Tom Overdeck keeps Kost USA’s growth aligned with its mission and vision

Tom Overdeck, CEO, Kost USA Inc.

Tom Overdeck doesn’t have a crystal ball or any kind of secret tricks that are helping him lead Kost USA Inc. into the future. What he does have is a mission and a vision for what he wants his company to become.

A manufacturer of more than 100 chemicals, coolants and lubricants that has sales of $80 million, the company is poised for some impressive growth and to be positioned as a leader in its industry. Over the next 10 years, Overdeck, CEO, expects Kost USA to become a $250 million company.

“My biggest job as CEO is work toward providing the environment, the climate and the culture to support this but also to provide the infrastructure to support all of this,” Overdeck says. “Providing the infrastructure is a key element in a growing company. That is an important aspect of my role besides providing a vision and giving the organization the capability of executing.”

The key to achieving successful company growth is following the vision and sticking to a path that allows the company to remain true to its heritage.

“We’re a customer-focused company, so we need to continue to reinvest in our technologies to bring the best and most functional products to our customer base,” Overdeck says. “We have to do that within our own heritage and expertise. The vision says that we’re going to be a $250 million sales company while doubling our percent of EBITDA as a percent of sales. The vision in itself is not that complicated, but the pieces of how you get there are where all the work is.”

Here is how Overdeck keeps his company’s growth aligned with the mission and vision.

Communicate your mission and vision

When your company is in a growth mode, there are very few elements more important than the company culture, mission and vision. These elements are the foundation to guide the growth of the company and its employees.

“You have to ask yourself what kind of culture you need to be successful in your vision,” Overdeck says. “You have to have good leadership and everyone has to understand what their job is. The vision can be established by top management, or it can be the result of collaboration by a management team, but it is important to have a vision. What’s very important is the mission and mission statement. Whether you have five employees or 500, employees really needs to understand how their job delivers some piece of that mission and they have to be able to relate to that and understand it.”

Every employee should be encouraged to offer information about how to improve the process. By doing that you allow employees to understand the mission and how their job is related to accomplishing the mission.

“In all of that, you find it becomes easier to empower people if you’ve got the right culture, the right people and they understand what the mission and vision are,” he says. “The watch out is that you have to make sure that you’re recognizing their contribution and rewarding them in some manner. Once you get on that flywheel, the momentum builds.”

Kost USA’s mission states: “We are trusted entrepreneurial partners with our customers, creating joint growth by providing preferred liquid technologies and passionate service. It has been critical to the company’s success that employees are aware how they can contribute.”

“From that mission statement our people need to take away what they’re doing on their jobs that affects that mission,” he says. “It ends up being a cultural thing. You have to have employees that understand the importance of it and are committed to it. You have to stay focused. You have to have a two-way flow of information and communication with the management team being the conduit between the vision and the employee population. No idea is a bad idea, so all your employees need to be active participants in ideas.”

Manage growth opportunities

When following a mission and vision for growth it is important to have a person or team in charge of monitoring progress toward those goals. Without that oversight it is easy to get sidetracked.

“The key to our success is that we first created a management team, and this team works together in a cross-functional mode allowing for advanced planning, support and execution of new and improved technical product innovations,” Overdeck says. “The management team determines which opportunities best fit the heritage and the vision. We have predetermined criteria as to what constitutes success in a particular project before we spend a lot of time, energy, money and resources on it. It becomes data-based decision-making, and it becomes apparent fairly quickly if your project is on track or not.

“If your project is on track, then you keep supporting it and putting more resources behind it. In the event it’s not meeting the predetermined criteria, you have to take a step back and ask what you’re doing wrong. Do we need to modify our thought process or is this just a bad project? It’s not flying by the seat of your pants.”

Managing growth is about customers, employees and partnerships you have with suppliers. Those are the biggest drivers of growth and you have to balance the opportunities.

“You always have more to do than you have available time and resources so you have to make decisions early on about how many projects you can handle simultaneously,” Overdeck says. “That’s where you rely on some of the data you hear from your customers, suppliers or employees to get you pointed in the proper direction and what the expectations are. You have to be realistic and gauge your success against that predetermined criteria. That becomes critical because otherwise you’re going to get yourself saddled in a particular project that might suck up a lot of resources and it’s less attractive in the long run.”

Overdeck and his team at Kost USA are constantly trying to find new chemistry within the framework of a particular chemical compound. However, they realize it’s important not to spread themselves too thin.

“It’s like branches on a tree,” he says. “You can’t be developing too many branches all at the same time. That’s where you start determining which seem to be the most logical fit for you at any one point in time in your business platform, and that’s always an ever-changing environment as time goes on. We’re always developing additional limbs off the main trunk of our chemistry.”

Constantly looking for new developments keeps the company’s products and services unique. You need to understand who you’re serving to be able to provide the best products.

“If you’re truly in touch with your customer base, you truly understand what you’re good at and what you want to be a leader in, then it becomes easier to understand when to increase the number of offerings, the best way to accomplish that, and why you’re expanding at all,” he says. “You need to understand the customer’s motivation, not only what they buy, but how they buy it and why they buy it. You also need to understand the competitive landscape and with these insights you can begin to define and develop products that meet your customer’s needs and move forward.”

