Twice a year since November 1998, Sam Grooms has been attending a meeting with more than 20 of his valued customers but he hardly says a word.
It’s not because the president of Hy-Tek Material Handling Inc. is shy or preoccupied. It’s because the Customer Advisory Board is the creation of General Manager Jim Ripkey, and that means it’s not Grooms’ place to butt in even if he is the president.
“He gives me two minutes to go up and do my thing,” Grooms says. “It’s his program. He runs it.”
The concept is typical for Grooms, who has fostered an environment encouraging Hy-Tek’s 165 employees to come up with their own ideas and follow them through to completion.
He uses the philosophy not just for managers, like Ripkey, but for each and every employee: The company’s truck driver chose his own truck; the sales staff shopped for its own database.
The result: Hy-Tek has kept its turnover rate to 4.5 percent in the last two years, while others in the material handling trade report 10 to 12 percent, Grooms says. In addition, the company benefits from the ideas of employees who do their jobs better than the president can.
“The knowledge and strengths and abilities of people are endless,” Grooms says, “if you let them have the ability to use their talent.”
Grooms was the first person Ripkey approached a little more than a year ago when he had the idea to create a board of customers to provide input to Hy-Tek.
“In our business, like most businesses, there are so many sources of information and people telling you what your customers want,” Ripkey says of trade magazines, consultants and the like.
His idea was to create a board of customers, including major clients and prospects, to get more direct input.
“We looked for a certain chemistry in people that would tell us like it is,” Ripkey says. “We didn’t want it to be a good ol’ boys network. We wanted them to challenge us.”
Six weeks after he had the idea, the first meeting was held.
Advisory board member Phil Trabulsi, director of project management at Exel Logistics in Westerville, has seen consultants work with companies, but says the Customer Advisory Board is more effective at providing the specific solutions Hy-Tek needs. The company has responded, Trabulsi says, to the board’s suggestions for creating a Web site, and for expanding system design and management capabilities.
He says he did not realize the Customer Advisory Board was one employee’s initiative, but he has observed Grooms’ interactive management style.
“I think he recognizes that the way he’s going to grow that company is through effective delegation,” Trabulsi says. “So when the company was smaller, he would wear more hats, and as the company has grown, he’s hired capable people.”
Grooms has even turned over some high-dollar purchasing decisions to the Hy-Tek employees who will be most directly affected by them.
Employees were asked to choose between two business operating software packages for the company’s financial center. Not only did they get the system they preferred, but they unwittingly saved the company money. Grooms withheld the price of the two systems from his employees because he wanted them to choose the program based on its merits rather than its cost. They selected the less expensive of two one was $44,000 and the other, $146,000.
Turns out the more expensive one would have been antiquated for the company’s needs in a short period of time anyway, Grooms says.
By way of necessity
Grooms had to learn quickly that delegation would serve him well in running the company, which he and four other employees purchased in 1989 after the death of the founder, William Slife. The southeast Columbus company was formerly called Slife & Associates.
“When Slife was no longer there, what were people going to relate to?” Grooms asks, recalling the apprehension of employees, suppliers, vendors and customers.
At the time, Grooms was the youngest partner.
“I mortgaged everything I had at the time. And what a great deal it was now, looking back,” he says. “But I was a straight commission sales person going into a salary half that and more than doubling my expenses.”
Over the years, the management team changed; Grooms moved into the president’s position and now owns the company along with three partners, executive vice presidents Dave Price and Tony Murray, and Dave Tumbas, vice president and CFO.
“The success of this company is based on the fact we’ve had the best people in the marketplace,” Grooms says, noting the company’s revenues have grown to nearly $40 million from $11 million in the first year after he and the other employees purchased the company.
“We didn’t realize what we weren’t capable of doing, or how we could do it better, until we brought in somebody who was an expert,” Grooms says.
For example, the company didn’t do much marketing before hiring Claire Rigot as marketing analyst in March 1998. Since then, she’s produced a corporate brochure and video, launched public relations efforts and the company’s Web site, and conducted competitive and market research.
“We also centralized efforts just to make sure we were all telling our story as well as we could,” Rigot explains.
“With more demands today and so much that has to be done more quickly, you just have to let people do their thing,” Grooms says, adding that there’s no more cost to let others make decisions he might have otherwise made.
Here’s how he makes the system work:
Hand-pick your employees.
Grooms does this in two ways: through recruiting and by growing his own. His head of human resources is someone he met through networking at his church. The general manager at Hy-Tek’s new Cleveland office was hired through a contact on the Customer Advisory Board.
When networking and ads aren’t successful, Grooms has another trick up his sleeve. By working with local schools, he can train his own employees before they’re even hired. Through an Eastland Vocational School program, for which Hy-Tek provides equipment and employees as instructors, Grooms has hired about three new employees a year since the company became involved in March 1998.
Speak and interact freely with employees.
“Get out; be visible; be approachable,” Grooms advises.
He makes sure he’s not always stuck in his office, and he tries to keep his door open. If it’s closed, employees still know it’s OK to knock.
On a quarterly basis, Grooms holds a breakfast before work to update employees on the company’s status and to point out accomplishments. At least 70 percent of his employees attend, even though it’s optional. If he subtracts employees who live far away and others who are on the road on business, he estimates attendance at nearly 100 percent.
“That makes you feel good, too, that people give a darn about what’s going on,” he says. “And we give them the opportunity to ask questions.”
Grooms shares as much as he can without jeopardizing the company’s negotiations or its own employees. When the company was making plans to expand to Cleveland, he told employees he wanted Hy-Tek to gain a presence there either by acquisition or starting another office.
“So they’ve got enough information to know they’re with a growing, vibrant company, but I’m not, at the same time, divulging any confidentiality agreements by naming names,” he says.
Similarly, when employees ask about the company’s financials, he tells them in general terms whether they’re ahead or behind projections. If they ask about their own department, he’ll give them information about the invoicing or expenses.
“You don’t talk salaries ... but you can talk about what are the total expenses of a given department,” he says.
“We try to answer as many of the questions as we can in the format of the meeting itself so we’re answering the questions before they have to ask it,” Grooms says.
Offer encouragement. Grooms acknowledges his task is to make sure he knows a little bit about every person’s position in the company, but he has to “get out of the way and let them do it. I don’t think I’ll ever get accused of being a micro manager,” he says.
“My only other job is to make sure everybody’s not afraid to think big.”
He often gets skeptical reactions when he says his goal is to be a $100 million to $125 million company within the next five years. People may tell him that’s impossible, he says, considering the company’s revenues are a fraction of that now.
“Yet five years ago, we were about one-third of the size we are right now,” he says.
Grooms also makes sure employees know they can take responsibility for their decisions.
“Give people a part in the process, and they’re going to go out and take ownership,” he says. “They’re going to go out and make it happen on their own.”
Ripkey says he gets personal satisfaction in seeing that his own idea is working and paying off for the company.
“I guess the next challenge, then,” he says, “is to come up with the next idea.” Joan Slattery Wall (firstname.lastname@example.org) is associate editor of SBN Columbus.