How the Sausage Is Made
Guests:
Karen Clark Cole is co-founder and CEO of Blink.
Jay Goltz is founder and CEO of Artists Frame Service and Jayson Home.
Stephanie Stuckey is CEO of Stuckey’s Corporation.
Producer:
Jess Thoubboron is founder of Blank Word Productions.
Episode Highlights:
Jay Goltz: “The biggest joke of them all is, ‘I’ve got an open-door policy.’ I mean, that’s just laughable that you think people are gonna feel comfortable walking up to your office.”
Jay Goltz: “I’m not going to their birthday parties, and I’m not hanging out with them. But that doesn’t mean I’m not extremely close to them.”
Stephanie Stuckey: “I’ve structured Stuckey’s where I’m not lonely at the top, because I have a colleague. I have a president, and we co-own the company. We run it together.”
Stephanie Stuckey: “He just was on my case about every decision I made and anything I wanted to do to take the company in a different direction—like buy a candy plant. He was just freaking out, and I said, ‘Dad, why are you doing this?’”
Full Episode Transcript:
Loren Feldman:
Welcome Karen Clark Cole, Jay Goltz, and Stephanie Stuckey. I really appreciate you guys being here, and I hope you’re all doing well. Today, I’d like to start by running through some news items and something that we talked about in the Morning Report this week. This past Saturday, I asked all of our subscribers whether it’s possible for an owner or CEO to be friends with his or her employees, and we got some really interesting responses. It just made me think, I want to ask you guys the same question. Karen, let me start with you. Do you think that it’s possible for you to be friends with your employees at Blink?
Karen Clark Cole:
You mean, like going out for a beer and hanging out on the weekend? No.
Loren Feldman:
However you define friends. That’s part of it, sure.
Karen Clark Cole:
Yeah, it’s a little tricky. No, the short answer is: not really.
Loren Feldman:
Have you learned this the hard way, Karen?
Karen Clark Cole:
No, depending on what the hard way is. I don’t really know what the hard way is. But what happens is there becomes a fairness issue as we get bigger. It’s important that I’m not seen as favoring anybody. At the end of the day, there’s a raise and a promotion somehow tracked back to me, which isn’t really the case. But there’s perception, and optics is everything. I’m just really aware of how I am received and what the optics are around me and my role.
Loren Feldman:
Stephanie, how do you think about this?
Stephanie Stuckey:
I think you can be friendly, but there’s definitely a line of demarcation where you are still the supervisor. If you cross that line too much to where you’re really engaging with them on a personal level, and you get to know the family, and you’re hanging out in a very social way, it makes it hard to make tough decisions that can be fair. And you also want to make sure you’re treating your entire team equally.
When I was with the City of Atlanta, our team grew from five to 20 during my period of time there. Well, I couldn’t be personal friends with 20 people. So no, I don’t think you can be friends—what I think most of us think of as friends. That doesn’t mean you can’t be friendly, you can’t be warm and caring, and ask about their family and their relationships. But there’s a line that you cross, and it’s no longer a professional relationship. And I think it’s important to maintain that this is a professional relationship.
Loren Feldman:
Jay, you’ve been doing this the longest, over 40 years. Everything that Karen and Stephanie just said makes sense to me. But I also wonder, you spend a lot of time with people and friendships kind of just happen. It’s not something you can always control. Has this ever been an issue for you?
Jay Goltz:
It’s extremely complicated, and I don’t buy the theory that you can’t be friends, that you shouldn’t be friends. I think it’s a mixed bag. And I think when you say something like “treating people equally,” that gets to be difficult when you have an employee who’s been by your side for 27 years, and you know they’re always there for you. And when you’re out of control, they go, “Hey, you’re out of control.” Versus someone who has been with you for six months that you’ve got to sit here and have meetings with that they’re not coming in on time.
I’ll just speak for myself. There’s different relationships—everything from you see this person more than you see your own family and was a critical part of growing your business, to someone who I call a “work-for.” There are work-withs, and there are work-fors. Someone’s a work-for who shows up on time, does a nice job, but could quit at any time and is not going to come pull you aside and give you some inside information about, “Hey, you better keep an eye on so forth and so on.”
