Episode 53: I Hope You’re Not Torturing Yourself
Guests:
Laura Zander is co-founder and CEO of Jimmy Beans Wool.
Stephanie Stuckey is CEO of Stuckey’s Corporation.
Jay Goltz is founder and CEO of Artists Frame Service and Jayson Home.
Producer:
Jess Thoubboron is founder of Blank Word Productions.
Episode Highlights:
Jay Goltz: “I’ve learned that if you want to run a warm, wonderful company, you have to do some cold, unpleasant things.”
Jay Goltz: “You just have to remember: I’m stuck here in 1997. That’s the last time I felt comfortable with the technology that was available.”
Laura Zander: “I don’t want people to associate our brand with Amazon. I don’t want them to discover us that way.”
Stephanie Stuckey: “Wholesalers will buy product from us, and then they’ll sell on their website at a lower price than what we sell on our website.”
Full Episode Transcript:
Loren Feldman:
Welcome Jay, Stephanie, and Laura. Today—and I hope you guys are ready for this and can handle it—we actually have some good news to talk about. As we discussed last week, it’s been quite a year. But all of a sudden, cases are down, vaccinations are up, a huge stimulus bill just passed, and economists are talking about a historic boom later this year. Are you guys ready for it?
Stephanie Stuckey:
Yes!
Loren Feldman:
Stephanie, you’re ready?
Stephanie Stuckey:
Yes, so ready.
Loren Feldman:
Have you seen anything pick up already?
Stephanie Stuckey:
Store sales are picking up, orders are starting to gradually rise. So, yes, and we’re getting some very good leads from potential large big box retail accounts—all within the past couple of weeks.
Loren Feldman:
Are you prepared to handle that kind of pickup in business? Can you gear up for it?
Stephanie Stuckey:
We are working on it, and as listeners who heard the last podcast [episode] I participated in will know, we’ve purchased a manufacturing facility. We’re in the process of getting packaging and getting our own product line made at this existing candy plant and pecan snack plant. We’re working on it. We really are trying to scale up. But already, we’re concerned that we might not have the capacity. We’re already looking into what additional equipment we’ll have to buy, how to expand our space, and we might even need to staff up as well. Already!
Loren Feldman:
You just bought the facility.
Stephanie Stuckey:
Yeah, six weeks ago.
Loren Feldman:
And you’re concerned about capacity?
Stephanie Stuckey:
Yes.
Loren Feldman:
That’s a good problem, I guess.
Stephanie Stuckey:
Well, I think part of what happened was I was putting out on social media that we bought this candy plant, and it got a lot of circulation, because it’s an interesting story, I think, and others agreed. And so that prompted people contacting us, letting us know that they’re interested in buying our product, now that they know we are in the manufacturing business. We can offer better margins, because we make the product ourselves, and we can offer private labeling. That’s of interest to a lot of retailers, so we’re getting very good leads without even having to pay a rep or a broker. We’re getting these on our own organically, which is exciting.
Loren Feldman:
Laura, you guys actually did pretty well during the pandemic when people were stuck at home. Are you concerned that, as things open up, your business might actually drop off?
Laura Zander:
Ah, no, not a ton. Actually, I think we’ll probably see a boom. It’s funny, you say that we did pretty well because, like Stephanie, we bought a factory or manufacturing company right before the pandemic hit. One side of our business—the business that we bought in Texas—saw a huge drop in revenue, and I know this because I’ve started running the numbers to compare against 2019. I mean, like a 50-percent drop.
Loren Feldman:
And that’s the wholesale part of your business, right? You were selling to retailers who were shut down.
Laura Zander:
Part of it was wholesale, part of it was COVID. We’ve probably had 50 percent of our staff contract the virus, so attendance has been a huge issue. Production capacity has just been nailed. But then the Reno e-commerce side of the business has done really well. But on the flip side, we lost probably a million and a half from our retail store and from the in-person events. It’s this really interesting mix of part of the business has done really, really, really well as a result, and then other parts of the business have done miserably.
Jay Goltz:
Do you think you lost any business because the people who were buying from this manufacturer—you bought it, you’re a retailer, you’re competing with them on some level—do you think that you lost some business from that, that they don’t want to buy from you because of it?
Laura Zander:
We forced a little bit of that to happen. Our two largest competitors happen to also be discounters. We stopped selling to them on the manufacturing side, and they were two of the top three or four accounts. We made a strategic decision that we would only sell to people who sell the product at full price as a premier brand. And so yes, definitely, we lost a big chunk of revenue as a result of that.
Loren Feldman:
Are you still glad you did it?
Laura Zander:
Absolutely. One hundred percent. Because we’re actually seeing a huge increase in interest, as a result of that. And we think that, personally, even though it’s less likely to make us rich in the short-term, long-term we think it’s a better thing to do for our industry and for the yarn industry and for the small, independent yarn shops.
Jay Goltz:
I’m a little curious as to fair market trading. I assume you’ve looked into this. What’s the law on that? Can you insist they sell at full price? Is that legal?
Laura Zander:
I don’t know the exact answer to that. I think you can do it. I don’t know really how to do it.
