How Ira Kerker eliminated micromanaging to help Vitacost grow

Ira Kerker felt one of the biggest impediments to the growth of Inc. was the tight control exerted by the former CEO, Wayne Gorsek, the company’s co-founder.

“He controlled the whole business, as you would expect an entrepreneur to do, from a top-down standpoint,” Kerker says of the man he replaced as CEO in January 2007.

“The company was very successful at being able to respond very quickly to changes in the environment, changes in technology and changes in the business. The problem was as the company got bigger and bigger, the weekly meetings started becoming two and three times a week because the founder of the company needed to be involved in each and every decision.”

Kerker, who also serves as director, had been with the 307-employee company since early 2005 serving on the executive management team as its general counsel. He felt the micromanagement approach was not conducive to growing revenue at Vitacost (NASDAQ: VITC).

“I just felt a flatter organization would not only allow the organization to grow and be a more efficient use of my time, but it would also allow the managers and VPs to grow personally and professionally,” Kerker says. “That is something everybody wants to do and something I wanted to do when I was one of those VPs.”

He knew the change in leadership style would take time. The company was used to how things had been done and Kerker would need to do some work to convince them that he really wanted them to take on these additional responsibilities.

“You don’t throw the light switch over night,” Kerker says. “What has to happen is you have to empower the person to be able to run their department.”

He wanted to create a culture where his leaders played an integral part in setting the direction of the company and developing new products using their own skills and talents.

By doing so, Kerker was able to position the company for growth and ultimately for public ownership.

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