I think it’s an extremely big bandwidth of people who are 100 percent with you, who you can always count on, who will always tell you what’s going on, who will always speak truth to power. And there’s other people who need to be written up because they come in late. I would never make a blanket statement about it. But I would say it’s very tricky, and you have to be careful. But I have very deep relationships with—I don’t know—10, 20 people out of the 125. There’s no right or wrong answer to this. It’s whatever everybody’s comfortable with.
If somebody says, “No, I’m not gonna be friends with my employees.” Okay, I’m not gonna argue with that. And then Paul—he’s not here, I’ll speak for Paul—he said something really smart on one of these podcast [episodes]. “Boy, how do you define friend? You have control over their income. That’s taking the word ‘friend’ to a different level.” And he’s right. You do have control over their destiny and stuff, and that’s not normally what a friend has. I can give you a black-and-white answer on this: Do I socialize with my employees? No, I get in enough trouble with my own family. I’m not going to their birthday parties, and I’m not hanging out with them. But that doesn’t mean I’m not extremely close to them.
Karen Clark Cole:
I think that’s what we’re talking about, Jay. I mean, for me, that’s the difference. I have really close relationships with some of our longest-term employees, like I would do anything for them. That’s a good way to put it, is I don’t go to their birthday parties. Because Paul’s right. Ultimately, certainly the people I’m closest with, they report to me. I control their salary. That’s a really interesting way to put it.
Jay Goltz:
Yeah, it’s very complicated. And everyone needs to find what they’re comfortable with, but I have people—
Karen Clark Cole:
Isn’t this where you say, “It’s lonely at the top”?
Jay Goltz:
No, and I guess that’s what I’m saying to you. It isn’t lonely at the top for me, because I have six people who I have very tight relationships with. No, it’s not, and I couldn’t deal with that. I didn’t want to deal with that. I do have six people who I’m very tight with who I can go into their office any time of the day and have a conversation about anything and be comfortable with it. I’m not lonely, and I like it this way. Could someone argue they don’t like it that way? Sure. I definitely would not subscribe to the black-and-white, “You can’t be friends with your employees. Or you should be friends.” It’s like I said, it’s complicated.
When you’re growing, it’s very different when you get to my size. I’m not hands-on managing anymore. It’s a little different than when you’ve got 10 employees. It’s very different than when you’ve got 10 employees. Loren, you asked a question, “Have you had a problem?” Absolutely. I mean, I’ve got 50 of them I could tell you about. So I’ve absolutely had some bad situations with it. I’m very comfortable with where I’m at now. It’s like being a parent. It’s like being a parent. You can be their friend, but you’ve got to be the parent first.
Stephanie Stuckey:
I do want to add something. And like I said at the beginning, you can be friendly without being friends. You can have a warm and trusting relationship, but I do think that there’s a point—I agree, it’s a subtle, complicated relationship sometimes—but you do need to establish you’re in charge. And it all comes down to company structure and company culture. I’ve structured Stuckey’s where I’m not lonely at the top, because I have a colleague. I have a president, and we co-own the company. We run it together. And so I have someone I can trust completely to share with him everything about the company, because we’re in it together. I don’t feel that sense of being lonely.
But I do think you have to be really careful not to cross that line, and I disagree that you can only get full and frank advice from people who you are close to. I really have tried to cultivate an atmosphere at Stuckey’s, and every place I’ve worked, I want everyone—even if they’ve only been with the company for three months, and they see something that they don’t think is working—that they should feel comfortable being totally honest with me. Because if you can’t be willing to accept criticism and act on it, you’re never gonna move whatever organization it is that you’re running.
Jay Goltz:
I don’t know what I said that you say you disagree with. I’m certainly not saying you can only trust certain people. I’m saying you’d like in a perfect world to think that everybody’s gonna come up to you and tell you, but the biggest fallacy in the world, the biggest joke of them all is, “I’ve got an open-door policy.” I just laugh at that now. I mean, that’s just laughable that you think people are gonna feel comfortable walking up to your office. You’ve got to go out there on the floor. You’ve got to go and talk to people, and then they’ll tell you.
But I’ll tell you what. You just described the relationship with your partner. I’ve proven this to myself. You don’t have to have a partner to have that same relationship. My employees will absolutely—they act like partners. They tell me everything that they think. They’re not partners in the company, but they act like it, because I treat them like that. Just to give you some perspective, I’ve got six people who have been with me more than 20 years. Through this whole pandemic, it’s been stressful, but I’ve gotta tell you, it’s a beautiful thing. We’re all together.