Loren Feldman:
I think it may be that you can’t tell somebody what price to set for a product they’re selling at retail. But I think you can choose not to sell to someone who routinely discounts your product. Which is, I think, what you did.
Laura Zander:
Yeah, and that’s what we did.
Jay Goltz:
And I agree with you, in the long-term, it’s better for the industry, because the whole magic of the internet is it’s driven prices down to where whoever gets the sale can’t make any money on it. So, you know, margins still count.
Laura Zander:
It’s tragic. I mean, it’s really, really hurt our industry, which is similar to, let’s say, the running store industry. It’s a passion-led industry. The guitar industry. And so you’ve got these couple of really huge brands that are taking up—now we’ve learned today—$83 million in sales, and they’re selling everything at 20-, 30-, 40-percent off. So that’s $83 million that’s not going into the pockets of small, independent-run shops that are selling at regular price.
Jay Goltz:
I think the key being, [the independents are] selling and supporting the industry. They’re helping the customers. They’re the ones that are introducing customers to your industry, and that’s a problem—that the people who are providing services are losing sales. I’ve read stories where people go into the shoe store, and they think nothing of trying on shoes: “Okay, thanks a lot. I’m gonna order them on Amazon, on Zappos.” I mean, they think nothing of telling the shoe guy, or the shoe woman, in the store that you just wasted 20 minutes of their time, and now they’re gonna go order them online. That’s a terrible thing.
Stephanie Stuckey:
We’ve had that experience with Stuckey’s—not to a significant extent—but where wholesalers will buy product from us, and then they’ll sell on their website at a lower price than what we sell on our website. The choice is: We can choose not to sell to them. And you can make a decision when they next place an order: We’re not going to sell to them. Another thing is just to be very brand-forward and aggressive about buying from us, buying from the Stuckey’s website. And we actually are having some serious discussion about whether we should continue to sell our product on Amazon, and have our product only available on the Stuckeys.com website or in retail stores. But if you want to buy it online, you go to our website, period.
Laura Zander:
That’s what we did. When we took this business over, they were on Amazon. They were on all kinds of things, and we took it off of everything. And then on our site—the Madelinetosh site—we increased the prices above MSRP, above what we wanted our shops to sell stuff at, so that it was a detractant. We’re trying to drive people to go to the local yarn shops, and they only come to this site if they have no other option.
Stephanie Stuckey:
I don’t think consumers realize that they aren’t helping small independent businesses when they go to Amazon. The prices that they charge, the fees… We are barely making a profit on Amazon, and that’s what prompted this discussion. I think if we do make the move, it would be accompanied by aggressive outreach to our customers to say, “This is why we’re making this decision. Support small businesses, go to our websites, purchase from our websites, we can deliver.” Now, we can’t necessarily ship overnight, or be as quick as Amazon, but Amazon isn’t as fast as they used to be, so it’s actually allowing some of us to be more competitive with them on their shipping.
Laura Zander:
Well, and if you think about it, Stuckey’s isn’t about quick shipping, right? In my mind, as a consumer and as somebody who used to go, it’s about the road trip. It’s about taking your time. It’s about really appreciating things, which is kind of diametrically opposed to the whole Amazon model. So from that brand standpoint, it’s worth the wait.
Stephanie Stuckey:
Yeah, and we’re small, and we’re a comfort brand. We’re a nostalgic brand. Amazon is not aligned with what our brand is.
Loren Feldman:
Some small retailers choose to be on Amazon just because so many people discover products there.
Stephanie Stuckey:
That’s right.
Loren Feldman:
That’s where people search. And I know some people who have tried to sell a little bit on Amazon—just to have that presence—but try to drive most of the sales through their own site. Have either of you thought about that?
Stephanie Stuckey:
That’s what we’re doing. We did have pecans and our pecan log rolls on the site, and we’re taking the pecans down. They’re probably down already. They were supposed to be down a couple of days ago. We’re just selling our pecan log rolls. That’s it. And so if you want the full suite of Stuckey’s product, you go to our website.
Jay Goltz:
Is that full sweet—s-w-e-e-t or s-u-i-t-e?
Stephanie Stuckey:
That’s very punny.
Loren Feldman:
Laura, have you seen any pickup—any changes based on the economy picking up a little bit?
Laura Zander:
No, it’s pretty steady. I mean, we’ll see when the stimulus checks come out in the next week or so. We’re kind of preparing for that, because we’ll get a big huge jump out of that.
Loren Feldman:
You’ve seen that before when the checks have come out?
Laura Zander:
Yep, totally. Now we have a track record to go by.
Loren Feldman:
Are you at all concerned about the capacity to keep up, if business really picks up?
Laura Zander:
Yeah, we’re actually booked through the end of the year already in our Texas location, so we’re really struggling. Part of that is, we got flooded, so we lost about 10 days of capacity. We had to let a couple people go, as we’ve talked about before. And then, we moved a month ago. So it’s just been one thing after another, it feels like. But yes, we’re booked up for the rest of the year.
