Growth navigator Featured

8:00pm EDT June 29, 2006
Bill McGill has growm MarineMax Inc. with a complementary balance of internal and external growth, but the key to both has been a focus on people.

While nearly 30 acquisitions in the last eight years have made MarineMax the largest boating retailer in the country, McGill knows he can’t rely on acquisitions alone to succeed. He has to offer something different — something better — than the competition to both his customers and to his employees.

“The people are the most important part of it, because that’s the business we’re really in,” says McGill, chairman, president and CEO. “By investing in our team ... and enhancing our customers’ experience, we will build upon the solid foundation we have constructed over the past several years.”

McGill and the company’s leadership have worked hard to build a customer-centric culture and hire top performers at MarineMax’s 85 locations in 21 states. These are things he considers critical to the company’s overall growth strategy of increasing same-store sales and completing successful acquisitions.

McGill’s focus on people has enabled the company to grow revenue from $291 million in 1998, when the company was born out of a merger of six marine retailers, to $947 million in 2005.

Anchoring on people
Because the customer experience is so fundamental to the company’s growth strategy, MarineMax is very focused on the type of people it hires. To get good people who are well-suited for their positions, McGill uses personality profiling and a process called Topgrading.

Developed by management psychologist and consultant Brad Smart, Topgrading is an interviewing and evaluation process meant to ensure a company is hiring what Smart calls “A-players.” A-players are those in the top 10 percent of available talent for a given position. The process not only seeks to hire great people but to make sure that they are in the position best suited for their skill set and personality.

By putting job candidates through a chronological, in-depth, structured interview — often lasting a few hours — Topgrading seeks to get past the faade that people often present on their resumes and during an initial interview.

“It’s an interviewing process where you can discover the kinks in the armor,” says McGill. “You drill down on the things that you discover to make sure you have an A-player.”

Although the process requires a significant time investment from MarineMax’s leadership, McGill says the end results are worth the effort.

“Nothing is more expensive than making that bad hire or having someone in the wrong position,” says McGill. “Our managers, they probably spend a little more than a third of their time involved in making sure that we have the right people in the right position, because we’re in the people business.”

MarineMax implemented the process a few years ago and has since brought the number of people in the company who are A-players or have A-potential to above 90 percent.

The process has been applied to most of MarineMax’s current employees, including McGill and his senior executives.

“It has to start from the top,” says McGill. “That’s where the word [Topgrading] comes from. Like any culture that you have in a company, it must begin with myself and all of our senior team.”

By assessing the value of his current employees, McGill can target individuals who have potential but aren’t quite A-players and work with them to bring them up to par. Those who don’t progress to A-player status after extensive coaching and development usually quit, and in a few cases, have been fired.

The last part of cultivating a high-quality employee base involves a developmental plan and career path for all employees. Employees — especially store managers — are measured against certain goals and are held accountable for their performance. Executives are constantly looking at consolidated reports that compare all its stores across the country.

“We’re continually looking at the numbers,” says McGill. “So we’ve got them all focused on how to do it better and how to keep growing. About once a quarter, we sit down and say, ‘OK, here was the plan. Are you on track?’ Pretty soon, if you keep getting, ‘No, not on track. No, not on track,’ then they need to be redeployed.”

Redeployment doesn’t always mean out of the company — sometimes it just means shifting job duties to better match someone’s skills set.

Wind in their sails
At MarineMax, it’s not enough just to get good people in the door. Whether employees were already with MarineMax or were part of an acquisition, McGill empowers them and helps them do their jobs better.

Although the company uses traditional training methods such as videos and online courses through MarineMax University and MarineMax Online, McGill believes it’s important to also provide people with training that will instill in them a passion for what they are doing.

“If you’re passionate about what you’re doing, that’s probably the biggest ingredient that leads toward success than any other single thing,” says McGill. “You’ve got to have team members that believe in what you’re doing and understand this thing called boating and really have a passion for it. There’s no substitute for that. Because guess what? Our customers pick up on it immediately.”

One way McGill instills that enthusiasm is by sending employees on “Passion Days.”