Loren Feldman:
When I asked this question in the Morning Report newsletter, we got a bunch of responses, and all but one of them came from men. We normally have quite a few women owners and CEOs who participate in that kind of conversation, but not in this one. Maybe that means nothing. Maybe it’s just random. But I’m curious, Karen and Stephanie, is there anything different about this from a woman’s perspective?
Karen Clark Cole:
Well, having only been a woman, it’s hard for me to tell. But to me, what Jay’s saying, what Stephanie’s saying, I think we’re all saying the same thing.
Jay Goltz:
Absolutely.
Karen Clark Cole:
You want to have friendships at work who are people you trust, and that’s the bottom line. Whether you go to their birthday party or not, is sort of a different level.
Jay Goltz:
I have a guess here. Here’s a guess as to why: I think guys struggle with this more. And I think that the guys who went on there have struggled and think they figured out the answer, and they wanted to share that. And I think—I’m just guessing—that women are more comfortable with it and didn’t feel like they had to share their revelation, because this is how they have relationships.
Loren Feldman:
That’s interesting. I like that theory.
Jay Goltz:
My older sister once told me, she said something about one of her friends. And I go, “I don’t have that problem with my friends.” And she says, “Women have deeper relationships with other people than guys do.” And that was food for thought.
Stephanie Stuckey:
I think that’s a good point. You know, you don’t want to generalize by any means, and who knows why people didn’t respond. Maybe we were all just too busy. I think often women are really good at multitasking, because we often have family obligations that take up a lot of time as well. I think we are really comfortable having close bonds with a variety of people in and out of work, so that may be part of it. That’s a good point, Jay. It is interesting in a family business. You get a whole other dynamic, because it’s your family members.
Karen Clark Cole:
Yeah, that’s tricky.
Jay Goltz:
In many cases, you could say a whole different dysfunction. I always say, a family business, when people hear that, it’s supposed to be warm and fuzzy. From my perspective, I get a knot in my stomach, because I watched my mother and my aunt not talk to each other for five years. And I’ve been in business groups listening to this stuff. It ain’t pretty. It’s either wonderful, or it’s really bad. I haven’t seen many that were in-between.
Loren Feldman:
Jay, do you consider your business a family business?
Jay Goltz:
You know, when I was blogging with you with The New York Times, there were a few comments that really were helpful to me. He goes, “Jay, you don’t have a family business. This is your business. Your kids didn’t didn’t work in it when they were growing up.” And he’s right.
Loren Feldman:
But you have two of them working there now.
Jay Goltz:
Well, they’re here now, so it is becoming a family business. But I can’t say that it has been up until now, because they were out in the suburbs, and I was in the city, and it wasn’t easy. My kids have never framed a picture in their lives. I’ve got three sons. Not one of them has ever cut a frame on a saw. Not one of them has ever put a picture together. Not one of them has ever sold a piece of furniture. They have not been hands-on ever. So yeah, I would say that’s my new thing. I’ve got two of them now here, and my new goal is, I’m working on indoctrinating them into the whole inner thing of this, and it’s going to be a very interesting experiment.
Loren Feldman:
Stephanie, do you consider Stuckey’s a family business today? Obviously it once was.
Stephanie Stuckey:
It was, and it’s really interesting. When my grandfather founded Stuckey’s, literally the entire family was employed. My grandmother worked in the business. My grandmother had 10 siblings. All of them worked in the business.
Jay Goltz:
Whoa.
Stephanie Stuckey:
Yes. He had two kids. My dad worked in the business for some time before they sold it, and then my aunt’s husband worked in the business. His dad worked In the business. So there were probably about 30 Stuckeys in the business. Now, it is me and my nephew, and it works out really well, because he owns and operates two Stuckey’s. He’s an independent franchisee owner and operator. He kind of does his thing, and I’m at the corporate level.
Jay Goltz:
So how long did that last with all this family? Was this a 20-year social experiment? Was this 30 years? Was it 40 years? How long, from beginning to end, did this whole family dynamic hold together?
Stephanie Stuckey:
From the mid-1940s until my grandfather sold in 1964, so about a 20-year run there. And then my grandfather sold the company, and it was completely out of family hands at that point.
Jay Goltz:
Why do you think, with so many family members there, why do you sell the company?