Stephanie Stuckey:
Hey, Loren, I want to add something about the browsing, because I think that’s a really good comment you made, that there are consumers who go to Amazon just to get a feel for what’s out there. And I’ve recently started to have more of a presence for Stuckey’s on Pinterest, and Pinterest users do the same thing. They go there to browse, and we’ve seen quite a bit of traction. Now, it’s only been a month, so I’m just getting that first four weeks’ worth of data to analyze, but our conversion rate is pretty good for having just gotten on there. I noticed Pinterest started popping up where all I’d done was place a few photos, and so I hired a woman at a very reasonable price to help me create a more professional look, and it’s starting to pay off. So I’m hoping to get that browsing experience still for our consumers, but just not on the Amazon site.
Loren Feldman:
Laura, are you on Pinterest? I bet you are.
Laura Zander:
Yeah, it’s funny that you would mention that, Stephanie, because we just had a meeting this morning about our Pinterest return on investment. And we actually—Loren, when you had asked about us putting our products on Amazon so that people recognize them—personally, I don’t want people to associate our brand with Amazon. I don’t want them to discover us that way. I would like them to discover us through Pinterest, because our brand aligns more with Pinterest. It’s a little more artistic. It’s less about the transaction. We have started to see—I think the number that we got today is that, last month, we put in 45 bucks, and we got a return of $4,200.
Stephanie Stuckey:
Wow.
Laura Zander:
Yeah, it’s crazy. You know the numbers aren’t huge…
Loren Feldman:
Are you going to double down on that?
Laura Zander:
Yeah, I know. I was like, “I’ll give you another 45 bucks.” The volume just isn’t huge, but the ROI is really great. We can’t put in 90 bucks and get $90,000. There’s a cap there.
Loren Feldman:
Do you know that because you tested it?
Laura Zander:
I haven’t but, yeah, our team did.
Loren Feldman:
Jay, are you on Pinterest?
Jay Goltz:
I believe so. [Laughter] I’d have to talk to my Pinterest division.
Loren Feldman:
Laura and Stephanie, do you think there’s a place on Pinterest for somebody who sells picture frames and art?
Jay Goltz:
No, not the framing. Jayson Home is on Pinterest, I’m sure.
Stephanie Stuckey:
It’s artistic. It’s crafty. It’s DIY. It’s people looking for ideas. It’s decorating. A lot of home renovations and people designing rooms. That totally fits within picture framing.
Jay Goltz:
I’m sure we’re on it. You just have to remember: I’m stuck here in 1997.
Loren Feldman:
Why are you stuck in 1997?
Jay Goltz:
Because that’s the last time I felt comfortable with the technology that was available. I have never been on Pinterest. It’s not my thing. But I know we do all that stuff.
Stephanie Stuckey:
Well, running a small business is getting outside your comfort zone. I am not at all comfortable with video content, and I am forcing myself to do short-form videos. I posted a couple on Instagram this week. I actually posted a couple on LinkedIn. So you’ve gotta get out there because that’s what drives sales.
Jay Goltz:
No, no. The other option is you don’t get out of your comfort zone. You hire people who are comfortable in that zone and have them do it. And that’s what I’ve done.
Stephanie Stuckey:
I’ve done a mix of that. You do have to understand the medium in order to effectively interact with whoever. You can’t just hire them and say, “Okay, go.”
Jay Goltz:
No, no. They work for me. They’re full-time employees here. They understand what we do. I’m not outsourcing it. They know what we do, and they do it extremely well.
Stephanie Stuckey:
Yeah, I’m outsourcing.
Loren Feldman:
Jay, if we were talking about accounting and numbers, you would say that an owner has to have a working understanding of the way the numbers work and be able to keep an eye on what your people are doing to make sure that you’re comfortable with it. Doesn’t that apply to marketing as well?
Jay Goltz:
No, because the numbers are how you make a living, and I do get feedback from people who say, “Oh, I went to your site…” And you know what, I just can’t be everything on everythin, and I’m okay with that. I can’t. Maybe I’ll change the word “can’t” to I just don’t “want” to. It’s like, you know what, I’ve got really competent people doing it. I hear nothing but positive things about all these things. Sales are solid. I’m the opposite of the micromanager. I just don’t have the head to go do that, and it’s working. I’m not arguing with you that maybe that’d be a good thing to spend some energy on. I’ve got 10 other things that I’m spending energy on—like this podcast, for instance. If I did that, could I be on this podcast? You tell me.
Loren Feldman:
All right, we’re not going down that road, Jay.
Stephanie Stuckey:
Well, it’s all about delegating and playing to your strengths. But I do think a certain amount of any business is going to require that you get outside of…
Jay Goltz:
How many employees do you have?
Stephanie Stuckey:
On the management team, we’re right around 10. I’m a little sketchy on that, because we’re merging four companies right now, and so we’re still figuring out who’s doing what. We went from 10 people for the entire company to… we’re right at 120 now, since our merger. A lot of those are our seasonal line workers at the factory, but about 25-30 are year-round. We’re definitely in transition, as far as staffing, but the social media is all consulting plus me. I’m managing all of that with a very limited amount of spend on support.
