Ron Whitley is fully aware that theworld’s appetite for steel is insatiable. Steelis built into cars, buildings, bridges and ahost of other things that make modern lifepossible.
Armed with that knowledge, a companythat makes and distributes steel could follow any number of paths to profit. AsWhitley charted a course for Ranger SteelServices LP in the early ’80s, the optionswere almost too numerous. Ranger hadbecome involved in a variety of steel markets since Whitley’s father, Roy, foundedthe company in 1958, but as Whitleyworked his way up through the ranks, hebecame concerned that Ranger wouldspread itself too thin.
“In the earlier years, Ranger was involvedin other product lines, which at the timedid work for Ranger,” says Whitley, thecompany’s president. “But since then, asthe world has changed and become morecomplex, so have the items and the sourcing of these items. So, in 1982, I made thedecision that we were going to focus onplate products.”
Ranger pulled out of other markets, someof which were putting them into directcompetition with their customers, andbegan focusing on delivering differentsizes, grades, thicknesses and widths ofsteel plate.
The new approach allowed Whitley tofocus Ranger — which earned $328 millionin 2007 revenue — on delivering two thingsto customers: steel plate and service. Withjust two overarching goals placed in front ofthe entire company, Whitley has been ableto focus everyone at Ranger on becominggreat at both of them, loading the company’sfinancial and manpower resources into oneniche instead of attempting to cast a widenet. But keeping it simple doesn’t meaneverything stays the same at Ranger, year inand year out. Focusing on a niche marketmeans having the ability to adapt to continue serving that market.
Not every company can home in on a narrowly defined niche and cast everythingelse aside, but Whitley says keeping yourcompany’s approach to business as simpleas possible is a goal for which you andevery business leader should strive.Simplicity helps your people stay focusedon building within your niche. It also helpsthe transition process in a time of change.
Whitley has had to help his company doboth at various times.
“We keep the model simplistic so we can behands-on,” he says. “A lot of companies mightoperate in a more complex fashion, and thatmight be right for their business model. But,for us, it would be totally disruptive.”
Stay ahead of the curve
Change is a fact of life in business, andthe only way you’re going to be able to stayon the basics of drilling down on your company’s core competencies is to make sureyou’re going to understand what in themarket is going to affect your company inthe coming months and years.
Whitley received some firsthand experience with that in the late ’90s when customer demand was shifting from importsteel to domestic.
“At that point, the majority of Ranger’sinventory was made up of mostly an importorigin, and there had been a continual trendby customers to demand more steel manufactured in the United States,” Whitley says.“We charted this, plotted this and realized thetrend was becoming more cumbersome tobuy large quantities of imported steel, so weshifted our focus to buying a majority ofdomestic steel. Today, 95 percent of ourinventory is made in America.
“If we had just continued to stock 100percent import, we would have lost a significant portion of our customer base.”
The key to reacting to market changes isto not waste time. If your research says themarket is shifting, prepare to shift alongwith it — or even beforehand, if possible.
“If you meet and react to these changesearly on, you’re more able to maintain control of your business,” he says. “New eventsare going to happen constantly. That’s justthe nature of business. In Ranger’s business, that’s been our blueprint. When theseevents do happen, we look to see howthese events might interact with or compromise our blueprint. Then we relate tohow we’re going to change to that. We’revery careful.”
Keeping ahead of market trends requireskeeping up on the latest industry news viathe media outlets that serve your industry,but your knowledge base shouldn’t beginand end with trade journals, newspapers orwhat you see on television. You need eyesand ears on the ground.
Representatives of Ranger Steel cultivateand maintain relationships with customersand vendors both in the U.S. and abroad.The representatives in the field stay in frequent contact with their superiors, whichallows information to well up within theorganization, giving Whitley and his management team a view of where the marketsthey serve might head in the near future.
“Staying ahead of the curve on purchasing requires our purchasing department to,at times, look nine to 12 months in advanceon buying commitments,” Whitley says.“You have to have a lot of exposure whenyou’re looking that far down the roadbecause the market can make changes upor down in a certain time period.
“We spend a lot of time nurturing partners,the people who make steel, and we try towork with them and communicate withthem very closely through face-to-facemeetings where we exchange frank andhonest market information about what isgoing on in the steel industry. We have beenable to nurture a reliable group of vendors,both domestic and foreign, that we continueto depend on for our product line.”
