Wheels of Change: People, Place and Challenge from a Leader’s POV | Paul Reitz, Titan International

No, great to be here. Thanks for having me here today.

I think everybody has an interesting story, and the paths are always different. I think if I had to look at who I am first, it does translate into the story. Who I am has been somebody that has always looked at life with my eyes wide open, trying to learn from what's going on around me. And when you do that, one of the good things is you can learn faster, and I believe in that. One of the hard things is you learn more from failures than the good moments, the winning. So as I look at who formed who I am, it's from the losses. I grew up loving sports, still love sports, too old to really play them, but that competitive nature and loving sports, I learned a lot from some of my sporting losses. Over time you forget the wins. I think back, I played college tennis, and I'm not going to be the old guy talking about old sports stories, but there was a particular loss where it was a good match, an important match that was going well against a school called Butler University in Indianapolis. I was winning easily, everything was going great, 6-1, 5-1, if you know tennis. I was already starting to think ahead to winning, and I let up on the shot. The guy made a really good volley at the net, caught me off guard. He wins the point, shook me up, threw me off, and the next thing you know I end up losing the match. Point of the story is, and it translates to some of the things of who I am: you've got to focus on the moment. As soon as you take your eye off the ball so to speak, and you don't focus on the moment of doing the best you can in that moment, crazy things can happen. If you ask me to remember anything else from college tennis, I don't remember anything other than that stupid point where if I had won it I'd go up 5-1, then I'm serving and the match is over. So it's things like that from sports that I feel like I've learned. Also, one of the things that we all learn from is from mentors and parents and friends. For me, one of my important mentors was my dad. He was in a completely opposite career than I was. I went into accounting - he told me don't go into accounting. He was in sales. So I learned some things about relating to people from him. But one of the things that sticks with me about his career, and he passed away about 15 years ago, is that he was afraid to take risks. So we had stability as a family, but he never took a risk, he worked at the same company for 40 years to the day he died. But it also led to my mom not taking risks with her career as well. As they both look back on their lives and careers, they're always disappointed that they never took risks. I remember I was running for a local board back when my dad was alive, so I was young, about 25. Somebody asked me to do it. There were six people for four positions. I got whooped, I probably came in dead last. My dad called me up and said, 'How did that go?' I said, 'I didn't get it, didn't really expect to.' He goes, 'I don't know how you were able to not be humiliated because you lost.' I said, 'Who cares? I tried, that's what matters, right?' He goes, 'No, no, that's not what matters. You shouldn't have done it. You put yourself out there publicly, you lost, you shouldn't have done it.' I said, 'Well, I disagree. The only way I would have been a loser is if I didn't try.' Again, it's watching my dad's life, watching the impact on my mom. They both had master's degrees but were afraid to take risks for their careers. I said with my career, I'm going to take risks. And I did. A lot of times it worked out, and there were quite a few hard times where it doesn't. So in sports I learned to focus on doing your best, but sometimes you're just going to lose. Translated that into what I saw my parents do, and I said, okay, in my work career and who I'm going to be, I'm going to live every day the best I can, realize that this also means I'm going to lose, and just like sports, also not follow the same path my parents did. Take risks, go live your life, do the best you can. I've had the support of a spouse that's allowed me to do that, because at times when you fail, you need people that are helping you pick you up and be willing to accept that failure. So my professional story kind of follows that path. I've gone a number of different ways. Started off in accounting, got a master's degree in marketing so that I could balance not just being an accountant with learning from the other side of the envelope. Living with my eyes wide open, I applied that to my career. I worked in marketing but also in accounting, completely abnormal. But it always taught me that when I walk in a room, I can see the world from two different perspectives. That's how I followed my career. My professional story is I took that accounting background, controller path, got some marketing experience working in marketing departments. I reached a point when I was getting into promotional levels where they said you've got to make a decision. That's when I stuck with finance. Started off as a CFO here at Titan, and it's been 11 years already. Became president, and then president and CEO. There's a lot to unpack there, but the part that has been the most important for my professional story and who I am is just live every moment your eyes wide open and do the best you can every day. Some days are going to stink and you're going to get your ass kicked, and wake up tomorrow and try again.

