The Leadership Mindset That Transformed a Small Wisconsin Manufacturer Into a Market Leader

Intro  0:06

Welcome to the Growth + Exit podcast where owners of privately held middle market companies talk about founding, scaling and exiting their businesses successfully. Learn how to maximize and monetize your business on your own terms. Let’s get started.

Susan Kearney  0:31

I’m Susan Kearney, co host of the Growth + Exit podcast where middle market CEOs and owners talk about founding, scaling and sometimes exiting their businesses. This episode of the podcast is brought to you by Newport LLC, a team of founders and seasoned C suite executives who help CEOs of privately held companies build more valuable businesses and exit them on their own terms. You can learn more about us at Newportllc.com. Today, I’m excited to be talking with Tom Carney. Tom is the CEO of Royal Basket Trucks, which he transitioned to just recently. Previously, for 27 years, he was the president of Royal Basket Trucks, and we’re going to talk to him about his journey leading that business. So welcome Tom. It’s a thrill to have you here today. Thank you, Susan, so let’s start Tom talking a little bit about you professionally. First, tell us about your professional background, and is there a common theme or a common thread that runs through the course of your career? Well, I guess the most

Tom Carney  1:39

important thing would be curiosity. You want to learn something. You first, you wonder about it, then you just go figure it out. I went to, went to undergraduate at Wayne State College in Wayne Nebraska. It’s a school usually for business and teachers started off being Wayne Teachers College, I guess so. I taught school for four years before entering law school at Creighton University in Omaha, and there I figured out I wanted to know more about tax law. I’m one of those nerdy kinds that said I can read this, and it makes sense to me. And so then I went to Georgetown in Washington, DC, and attended Georgetown Law Center, and I’ve got my Master’s in tax law there, so got to rub elbows with some people on the tax committee and on, because Georgetown Law Center is just a couple blocks away from the US Capitol, so it’s kind of an interesting place.

Susan Kearney  2:34

So how did you end up transitioning from tax law to operating executive?

Tom Carney  2:42

Isn’t that a great question? Well, as part of my work experience, when I was in Washington, DC, I joined an accounting firm at that point, one of the big eights, twos, Ross, it’s now Deloitte and toosh, and I worked in their tax area, and they didn’t differentiate between, you know, research professionals, because I was my major as an undergrad, were in accounting, or not in accounting. I’m sorry, they were in math and PE, which qualified me to work for a big eight accounting firm, of course. So I was in, like all the other people that were entry level, doing tax returns and talking to clients and preparing tax returns and and just doing what we’re supposed to do. But this was in the early 80s, and about that time PCs are starting to be developed, and I had a knack for Lotus 123, most people now use Excel, but I was using Lotus 123, and I was able to use it to do a lot of things, including modeling business transactions and business acquisitions. And one of my clients said, Well, that’s pretty cool. Let’s do this and do that and do that, we’re able to do some hotel syndications and really produce numbers much quicker than they could at the other techniques and stuff then. And so eventually he hired me away to a small Merchant banking company, and we bought several companies, and I was involved in doing acquisitions with my both my legal and my tax background. It came in handy for structuring the deals and also with trying to model the numbers, because, as you know, sooner or later, you better be able to prove something what you’re going to do if you’re going to talk to talk to people, either as investors or bankers or stuff, and so that’s kind of how I got into the business

Susan Kearney  4:25

world. Wow, that’s fascinating. And it seems as though you left the Midwest to go east to get your master’s degree in DC, but you got yourself back to the Midwest after that. Yeah, I grew up in Nebraska,

Tom Carney  4:39

which was a wonderful place to grow up. The people are fantastic. I’d like to tell people I grew up the same place where Johnny Carson grew up, nor fork Nebraska, yeah, and stayed in Washington, DC for about six or seven years after graduating from Georgetown Law and worked in public accounting. And met my wife. She was also an accountant there, although she was a real accountant, not just a tax accountant. And then eventually, one of the companies, I said, I joined one of my clients. My client bought a couple companies in the Chicago area. So we relocated to the Chicago area.

Susan Kearney  5:19

Okay, nice. And then, how did you come to be involved with Royal Basket Trucks? And what is Royal Basket Trucks?

Tom Carney  5:26

About one of my favorite questions, when people think of a basket truck, they say, oh, yeah, you must be like, on back of those trucks, on the booms that go up and change utility lines and stuff. I said, No, a basket truck is really just a laundry cart. So when people think of people escaping from prison, usually they’re hiding at the bottom. The laundry is thrown on top, and they’re pushing them back out the exits. They don’t all get to escape through the drain pipes, like some other people on some more fascinating prison breaks. So the carts used to see in the back of the post office, and nowadays you see them pretty much everywhere. A lot of you see in hospitality and hotels as they’re doing collection dirty linen and stuff. The reason I got into the business was in my prior business, we bought a company, series of companies, put them all together, and then sold them to a public company in 1996 so then, because I was basically the corporate treasurer and corporate secretary, they didn’t need me anymore, so I had to the unemployment line was my incentive to find something to do. And since I I was able to do buy companies and evaluate companies, I found a couple companies in here in Wisconsin that caught my eye. Because I’m not a technical guy. I’m not an engineer, but I had to buy something that I could understand, and carts made out of wood and wire and vinyl and canvas. I could understand that.

