those processes or you’re not able to get recertified.
“If you utilize those processes then it becomes a part of your culture and once it becomes part of your culture, then your operations begin to change. It’s not automatic just because you have a quality system that you’re going to operate in a quality manner. It’s a gradual adaptation of your everyday natural life.”
Having those processes and systems in place allows you to bring on new employees without having to recreate anything.
“It’s all written, it’s all documented and it’s all practiced such that when you bring new people with new ideas and ways that they’ve done business at other organizations, it’s a lot easier for them to adapt to the new processes that we already have in place,” Hightower says.
With the pace at which Hightowers Petroleum has grown, the company’s success has relied on good employees.
“You have to measure when your people are at 110 percent to add that additional person in that particular department to support the accounting side of that growth as well as the execution of that business on the other side,” he says. “So it’s making sure that you continue to have quality individuals that know their job right up front. They may be trained to your system, but they are quality people walking in the door to be able to adapt to your business and your system and be able to become part of the team very, very quickly.”
Quick adaptation is key in maintaining fast-paced growth. Hightower makes sure he sets the pace of his organization.
“When you set the pace as a leader in terms of working hard, working long, working accurately and not having or accepting mediocrity in your organization, then the culture of your people falls into that same rhythm,” he says. “Once you’ve established the rhythm of your organization, it becomes pretty easy to identify individuals that cannot keep up with that pace. Either they stick out and they perform or the fellow employees support them and correct them or they are the ones who weed their own peers out of the system.”
Get in position
When growth is the primary focus of your business, it is important to plan how your company can best benefit from that growth.
“Succession planning has been a very key part of our future planning process,” Hightower says. “We elected an outside board of directors about a year ago. In doing that, part of the reasoning was from a succession-planning standpoint; those that would take over the business in the future would have to have an outside board. We felt that it was proper to begin to exercise and practice with a quality outside board so that if something were to happen to myself or if we were ready for a change, that process is already in place.”
To fill the board, Hightower brought in senior people from Shell, Marathon, Eli Lilly and other businesses of a similar size and nature to his own in order to take the company to new heights.
“If you’re a privately owned company, there’s typically a lot of fear of outside boards because there’s fear about giving up control,” he says. “There was a decision that we had to make whether or not we wanted an advisory board, or whether we wanted an actual board of directors.”
The decision to go with an outside board of directors proved to be the right one in the long-term.
“We’ve got some quality people and some expertise that will hopefully balance our growth as I go into water that I’ve not necessarily been into from a size standpoint,” he says. “When you’re trying to get to a billion dollars, you’re in territory you’ve never been before. Having that type of advice and support from an outside board that’s committed to the success of the organization has been a good experience for our company.”
Most privately held companies have family and friends as board members so they can remain in control of the organization. Hightower says it’s been advantageous having an outside viewpoint.
“Don’t be afraid to have people know more than you know, people who are smarter than you and people who can contribute to growth and not just be a yes man to you as a CEO,” he says. “The fear of someone being better, taking over, or learning something that you may think is proprietary is narrow-minded as it relates to long-term growth. If you don’t want to grow and you want to maintain a lifestyle business and just do enough to get by, that’s one thing.
“If you’re really committed to growth in your organization, then you need people better than you on top of you and people better than you below you and that may or may not be someone in your family. If it’s not someone in your family, get the best person for the job.”
Often, just giving up control in aspects of the business is the hardest thing for a family-owned company to come to grips with.
“Many people remind you of the horror stories of CEOs being fired by their board and being locked out by their board after they’ve ran a business and built a business and then their door locks are changed one day when they come in,” Hightower says. “That’s the worst case scenario, but yet one that was presented over and over again from a fear factor. As a CEO who is the leader of the organization, I had to overcome those fears not just myself, but for family members and others in the organization who do not have the same level of no fear.”
For the betterment of the business there has to be someone willing to take the chance and take the risk to push forward.