“Passion Days were created to get our sales team and managers ... learning about the boats, navigation and the whole experience of boating to better understand and relate to the needs of our customers,” says McGill. “Usually they are three days long. We supply the sheets, pillows, food, fuel and location, and team members get (our employees) learning by doing. A big benefit is also derived by involvement of the manufacturers to assist in learning the boats or yachts.”

This intimate knowledge is critical if employees are going to relate to customers. McGill makes the point that a customer probably wouldn’t buy a motorcycle from a Harley-Davidson sales employee who has never ridden a motorcycle. Likewise, people aren’t going to buy a boat or yacht from someone who isn’t well-educated and excited about the product.

McGill’s philosophy is that MarineMax can’t just sell boats; it has to sell a boating lifestyle. And to do that, it needs to deliver an outstanding sales experience and continue to connect with customers even after a boat has left the showroom.

McGill recognizes that buying a boat can be intimidating, so he has built a business model focused on removing obstacles for customers and that maximizes the enjoyment of owning a boat.

For starters, purchase deliveries take place on the water, where customers are assisted by certified captains. MarineMax encourages the entire family to be present so they can also receive hands-on instruction in the operation of the new boat. Customers can also take part in training and classes throughout the year.

“We focus on what does this thing called boating do ... not only from an individual standpoint but also for the entire family,” says McGill

For example, MarineMax’s “Women on Water” and “Kids in Boating” educational classes help improve customers’ skill and confidence.

MarineMax has developed several events that allow its customers to interact with one another, as well. The hope is that these events will further stimulate people’s interest in boating, which may lead to additional investments in their boat and/or future purchases from MarineMax. One such example is the company’s “Docktail” parties, where past buyers socialize over cocktails and drinks at a local marina.

“The Docktail parties, as well as all our events with customers, create an atmosphere where customers can make new friends by having a mutual interest in the lifestyle of boating,” says McGill.

The company also organizes some 300 armada-style excursions a year, guiding current and prospective owners out for one-day to weeklong events from Chesapeake Bay to Catalina Island to the Bahamas and everywhere in between.

The trips help new owners gain boating confidence and provide opportunities to showcase larger boats for customers looking to upgrade.

It’s another way to build loyalty with the customers, as well as provide some subliminal marketing.

“Our brand is the experience our customers receive,” says McGill. “Every interaction is an opportunity for our team members to build the relationship and our brand.”

Building that relationship is important because MarineMax’s primary business comes from repeat sales and word-of-mouth referrals from families who have enjoyed their experience with MarineMax.

McGill also wants to create a better experience for customers and employees by maintaining an entrepreneurial spirit throughout all of MarineMax’s locations.

He knows that while things such as stock options and stock purchase programs are helpful, they alone aren’t enough to maintain that spirit of ownership, which he believes drives people to work harder.

He found the solution when he stopped to think about how he spent his time as the owner of Gulfwind Marina, one of the original merging companies that formed MarineMax. Most of his day was spent talking about financial issues, dealing with floor plan concerns, handling taxes and insurance, and doing other time-consuming and tiresome duties. But those things weren’t really conducive to being an entrepreneur.

“Those are the things that I did, but there were things that I could do better,” says McGill. “The things that I really enjoyed doing were dealing with our team members and dealing with the public.”

So instead of creating the usual corporate headquarters, McGill created Team Support. AS its name implies, these corporate offices support the field by managing the tedious day-to-day tasks that can detract managers from what McGill considers to be their most important job — dealing with people.

Team Support manages everything from human resources and marketing to computer systems and IT issues. It is responsible for most accounting and finance tasks and even monitors inventory and orders product. This allows managers to focus all their efforts on motivating staff and satisfying customers.

There’s no disputing that MarineMax’s systems are working. McGill credits the company’s focus on people for same-store sales that grew 21 percent from 2003 to 2004, and grew another 23 percent from 2004 to 2005.

“Our strategies are pretty basic,” says McGill. “It takes the right people. We really try to instill in our team that we ... need to be passionate.

“It’s a business that we’re going to continue to keep making better, not just through acquisitions, but also through internal growth. We’ll grow this thing to $2 [billion] and $3 billion in size in the not too distant future.”

HOW TO REACH: MarineMax Inc., www.marinemax.com