Several years ago Peter Asch from Twincraft Skincare sold his business to a private equity group. Every so often the buyers don’t understand the business and it loses a significant amount of value. Even rarer is the opportunity for the selling owner to buy back their business. Peter had one of those rare opportunities.
Today’s episode is about what Peter learned and why he decided to buy his business back. Here are some of the things we’ll talk about today:
- Why your business culture is such an important driver in business success.
- Why you need to focus on your people for success.
- Where appreciative inquiry can help you ask the right questions about your business.
- What some of the advantages and pitfalls are when you change your culture.
Narrator: Welcome to the Sustainable Business Radio Show on podcast where you’ll learn not only how to create a sustainable business but you’ll also learn the secrets of creating extraordinary value within your business and your life. The Sustainable Business is all about creating great outcomes.
Here’s your host certified financial planner, student, entrepreneur and private business expert, Josh Patrick.
Josh: Today’s podcast features Peter Asch, the owner and CEO of Twincraft Manufacturing. Several years ago, Peter sold his company. He didn’t like what the owners were doing with the culture and recently bought the company back. His main reason for doing so was to preserve the culture that he had worked so hard to establish. Let’s spend a few minutes talking with Peter about why culture is important and why he thinks you need to spend a lot of time focusing on and establishing a positive culture in your company. So, let’s get right to it.
Hey, Pete, how are you today?
Peter: I’m great, Josh. Good afternoon, how are you?
Josh: I’m well. Thanks so much for spending some time with us.
Peter: Great to be on the show.
Josh: Let’s just start talking about your culture in general. I know this is something that is near and dear to your heart and actually the reason you bought the company back. Can you talk a little bit about that?
Peter: Yes. Well, I had sold my business and then had the opportunity to re-purchase it. It was a favorable circumstance. One of the important reasons and really one of the pillars for re-purchasing it was it allowed me to re-engage in a very substantive way and focus on the culture. I have a very strong belief in people. I enjoy building teams. I like to focus on, not only the culture but when I say culture, I mean really helping people and having people feel inspired and worthwhile and really helping people to get the best out of themselves within this organization. When I re-purchased the company, I really started to focus on that. I hired a president who was–actually, promoted somebody within the company who was just fabulous and is really running the company on a day-to-day basis. That allowed me to spend that much more time focusing on the cultural parts of the business.
Josh: When you say you want to have people feel proud of what they’re doing, how specifically do you guys go about doing that?
Peter: As an example of that, for instance, we talk a lot about appreciative inquiry within the company. Appreciative inquiry is something that came out of Case Western. David Cooperrider actually is the sort of inventor or person who kind of coined the term. A local college here at Champlain actually is deeply involved with this at the moment. Appreciative inquiry really is fundamental to appreciating individuals. What one appreciates tends to appreciate i.e. what one focuses on tends to appreciate.
Let me give you an example. For instance, we are normally taught that, let’s say, we have a shipping rate of 95% and we will tend to focus, because that’s what we’re taught, to focus on the 5% i.e. that which is not being done properly or not happening, or is failing to happen et cetera. That puts the whole issue into a negative context. Over here at Twincraft, we will tend to focus on the 95% and really look at what is going right. What did we do to ship 95% on time as a fulfillment? And by focusing on that what tends to happen is you crowd out the 5%. Whereas, if you focus on the 5%, the dialogue tends to be quite negative, and then you tend to end up with a sort of negative dialogue that really doesn’t accomplish the issue which is going from 95% to 97% to 98% and potentially 100% fulfillment.
We feel that language is very important. What we call that is a positive discourse over a language of deficit. A language of deficit might be, we talk about how hard things are, how difficult it is, we’re burned out, it’s stressful et cetera. A positive discourse would be much more about looking forward to the future. We have hope for the future. We’re going to grow. We appreciate people and what they do. We honor them. We’re curious. We ask questions et cetera.