Jay Goltz:
Well, it’s all about bandwidth, and each of us has a limited bandwidth. We either choose to do what we think is most effective, or we choose to do what we like. I can’t even argue. In some cases, yeah, maybe I could add something to it—though I doubt it. I don’t choose, I just have to tell you, I stopped driving myself crazy years ago. If I’ve got something that’s working and someone’s in charge of it, and it’s working really well, I leave it alone. I try to put my energy into stuff that I think there are some opportunities in or that I think there’s a problem with.
Loren Feldman:
Fair enough.
Stephanie Stuckey:
That makes sense.
Loren Feldman:
That does make sense. Laura, I want to go back to when you were talking about with your operation in Texas. You referred to having to let some people go. Is there a story behind that?
Laura Zander:
Argh, yes.
Loren Feldman:
Tell us about it.
Laura Zander:
Oh, God. So… and Stephanie, I’m so interested to hear your journey through acquiring this manufacturing company, and I can’t wait to pick your brain about it. We bought this about a year ago—this one in Texas—and there were a lot of long-time employees, a lot of legacy employees. And we had a small group, three or four people, who were just toxic. Just calling each other bitches and yelling at people and just I don’t know.
Stephanie Stuckey:
Wow.
Laura Zander:
Yeah, yeah, yeah, we had to put a rule down, after the trauma or the events of letting these guys go, that you not allowed to call anybody these names and blah, blah, blah.
Jay Goltz:
Wait, wait, wait. Can we go back before you let them go? Did you have a meeting with the entire staff and say, “Listen, I’m new here. I don’t know what’s been going on before I got here, but I just want to tell you how this company runs, and we don’t do this. We don’t do that. Here’s what we do do.” Did they get told that you can’t do this?
Laura Zander:
Yes, multiple times. And we actually had to let some people go last March, because they had been creating—and I know Jay doesn’t like this word—but they’d been creating drama. They had gossipped and were talking to problems that those people couldn’t solve.
Jay Goltz:
I only don’t like the word “drama” just because I don’t know what it means. There are just a million different connotations.
Laura Zander:
To you it does. But Dana and I talked about it, and we’re like, “We know what it means.”
Stephanie Stuckey:
I know what it means.
Laura Zander:
Yes, it’s very clear. And it has been this kind of drama creation, this disrespectful behavior…
Jay Goltz:
Okay, that I understand. That’s in my wheelhouse. I get disrespectful behavior. That’s clean. It’s easy to identify.
Laura Zander:
That has been something that was part of the DNA of this business when we took it over, so we’ve been slowly—sometimes quickly, sometimes slowly—weeding out the people who are the ones that are causing some of the problems. But it’s taken us a little bit longer to figure out who some of these people are. Anyway, we had a group of five people who decided not to show up to work multiple days in a row, and they had made a pact that if any of them got fired, they would all quit.
Loren Feldman:
What reason did they offer for not showing up at work?
Laura Zander:
Just that it was… I don’t want to go into it.
Jay Goltz:
Was there a flood? There was a flood, wasn’t there?
Laura Zander:
There was a flood, yeah.
Jay Goltz:
Was there no electricity?
Laura Zander:
No, we had electricity. The building flooded and so—
Jay Goltz:
Were there locusts?
Laura Zander:
No. There were no locusts.
Stephanie Stuckey:
Was there a plague? Clearly there was a snitch in the ranks for you to have this information, though.
Laura Zander:
Well, it’s really obvious when everybody else shows up except for one core group of people. Anyway, so we let these people go. We fired four of them, and then one of them came in, a fifth one came in, and said, “I now have to quit.” And we’re like, “Okay,” and she told us they had formed a pact, and, “If anybody got fired out of us, then we were all going to quit, and I want to hold true to my word.” And it was so tragic, because this is such a nice woman.
Stephanie Stuckey:
Do they know, if they quit, you don’t qualify for unemployment. Just saying.
Laura Zander:
I know, I know.
Jay Goltz:
Forget about the pact she has with actually feeding her children. Forget about that pact. Better to have a pact with some people… I mean, that’s just sad, and childish.
Loren Feldman:
Did you try to talk this person into staying despite the pact?
Laura Zander:
We did not because we felt like she made her decision. If we need to get rid of all of the bad juju, we’re gonna get rid of all the bad juju. But it broke our hearts, because she was a really nice woman. She just was kind of following them. So anyway, yeah, that really impacted our production, of course, but it really shook things up. And I’ll tell you, the day that we did that—it was a little while ago—was one of the worst days that I’ve ever had there.
Loren Feldman:
Why?
Laura Zander:
We’re just tired. It’s been 16 months or whatever, like just getting punched in the face. I mean, it’s rocky, right?
Loren Feldman:
But you also hear business owners say, “When I finally fired the person, or people, everything got better. People thanked me for it. It just lifted a cloud. And the only question was, ‘Why didn’t we do it sooner?’” You didn’t have that experience?
Laura Zander:
Well, yeah, but not on that day.
Loren Feldman:
Okay.
