I've had to, you know, I give a speech every year at Washington University called Defining Moments, you know, looking back, that I share with second-year MBA students. And you know, I got a traditional business background, accounting degree from Indiana, decided to get an MBA from Michigan, got a chance to go with Price Waterhouse, had every intention of being a public accountant. And my father had invested into this kind of broken old machinery company in the '50s, $30,000 to buy a small piece of it, and it was struggling. And in the 1960s, he had a chance to do kind of a leveraged buyout. It wasn't his idea, somebody approached him. So we became, we gained control, my family gained control of the Barry-Wehmiller company in about 1964, '65, through a leveraged buyout, through an asset-based lending, and struggled under the burden of that debt because the company was struggling but was getting along. And 1969, second year into public accounting, my dad approached me because that never occurred to me to work for the company. You know, a lot of issues in the company, you know, I just, and if you said why didn't your dad, I have no idea, we just never occurred to us. So anyway, he says to me in 1969, seeing his son start to do well and through Price Waterhouse and my ability to talk strategically, he said, 'Would you consider joining Barry-Wehmiller? I need somebody I could trust.' I mean, that was my title, somebody he could trust. The beauty is, I mean, for your audience, is because I walked into an unstructured role that didn't exist. My role was my creativity. And my first job was in engineering, coordinating projects with Owens-Illinois on new technology. I was just the liaison between Owens-Illinois and Barry-Wehmiller. So I got to understand kind of engineering and technology and challenges. And then I moved into running customer service. Then I, you know, got into license agreements. And so it's a little bit like if you look at a clock, you see the hands, it seems pretty simple going around, but if you look behind the clock and you see all those gears that interact to create the time, you appreciate the simple output but the complex behind it. And so the beauty is I got to see the company through the complexity. You know, I studied manufacturing, I got into engineering, I got into customer service. And we had a small tool and die company that my dad said, you know, was losing money, would you go run it? So that beauty of my kind of self-created leadership development. My dad suddenly died of a heart attack six years later. And you know, I'm 30, he was 60. The first thing that happened, the company, the banks pulled our loans because the company was so thin without my dad there and this 30-year-old kid they give. Now the good news to your audience is that's the good news. So how could it be good news right after your dad dies, the banks pull out? Because it stimulated in me a reaction. I said, you know, in hindsight, I kind of said, 'I ain't going down like this.' I grabbed a hold of that company, I got a hold of its cost structure, and under the pressure of the banks wanting to withdraw, we had the most profitable year in our history, my first year at 30 years old, okay, and paid off our debt. So I didn't replace the banks, I paid them off. And so that's the good news. The bad news is I became a little overconfident, okay, because I turned the company around in its 100-year history, it had its most profitable year in its history the first year I ran it. And that's the only thing that changed is my running, my intensity to react to my dad's death, the banks pulling out. My reaction was, 'I'm going to deal with these cost structure issues.' And so anyway, then I began growing the company organically with my ideas from my MBA program. I got into solar energy, got into electronic technology, and everything seemed to be unbelievable. We grew from 18 million to 72 million in four years. We're growing all over the world, was the story of St. Louis. The problem was the company was experiencing growth beyond our capacity to handle growth, but it was so exciting that it masked the practical aspects. Can you really? And my bankers supported it, my board supported it. But all of a sudden, each one of those initiatives started having issues. The solar energy panels started warping, the filling technologies. So anyway, all of a sudden now in 1983, the banks pulled on me again. This time it was severe. They pulled out, and so I spent nine months trying to refinance the business, okay. And the beauty is when you have no money, you learn things you would never learn when you have money. In other words, I learned more in that nine months that we lived day-to-day on cash, and that shaped the company we have become. The trauma that I lived through, now I didn't feel the trauma, I dealt with the trauma. It never caused me stress because I just said, 'This is a challenge, I've got to get through.' So anyway, I got through that, we got refinanced, and I said something to my team. I said, 'You know, I'm proud of our hundred-year history, but I now realize our history does not give us a future. We need to step out and start acquiring companies that have product lines that give us a better future.' And my team looked at me and said, 'Bob, great idea, we only got one problem.' And I said, 'What's that?' And they said, 'We have no money, Bob. Do you understand that we have no money?' A bit of a, now for