Vargo moves away from the traditional to hit a new stride

“There is a big difference between leadership and dictatorship,” he says. “And a lot of times you feel that because you’re in a leadership role you are supposed to somehow always start the conversations or direct the conversations or clearly have the final say of the conversation.

“But that, I think, gets more into a dictatorship process,” Vargo says. “And you’ve got to let your growth happen and sit back and continue to look for and surround yourself with bright, energetic people.”

Vargo considers it a daily challenge to try to be more on the receiving end of information rather than the one broadcasting it.

He says you have to surround yourself with smarter people and then give them an opportunity to have a voice — which is important as the business grows.

When his father and mother started the company they were entrepreneurs who had the ability to play all of the roles, Vargo says. Later in the life of a company, you don’t want to operate that way.

“We have to rely on one another as a team, and we need to function as a team,” he says. “And I think that’s really been the difference, and if we want to continue to foster the growth that we’ve been blessed with we can’t take our eyes off of that fact.”

At the end of the day if there’s something he’s not in favor of, Vargo can still respond, but he’s established a core group who has a voice in how the company operates.

“I have created a core group that doesn’t let me go too rouge in either my thinking, or my actions,” he says.

 

Takeaways:

  • When managing rapid growth, don’t just bring on bodies.
  • For a broader, stronger recruiting pool consider remote employees.
  • Smart leaders operate more on receive than broadcast.

 

Out with the traditional …

With its COFE® (Continuous Order Fulfillment Enterprise) software, Vargo is using a completely different methodology to solve the challenges for the direct-to-consumer and retail fulfillment processes.

Similar to how lean manufacturing changed traditional manufacturing processes, the company starts at the end of the process and pulls the fulfillment along.

Vargo uses the analogy of going on a trip. In the old days you had a trip ticket, but now navigation systems can provide real-time updates about construction or accidents.

“What our system does is in milliseconds it recognizes that this isn’t what the plan was, so I’m going to redirect you and I’m going to put you back on the most efficient path in order to accomplish that goal,” he says.

If you ordered three items and one is out of stock, while another person paid for expedited shipping, it’s more efficient to jump to the overnight order even though it’s not next in the queue, Vargo says.

Cera says COFE® isn’t built on serialization with tasks that are done in batches or waves. Traditionally, you cannot go on to the next set of tasks until the first is completely finished, or your system needs to have the ability to process overlapping batches.

COFE® reduces fulfillment to the lowest common denominator of one unit, he says.

“We can use less people, we can use less of a footprint that’s required in a traditional design, and we’re much more efficient,” Vargo says. “We eliminate piles of work.”

 

The Vargo File:

Name: Michael Vargo
Title: President and CEO
Company: Vargo Adaptive Software LLC, Vargo Integrated Systems Inc.

Born: Columbus
Education: Bachelor’s degree in business from the University of South Carolina

What was your first job, and what did you learn from it? My first job in high school was working at Scioto Country Club. I was a caddy, and then I worked various positions throughout the club from busboy to snack stand.

There wasn’t any real significant takeaway other than the influence of Don Hayes, who was the general manager for Scioto Country Club for many, many, many years.

Did you always think you were going into the family business? That was my aspiration going through college, to graduate and then come home to work with my father and mother. But I had a short, little bump in the road. I thought that perhaps there was going to be another opportunity for me to slam a stake in the ground and make millions — and that was selling insurance.

My father was kind enough to let me go off and try another avenue. He said, “If you decide to come back, you need to give me one full year of your undivided attention. And then after that year, if you decide that this industry is not for you, then by all means pursue whatever you want.” So when I came back I gave him that full year of focus and I’ve never looked back.

Is there anything about you people might be surprised to learn? My wife, my daughter and I have a very strong passion for quarter horses. We raise, breed and show quarter horses. I think most people within our industry or people that I interact with at work don’t know that.

So, if you weren’t a CEO, would you be a horse rancher? That would be my ideal position. I love the American Quarter Horse industry and I do enjoy the time that we spend in that arena.