Josh: [inaudible 00:04:45] the change into appreciative inquiry, Pete. How much change did you have to make with your people? Did you have a lot of turnover or were you just able to turn people’s attitudes around?
Peter: I think we had some turnover but in general, it’s somewhat trite to say, but people appreciate being appreciated. There’s a lot of talk in business about people not being appreciated. I think, when you have a culture of appreciation, people, to a fairly large degree, kind of glom onto that and are quite grateful that they are being appreciated. Some people weren’t able to go there, didn’t want to be part of it but by and large the majority of people appreciate it. And so, we haven’t had a huge amount of turnover although there certainly has been some. I think whenever you have a culture shift some people—or almost people actually, particularly if it’s a positive cultural shift, are very keen on it. And some people prefer to stick with what is, even though it is perhaps not very positive and often they just self-select out.
Josh: That’s been my experience also. You have a value statement which I love, which is “We operate Twincraft with a heart for people, a head for business and a passion for bringing the two together.” Can you talk about how you managed to come up with that? It’s a great statement, by the way.
Peter: Oh, thank you. Thank you. I don’t recall exactly how I came up with it per se. It’s just fundamental to what we do here. We’re operating a business, of course. I mean, it’s an organization that needs to make money in order to survive but at the same time, there’s really so much more in an organization than just making money. I think, if one falls prey to purely making money then there’s something tragically missing from a culture that is focused principally on that.
People feel it. Whatever you focus on, people know what you’re doing and they feel it. You can’t hide these things. I just really believe in people. I love people. I like working with people. It gives me a lot of energy to see people win, and to see people grow, and see people get better at what they do and feel inspired of what they do. I think, through just my belief system, we came up with the statement that resonates with who we are and what we do within the company.
Josh: One of the things which is unusual with companies is your attitude towards mistakes. How do mistakes play in with the success that you have and the culture that you’ve established?
Peter: It’s a great question. We are very accepting of error and forgiving of error because we believe that largely our species, humans, tend to learn because they make mistakes. I have a video on the company’s website where I talk about how difficult it was in elementary school and grade school and still is for pretty much everybody to put their hand up – for instance, putting your hand up in math class. Who wants to do that and look foolish and look silly and what not? And so, people don’t like to single themselves out and potentially look foolish in front of others and make a mistake in front of others. We understand this.
We’re very sensitive to people’s emotions or we try to be anyways. And sensitive to how people might be perceived within an organization. And so, what we try to do, to the greatest degree possible, is take away fear within the organization. Try to infuse trust within the organization. Try to give people freedom within, of course, reasonable parameters to do their own thing and make some mistakes. I will talk at company meetings and say that, “I make mistakes all the time and it’s really not the mistake that’s important because that’s so often how we learn. It’s what we’ve learnt from the mistake that is truly important” because, of course, if we’re making the same mistake again and again and again, we’re not learning anything and then we’re not tremendously tolerant of that within the company. But again, we’ll talk about it so that people will be educated and understand that by talking about it, it’s okay to do it and you can then move forward. We’re pretty passionate about error because I think any company or any organization that feels they don’t make many errors is really not being honest with themselves and people tend to be somewhat muted as a result of that. And therefore, more errors are made. So, we try to do the opposite of that.
Josh: Yeah. I call that taking the mistakes out of the closet but it’s an interesting method. I always find it fascinating that companies who perform well, tend to do well with the issue on mistakes. Let’s take two words that you brought up which I think are really key, which is how to control fear and build trust. Let’s talk about trust. How do you guys specifically build trust at Twincraft?