Stephanie Stuckey:
That’s a whole episode in and of itself. He was getting to the point where the company was expanding beyond his capacity to manage it, and he would either need to get outside investors or loans and additional support, and his health was failing. He just decided it was easier to sell. He had, frankly, a really good offer.
Jay Goltz:
What’s the status of the family now? Do you have a cousin’s party? Are they all happy and loving and picnics and flowers and puppy dogs?
Stephanie Stuckey:
Yeah, they’re all actually delighted that I got the company. I was the only one interested in buying the business, and had I not bought it, it would have fallen out of family hands. They’re just frankly relieved. They’ve been very supportive, and they buy up all our merchandise because it’s got the family name on it. It’s worked out really great.
Loren Feldman:
That’s the least they can do.
Stephanie Stuckey:
I will say, my dynamic with my father was not good when I initially took on Stuckey’s. I bought 49 percent of the company from his former partners. And then six months later, I bought out my dad. And once I bought him out, it was 100 percent better. It was like, I could have a father or I could have a business partner. We both chose we wanted to keep our relationship, so I just paid him—completely above board, fair price.
Loren Feldman:
Was there a particular issue that you guys saw differently?
Stephanie Stuckey:
Everything. He just was constantly on my case about every decision I made and anything I wanted to do to take the company in a different direction—like buy a candy plant. He was just freaking out about the cost of that and the financing, and I said, “Dad, why are you doing this? You retired, and you live on the beach with your wife of 50-plus years. Why are you doing this? Just let me buy your shares out, and I’ll take the risk. And if the manufacturing effort is a huge failure, that’s on me. It’s my investment.”
Jay Goltz:
Well, I can tell you, as a father, the answer. He doesn’t want to watch his daughter get in trouble. I mean, that’s an easy one. So I can understand why he cared. I’m trying to navigate this, and I see myself as—I hope, I think I am—the kind who will work collaboratively with my kids. And I don’t think we’re gonna have those problems, but I don’t know. We’ll see.
Stephanie Stuckey:
Well, it’s great now. And he actually didn’t agree to sell to me until I was making a profit, and he had the confidence to hand it over.
Loren Feldman:
Next issue. Another thing we’ve been writing about a lot in the Morning Report is the price increases rippling throughout the economy. Karen, how about you? Have you seen this happening?
Karen Clark Cole:
Well, no, we’re selling services. So, no.
Jay Goltz:
Do you have to pay your people more because it’s a competitive market, though?
Karen Clark Cole:
Well, that’s nothing new. Nothing’s changed. No.
Jay Goltz:
So is it going up more than inflation? That’s kind of the question.
Karen Clark Cole:
No, nothing new in the last couple of years. We’re in a different world, though, because we have these tech giants in our backyard, and the competition there is just… they’re not normal salaries. It’s in another world. It’s ridiculous. It’s not directly connected to the economy.
Loren Feldman:
How about you, Stephanie?
Stephanie Stuckey:
Yeah, I’m experiencing price increases. But like Karen, it’s not directly connected with the economy. It’s directly connected with the fact that we just bought a manufacturing facility. We’re improving the quality of our product, which is a very deliberate decision that we made. We are buying better ingredients, and specifically, the pecans. We’re buying a higher grade nut. And that, to me, is the most essential way to up our candy game and our pecan snack game. We’re going to charge a more premium price for a better quality product.
We’ve been reaching out to B2B retail customers with whom we have good relationships and asking their honest feedback. Although it’s been hard, because if you say, “All right, are you okay with us raising your prices?” Most of them are gonna say, “No, we don’t want you to raise your prices.” But we’re sending them samples and letting them taste the product and getting some really honest feedback from people who we respect. We think we’ve arrived at a price point that’s higher, but not ridiculously so. It’s kind of nice that the market is already showing price increases, so it’s not as much of a shock when our competitors are raising prices.
Jay Goltz:
Let me give you a little insight that I think could be valuable. I’m at a trade show—a picture framing trade show. We make Prisma frames, they’re made out of acrylic and colors, and they’re just magnificent. So this framer walks up to me, she looks up at the wall, and she goes, “How much is that?” I said, “I don’t know. It’s probably around $600.” “Wow, that’s a lot of money.” And I looked at her, and I said, “Doesn’t fabulous always cost more?” And it was like a lightbulb went on. And she looked at me, her mouth drops, and she goes, “Of course it does! Oh my God, I’ve got to make sure I tell my customers.” I’m telling you this framing was a magnificent, beautiful thing. It made sense to her. So I think that translates beautifully when they say, “Oh, that’s a lot.” All I say: “Doesn’t the finest chocolate, doesn’t the finest pecans in the world, doesn’t that cost more?” I mean, it just makes sense. Of course it costs more.