Laura Zander:
On that day, it’s pretty freakin’ horrible. Now granted, we had a list—in December, we did bonuses for the staff, and so I asked our managers to rank people based on a one-to-five scale. And I know Jay says, “Go one to 10,” but we did one to five. We had a group of people who were two out of five. And attendance is one of the major issues—attendance and then, like I said, kind of the shittiness and not treating people well. We had this group of people that were two’s who we knew we needed to do something about, but we’re in the middle of a move, there’s Christmas. We had a huge COVID infection that happened in December, blah, blah, blah.
There are all these things, so the timing wasn’t right. Then these people who all coincidentally happened to score a two all decide not to show up to work for a couple days. Then that’s when we let them go. We knew it was something that needed to be done. We just weren’t ready for it. The timing wasn’t right. It’s now been a couple weeks, and you’re right, Loren. Even after five days, it’s the hardest thing that we’ve done, because all of us had to jump in and do their jobs so that we could try to keep up. But we’re in better shape now and the environment there is better than it’s ever been.
Jay Goltz:
You keep saying “we.” What are we talking about? How many managers are with you on this whole thing?
Laura Zander:
In this case, it was three.
Jay Goltz:
Okay, so my question to you is: Those three had been working for the company for quite a while?
Laura Zander:
Yes.
Jay Goltz:
What was their excuse to you for why these twos out of fives were still working there before you got there? Was it the owner that overruled? Did they think there was a problem with having someone who doesn’t show up to work? I just wonder…
Laura Zander:
Because that was the culture. The turnover there has been—
Jay Goltz:
So put up with everybody no matter what they do, basically.
Laura Zander:
Yes. Basically somebody could stay employed if they showed up 80 percent of the time. That was consistent.
Jay Goltz:
So just for my business language, because I try to keep it in business language. Forget about the word culture. Their standards were such that no one set a standard to say, “Okay, you need to be here 95 percent of the time in order to keep your job.” So the previous owners had set a standard, or let a standard find itself, which is, “Yeah, if you show up 80 percent of the time, we’re not going to fire you.” And the managers, why would they not go along with what the owners thought? So, okay.
Laura Zander:
Yes, exactly. In business terms, there was no accountability, pretty much. People would get fired for just random reasons on random days. So this has forced us—we’re putting a point system in place. It’s forced us to really do a much better job and be more clear about expectations and to put standards in place.
Loren Feldman:
Did it have an impact on the morale of people who stayed?
Laura Zander:
For the first couple of days, absolutely. That day, we had an all-hands meeting where I just kind of laid into them, and I had pretty much every person come up to me over the next week and tell me how embarrassed they were and how just sorry they were, blah, blah, blah, blah, blah. So in the beginning, it was very fearful. People were scared. “Am I gonna get fired too?” And then, after a few days, everything kind of lightened up, and it’s a much more community-based thing.
And the other thing that has changed: We’ve taken a more intentional approach with the hiring. Because in the past, basically they just hired anybody who walks in the door. Now, working through a more intense interview process, including more people in the interview process, being more clear about the expectations.
Jay Goltz:
Wait, can I help you with this? Stop saying “expectations.” This isn’t about expectations. It’s about standards. Lower your expectations and raise your standards. I can expect somebody to be the perfect employee, and it doesn’t mean they’re going to be that, whereas a standard is a standard. They didn’t know what the standards were. They didn’t know they had to show up at a certain time. They didn’t know that they had to do a certain quality of work. Because everybody has different expectations, whereas standards, once they’re put in, these are the standards.
Laura Zander:
All right.
Jay Goltz:
Are you with me on that?
Laura Zander:
Yeah, ’cause you were born in like 1930. I mean, so I get it.
Jay Goltz:
No, I’ve been through it myself. That’s the only reason I know. It took me 20 years to figure out what I just told you in 30 seconds.
Laura Zander:
Okay, thank you. I’ll pay you later.
Jay Goltz:
You said that last time, and I still haven’t gotten any payments. I would take some Stuckey’s chocolate or a pecan roll.
Laura Zander:
That’s a great point. Thank you, Jay. I appreciate that correction.
Jay Goltz:
And I’m afraid that, these days, everyone talks about corporate culture. There’s certainly something called corporate culture, but usually they’re talking about management, and they’re not the same thing. It’s just not the same thing. Management is putting good ads out, doing a thorough interview process, hiring properly, setting standards, explaining to people what those standards are in holding people—
Laura Zander:
You almost just said it!
Jay Goltz:
I almost did, but I caught myself, you’ll notice. Almost doesn’t count.
Loren Feldman:
You just made Laura’s day.
Stephanie Stuckey:
If I can weigh in just a little bit here, though, one of the challenges that we face is—and I’m still working through this, I’ve only had the manufacturing facility for a little over a month—but we are in a very small town in a rural community, so trying to get the motivated staff is hard sometimes. And then motivating people for somewhat repetitive line worker factory jobs is hard. Even if you tell them what the standards are, getting super excited about coming to work every day and sorting pecan shells—
Jay Goltz:
You just answered your own question. No one says that you have to be super excited. They just have to show up. That’s the point. And everyone talks about motivating everyone. I’ve found that usually—how many ways are there to motivate people: Maybe 10? You know: money, titles, time off, gifts,. There are 100 ways to demotivate people, and I see people doing it all the time. They demotivate people by yelling, that’s a big one. And then when you ask the entrepreneur, “Well, I’m just passionate.” No, you’re an asshole. And believe me, I used to do it. Yelling is destructive behavior. There’s no need to be yelling.