most people, it's a bit of a problem, okay. It's like going shopping without your wallet, okay. And but this is what I want your audience to hear. My reaction to that statement was I looked at the team and I said, 'I didn't tell you I needed money, I told you we needed to do acquisitions.' And I left that room unencumbered by the fact that I had no money and I just got refinanced with asset-based lenders. And I began doing acquisitions. What do you buy when you have no money? You buy stuff nobody else wants, okay. But I did, and I brought, because of the intensity of the situation, I was determined to be successful in these. And I was. I took companies nobody else wanted. I saw value where other people didn't see it. And so this is '85, by '86, late '86, still struggling financially even though we were doing these smaller acquisitions. An idea surfaced that we could spin off two-thirds of our company on the London Stock Exchange, kind of the acquisitions plus a piece of the history. And so spin off 70% of the company, keep 30, and generate enough cash to pay off our debt and have $2 million in the bank. Now that seemed like a million-to-one odds that we could actually take these broken pieces, put them together, and go public. But sheer determination, focusing on value, by May of '87, we launched this $30 million collection of kind of sunrise-to-sunset businesses, and it was oversubscribed 35 times. And instead of ending up paying off our debt and having $2 million in the bank, which we thought would be heaven, we ended up with $28 million in the bank and 30% ownership in a public company that was now worth 70 million. So we went from virtually insolvency to dramatic liquidity overnight by sheer positive attitude and looking for value. So that's kind of the end of the historic story. So now I sit in June of '87 with $28 million in the bank, a $20 million piece of the historic business still private, and 30% ownership in a $35 million public company. So now the new journey began, the new Barry-Wehmiller began. And I sat down, and I think this is important for your audience given the nature of your audience, I sat down for almost nine months ruminating in what actually happened. And I went back and I looked at my journey from my dad's death in '75, and what did I learn? And I said what I learned is how to fix broken businesses, because that's what I bought with no money. And so we were sitting on 20 million, and I came back to my board nine months later, I have an idea that I could create a hundred-million-dollar business because there's a number of companies I've studied now in the last nine months that are just as broken as we were that I see where we could create value. So I went to them with a vision: we're going to buy challenged businesses with good recurring revenue, and we're going to bring the value creation which we could do prior to the public offering. I said, okay, so the vision was to get to 100 million, but key was this time we're going to have balance of products, markets, and technology. No dependence on any one sector, any one technology, so should something change, we're not hurt. So balance is a key word in the new Barry-Wehmiller that emerged in 1988. That vision in 1988 that I created to get us to 100 million got us to 3.5 billion, okay. And I would say to you, to all your audience, the primary responsibility of a leader is to create a business model that gives people a grounded sense of hope for the future. So again, the business model I designed with balance of markets, products, of technology, with a high degree of recurring revenue, which is predictable. If Ford builds a new F-150, they drive it into the worst terrain they can to see how the chassis, the engine holds up. Well, if you design a business model, drive it into '08, '09, when General Electric, Bank of America, a lot of companies experienced severe challenges, great businesses prior to '08, '09, all of a sudden their business model failed. We went through '08, '09 with our business model. We let nobody go. Our share price went up 11%, and we came out of it stronger than we went into it. So our business model, which is the primary responsibility of a leader, okay, it's not getting the right people on the bus, it's about building a safe bus, which is your business model, and then having leaders who know how to drive that bus and know where they're going. And then anybody you invite into that bus is going to be okay because it's safe and it's got drivers who know where they're going. So again, I would say to you, my experience is that today we have, so today again, we're the combination of 130, I call them adoptions, acquisitions around the world. We got 13,000 team members, and our share price has gone up an average of 12 to 14% compounded for 25 years as measured by EVA, economic value added. So it's a very objective term. So I'd say to you again, the key is for every leader is you've got to have a business model that when you invite people to join your firm, they can decide to get married, they can decide to raise kids, to buy a home, because they can count on you as a leader to give them that sense of confidence. And they will share gifts with you towards that goal they didn't ever imagine. So again, that's the number one responsibility of any business leader is to have a business model that gives people a grounded sense of hope for the future: your investors, your team members, your customers.