Susan Kearney  6:51

And so you’ve been there quite a long time. It seems like many, many people, myself included, have had a number of jobs over the course of their careers, but you’ve been there 27 years. What are some of the transitions you’ve seen in the business that have either been most challenging or most interesting to you? Well, it’s

Tom Carney  7:10

been a heck of a ride, because when I bought the business, or really two business, and we spun one off after several years, and I had a partner initially, so to go through a partner divorce, which was always fun, yeah, our building caught on fire and burned, had to relocate for six months and then come back at the time when we bought the company, was about 15 people, and about a million and a half dollars in sales last year were over 200 people and substantially more on the top line. So the transition has been one of growth, where you’ve had to wear a number of different hats. I didn’t start off being the president. My partner the time was the president for about five years, and then we said we like each other, but maybe not in business, yeah. So I was able to buy him out and then continue growing the company, with the help of some incredibly good people along the way, you know, you end up with good sales people and just good luck and paying attention to details and doing some things that I think were a little bit, you know, we really focused on lean manufacturing before it was all the hot topics and stuff. And our big deal is we’d make our product quickly so that a lot of times, our competitors, if you order a product, they take like 30 days. We wanted to do it in five business days. Then our customers, if they were inventory, you don’t have to inventory as much. Or if they can drop ship, it’s a quicker lead time. So I don’t know if I’m answering your question directly or not. It’s just that it doesn’t feel like it’s the same company just doing the same thing. As we continue to evolve, add product lines, add capabilities. We got, you know, went from 40 25,000 square feet to over 200,000 square feet on a little town called Darien, Wisconsin, population just over 1500 Wow,

Susan Kearney  9:00

because we’re 1500 and so you are a lot of your employees from Darien. You are, you one of the bigger employees in the town.

Tom Carney  9:07

They’re, we’re probably number three or so. There’s a couple of companies bigger than us, but it’s a it’s been a great little community for us. We draw from about 30 miles away, Beloit, Wisconsin, Janesville, Wisconsin, which is around 80,000 people whitewater Wisconsin, which is a college town, isn’t too far, and we’re pretty close to beautiful Lake Geneva, which is where all the rich people in Chicago have their summer homes. Okay, that’s a very interesting crowd. You’re in Wisconsin. We’re only all these Illinois license plates doing here, right? I can’t say much about that, because I lived in Illinois for 20 plus years.

Susan Kearney  9:43

So you probably know some of that crowd, if my knowledge of the Midwest is any indication, it’s interesting you say that it feels like a different company. I was reading in a book the other day, and they were talking about philosophically, if you have a boat, and over time, you repair the boat, you keep. Being off planks and adding new planks. At some point, the entire boat is new. Is it the same boat? Or is it a completely different boat? It’s kind of similar for businesses as you add products and get rid of divisions and add people and so on, it does take the feel of just a completely different entity from when you got there.

Tom Carney  10:17

Yeah, it’s like basically we were making what I refer to as sewing carts with vinyl and plastic, and it had a wire frame and a wood base, kind of like you used to see in the post office. And now we make them out all different materials, including plastic carts, including carts made out of PVC. We do sheet metal carts. So we continue to still make carts, just all different kinds. So nowadays, if you go into hospitality, even the carts the housekeepers use to turn down the rooms and refurbish the rooms and stuff. And we’re inducing a motorized housekeeping cart there, because from what I understand, the housekeepers aren’t getting any bakers, but they need more stuff in the room all the time, so they load in those carts down, pretty

Susan Kearney  10:56

good. Yeah, yeah. So in that evolution of your business, growing to now be 200 employees and a much larger top line. What’s one or maybe the most important lesson that you have learned about business and what about yourself?

Tom Carney  11:14

I think the challenge is, when you’re a small company, a 15 employees, it’s much different than when you’re a much larger company. No matter what size company you are, you can have as many systems as you want, but it’s all about the people. And hopefully, if you do the job right, you develop a culture, and that the culture takes care of a lot of other issues. I mean, you got to follow all the rules the government has and the state and stuff has but at the same time, there’s all all the intangible things that you look at. And if you really can hire people that follow our core values, and our core values are integrity, respectful, hard, working, quality, focused and committed to change. And if our people can do that on a regular basis, it’s amazing what you can accomplish.