It definitely is. And I guess the other element I left out is luck. How I got that accounting and marketing background was actually luck. When I was getting my MBA, the administration came to me and said because of your finance background, you don't need to take all the finance and economic classes. So I started looking at the list, going well, let's try a marketing course. I had a great professor, and I went wait, I'm on to something here. I can learn something new. Ended up sticking with it, getting that marketing major. So then I took that and combined it with the fact that my dad spent 40 years in sales and I got to see the world through his eyes, and I'd gone the other path. I said okay, I think I'm on to something. If I can walk into the room and be able to see it from multiple vantage points, that to your point like in your household that are completely opposite, I think that's a skill that will end up being meaningful. And it really has. But the other piece I should add, it's luck. I didn't have a brilliant idea that I executed on, it's sort of luck fell into place for me.

What we do is somewhat special. Like you said, it is cool. I have a 23-year-old son who just graduated from college, and I notice he likes wearing Titan gear because if people ask him what it is, it's cool. We make wheels, tires, and steel undercarriage tracks that go on everything that would be off-road. That lends to larger equipment: excavators, bulldozers, equipment of all sizes from small to large, and construction equipment. We are the only company in the world that does what we do for all off-road. Now with an acquisition, we do have some products that are going more on-road as well, so that tune changes a little bit. But we cover the full gamut of everything off-road: wheels, tires, and undercarriage. We are a niche company, and that's how we really came to be. Our founder back in the early 80s saw an opportunity where some of the OEMs had done vertical integration with wheels and tires, other large conglomerate companies were doing wheels and tires off-road, but if you're doing 95% of your business on road, the less glamorous part was always off-road. So the founder saw this niche business, created the company in the early 80s, and went public in 1993. So we have 30 years of being a publicly traded company in this niche space that Titan has created. It's interesting because we compete against companies of all sizes. We compete against companies that are global behemoths, $2 billion plus in scale, global companies that do what we do but their primary focus is something else, and we compete against smaller companies that are competing more directly with us in just the off-road space. So we've been at it for 40 years and still ticking.

Yeah, that does get complicated in manufacturing at times, and I think we fit that bill because we do large manufacturing. We have tires that are 5 feet tall, we have steel undercarriage that weighs thousands of pounds, so we do heavy manufacturing, which lends itself to different products. That does lend itself to be more decentralized. I've spent a lot of time talking with other manufacturing CEOs about this topic, and I found that heavy manufacturing does become more decentralized because you need strong infrastructure at your plants. We have about 18 to 20 locations around the world. Each location is going to require engineering support, technical support, you've got to have all the plant support, then you get into local finance and HR. So you end up having a lot of infrastructure at your plant level. When you try to centralize, especially with different products, different cultures, operating in as many countries as most large manufacturers do, it's hard. Where we have tried to centralize, we failed. So we've kind of stopped trying to centralize and said okay, this is who we are. We're centralized with finance and legal and some of the corporate functions for the SEC reporting we have to do, but the rest of it is heavily decentralized. Our culture needs to fit that. And culture is, as Peter Drucker has said, and we all know what he said, culture is everything.

It's evolved, but the one thing that hasn't changed: it's still all about people. Whether it's hybrid, whether it's during the pandemic, pre-pandemic, it's all about people. With your background and experience, what you're really doing is connecting people. Now there's just different modes of how you connect people. For Titan, that connection is everything. We operate in a way that balances hybrid with in-person. We do have hybrid work, it does work and it can work, but we also balance it with enough in-person relationships that you're able to be successful hybrid. I think being all hybrid is a challenge. I agree with what some of the large companies are doing like JP Morgan, but I also have to be realistic and realize Titan is not JP Morgan, so I can't operate the same way and say get back to the office or you're out of a job. I need to recruit and retain in a different way, so hybrid is now part of that. We've done it in a way, instead of centralizing how hybrid has to work, going back to that decentralized theme, we allow each business unit and even within each function to determine what they need to do to get the job done. If they need 100% in-person work to get the job done, then that's what they do. At first I wasn't sure if that was going to hold, but four years later our policy hasn't changed. There is no centralized corporate policy that says how you will work; in your business unit within your function you will find a way to get the job done. To this moment, I've had zero instances where I've had to get involved. Now, what is important is if I call a team meeting, if I'm in a location, you will be there in person because that sets the tone. I do travel every week, very decentralized environment, so it's important that I'm out within the business. My CFO is expected to do that as well. But if he or I are at a place, you will be there in person. That's how you build that relationship and trust, so that when we are working virtual or hybrid, you feel connected.

