Big and family owned.
That’s the type of company Stu Thorn has worked for during most of his career, from SC Johnson (cleaning products) to Beaulieu of America (carpet) and Southwire. As CEO of the Carrollton-based manufacturer of electrical power cable and wire for the past 12 years, Thorn has seen Southwire grow to more than $5 billion in annual revenue and about 5,500 employees. He was the first non-family member to run the 63 year-old company.
Six years ago, Thorn, 57, led Southwire to create a unique program to combat the high rate of high school dropouts in Carroll County. He talks about the program, as well as creating a collaborative workplace and building a family enterprise.
Q: Was there an experience early in your life that helped shape who you are today?
A: I wasn’t really able to pursue sports successfully in high school because my body grew quicker than my coordination did. I grew to 6 feet, 6 inches. I was a nerd, but I wanted to be in the game.
In college, I got on the rowing team at the University of Pennsylvania. I was a walk-on. I was built for it. I ultimately went from barely hearing about the sport to making the varsity, and at one point winning the national championship.
It is very much of a collaborative sport. You’re only as strong as your weakest link in rowing. Everyone has to flow together. If you’re pulling really hard, but if you’re not in sync with everyone else, you’re actually slowing down the boat, not speeding it up. You learn very viscerally the importance of paying attention to the other people in the boat.
Family-owned companies tend to be collaborative by their nature, because family members are real shareholders who interact with the managers. You know what’s on the owners’ minds.
Q: How have you tried to build a collaborative environment at Southwire?
A: We have a corporate kitchen. I eat lunch every day in the boardroom with a random, middle-management employee if there are not visitors. It’s one-on-one and we’ll just talk about the business and their life and what they’re working on.
A couple of times a month, I’ll have lunch in the boardroom with 10 or so factory employees. We call it “sounding board.” I’ve done this for 12 years. We’ll enjoy the fellowship of a meal together, but when we get to dessert, I’ll start talking about the business. And then I’ll turn the floor over to them for questions, suggestions and issues. It generally lasts for a couple of hours. And then I’ll have dinner with the night shift and we’ll have the exact same format.
When we have these, I work hard to make it very clear that I want to hear any issues you have. I’m not going to go out and compromise you for any issue you raise. Those are just words, but if you do it for 12 years it becomes reality.
One of the rules is that someone in top management will get back to you about the issue you raise. For example, a warehouse safety issue was raised several years ago and I made a $2 million to $3 million decision on the spot to correct it. There are many examples of that over the years.
Also, once during every shift there will be a huddle in each area of the factory or warehouse to solve problems. A supervisor gets together with the people they supervise to deal with frustrations and share ideas. There’s a “huddle board” to keep track of the ideas.
Q: One of your key ideas has been to reinvent yourself by broadening your experiences. Please discuss.
A: After getting my MBA, I was focused on finding a job where I could get a lot of experience quickly. I didn’t just want to be a finance person. I wanted to be a business person. The reason I majored in finance was because it’s the language of business. But I had the desire to reach into new areas and think beyond the constraints of whatever function I was in.
At SC Johnson, they had a philosophy that they weren’t going to pigeonhole me. I got experience in marketing, strategic planning, acquisitions and international. I picked up all these different experiences for 15 years at SC Johnson, but they were all in one industry — consumer household chemicals.
So to advance my career, I moved on to the Campbell Soup Co. I was reinventing myself by going into a new industry, which later morphed into carpets and then wire.
As my life moved on, I also broadened myself geographically by taking jobs in different places.
Also, as my career progressed I always tried to put myself in the shoes of the owner of the business. If you put yourself in the shoes of the shareholder, you realize the customer is your boss. The customer can fire the shareholder by buying from a different company.
Put the company first and your own self-interest second. I’ve always found if you do that you tend to do pretty well. People who ultimately make decisions tend to trust the person who they sense is putting the organization first.
Q: You’ve worked for successful family-owned businesses. What are the common threads that others could learn from?
A: If you’re looking for the end result to be a large, multigenerational family company, one of the common principles is that it needs to be founded by an aggressive entrepreneur who is willing to take risks, borrow money and push the envelope. If you’re founded by someone who is very conservative, you’ll never get big.
The second point is that they invariably stumble because, with that personality, they get overextended at the wrong time. Before you know it, they’re in financial difficulty.
The third hallmark is that if they’re going to make it through the difficulty they need to have the ability to go from entrepreneurial management to more professional management. Not every entrepreneur has the mindset to do that.
Another hallmark is they need to preserve their core culture as they grow. At SC Johnson, every product that was sold had to have something about it that consumers preferred to the competition on a blind-test basis. And every product had to be refreshed at least every two years.
Q: In addition to pushing innovation at Southwire, you’ve come with up with an interesting program aimed at preventing students from dropping out of high school. What is it?
A: The high school dropout rate in Carroll County was high. That was a problem for us at Southwire because we’re growing and we won’t hire anyone without a high school degree. Helping those kids graduate and then come to work in our factory would help us and the community, along with the kids.
We came up with a program called “12 for Life.” It’s a during school program for juniors and seniors at risk of dropping out. We bought a building for $1.5 million and put another $1 million in it.
The kids staff the plant, get paid and make products that have to be made. It’s a money-making operation.
But they also get school credit because there are classroom teachers and guidance counselors in the building, so the kids get their course work there too. They work about four hours and go to class for about four hours. Our employees are mentors and tutors.
There are about 150 kids there now in different shifts. Over the past six years, 644 kids have graduated who probably would not have.
Success isn’t only defined by dollars and cents. It’s also defined by how we impact the lives around us.
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Thorn’s remarks were edited for length and clarity.