Susan Kearney  12:05

You know, I really appreciate you having committed to change in your values, particularly because at the time you’ve been at that business, the pace of change has accelerated. And if you aren’t, if you don’t have a culture and people who are okay with that that can cause problems. And a lot of companies I see are not equipped to take care of change really

Tom Carney  12:28

well. The people part is always the hardest. They always say, business is easy. People are hard, you know, but I’ve been very blessed with having some really good people. And again, what sometimes your company does outgrow certain people’s skills. So what you want to do is make sure you still have a place for people that as you grow, they may not be doing the same job, but they’re making a contribution. And if we can continue to do that, we end up with a great situation.

Susan Kearney  12:54

Yeah, it sounds like you’ve been very, very successful in that regard. One thing that private company owners are frequently challenged by as they grow from 15 to 200 employees, for example, as the leader is letting go and letting other folks operate the business, I’m wondering what your experience was in that regard, and what your secret sauce was to you, learning how to let go and you getting your employees to grab up?

Tom Carney  13:26

Well, that’s a great question, because I’m not all that good at letting go.

Susan Kearney  13:30

Oh, I should be interviewing them. I don’t know.

Tom Carney  13:36

You know, it’s very important to me to know every employee’s name and to usually walk around and say good morning to them and see what’s going on in their world. And even though it doesn’t sound like much, you know, being there, it’s important to me, because I learn about what’s going on in their world, and it does affect you. I mean, we are a family, whether it’s official or not, we are, you know, part of each other. People spend a great deal of their time here at work, so making sure the work environment is comfortable for people is important, and trying to make sure that as I do promote myself out of certain jobs, as I did last December, when I became the CEO and I brought in a president to kind of take over my thought being I wanted to try and really focus on growing the company externally. We’ve done a great job of growing the company internally by introducing new products through our distribution system, but now it might be time to look externally and see if maybe there’s some acquisitions or things we can focus on. Because I have, like, a five year time horizon I’m looking at now. I don’t have family members who are ready to step up and take over the business, although my son thinks he is. But you know is, when you look do that, you try and bring in the right people, and you don’t, you’re not always successful. But if you can really work on hiring with your core values, and the hardest thing for me to do is to is to be brutally honest with people, and that. That’s one of the things I shy away from. I don’t like confrontation, you know, and it’s like, no, that’s part of your job. But just remember, talk in terms of facts. Make sure you have your little documents in line. And most people want to do a good job, and they want to be successful, and it’s your job to make sure that they have all the information they need. Because even in my case, sometimes I did that, or that’s how that, that’s how that came across, just like that wasn’t what I was intending. If everybody you can start their core values and everybody’s intentions are good, communication gets very easy. You don’t have to agree, but you have to be able to speak, and you have to say why, and you have to be able to be pushed a little bit, and you know, just because you’re the owner doesn’t mean you have all the answers. That’s for sure.

Susan Kearney  15:47

Yeah, that’s for sure. But I think your dedication to knowing your employees and checking in with them probably is a lubricant for that kind of communication, because they know you care. They know that you know them and what they’re capable of. So that communication maybe is a little easier.

Tom Carney  16:02

Well, I hope so. What I’ve tried to do is to back out of that. We bought another building in the industrial park, so I’m I’m at the west building now, if you will, it’s kind of lonely. But then I said, Okay, so I’ll try and do my walk about once a week. I feel like crocodile dull. Do my walk about, get to see everybody and see what’s going on. And I always come back with my questions, and I try to then work through the management team, and, you know, before I just run to something and try and fix the problem, sometimes that make it worse. It’s like, tell me again why we’re doing that, you know? And I get a good answer and figure out the right way to approach things. So it’s been some training on my part and learning and learning on my part too.

Susan Kearney  16:44

Yeah, and why did you make that decision to bring in president after all these years? Was it solely because you wanted to focus externally, or were there other dynamics? And how’d that transition go?

Tom Carney  16:56

Gail, our new president, started last December, but she’d been working with the company on and off for many years. At one point we were between controllers, and she came in and for like a year, was our acting controller and stuff, and she’s been a consultant over time and stuff. And so she knows the company pretty well, and I got to know her pretty well, and she has a nice fit with the other members of the senior management team. So I mean, the hardest part is being away from the people’s stuff, but then it’s like, okay, Tom, do your job. Now, you know, it’s like, you know, you have the legal and financial background, shuffle some papers, you know.

Susan Kearney  17:32

Well, you know, be careful what you ask for. You’ve asked for an opportunity to spend time externally. And now you have it.

Tom Carney  17:39

I’m looking forward to it, and again, the networking is going to be more interesting. Yeah, have time. Have time to do it and to do it well,

Susan Kearney  17:47

yeah, that’s great.