Stephanie Stuckey:
And that’s why we’re offering samples as well, and so when we’re getting potential accounts, first of all—I think y’all gave me this advice—I send the sales sheets without the price and say, “Let’s follow up with a phone call,” so they can see we’ve had beautiful photography done. It really looks terrific, the product. We did new packaging, and so it was just beautiful. We’re in the process of ordering new displays. Everything just looks like a quality product, and then you send the samples, and then we can talk price. And then also we are frankly looking at getting into more upscale retail operations, so I would rather be in a gourmet grocery store than a convenience store for some of this product line.
Loren Feldman:
So Stephanie, you’re describing a process by which you’re choosing to pay more for better stuff. You’re not experiencing—as a lot of people elsewhere in the economy are experiencing—the kind of supply-chain issues that are causing them to pay more to suppliers for ingredients or services or whatever.
Stephanie Stuckey:
We’re not experiencing that because we are now making our own product, right?
Loren Feldman:
But you have to buy the nuts, and you have to buy chocolate, and whatever else.
Stephanie Stuckey:
We have to buy sugar and chocolate, and that pricing actually is going up. But the pecans we are shelling ourselves, and then my business partner grows pecans, as does Stuckey’s. We actually are tree-to-table. Literally a lot of the supply chain, we are controlling as we become more vertically integrated. We have our own distribution facility, and we do have retail outlets with the Stuckey’s locations that we have a certain amount of control over, as far as providing our product for sale. So what …
Loren Feldman:
I didn’t realize you grew all your own nuts.
Stephanie Stuckey:
We do, and we don’t. It gets a little complicated, because it’s separate ownership. It’s owned by the same owners, but it’s not a corporate umbrella. We’re actually selling pecans to ourselves. But we do have a good supply chain there.
Loren Feldman:
How about you, Jay? Are you seeing price increases in your chain?
Jay Goltz:
Absolutely. I’m getting it on all ends. The minimum wage is now up to $15. That’s added to cost. I call it “compression.” It’s not like I had to raise everybody, but there had to be a little raising in the middle people, because if someone’s just starting, making $15 an hour, how can you pay someone $16 an hour who’s been there five years?
I’ve got minimum wage issues, the real estate taxes keep going up. We’ve got supply-chain problems of the containers. All of the government stuff is just… we import a lot of stuff, and we’re paying more for freight now, and the container costs have gone up. Most of what we’re buying is just going up.
Stephanie Stuckey:
I have a question for you, Jay, related to that, that we are grappling with. In fact, just before this podcast [episode], I was on a call with our sales rep on this issue, which is the freight, which you referenced. We’re grappling with, right now, we offer the shipping costs on top of the cost of the product. We’ve gotten some complaints from some of our retail outlets, who’ve said, “Well, some of our other candy suppliers, they don’t charge us for shipping.” And I think, “Absolutely they do. They just make it into the cost. So if you want us to give you a delivered price, we’ll give it to you.” It’s going to be a higher price, but we’ll include the shipping. And shipping costs have gone up, so we’re feeling the pain, intensely, of increased shipping right now.
Jay Goltz:
Yeah, the party’s over with UPS and FedEx. They’ve all figured it out, that they needed to raise their prices. It’s going up dramatically.
Stephanie Stuckey:
And FedEx doesn’t even service our area reliably, not every day. So we don’t have competition in our rural community.
Jay Goltz:
We’re not paying the same price as Amazon’s paying for shipping. That’s the reality. I almost feel like we’re subsidizing their shipping rates perhaps. I don’t know what they’re paying, but I’m sure it’s not what we’re paying.
Loren Feldman:
They’re doing a lot of their own shipping now.
Jay Goltz:
Right. There’s trucks all over Chicago. It’s unbelievable. There’s just trucks all over the place. So the shipping thing’s a problem. In your case, I think you’d have to find out: Is that a standard thing that people are doing free freight? It’s kind of not, quote-unquote, right, because if they buy one box, it’s going to cost you a lot more freight than if they buy six boxes in one package and the freight’s a lot less. As you said, you’d have to build it in.