When I became president transitioning from CFO, I knew where the weaknesses were within our culture in our company. Nobody's perfect. I put something in place called One Titan. It was critical that it was accepted not just within our organization but also by the chairman and board. About six months after I put One Titan out, the chairman on the phone talking about something else goes, 'Hey, by the way, I wish I had put One Titan in place a while ago. That's what we needed.' That gave me the blessing to know we're on the right path. What One Titan was about was how we really treat each other as a management team. We all walk into conference rooms, we've read books, and you get charts on the wall that say these are the ten things we are, but if you really went around and asked people, not all ten things were exactly being followed or lived on a daily basis. I kept it simpler. It was really about accountability to each other, to our shareholders, to our customers, about transparency with each other to build the trust that is needed, and about using information, however that source, to drive our decision-making. Three key things. I put it out there to our management team. It wasn't a yes or no question; if you didn't live by this, you weren't going to be following the culture we needed. The good news is it was received well. They could then take it to their business units and extrapolate it differently if they wanted to. But those three key things were for my key team of 35 to 40 people around the world. Some people wanted to challenge it, go outside that box, and they were not with the company for very long after that. It took a while to get through that, but I'm proud to say if you look at our Titan team now from 2019 to today, five years later, it's exactly the same team. With all the things that have gone on pre-pandemic, post-pandemic, during the pandemic, that One Titan culture has really lived through some pretty significant challenges. I think it's a pretty good testament to a company our size that we're able to keep us all together. A lot of it is attributed to One Titan. We can trust each other, we have that accountability to each other, we know our customers and shareholders are important. I don't want to make it sound like I was brilliant, but I think by keeping it simple, it allowed it to really come to life in a way that was meaningful for us. Those three things are pillars in a strong relationship, in loyalty, and in trust.

Completely agree with what you said. That let me at least know that the principles I had put out there were the right ones. It's good to hear from your perspective. That's important because if I have the wrong principles, then the team's going to have problems and I'm going to have problems. I wouldn't be sitting here 11 years later if those principles weren't the right ones. We just acquired a company about 60 days ago, and I noticed all their locations have a lot of corporate slogans around the conference room. It bothered me. I dug into it and asked what the ones that are important are, because when I see too many you're just putting stuff on the wall. What I found out is they said all the things you see in the conference room are just there for the CEO, that's not who we are, nobody would speak up to the CEO, so they just stayed in place. But they had very simple what they called associate values that when you onboarded, you presented them to all new employees. I read those and said, 'These are it, these are really good.' And they said great, because that's who we are, ignore everything else you see in the conference room. So it again lends credence to the fact that if you just keep it simple and it's something that everybody can get their arms around, it has a higher chance of success.