Keep people informed
At first glance, it might seem like something of a contradiction: Build a work forcethat stays focused on what it is you do well,yet is open to change.
In order to continue to stay focused onyour markets, you need adaptability within your company’s ranks, people who are willing to change theirapproach to meet the needs of the people you serve.
Whitley has a basic rule pertaining to thinking ahead: Informedpeople are motivated people, and motivated people are muchmore likely to be willing to do what is asked of them.
“It requires a balancing act to stay on what it is you do well whilestill accepting changes,” Whitley says. “Because we eat and sleepplate steel 24-7, we feel like we’re going to know the changesbefore anybody else does.”
But it still takes communication and education to achieve buy-inwith an employee base that wants to know where the company isheaded and why.
“Changes are about how they are presented to employees,” hesays. “It’s a matter of education, to explain what I call result outcomes, to explain to people that this is why we’re going to changeand this is what we see as the result of that change.
“If people know where you’re going with it, it’s a lot easier forpeople to accept changes. Changes are uncomfortable for everyone, myself included, but if you aren’t changing, you are growingstagnant and going nowhere.”
Keeping your company both focused and nimble starts with youand the communication you deliver. If you don’t keep your employees informed about the direction of the company and the industry,you can’t expect to easily justify your future plans to them.
Whitley says communication is the first and most importantingredient in paving your company’s future path. Without it, no onegets on board with you.
“You can’t force change if someone doesn’t know why you’remaking the change,” he says. “The result of that is negative.Communication is No. 1, and showing them the outcome is No. 2.Show them why you’re going to make the changes and ask for suggestions. People might come up with different things to add thatwill make the whole situation better.”
Developing a culture of communication can become a lengthyprocess. It’s something that can only be accomplished over time asyou continually take steps to keep your employees in the information loop.
“It’s kind of like being married — that level of trust doesn’t comeovernight,” Whitley says. “It takes a lot of years of work. If you aretelling someone to trust you, you have to demonstrate it. If management says something to employees, they’d better back it up anddo it.
“It’s something that grows over time. It’s not something that youcan come in and write down on a piece of paper.”
Let others help you lead
As the person who leads change in your company, you have tosee to it that your vision and mission isn’t lost as the companyevolves.
But just because you have to keep the overarching goals of thecompany in mind doesn’t necessarily mean that you need to control every aspect of the process.
At Ranger Steel, which is projected to earn $500 million in revenue this year, Whitley lets others in the organization step up andassume leadership roles, helping to cut the paths that will serve asthe means to the end goals. Every employee at Ranger knows thatthe goal is to stay adaptable and profitable — which the companyhas for each of its 50 years — and the foundation is built on theproduction of plate steel. Those facts serve as the boundary linesfor Ranger’s future. Beyond that, Whitley wants others to deliverinput as to how Ranger will meet their customers’ plate steel needsin the future.
It’s part of having a culture of communication. After you havecommunicated from the top, you need to be willing to listen towhat everyone else wants to say.
“People come in here looking for answers,” he says. “Sometimes,I don’t have all the answers. I don’t pretend to be the brightestleader here, but I think I do quite a respectable job of it. If I don’tknow about something, I ask people what they think we should doand listen to what they have to say. Listening is a very importantpart of being a leader. You have to lead by example, and if you sayyou’re going to do something, again, you’d better follow throughand do it.”
If you want employees to take a genuine interest in where thecompany is headed, and take a genuine interest in helping youlead, you need to take a genuine interest in informing and teachingthem, then take a genuine interest in their input.
It’s a lesson Whitley learned long ago, and something he continually reinforces to his managers.
“Any information that needs to go lower down than management,such as market information, customer information or anything thatwould affect sales, is immediately passed down through the company, whether it be in formal meetings or e-mails,” he says. “Everybodyhere is well informed, because the days of telling people things on aneed-to-know basis are long gone.
“A company team is like a football team. They have to work together and jell together. They might not all go out to dinner or lunch witheach other, but at work, they need to develop into a true team.”
HOW TO REACH: Ranger Steel Services LP, (800) 231-5014 or www.rangersteel.com