On the other hand, maybe that’s what they need for their own accounting. They can’t start factoring in freight. But we found, I’m signing checks now, which I haven’t done in years. Every Friday, I’m writing 90 checks, and I’m looking at the invoices, and the freight’s all over the place. But like for my furniture store, it’s pretty much running 10 percent, which sounds like a lot to me.
Stephanie Stuckey:
That’s consistent with ours. It’s about 10 percent, and it’s also a volume game, like you said. If we can fill—we pay a flat rate for a truck. So we have to just fill it up. And at that point, we can offer some pretty good price structures to our customer base if they’re along the route. I keep telling my sales reps, “Okay, it really doesn’t behoove us for you to get us a bunch of clients in Colorado because of the shipping.” In fact, the sales rep today is like, “I got this client in Colorado.” I’m like, “Great, does he know about the shipping?”
Jay Goltz:
I’ve got that problem. We sell to frame shops all around the country. It’s a problem shipping to California. It costs a lot more than shipping to Michigan. It’s self-selecting. Some of the customers won’t pay it, and I don’t have as many customers there. But what are you doing about the fact that, in August, the trucks are so hot? What are you doing about the chocolate melting? Do you not ship certain months of the year? Do you have to ship refrigerated? How do you deal with that?
Stephanie Stuckey:
We call them reefer trucks, which cracks me up. Yes, we pay for reefer trucks. We’re in the South. We started paying for reefer trucks at the end of February. It was getting warm enough in the warehouse where we were concerned that, once we loaded them from the warehouse to the trucks, that they would start melting, especially because we deliver to stores in Florida. And so our Florida shipments, starting the last week in February, we had to start shipping reefer.
And here’s the other strategic decision we made. This is a dirty secret in the candy business: Sometimes that chocolate bar is not chocolate. It’s what they call a compound, and it’s got a bunch of artificial crap in it that enables it not to melt as easily. We had to make a decision: Are we going to use a compound that’s less likely to melt and we don’t have to use reefer trucks as much? Or do we go with real chocolate? And we went with real chocolate. It’s costing more, not only for the product itself, but for the shipping. But you can taste the difference.
Jay Goltz:
You are really showing how the sausage is made. And I’m not so sure I wanted to know. Wow. [Laughter]
Stephanie Stuckey:
We’re doing away with high fructose corn syrup, too. That’s going to cost more. There’s a reason why there’s high fructose corn syrup in so much of our food product. It is cheap!
Loren Feldman:
Stephanie, who was your outsourcer who was making your candy previously, were they using the compound and the corn syrup?
Stephanie Stuckey:
They were using compound and corn syrup, yes.
Jay Goltz:
Isn’t it very expensive to ship things in refrigerated trucks?
Stephanie Stuckey:
It is. It is very expensive to ship things in refrigerated trucks, which is why we need people to place big orders. Small orders really don’t help us, unfortunately.
Jay Goltz:
What are you doing about that? Are you putting a minimum or are you just putting a chart? I mean, I think you have to do something about that or otherwise it’s not going to work.
Stephanie Stuckey:
Like the Colorado order, that’s just a real life example. I said, “We’re happy to ship to Colorado, but they need to pay the shipping.” And he said they want to pay the shipping. They want to be able to offer Stuckey’s in Colorado, and right now we don’t have a single location in Colorado that’s selling our product.
Jay Goltz:
Here’s one thought: It might be worth it to you to subsidize the shipping—to charge for shipping but build into your pricing structure some amount, because the shipping might just be a real turn-off if they see it turns into 20 percent. It might be worth building into your cost structure to eat some of it because shipping two boxes or whatever in a refrigerated truck is probably not pretty.
Stephanie Stuckey:
Well, we actually do that approach with success online. You referenced Amazon. Amazon is just killing it for everyone else, as far as the expectations of this overnight delivery.
Jay Goltz:
Absolutely.
Stephanie Stuckey:
Click a button, and it’s going to be at our doorstep the next day. That’s made it very hard for the rest of us. We decided to bake in some of the cost of the shipping on our website. Orders below $10, we’ll pitch in a couple of dollars for the shipping. Up to $25, we pitch in a certain amount, and then over $50, we cover shipping entirely.
