Making Mama proud Featured

8:00pm EDT August 26, 2007

The opportunities for Mike Mellace to grow his business seem endless. But by the same token, the opportunities to overextend his resources are equally plentiful.

His company, Mama Mellace’s Old World Treats, produces and distributes specialty nuts, and as Mellace often asks, what store in the world doesn’t sell nuts?

“Whether it’s Home Depot, AutoZone, Office Depot or Neiman Marcus, they all sell nuts,” says Mellace, Mama Mellace’s co-founder and CEO. “As entrepreneurs, it’s one of the toughest things to say no, especially when you’re trying to grow your business. When we first started, we had that shotgun approach. We didn’t say no. We found we had spread ourselves so thin that we weren’t specialized at anything, and that really hindered our growth initially.”

Now, after growing Mama Mellace’s annual revenue to $10 million in just four years since its founding, Mellace — whose mother emigrated from Italy in 1962 — says his company’s success owes much to concentrating on its core market channels and becoming experts in those channels before expanding to others.

Mellace spoke to Smart Business about why empowerment and delegation are essential in a growing company.

Q: How can a growing company maintain service to its customers?

You have to go after the customers you think you can manage. Many entrepreneurs have the approach of, ‘Anybody who will take us will be fantastic,’ and a lot of times, we go for the biggest guys out there.

We purposely stayed away from Wal-Mart because we knew we probably wouldn’t be able to service them. They would take so much of our production that we wouldn’t be able to service any of our other customers, which leaves us counting on one customer to make up our revenue. That’s not a good scenario.

It’s being selective of your customers to the extent that you can be, not biting off more than you can chew and having a realistic expectation of what you can actually do productionwise, what your people can actually accomplish. As entrepreneurs, we get into this mindset of, ‘They can do more; they can work this many hours.’

People aren’t going to work as hard as you are. They don’t have as much invested as you do. They will work hard, but to expect them to work as hard or harder than you will is not realistic.

Q: How would you describe your leadership style?

When I was a little less experienced, I led more by fear and intimidation. Today, I have more of a servant-leader leadership style. A servant leader determines vision and values. Once you determine that, you flip the pyramid upside down and empower your people to actually implement it and to make it happen on a daily basis.

If you were to ask our employees, they would tell you they’re not afraid to fail, and they’re not afraid to make decisions. Things happen where they can’t depend on me to make a gut call. I’ve got to trust that they’re going to make the right decisions, and they know that I stand behind them.

Q: What are the benefits of empowering employees?

It does two things. An empowered employee is able to take care of your customers, which, in turn, creates more loyalty.

Unfortunately, the best example is probably the airline industry. You go to Southwest, and people can make decisions. People can put you on an earlier flight and help you with your situation. You go to one of the ones that are bankrupt, and they can’t make a decision. They sit around and say, ‘Well, I’m sorry, but that’s policy.’ Your customers end up getting frustrated and leaving. Empowered employees will create more satisfied customers at the end of the day.

It also gives them a sense of purpose, a sense of accomplishment and better job satisfaction because they feel like they can make a difference. They’re not an order-taker. They can make decisions that impact people’s lives on a daily basis.

Q: How important is delegation in a growing company?

It’s something you have to do as you grow. We’ve grown from zero to $10 million in four years. There’s a lot of change there.

When you’re small, you can handle a whole bunch of stuff, and you almost feel like you have to. You feel like, ‘Who else is going to do it? Nobody is going to do it better than me.’ You do the sales, the accounting, the production, and you coordinate all those different aspects, but as you grow, there’s just no way. You’re only one person.

You have to figure out a way to delegate and get things done, and as I’ve learned, you’re not going to be able to do it through intimidation and fear. You have to begin to empower and trust that your employees are going to be able to make the right decisions. Otherwise, you’re not going to be able to grow.

HOW TO REACH: Mama Mellace’s Old World Treats, (760) 448-1940 or www.mamamellace.com