Align your organization

To turn a vision for growth into actual results, it takes complete alignment around your customers, the marketplace and your product or service to make those plans fall into place.

“You must align the organizational capabilities to be successful,” Overdeck says. “Consideration regarding those capabilities differs based upon what your customers select as a market they want you to be good at.

“For instance, in some industries, great delivery may be very important, high level of customer service might be very important, low pricing may be very important or product features may be very important. You have to find one or two of those that drives the business. When you understand that, then you have to build your organizational capability to handle that.”

You can’t necessarily expand and overextend until you build the organizational capability to support it. That puts a check on unbounded expansion.

“Doing it by intuition and gut feel is where you get yourself into trouble,” Overdeck says. “You can end up making an investment in your facility or moving into a new product line without really thinking about how you’re most effectively going to deliver that and that’s where people get themselves into trouble. You might have a good idea, but the idea and the investment in the idea are ahead of your capabilities, and at that point you’re going to fail.”

In order to build your capabilities for the future, you have to have full understanding of what your core competency is.

“Once you understand what you’re really good at and what your competitors are not so good at, that’s what you focus on,” he says. “That’s an on-going process that you continue to build on. The key is you have to know what you’re good at. If you’re really not good at anything you’re wasting your time. Sometimes it’s not that easy to really understand what you’re good at. Sometimes you may think you know why you’re doing well, but that really may not be the answer.”

Overdeck makes sure he uses his resources to their full benefit. He utilizes his customers, employees and suppliers to better align the company with the direction he wants to go in.

“You have to be as informed as you can by getting as many sources of information coming back as you can enlist,” he says. “A common mistake is to think you know the answers as opposed to directing questions in a way that would foster additional ideas and thoughts as to why this company is good. It’s a function of how you handle yourself with your customers, your suppliers and your employees.

“There’s nothing that’s totally understood and on cruise control. You have to always try to make yourself better and in that process you have to keep your eyes wide open. If you stay focused on that, pretty soon you’re a leader in your industry and that’s where you want to be. That’s what you’re always trying to find — that niche where you can provide leadership, but importantly you have to make sure it’s a niche the marketplace wants.”

Alignment cannot just be internal. You have to make sure you have alignment with your customers needs and their needs align with your capabilities.

“There’s nothing more important than that,” he says. “From there, you can innovate your products and services to meet their needs. However, it’s not just a one-way street. A customer may have a need but you have to make sure that the need is aligned with your core competencies, your technical heritage and that it supports the company vision.

“A successful company wants to be a leader in the product and services that they select. From this foundation you can continue to grow complementary offerings. Once you’re on task it becomes easier to know directionally how to expand these products and services. This will help you maximize the value proposition to a customer. In my mind, it’s a pretty simple approach, but it’s very important that you stay on that path.”

Ultimately the path to growth and executing a successful vision is being able to build alignment around both internal and external operations and that means building relationships and partnerships.

“You put a fair amount of responsibility on the shoulders of your representatives to ask questions beyond the obvious to better understand your customer’s business,” Overdeck says.

“Then you become to that customer a resource and a partner. You’re not just a vendor. That’s how you begin to bridge this gap of knowledge so you can really understand where your offering is best suited relative to accomplishing your company vision. Being an entrepreneurial partner with your customer base is where you want to be perceived.”

HOW TO REACH: Kost USA Inc., (800) 661-9391 or www.kostusa.com

Takeaways

-          Make sure everyone understands the company mission and vision and how he or she fits into it.

-          Understand where opportunities are that help your company grow.

-          Be certain everything you do is aligned around your vision and your capabilities.

The Overdeck File

Tom Overdeck

CEO

Kost USA Inc.

Born: Gary, Ind.

Education: Attended Indiana University and earned a degree in marketing. I went to work with Dow Chemical and during that time earned my MBA in finance from St. Louis University.

What was your very first job and what did that experience teach you?

In my junior and senior years of high school, I would go back home during the summers and work in the steel mills in Gary, Ind., for U.S. Steel. The magnitude of that world had an impression upon me. It gave me an experience of what American industry was like. That’s where I began to think about process change. I was just an hourly labor guy, but I was still looking around and saying to myself, ‘There are better ways of doing this.’

Who is somebody that you admire in business?

My dad. He wasn’t a business person, he worked in the steel mills as a machinist, but he was a very bright guy. He had wonderful ideas and a number of patents that he applied for and got. I looked at his commitment and his desire to succeed even though he was handicapped by not having the proper education. He was always willing to stand up and find a better way to do something.

What Kost USA product are you most proud of?

We consider ourselves experts in heavy duty off-road engine coolant for large trucks used in mines and quarries. There’s a lot of technology involved in the additive systems to make the product work as well as they can work, and we’re very good at that. We’re not a household name, but within that particular subset of the industry we’re recognized as guys who know their stuff. Another area is stationary engine coolant for the drilling work being done in the Marcellus Shale Region.

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