Loren Feldman:
Jay, what are you doing about the price issues that you described? How are you handling it?
Jay Goltz:
I’ve got no choice.
Loren Feldman:
You’ve got to do what?
Jay Goltz:
I have to build it into the price. I mean, I can’t eat it. It’s not like I have a 20 percent bottom line and, “Oh, I’ll just settle for 15.” The prices went up. I have to raise prices along with everyone else in the industry. So as much as everybody complains about, “Picture framing’s so expensive,” well, it just got a little more expensive. But it’s still a bargain because picture framing is one of the few things you do that you’re going to have the rest of your life. It’s going to hang on your wall. It’s not going to be at the Salvation Army in three years. It’s not going to wear out.
Loren Feldman:
I’m guessing you’ve used that line before.
Jay Goltz:
Well, here’s my new line, which is true: The question isn’t, “Why is picture framing so expensive?” The question is, “Why do so many people do it?” Because it’s marvelous. Because you hang it on your wall, and it changes your life. That’s why.
Stephanie Stuckey:
There you go.
Loren Feldman:
Well said. We’re running short of time. I want to hit a couple of things. Karen, I understand you’ve had an interesting issue recently with employees who objected to some of the clients you were doing business with. How did you deal with that?
Karen Clark Cole:
Well, it’s a long process. Long story short, we’ve created an ethics review board, which we informally had before, of people making the decisions of whether we will or won’t do a project. And it’s project-based. We’re singling it to a project, rather than the whole company, because some of our clients are very big, and they have all kinds of different business lines. Some would be a good fit for us, some wouldn’t. And so if we look at it, just in the context of the work that we’re being asked to do, then we can make a better decision. We’re calling it “adjacency,” in that we’re not throwing the whole baby away with the bathwater. It’s not a slippery slope. It’s just a specific decision, and we’ll do that every time, if necessary.
Loren Feldman:
Tell us about the review board. Who’s on it? How many people?
Karen Clark Cole:
There are seven of us. So it’s essentially the executive team, plus our two delivery heads.
Loren Feldman:
And do you take a vote? If there was an issue about doing business with somebody, and some people objected, would you put it up to a vote? And would the review board’s decision stand?
Karen Clark Cole:
Yes, but hopefully, we don’t need to. The goal is that we can get to a unanimous decision. In any cases that we’re reviewing, there are a lot of pros and cons. I mean, you can see it both ways, which is, hopefully most things don’t even have to get to us. But occasionally, there’s a project that you can really see both sides, and that’s when we get in, and—just like the Supreme Court—we weigh the pros and cons.
Jay Goltz:
I’m surprised that you haven’t found that to be a slippery slope, because that’s exactly the phrase I would have thought. =I don’t envy you. To me, that’s a very difficult win. Even though that hasn’t been a problem for 20 years, I think we’re living in a new world now. I could see where people who are more socially aware would say, “Wait a second. I don’t want to do anything for that company. They’re doing some really bad stuff with blankety-blank.”
Karen Clark Cole:
Right. That’s what’s happening.
Jay Goltz:
Yeah.
Karen Clark Cole:
So we created a policy and made it very clear what’s in or out of the policy, and then anything where you can see both sides, where there is a gray area, that’s when the board meets. It’s really only in extreme cases that we’re actually meeting and coming up with a decision.
Loren Feldman:
Karen, do you think that’s going to satisfy your employees?
Karen Clark Cole:
I think it’s good. I think it’s good to have clarity around it. You know, it’s good for me to be able to point to that document and say, Yep, we’ve thought about it hard. And here’s what we’re doing.
Jay Goltz:
Can we get another witness on the stand? I’d like to ask Stephanie, in Georgia, with all the turmoil there with the voting rights: Have you seen some problems coming with some companies are taking a stand that people are really upset about? Are you in the middle of that at all?
Stephanie Stuckey:
No, I really am not. It’s interesting, because I’m a former Democratic state legislator. I spent 14 years as a state rep, so I know most of the players involved with this debate. I served in the legislature with now-governor Brian Kemp, and I’m friends with Stacey Abrams. In fact, my legislative district, when I was redistricted, she actually got most of my old district, and I knocked on doors the first time she ever ran and endorsed her. I’ve had friends on all sides of this debate, and I thought for sure, I would be brought into the midst of it. And I really haven’t. It seems like most of the focus has been on the larger corporations. Now, personally, I’ve come out against it. I have posted on my personal Twitter feed that I am opposed to Senate Bill 202, but no, the company itself, we’re not really political and haven’t gotten into that.
