Changing direction Featured

8:00pm EDT September 18, 2006
 Dan Ellsworth and his brother, Chris, co-founded World Micro Components Inc. as a broker of electronics, but faced a challenge when they needed to change the company’s focus to become a hybrid distributor.

The move met with resistance from employees used to the old way of doing business, and the company’s customers also had not changed their perception of the business. Informing employees about the company’s new direction was the first step to changing their mindset.

“If we can change our thinking internally, we can change the perception of our people, which will, in turn, change the perception of our customers,” Ellsworth says.

Although the process is ongoing, World Micro has had steady revenue growth of about 30 percent each year, with 2005 revenue of $11.7 million.

Smart Business spoke with Ellsworth, president and CEO of World Micro Components, about the importance of clearly communicating to employees, and why you shouldn’t keep secrets.

How do you keep employees involved in the workplace?
We tend to be transparent in our management style. We’re open for employees to see; we don’t keep any secrets. There’s no managers’ meeting. We keep it real clear.

We set real objectives, let them know where they stand and where they’ve got to be. Just keep an open-door policy. Being candid, honest and open-minded with our employees is very important. If we can employ those three characteristics, we’re all on the same page.

We tend to hammer in our mission statement over and over to our employees. We also let them know on a daily, weekly and monthly basis what our goals are as a company. When they know that, we can give them our annual goal and say, ‘This is what we’re trying to do in sales for the year.’

Then we break it down for them. This is what we have to do per month, per week. This is what you, the salesperson, has to do per day, and if you achieve these daily goals, we’ll be able to achieve that annual goal.

Make that clear to them in a consistent and straightforward manner.

How does having an open-door policy benefit both employees and the company?
They know where we stand, we know where they stand, and they’re clearly understanding what management’s goals are. They know our objectives, and we can let them know what they’ve got to do.

Letting everybody play on the same field allows us to keep a real open environment.

People know where they stand. There’s not a lot of guesswork. An employee doesn’t have to say, ‘What do I have to do today?’ Those objectives are in his mind; he knows exactly what he has to do.

The main advantage is there’s no ambiguity, there’s no questions about what a person is supposed to be doing. They know their job, and they do it.

How have you managed growth?
We started with a 100-square-foot office 12 years ago, and we’ve added one person at a time. We’ve done all that and remained debt-free, and now we’re at about 40 people total. I encourage slow and steady growth.

Don’t try to hit the ball out of the park. Be happy with doubles and triples, and even singles. That type of growth doesn’t break your infrastructure, it doesn’t throw you in all this debt, and it keeps everybody sane.

Also, keep the money the company has made in the business. I’m 50 percent owner, and my partner, Chris, is a 50 percent owner. We’ve kept a lot of the capital inside the company. Having an excellent credit history from a personal and business standpoint also helps, because we are debt-free.

When people look at our credit scores, like other businesses, they realize we are a very low credit risk. That helps us to purchase goods at lower prices, because the person we are purchasing from realizes they are going to get paid.

What skills does a successful CEO need?
You have to have the ability to attract people, to lead by example and gather the respect of your employees and your people. If they don’t respect you, you really have nothing. Just give them the ability to look up to you.

Hire people who are smarter than you are. Try to build the company like a manager builds a baseball team. We want to find the best person for the position, and we expect performance out of that person.

One of the pitfalls some managers fall into is they want to keep everybody in the dark. If that person is too smart, they say ‘I don’t want someone smarter than me.’

We’re completely the opposite, we want to hire people who are smarter than we are and who are experts in their particular position so we can have a real solid team and win.

HOW TO REACH: World Micro Components Inc., (770) 698-1900 or www.worldmicro.com