Stephanie Stuckey:
I think beyond the basics of making sure people are paid, and there are bonuses and performance-based incentives, etc., we’ve talked about culture. It’s a sense of belonging. You’re part of a higher purpose. We’re doing something really interesting and different here at Stuckey’s. We’re trying to make the pecan America’s favorite snack nut. We’re trying to revive the road trip. Be part of that culture. Be part of our community. Don’t just have a job.
We’re working through that because we just bought this company that has been essentially… it’s been called Atwell Pecans since 1930. It’s actually seven years before Stuckey’s was founded and has only been in two families that entire time. The previous owner had the company for 50 years. So, it’s a transition. You can’t snap your fingers overnight and expect them to get that.
Jay Goltz:
No, absolutely. Look at how people get into their sports team. My God, you see them on TV, you think they just won a million… “This is the happiest day of my life.” I think, “Wow, somebody has won a baseball game and it’s the happiest day of your life.” My point is, people get tribal association. Look, I totally agree with you.
Stephanie Stuckey:
People want to belong.
Jay Goltz:
Absolutely. They want to believe in something.
Stephanie Stuckey:
You think about how much time people spend at their jobs, if they’re working even a nine-to-five job just five days a week. That’s a tremendous amount of your time. And so, how can we make that time worth it, where they have a sense of belonging? And it’s more than just, I’m sorting pecan shells out. We’re part of creating something really special. We’re making the best-quality pecans you can find anywhere.
Jay Goltz:
Which makes people happy. And what a nice mission.
Stephanie Stuckey:
A sense of pride in yourself and your work.
Jay Goltz:
Our employees know that we always get the job done for the customers, and they take great pride in that, and we have regular meetings, and we talk about whether we got a note from a customer, whether we have a comment from a salesperson. They all get it. They get the mission. I think a lot of companies don’t spend any time indoctrinating them and including them in the mission.
And I only know when I hired people from a big factory—this was 30 years ago—they had no idea what was going on. One day, it just closed up and left town. They had no idea. They never had meetings. They had no idea. I think that’s not uncommon. Just having a once-a-week, 20-minute meeting, talking about what’s going right, what’s going wrong, about a great story, it makes me feel good. They belong to something. I’m sure you will be able to pull that off. Yeah, it’s gonna take you, I don’t know, six months or a year.
Stephanie Stuckey:
But communication is key, and also just basics and knowing people’s names. I’ve started walking down the line asking people, “What’s your name?” And remembering that. And so next time I’m walking the line, say, “Hi, Chris, it’s good to see you again.” “How are you, Tony? It’s nice to see you.”
Jay Goltz:
Especially if their name happens to be Chris or Tony.
Stephanie Stuckey:
Those actually are two names of people who work for Stuckey’s.
Jay Goltz:
I have to tell you, I’m always petrified of using the wrong name, and it’s frustrating.
Stephanie Stuckey:
Well, in those cases, I just say, “I’m sorry, I can’t recall your name. Is it Tony? I think it’s Tony.” But really, I work hard at remembering people’s names.
Loren Feldman:
I want to go back and just tie up Laura’s situation if we can. Do you still have any of the number twos left? Or are they all gone now?
Laura Zander:
I think we might have—we have two twos left, and we just had serious conversations with them last week. So we’re gonna give them a chance.
Jay Goltz:
And what are you trying to get the two to turn into?
Laura Zander:
A three?
Jay Goltz:
See, this is why I like my 10 better. Because I believe you should shoot to get eights, nines, and tens. Sometimes, for whatever reason, maybe the labor is hard to get, maybe a seven is okay. But you’re going all the way from a two to a… I’ve never succeeded, ever. I’ve succeeded in taking a seven and turning him into an eight or nine. I’ve never succeeded in taking a three and turning him into a seven. And without a lobotomy, I don’t think, I haven’t been able to…
Loren Feldman:
Have you tried a lobotomy?
Jay Goltz:
No, I think you can absolutely take a nine employee and turn him into a three with bad management. I think you can ruin a good employee by saying the wrong thing, by doing the wrong thing.
Stephanie Stuckey:
Yes.
Jay Goltz:
I’ve seen it. But I’ve also never personally—and God knows I’ve tried, I’ve spent years trying—I’ve never been able to turn a five into an eight. Maybe it’s just the wrong place for them. Maybe somewhere else they would be an eight.
Stephanie Stuckey:
Jay makes a great point. The most critical part of staff training is hiring the right people in the first place.
Jay Goltz:
Absolutely.
Stephanie Stuckey:
And it’s better to take the time to hire the right person and have some delay there, because the worst thing you can do for a company is hire the wrong person.