Peter: Oh, goodness, you know Josh, there’s so many ways in which we do that. But I’ll give you an example perhaps that might be helpful to answering the question. When Jim was promoted to become president, a few weeks after it happened, I walked into his office and we were chatting and I said, “I just want you to know that we’re going to have a lousy year, certainly, sometime in the future and I forgive you for it.” He sort of looked at me because I’m talking about the future and already forgiving him even though I don’t know what the cause was. And I said, “You know, Jim, I’ve been president for many, many years and we had some good years and we had some poor years. This is just normal. I want you to make truly decisions on behalf of the company that are the best decisions that you know how to make and they’re absent of fear. You’re not going to play small ball or be highly conservative because you’re concerned that I might penalize you heavily for making the wrong decision. Therefore, I forgive you for the lousy year that will come. It may come next year. It may come in two years. It may come in—I don’t know what it will but I forgive you for it.” It’s very interesting, we’ve talked about that several times since and he felt grateful for my saying that because it did take away his concern about repercussions for something that might not be looked at as positive, i.e. a poor year. The net result of that is it gives a person freedom because they know that they’re being trusted.
At the end of the day, if the people who report me know that they’re being trusted, they can then operate in a clean and surer fashion which is pretty much how I do it because nobody can fire me. Hence, I’ll make a decision without fear that somebody’s going to hurt me and to the extent that I can create that through trust within the organization. Not only to my president but the people around him and then the people around them et cetera and it rolls through. Then that trust allows for an operation that is far more effective and far less political because the more that people are trusted, the less political people tend to be. They don’t have to cover anything up.
Josh: If someone who’s listening to this and they say, “Boy, this sounds like a great idea. I really want to take my business and instill more trust in it.” What specific things could you tell people to be doing that will help them get trust at the lowest level of the company and not just at the top of the company?
Peter: Well, I think one of the biggest things is one of the cardinal rules and that’s just to treat people as you would expect to be treated. When you do that, that does create trust. It takes away fear. And I think it’s also compassionate and not only human but humane. I try to think, “Well, how would I want to be treated if my boss was speaking to me?”
We talk about these things quite extensively actually in our senior teams, in our middle management teams, and we try to surround ourselves with people who have a common belief at least as it pertains to this type of thing. It’s complex stuff because it plays into having people who have a high degree of emotional intelligence. And as a result of that, there’s a lot of training that goes on in the company to help people through it and with that a lot of forgiveness when people make mistakes. You have to also take the long view of things and not expect that every quarter or every year is going to be exactly as you’d like it to be because that builds up a lot of stress in a company. And really, if you actually want to make the most money possible, you’re better off not having those things in your company so it’s very much a business belief that works in practice and makes for a much happier organization.
Josh: Cool. We have a couple of minutes left but before we run out of time, I want to make sure that you have the chance of telling people how to get a hold of you if they’re interested and you’re interested in having a conversation with some of the listeners, possibly. Would you be willing to share your contact information, Pete?
Peter: Yeah, absolutely. My e-mail is email@example.com. I would certainly urge people to take a look at our website which is www.twincraft.com. If anybody wants to get in touch with me, I’d be happy to. We’re very happy talking about all of this kind of stuff. We’re a pretty transparent company at the end of the day.
Josh: I would highly recommend people take a look at the video you have in your website, it’s really quite excellent.
Peter: I give full credit on that to James Lantz. If anybody needs a video done, look up Jim Lantz. He is a magician and thinks very differently and I’ve had so many people comment on that video. Particularly, we us it when recruiting. A lot of people look at it when we’re recruiting and it makes a significant impression. It was very easy to do and a joy to do as well.
Josh: Oh, great. Pete, we’re almost out of time and I really appreciate the time that you gave us today. This has been really illuminating and I hope helpful to our listeners.
Peter: Great. Well, I hope it has been, Josh. As always, you’re a dear friend. We’ve worked together for many, many years and I appreciate doing this. Thank you for that.
Josh: You’ve been listening to the Sustainable Business Podcast where we talk about what you need to do with your business if it was to be here 100 years from now. If you like what you heard and want more information, please contact me at 802‑846‑1264 ext 2 or visit us on our website at www.stage2solution.com or you can send me an e-mail at firstname.lastname@example.org.
This is Josh Patrick. Thanks for listening. I hope to see you soon for another edition of The Sustainable Business.