One of the things we've learned, Alexander, is that we're all born with a unique personality. And what I can do with my personality skills is different than somebody else. And you know, not judging one or the other, but we all are created uniquely different. I was blessed with not a great level of intelligence, I think I was blessed with a great deal of common sense and creativity and a positive attitude. And if you blend those three together, the way I would describe our journey was I saw value that other people didn't see, and I was able to capture that value. And again, as you know, Harvard did a case study on our company. So the validation of this message, did a case study, it's now, they tell us, one of their better-selling cases with 70 universities from Japan to India using it to teach leadership. So that is, if you think of a parent, your responsibility as a parent is to provide an environment for your family that gives them a sense that they can be taken care of health-wise, they can have good education, and they can have a good, safe home. As a parent, we try to provide for our family. Well, take that same example into the business. Okay, the people, they're not your children, but they're somebody's precious child that's in your care. Your goal is to look at those people that you invite into your company and to make sure that those people feel valued and that those people feel that they have a future and they can count on your leadership. So that leadership, leaders have got to rise above the day-to-day and they got to make sure they know where they're going and how they're going to get there and have the creativity and the passion to share that vision so that people can embrace. Again, I always say in business school, I took management classes, I got a management degree, and I got a job in management, so I thought I was supposed to manage people. I was never taught to care for people, and I was never taught to inspire people. So I would say to you, when you manage people, they'll give you what you ask and not more, but when you inspire people, they'll give you gifts beyond your imagination and their imagination. That's kind of the foundation of truly human leadership: a good business model that you share with people that gives them and sends them hope, and then constantly people are engaged and proud of what they're part of. And so constantly the senior executives' role is to shape that vision to give people a sense of where are we going, not just do your job, that's what I pay you for, but where are we going and how can you contribute to that journey with us. So that is the job of a leader, okay, not just to design the product or deal with the customer, but to realize that you are the inspiration that people will give you their perspiration for.
Yeah, remember, Alex, statistically 88% of all people feel they work for an organization that does not care about them. 88%, okay. And 75% of all people are disengaged in what they're doing. They're doing exactly what they need to do the job, and then they can't wait till five o'clock, six o'clock when they leave and go home and get out of that environment. So how do, as leaders, how does a father, how do you create the environment for your family? How do you create the environment for the people that come in each day? Because one of the things I want your audience to hear that I learned, never in my education, never in my post-education experience, was I ever told or heard that the way I would run Barry-Wehmiller would affect the way people would go home and treat their spouse and their kids. So I want to make sure that we don't overlook that. I realized in this journey that when we teach people to be leaders in our company through empathetic listening, recognition and celebration, culture of service, when we teach them the skills of leadership as opposed to management, 90% of the feedback is how it affects their marriage and their relationship with their kids. You cannot imagine what that means to hear the stories we hear of the impact on people's personal lives when they feel valued. And that's the name of our book, is Everybody Matters. People simply want to know that who they are and what they do matters. And when you genuinely show them they do, they will share gifts with you for not only their own success but for their fellow team members, okay. You'll get that collective power that takes organizations. So again, I use an example in my speeches: if Ferrari builds the ultimate high-performance engine and you put 85 octane in that engine, it'll start, it'll run down the road, and eventually it'll go fast, probably won't win any races. But if you put 91 octane in that engine, that Ferrari is going to perform to its potential. So your business model, for every one of your AI, your business model is the engine which you designed. The culture, which we're talking about, is the premium fuel that activates that engine, okay. You can't put premium fuel in a Toyota and think you're going to beat a Ferrari, okay. So a good culture can't mask a bad business model, okay. It's not simply about caring. It's a rich combination of a good business model that you're constantly looking at how it's performing. You know, it's your game plan for sports, it's your game plan for business. And the fuel for that business model is the culture when people embrace that. And again, our share price has gone up more than 12% compounded for 25 years. There's a Harvard case study on it, there's the book. So the validation of that is beyond, you know, nobody debates what I just said to you, they just don't know how to do that because we're taught so much about management, using people to achieve goals, instead of caring for people to achieve meaningful accomplishments together. So it's a team sport. So as leaders, you know, the people on this podcast, looking at the people in your organization not as engineers, accountants, receptionists, hourly workers, production workers, looking at them as somebody's precious child that's been placed in your care for 40 hours a week and simply want to go home at night knowing that what they do matters. That is the role of every leader in every company. And we could heal this poverty of dignity we have in this country if we had leaders who knew how to give people that sense of mattering, sense of dignity in whatever their role is. So again, that's what we need in every part of our society, not just business.