Jay Goltz:
I’m telling you, I didn’t know what I was doing with hiring. It was so important. For 10 years, I just went though person after person after person. I’ve said this on the podcast before—and then I hired a hiring guru, and my business changed dramatically.
Stephanie Stuckey:
Yeah, it’s worth it. And even though I’ve only been at Stuckey’s here for a year, I’ve had many roles where I’ve had to hire people. And like you, Jay, I have the scars to prove it—of hiring the wrong people. It’s awful.
Jay Goltz:
I just had this conversation yesterday with my HR person. She called references for this particular person—which is kind of an important role here—and she got glowing references. And I said, Angie, have we ever hired somebody who got glowing references, and it didn’t work out?” She couldn’t think of one. I am confident that calling references is a critical part of this story, and if you get great references for a person, you’re probably in really good shape. If you can’t get references or the references act like you’re pulling teeth when you call them, that’s a concern.
Stephanie Stuckey:
Well, I call people who aren’t necessarily on the references. Places where they’ve worked, and that’s where LinkedIn comes in. It can tell you who your contacts in common are. Because of course they’re going to list references that are going to say good things about them. It’s important to dig deeper if it’s a key position, and pretty much any position is key.
Jay Goltz:
The fact is, you can do this 10 times, and nine out of 10 times, you didn’t learn anything. That one time that you didn’t hire that one person. Oh my God, what’s that worth? What’s that worth not to hire the wrong person one out of 10 times? It’s worth a lot, is the point.
Loren Feldman:
One last thing with you, Laura. You’ve explained what happened. Do you feel you learned something about this? Is there something that you would do differently, if you had it to do over?
Laura Zander:
I definitely feel like I’ve learned something. I think we all have—”we” being the management team, Jay, and the staff. Would I do something differently? That’s a tough question. Look, we the team have given 150 percent of ourselves. So, sure. But I don’t know where I would have found the energy. I don’t know where we would have found the time. I think we’ve just done the best that we could. So kind of, but kind of not. Does that make any sense?
Loren Feldman:
It does.
Laura Zander:
So sure, I wish things had been different.
Jay Goltz:
You might have very well done everything you can. You walked into a crummy situation that needed to be cleaned up over time.
Laura Zander:
Well, and remember, we hired a general manager who had worked there for years and years and years in January, and then she didn’t work out. In May, we had to switch, and we promoted the HR manager into the general manager, who had never done that role. And then we brought another new person into upper management in September. We’re all kind of discovering what our strengths and our weaknesses are. Who’s the structured one? Who’s the really good manager? Who’s the blah, blah, blah? I think we’re in a really good spot now, and it’s becoming very clear, but it’s been a painful process.
Jay Goltz:
For 16 months, you’ve done extremely well. I hope you’re not torturing yourself, because that’s a tough thing to walk into.
Laura Zander:
For one of the first times in my life, I’m not torturing myself. It’s been very painful, but it just is what it is. And the only way to get through it is to get through it.
Loren Feldman:
Jay, maybe you can help by putting it in perspective. It does sound painful, but I’m guessing you’ve been through in 40 years a more painful firing situation.
Jay Goltz:
I’ve learned that if you want to run a warm, wonderful company, you have to do some cold, unpleasant things. And anybody who thinks you can’t, or don’t, is naive. There are some people on this Earth who just don’t fit in your company. You’ve given it a good shot. You trained them. You hired them, and it doesn’t work. One of the big learning curves of being the boss is, sometimes you have to fire people. And it’s unfortunate, but it is what it is, and you have to do it. It doesn’t make you a bad person. It makes you a bad boss if you don’t do it. Why? Because if they shouldn’t be working for you, either the customers aren’t getting what they’re paying for or the other employees are not enjoying coming to work because of this person. The fact of the matter is there’s nobility in it.
Loren Feldman:
I want a story. What’s your worst firing story?
Jay Goltz:
You start out by yourself. You hire five people, 10 people. You get to a day where you think, “God, I need some kind of manager here.” So I hired the manager person, and he had an art background, and it was going well. We had maybe 20 employees and things were going okay for a couple of years. And then slowly but surely, I was growing the company, now I’m up to 40 people. Now I’m up to 50 people. Now I’m hiring a different level of employee for different jobs, and this person was clearly in over their head. And it got more and more stressful, and I eventually had to fire him.
I will tell you, what I’ve learned from this is: If you think that you’re going to grow a company from four of you to 100, and you’re going to have all those same people with you from the beginning, that’s almost impossible, if not impossible. Because the same kind of person who joins a company when there’s five employees is not necessarily the same person you need when you have 100. You can say, “Oh, well, can’t you put them back into another position?” Yes, sometimes that works. But frequently, it doesn’t. Frequently, it turns into them getting mad at you, because you’re not paying attention to them anymore and blah, blah, blah. It was really brutal.