Jay Goltz:
So what if some grocery store chain, the CEO comes out and is fully supportive of restricting voting rights or whatever, and your employees go, “Wait a second. I don’t want our product to be there.” Do you see that as a possibility, as a problem?
Stephanie Stuckey:
It hasn’t really filtered down to our level, no. Most of the controversy has been on the Deltas and the Coca Colas, and those larger corporations. It’s not to say I don’t care about this. Clearly, I devoted 14 years of my life to being involved in politics, and before that, I was a League of Women Voters president, so I think anything that restricts voting—and I think this bill does, I read through it—hurts our democracy. So I’m opposed to it.
Jay Goltz:
So it could become a problem.
Stephanie Stuckey:
Potentially, yeah, and at that point, I would need to make a decision with my business partner, and do what we think is going to be best for our company and our employees and reflects our values.
Jay Goltz:
Very tricky.
Stephanie Stuckey:
It’s tricky. It’s hard for corporations because, as we all know, at any level, whether you’re a small business or a big business, you’re about getting customers and being profitable. But at the same time, I think more and more, not only are consumers expecting this, but employees, and the general public wants to see corporations that are good citizens and are engaged in the community and are standing up for what they think are the values that they care about. Corporations, whether they want to or not, are being put in a position where they need to make a decision. Right now the focus is on the large multibillion-dollar corporations, but I wouldn’t be surprised if it starts filtering down at the smaller level, and we need to decide how we’re going to react to that.
Loren Feldman:
Jay, have you had any situations along these lines?
Jay Goltz:
I just had one small [one]. Somebody brings in some photographs from a well-known photographer who had a show in France, and it was kids, except they were small kids and they were naked. They weren’t wearing clothes, and there was no pornography, but this was upsetting to some of my employees that said, “Wait a second, it’s kind of getting close to pornography.” And there was a big controversy even in France over it. Somebody suing somebody. I mean, they were in a gallery. It’s not like this guy got the local kid in the neighborhood to pose naked, but on the other hand, what’s the difference? We concluded, if my employees are uncomfortable framing something, I’m certainly not going to force that on them. But we had to go around and around on it. And what’s art?
Stephanie Stuckey:
Did you decline the work? Did you say you won’t do it then?
Jay Goltz:
I believe the solution was we had one employee who couldn’t care less, and he put them together and you know…
Karen Clark Cole:
That’s similar to ours, in that we give employees the option to not work on any project that they’re uncomfortable with, and then it gets elevated if they think the whole company shouldn’t be connected to this thing..
Loren Feldman:
Okay, we’re just about out of time. I can’t let this episode end without acknowledging that, Jay Goltz, you had a big birthday yesterday.
Jay Goltz:
Did I?
Loren Feldman:
Yes, you did.
Jay Goltz:
I forget.
Loren Feldman:
Well, that’s what happens when you get older. Happy Birthday, Jay!
Jay Goltz:
65, yeah, quite shocking, quite thought-provoking.
Stephanie Stuckey:
Jay, you can retire now. You’re 65. That’s awesome.
Jay Goltz:
Well, that’s the point. And then, I don’t think a day goes by that I don’t get some Medicare mailing from some insurance company. That’s what you have to look forward to. It has made me double down on: I really need to work with my kids and help them understand this place and work with all the other employees. While I plan on being around a long time, who knows? So I’m working on it.
Loren Feldman:
Are you still thinking about an ESOP?
Jay Goltz:
It certainly is an option. But it’s not a succession plan. There’s a fallacy in that. Having an ESOP does not mean, “Oh, I took care of my succession plan.” I mean, somebody still needs to run the company. So they’re really two different things. It’s certainly something that I’m thinking about, that I’m going to pursue some more. It solves the problem of getting cash out of the business, perhaps. But it certainly doesn’t solve the succession plan. You hand the keys over to the employees, “Here it is. All yours. Go for it.” It’s not even close to that simple.
Loren Feldman:
My thanks to Karen Clark Cole, Jay Goltz, and Stephanie Stuckey. As always guys, thanks so much for sharing.