Yeah, it's a great question, George. It was a monumental step in the history of our company. I knew it was a big step; moving corporate headquarters is hard. I'd spoken to some folks who had done it before, and they reminded me it's hard. At the CEO level, you're going to be living this for two years. We had reached a point as a publicly traded company where we needed stronger financial talent. You can't not meet the requirements of the SEC or be borderline to meeting them as a public company; it becomes a big distraction to the business. Our board said we can't get the right people in Quincy. It's a community that if you have the right people there they love it and stay, but if you have to add or replace people, we were having a very difficult time. We were borderline with some of our SEC reporting and having issues. The board said headquarters has to move, we're not debating it. What became challenging for me was first, it's a hard process, and second, where do you do it? The board immediately said let's go to North Carolina or Texas. They assumed the easy response was a location like that, more talent easily available, just go do it. I spent some time researching it and said that's not who we are. We were founded in Illinois, founded in Quincy. We are an agriculture-serving customer base, construction with Caterpillar in Illinois at the time. Our culture is critically important; it's based around the Midwest and the customers we have. Let's try to stay in Illinois. We found a great location up in St. Charles, the west outskirts of Chicago. We looked at Oak Brook and some more primary centralized areas, and said let's go where the people that are there have families and want to be there for a reason, feeling that when they join a company like Titan, they're joining a family. It's a little bit outside the commuting patterns and traffic of the city. We chose St. Charles. I chose St. Charles. I'm going to have to blame this on me because the board looked at me and said you've got to be out of your mind. Then going back to what I'd heard from other CEOs, be prepared, it's going to be difficult, and it was. I had the board telling me I'm out of my mind, and the first round of building a team in St. Charles went horribly. It's tough to take that culture and all those things I said out loud and make it happen in reality. The new people you bring in were not fitting in with the culture, and we were going down a deep dark rabbit hole fast. We launched version two, which is tough because now you have the board already on my shoulder saying why did you stay in Illinois, and now the first version didn't work. This was around 2015, 2016. With a lot of history now behind us, by 2017, 2018, we got version two in place, and it's been absolutely fantastic. We love the team we have in St. Charles, we love the location. We're proud to be one of the few companies that has moved their headquarters from Illinois to Illinois. Honestly, I wish the state would give us more credit for that. It seems like the headlines are more about the negative things of companies moving out of Illinois. That's one of my pitches that I am currently in the governor's ear about, saying we should get more credit. We have two plants here, actually two plants plus another small plant in Illinois, so technically you can say we have three plants in Illinois, plus a headquarters. We kept a lot of employees in Quincy; if you were in Quincy and wanted to stay in Quincy, we left you there.

The hybrid work model created a headquarters in St. Charles and it's worked great. The board is totally satisfied. I just wish the governor and some folks would give us positive PR. We're really happy with the move to stay in Illinois. I love St. Charles.

I appreciate it. Failing is hard, especially in the eyes of others. I'm glad I stuck with it. It would have been easier to quit. We've built a great team in St. Charles.

Innovation has been good for us. Since wheels and tires have been around for centuries, driving innovation with a familiar product is different. OEMs are focused on tractor technology, so we have to drive innovation from the end user. We connect directly with end users to get real-time feedback. For example, we developed low sidewall wheels and tires that provide better comfort, fuel efficiency, and reduced soil compaction. By making both wheel and tire, we can innovate more easily than separate manufacturers. We build credibility through end user testimonials, which then drives OEM adoption. We also consolidate multiple tires into one tread pattern like the R14. It starts with understanding the end user.

The world is changing fast. Every day you try to catch up. Change used to be slower. Now it's a daily battle with information overload. It creates stress for adults at work. You have to create an environment where failure is not the end. I tell my team to fail fast and learn from it. But you can't fail and not know you failed. With so much change, you have to accept failure and keep learning.

You have to balance your energy. There are problems every day. You need to deflect some and clear your mind. I set aside thinking time. When I travel to locations, I dedicate the whole day to them. I leave slack in my schedule. You need a way to clear your mind, like biking for me. You realize you can only tackle a few problems at a time.

That's why we are proponents of in-person work at least some of the time. It strengthens trust. Without trust, you can't do anything. You need good people around you.

You have to read. I like Malcolm Gladwell's work for real-world application. Adam Grant on human psychology. Books on emotional intelligence. I avoid CEO memoirs that are not applicable. I also listen to sports podcasts like Bill Simmons and Ryan Russillo because they dive into the human side of sports, which applies to business.

Every year I make a contract with myself: Am I excited for the challenges? If not, it's time to look at something else. I'm energized by the challenges ahead, especially with the team we have. We just acquired a company with a couple thousand people. Cultures are melding well. I'm excited but aware there will be challenges.

You have to be committed and have the right support. You need people who keep you in check, tell you when you're an idiot. I've seen smart people fail because of ego. I have mentors, my wife, my chairman. Keep your eyes open and keep learning. I thought I knew a lot as CFO, but as CEO I've had to rewrite 90% of what I knew. You have to wake up every day knowing you know nothing. There is no destination; you're always learning.