And then it gets personal. Because in the beginning, you’re going out to dinner with your wife, and you’re friends with everybody. Then you come home, and you tell your spouse, “I have to get rid of so-and-so.” And the first thing out of their mouth is, “You can’t do that. They’re our friend.” And I would say that’s one of the growing-up stages of a business. It was brutal, and then I’ve had a couple more since then. They’ve gotten easier, because I see it sooner than I used to. But if you’re growing, the fact is, you outgrow people sometimes. If you’re not growing, maybe not. Maybe you can have the same people working with you for 40 years. But I think when you grow—not think—I’ve observed when a company grows, your needs change. Am I wrong?
Loren Feldman:
There’ve been a lot of books written about that.
Laura Zander:
Yeah, we’ve had the exact same experience. The staff at Jimmy Beans right now is probably 90 percent different than it was five years ago, because we went through that same trajectory. Everybody who we had five years ago had kind of started at the beginning, when we had five, 10 people. We all kind of grew with it, and then just really hit a wall.
Jay Goltz:
I have lots of people with me for 30 years now, but that was after I had critical mass at that point. When you’ve got 20, 30 employees, that might be the same kind of employee when you have 100. But when you’ve got five, it’s frequently a different person.
Laura Zander:
And it’s so interesting that you say that about going to dinners. It’s this kind of natural jealousy that I’m not getting the same attention. I’m not your right-hand man anymore. Now you’ve got other people that you’re paying attention to.
Jay Goltz:
You hit the phrase. That’s the problem. It’s the right-hand person thing. That’s exactly the problem. It went bad as soon as I hired a professional person to work in the accounting office, of all things. And he started going off on her, like crazy man stuff, and I had to sit down with him and say, “Do you think it’s appropriate to be talking to her like that?” I hope he’s not listening, I’m assuming he’s not. This was a long time ago. He gets a little teary eyed, says, “Well, I’ll have to think about it.” Well, young, naive Jay thought that he was embarrassed that he was getting out of control. And in hindsight I realized, “No, he felt like I just sold him down the river.” He thought I should allow him to be yelling at people at the top of his lungs. And she didn’t do anything. He was really just picking on her because he saw me spending some time with her on other issues. Yeah, it’s a problem, the right-hand person syndrome, when you’ve got five employees or ten employees.
Laura Zander:
And the first time you bring somebody in from the outside that skips ranks…
Jay Goltz:
Yes. I think you, me, just about everyone else, I think this is a common problem in business.
Laura Zander:
But then it’s like, once you break the seal, once we brought that first person in and they were successful, and some of the people who were the most angry or frustrated about it left, now we started bringing in more people who skip ranks, if you will, or jump ranks. And now it’s just part of the culture.
Stephanie Stuckey:
Well, hopefully it’s also going to motivate people to see if you have the capacity and you really are qualified, you can rise in the ranks. But you’re not entitled. We can bring in people from the outside who do have the skill-sets we need so hopefully it motivates people up and down the chain.
Jay Goltz:
I have no greater glory in my mind than looking at people who have been with me, who started on the line. They were working in the factory, and here it is, 30 years later, and they’re managers, and there’s nothing greater. There are lots of things that give you a lot of grief when you own a business. Well, this is one of the great things—that you’ve taken people who had no expectations of their own abilities, that really had no expectations. They thought they’d be working in a factory line their whole life. And slowly but surely, you groomed them and gave them confidence, and then one day, they’ve got 15 people reporting to them. It’s a beautiful thing.
Laura Zander:
I was telling somebody the other day, she’s got a smaller business, and she’s like, “I really pay attention to my customers. I have these great relationships with my customers, and I don’t know if I want to grow.” And I said, “What I’ve experienced is that now that I’ve grown, my personal customers—the people I have relationships with—are my employees. So those are the people who I get to know. Those are the people who I’m interested in watching them grow their skills.” And it really kind of reframed things for me to realize that, now these are my customers—the people who work for us.
Jay Goltz:
With that being said, if she’s happy with that, and she makes enough money? Hey, I respect that.
Laura Zander:
One hundred percent.
Jay Goltz:
I’m in the frame business. Most frame shops have two or three employees, and some of them are very happy and make enough living, and they’re happy with that. I don’t try to tell everyone you need to have 20 employees or 30.
Laura Zander:
Not at all. The conversation was: Pick one. The grass is not greener, it’s just different.
Loren Feldman:
One last question. Has it been harder to fire people this year because of the pandemic? Are you reluctant to take that big last step, knowing that people face a pandemic and possibly losing health insurance?
Laura Zander:
For me, personally, in a couple of situations, yes. But for the most part, actually, no. If you can’t show up at work, for no reason, during this time, then you don’t want a job. We have bent over backwards. We’ve done so much so much to support everybody at work, especially in Texas, and to behave this way in order to—
Jay Goltz:
You know what, I have a phrase for that. It’s about the unwilling, the unable—or in some cases—the unexplainable. Can you explain how somebody would leave a job they like because they made some high school pact with co-workers? I mean, it doesn’t make any sense, but that’s what’s out there. It’s unexplainable, makes no sense, but it is what it is. And at the end of the day, we can’t make it all our problem.
Loren Feldman:
All right, guys. My thanks to Stephanie Stuckey, Laura Zander, and Jay Goltz. Once again, appreciate you sharing and taking the time.
