Merv Dunn grows Commercial Vehicle Group Inc. on a global level Featured

4:01pm EDT July 31, 2011

Merv Dunn was having a moment of truth with himself. He realized he was frightened to go global with his company, Commercial Vehicle Group Inc. At that time, the company was only in the United States and had 95 percent of its business in one area with only two customers.

“I was afraid to start with it,” says Dunn, president and CEO of the vehicle component manufacturer. “But I was afraid of failure if I didn’t. I looked at my biggest competitor. I saw that they had stayed in North America, and they weren’t developing as the kind of company that I wanted to be. I was afraid if we did not go, we would not be successful, and we would dry up.”

There was another problem. The economic downturn of 2008-09 threatened not only the company’s health but its five-year strategic plan. The plan’s vision for growth and diversification geographically and in market use was at risk.

The first step was to start at the top, then work through the company to pare expenses.

“I took a 10 percent pay cut and so did my direct reports,” he says. “Then we put in a 10 percent pay cut across the board. In some cases, it was furloughs. They worked four out of five days a week. Some people we had to let go totally ? that was our last choice.”

And above all, the work continued. The team stayed true to the strategic vision. Global projects undertaken during the recession began to bear fruit.

When the 2010 sales figures came in, CVG tallied $598 million, up 23 percent from 2009. The company is in eight countries now.

Here are some tips on how Dunn helped stabilize the company as it gained strength to venture overseas.

Stay in focus

Dunn knew it was important to follow the strategic vision.

“Two years ago, there were a lot of people who didn’t think we were doing well,” he says. “They were questioning the strategy and they were questioning even internal management. When you started explaining your strategy and why you’re making these certain moves, then the overall company sees it. You may have pockets that still disagree, but once you can get them to understand why you’re making moves, I think then you get the buy-in.”

The vision needs to stay in place in good times as well as bad times.

“First of all, if you withdraw and pull everything in, you might as well tell everybody in the company that you’re closing,” Dunn says. “If you’re not working hard during the down cycle, then they lose confidence that you’re going to be here when the up cycle comes.”

Keep an eye on your competition because if they go under, you have a chance of getting their business. Develop contacts that could pay off with tips for new business.

“We get calls from customers who say, “We can’t get deliveries out of these guys. They seem to be having financial problems. Will you look at their product and quote it for us?’”

It’s not uncommon that if you follow those steps, you’ll see the benefits in more ways than one.

“It’s not unusual to pick up the business, and it’s not unusual to get a little better price for it because you’re going in with a product from a company that’s known to have a technically superior product and is known to meet its commitments ? and also does it in a consistent manner, and is honest,” Dunn says.

Hold on to staff such as the research and development department and assign them to develop new products or services.

“We developed three new products,” he says. “When you’re doing that, your people have confidence that they’re doing the right things and that you’re leading them the right way. In coming through an economic downturn and surviving that stronger, people kind of have confidence in that we know what we’re doing.”

Successes will encourage the employees, boosting their energy. Dunn used it as a rallying point.

“To come through it like we did, people are kind of walking on a cloud, saying, ‘Hey, you know, we’ve got a good game plan. Let’s keep after it,’” he says. “The successes that they’re seeing right now, it’s just tremendous, with the growth, and the different markets, the different customers. There’s just an excitement level. It’s like a basketball or football game. You start scoring, and your competition comes out with different plays, and you’re still scoring on them. People get pumped.

“You don’t always have to have what some people would consider the best team or the best captain, but if he’s winning, they get confidence in him quickly and they get excited.”

Be honest, consistent

The approach to take when expanding globally is really not that much different from the tactics you would take when building here at home.

“First of all, you’ve got to be honest,” Dunn says. “You’ve got to be competent in your abilities, you’ve got to trust your abilities, and you’ve got to be consistent. If I go there and they ask me to do something, and I don’t think there’s a chance in hell that I can do it, I tell them I can’t do it.”

People want honesty, no matter how hard the news is, and no matter which country is involved.

“If I tell them I’m going to deliver, when I’m going to deliver it, and I deliver it ? news travels. If I don’t deliver it ? news travels.”

Another important consideration about global expansion is to make sure the customer wants you to be there.

“A lot of people have had the attitude over the years, ‘Build it and they will come,’ or ‘We’re not going to build it until we know for sure we have customers,’” Dunn says, noting that finding a middle ground often works.

Go in small, and then with your technology, and quality and delivery systems, grow the confidence of the domestic market.

“That gives you the ability to start growing in leaps and bounds very quickly,” Dunn says. “But you have to be there in some form or you’re not going to get business because they don’t want somebody they can’t talk to.”

Do your homework. Get yourself in the geographic areas where your customers need you and learn about the country.

“You have to know the culture of the country that you’re in,” he says. “I would want people to get to know my culture if they were coming and putting a plant in my country, because to be able to turn my plants over to them, I need to know the culture, and I need to have trust in them.”

Gaining trust also involves patience. Subtleties in conversation can be misunderstood, for instance, when agreements are made. Be aware that some cultures place importance in not disappointing the other person.

“You’ve got to keep asking the same question and peel the layers of the onion back,” Dunn says. “See how consistent it is because many times you have to sort out the fact from the perception.”

When it comes to managing sites overseas, look at various options. You may find someone who already works for you that shares the culture and who could be given a management position.