“As a leader you’ve got to be the one who pushes the organization in a way that’s good for the organization and overcome those fears in the process,” he says. “Having done that, one year later, all of those that were nervous and not necessarily for having a strong outside board have now come around to say, ‘It’s not that bad after all.’ They’ve begun to see the value in the selection that was made.”
Take advantage of opportunities
While bringing in an outside board to help the company reach higher levels was crucial, it has also been important that the company keep looking for opportunities. Hightower started with technology.
“In our distribution model early on we adapted technology and we also adapted procurement methods of managing the entire enterprise versus just managing a site,” Hightower says. “We developed a national strategy very early to be able to adapt to corporations when they began to have a single supplier supply the entire commodity versus having 10 suppliers managing that one commodity. By adapting to that procurement process a long time ago, we were able to move as corporations were changing how they purchased to be able to be the single supply chain manager for those corporations for the fuels area.”
Being privy to the changes in supplier thinking and the new opportunities those changes could create has contributed to the company’s success. Finding new areas for your business to expand into is crucial for exponential growth.
“There’s a concept similar to football were you say, ‘You go wide or you go deep,’” he says. “If I was going to go wide from fuel I think if I got into electrical and got into HVAC or started doing fasteners, that’s going wide. I suggest that you go deep. If you’re selling gasoline and diesel, you add monitoring and equipment in the gasoline and diesel area and you add lubricants and oils and then you do things that are complimentary to your industry so that you get deeper into your industry versus going wide and trying to get into other products that are not complimentary to your industry.”
When the company adapted technology it got into technology relative to fuels. When the business began to look at expanding the supply chain into freight and transportation, it was in the fuel-related area.
“Going deep versus going wide is one of the key focus areas that an entrepreneur should look at when expanding what they do next,” he says. “Make sure that what you do next deepens your position in that industry versus trying to start all over into a new industry sector. There’s very little benefit in going wide because you have to now become familiar and an expert in a whole new area and a whole new set of people and suppliers and buyers. You want to stay within your industry and add components that will deepen that industry.”
To take full advantage of the opportunities that can be presented to your business, you have to set goals for what you want your company to become.
“We want to become a billion dollar company,” Hightower says. “We said that when we were only doing $50 million and now we are doing a quarter of a billion dollars. You’ve got to want to grow your business. You’ve got to have a deliberate effort in growing your business to scale and size because it won’t happen by itself. If you’re not talking about it and not trying to get there, then you probably have no chance of succeeding.”
HOW TO REACH: Hightowers Petroleum Co., (513) 423-4272 or www.hightowerspetroleum.com
Takeaways
– Make sure your company is doing the right things to keep up with the pace of growth.
– Plan and position your company to best benefit from what growth can provide your business.
– As you continue to grow be on the lookout for areas of opportunity.
The Hightower File
Stephen Hightower
President and CEO
Hightowers Petroleum Co.
Born: Middletown, OH
Education: Attended Wright State University and majored in management and communications.
What is the best business advice you have ever received?
Never stop pursuing your dream. There are many days and many times that it seems like tomorrow, but there is no tomorrow. You go to bed and you wake up and there is another day. Problems always get solved by waking up and meeting those challenges head on, regardless of how bad they are. Face your issues and never stop, because when you stop it’s over with.
Who is someone that you look up to in business?
The most important person in my business career has been my father. When I was a teenager I got to actually sit down in sales meetings and do sales calls with my father. That was probably the most impressionable. As I began to grow there were people like Bill Mays with Mays Chemical and Vernon Stansbury with SCSC and these were companies doing $300 and $400 million worth of business. I would see their boats and their 10-story office buildings and that’s what let me know it was possible for me to go out and have the same thing. If you don’t see that it’s possible for a young African American to have that size and scale of business, then you don’t know that it’s possible. It was seeing other African American CEOs that were young, aggressive and accomplished that I knew I could do the same thing.
What are you most looking forward to in your company and industry?
I’m looking forward to an event that will either take part of my company public allowing us to maintain majority ownership, but put me in a position where I can semi-retire from the organization and/or an event where I could sell the entire company.