“Usually, we can find somebody in our company that speaks the language,” Dunn says. “We’ve grown people either through acquisitions, we’ve selected the best talent, and if that talent was better than someone else we had in our company, we’d put the other person in a different role and we’d put this guy in the lead role.”

Ensure quality and buy-in

Concerns about quality are not limited by geography, and by following a simple rule that workers should treat a product like they were going to purchase it, many problems can be avoided.

“I think there are concerns about quality of products made in any developed country let alone an emerging country,” Dunn says. “Treat it like it’s a product that you’re going to buy. Do you want to be hassled taking something back that doesn’t work?”

The labor force in emerging countries can be trained just as in any other country.

“The people have to learn how to work in a factory when they’ve not been used to doing that,” he says. “Those lessons you’ve got to teach, and you’ve got to teach them until it’s second nature.”

You can do your global expansion alone, or take on a partner. Either way, make sure your reasons are solid.

In one country, Dunn built his own plant.

“I didn’t want to go in there and worry about that I might have a partner who didn’t see the same strategic vision as we had and the same commitment to the customer that we had.”

But in another country where CVG had already had some business dealings, it may be another story.

“I probably will have a partner, because we’ve been using engineering services,” he says. “We’ve had a strong relationship with someone over there that I feel has the same commitment to customers and the same commitment to innovation and to the employees and to the leadership.”

Once quality is secured, you also need employee buy-in.

“I believe in honesty,” Dunn says. “If a customer calls me with a problem, I don’t try to figure out whose fault it is. I want the problem fixed, and then we’ll deal with whose fault it is. It’s important to fix the problem, but it’s more important to fix the problem than to fix the blame.”

Not only does that lead to successful customer service, but it sends a message to the employee.

“Once you have a win, your team looks at kind of why you win. If they look at it and can see it was because you made the right strategic decisions and you make the correct day-to-day calls in the huddle, they buy in pretty quickly,” Dunn says.

Buy-in is something that needs to be addressed constantly with the staff, at all locations.

“If they don’t have confidence in the decisions that you are making and the outcomes that are happening, then they lose focus real quick and lose interest,” he says.

Give the employees the straight story no matter if it is something you don’t want to be honest about.

“Sometimes when you’re standing in front of a group and you get questions, you’ve got to say, ‘I just can’t discuss it right now.’ And, there are sometimes when you’ve just got to say, ‘Look. That’s not going to happen.’ Then there are sometimes you can go, ‘Yes, we agree with it and that’s what we’re going to do.’ You’ve always got to be honest. You’ve got to be consistent. You’ve got to trust your abilities. And you have to constantly stay in contact with the customer. Those are the kind of things that I push from my leadership role.”

If the leader can show his human side, the effects can be immeasurable. Dunn puts a high value on the experiences he has had with employees, even when a plant closing was imminent.

“I said, ‘We can’t be competitive here, and the customer is not happy,’” he says. “We’re in an economic depression with our end market, and we’re just not going to be able to keep it open. And I’m standing there, and I am thinking, ‘Oh God, how long can this take? I don’t want to do this. I don’t want to tell these people, but I’ve got to.’

“And at the end of it, there were these two older women who came up to me and said, ‘We’ll be OK. We’re worried about you, because we know how stressful this is on you. We know how hard this was for you to do. But we’ll be OK, so don’t worry about us.’  Two men said, ‘Is there anything we can do to help? Can we do anything to save it?’ I said, ‘Well, we can try. But I don’t think there’s any way to, to be honest,’ and they said, ‘We know how hard you have worked to keep it open. And we’re going to keep on working.’

“You know, that damn plant is still open. It doesn’t have near the employees it had, but they’re still adding to the bottom line. And they made it through the worst economic depression in this industry. The competitor liquidated and they got the business back after all these years. So it taught me that being honest with everyone is critical.”

How to reach: Commercial Vehicle Group Inc., (614) 289-5360 or www.cvgrp.com

The Dunn File

Born: Dayton, Ohio

Education: Eastern Kentucky University, master’s degree in operations management

What was your first job?

My first job was at 11 on a tobacco farm picking tobacco blooms. It was a buck an hour. That was a lot of money with my dad not able to read or write and my mom with a third-grade education.

What was the best business advice you were ever given?

I was fortunate enough when I got out of college to end up working for a guy that I had strong admiration for. One thing he always stressed to me was, ‘Try to think through your decisions. Don’t make them emotional. And most of all, be honest. Be honest with yourself more so than anyone else. And be true to who you are.’ My whole life I’ve competed against Harvard grads, MIT grads, and I have an undergraduate degree from Eastern Kentucky University. You’ve got to have something else to go along with it. I think being able to handle confrontation and being straightforward are probably the things that he taught me that I’ve stuck to. Have confidence in yourself. He said you’re here for a reason. You’ve got the job for a reason.

What’s your definition of success?

I consider success that as a person, when I see that my family is successful and then I look at my company and I see the people that are here are being successful, we’re being successful because the customer wants us, and to be wanted is a success. For me, seeing my company come out of this crisis, and people want to be part of my company, I consider that a success. It has to be wanted to be a success.

On taking risks: I don’t want to be 85 sitting on a front porch saying, … ‘I wished I’d tried that!’ I left a great company where I was president to jump out on my own in private equity. I screwed up, got with the wrong partners, lost a lot of money, started over again, did the same thing and won ? came out with good success because I learned from my failure. I think it’s always go