Tom Carney  17:49

I’m lucky enough, and one of the things I would share is that no matter what level you are in your company, it is important to network with your peers, not just internally, but externally. A number of us got together here in Wisconsin and have a CEO group we do once a month to get together with different businesses, a wide variety of people. But it’s great because everybody’s got a different perspective on things, right? And sometimes you’re saying you did what you’re still doing that it’s only been five years, don’t I get a little more the time hold you accountable, you know, once, because there aren’t very many people that can really hold you accountable, but you should open up and listen to the people that are trying to help you do

Susan Kearney  18:30

that. Yeah, I suspect in that group, as you’ve been together longer, people get, you know, easier and happier. To be really honest with you about things.

Tom Carney  18:38

Oh, we talk about some pretty in depth things, and if it ever leaves the room, man, you’ll be ostracized the rest of your lives.

Susan Kearney  18:45

You go. So what are some of the moments you’re most proud of in the time that you have been Royal Basket Trucks?

Tom Carney  18:55

Oh, one of the things that’s very interesting, we decided to get in the rotational molding business so that we can make plastic carts in addition to our sewing carts. Well, we were there before, because we bought the tooling and people on the outside to do the rotational molding for us. We just said we’re going to start doing our own right when covid hit. Oh, so we bought the equipment. We bought four machines at once, which is a little bit unusual by itself, and covid hit. And so the machines arrive, but they can’t send their people out to do the installation. So we hooked up our cameras and my team of my operating officer and our maintenance guys who got together, they told us remotely what we were supposed to do. So we installed those four machines without any help from the factory on site. So that’s pretty proud being able to do that. And just when you see, when you see your team step up and do things that even they didn’t think they could do, it’s pretty cool, although we think we can do quite a bit.

Susan Kearney  19:54

Yeah, that’s great. Maybe turn to some personal things about you now. Yeah. Okay, perfect. So you mentioned that you were born and raised in Nebraska. Tell me what that was like being raised in a small town.

Tom Carney  20:08

Nebraska? Well, I didn’t say small town because we were the seventh largest city in the state at 13,601 people according to the 1960 census. Okay, and we were like the largest town for about 100 miles, so Thursday nights, when all the other local towns would come in and do their shopping and stuff. But it was a wonderful place to grow up. I’m one of eight kids. You could ride your bikes all around town. Local YMCA was our focus of attention. We were all members of a swim team growing up and stuff. So all athletic and doing stuff. And I had cousins were there in the same town, and so you had the family, and then, you know, it was we, I grew up, went to Catholic grade school, but we didn’t have to pay tuition. There was enough money to the just the parish raising that the kids could be educated without extra money being contributed. That’s, that’s a pretty special time and a pretty special place.

Susan Kearney  21:01

That’s pretty unique for sure. Yeah, what did your parents do when you were growing up?

Tom Carney  21:07

Well, like I said, I was one of eight kids, so my mother was a stay at home mom for quite a while. Yeah, my father had a couple of different sales jobs. Eventually, he ended up selling feed to farmers, actually working for a local company called Norco that produced the grains and stuff and sold feed to farmers for their cattle and other livestock. And my mother, once the children were in all in school and stuff, she started selling real estate and was very successful. Working for century 21 became the number one sales person in town, so it

Susan Kearney  21:35

was pretty, pretty nice place to grow up. Yeah, so she was a bit entrepreneurial. Then, wasn’t she, yeah, but of course, you have to be, if you’re going to get eight kids out the door every day, right? You have to be.

Tom Carney  21:47

It’s amazing how she accomplished that. I’d like to think that Skubana, because it’s older ones, because I was number two of the eight, you know, we always helped a lot, just like, not really. She just was amazing.

Susan Kearney  21:57

Yeah. So what lessons did you take away from that upbringing that show up in you when you get to the office? I think that

Tom Carney  22:09

the thing both because growing up in that environment and then seeing people go away and be successful doing other things. You don’t have to stay in the same environment. You don’t have to do the same things. And so I think it just naturally, you kind of become an entrepreneur. And I was always able to ask as many questions as I want, not always favorably received by other people, especially my mother, when she’s trying to raise six other younger kids, and I come home at lunchtime, I’m quite try and quiz her on what I learned at school that day. You just wore me out. You know, schools are half, half a block, like, a block away. And so it’s kind of nice. You could come even during

Susan Kearney  22:43

a half hour break. Yeah, yeah, that’s great. Thanks for that. Did you want to be in business as a child? Did you have a lemonade stand? Or did you want to be an astronaut? What do

Tom Carney  22:54

you want to be when you grew up? Well, in fourth grade, you have to draw a picture of what you you’re going to be. And I do a very poor picture of a fireman with a fire hose fighting fire. So that’s, I guess, what I thought I wanted to be early on, I settled on wanting to become a teacher as I grew up and in college, with my double major in math and PE I was able to teach math and then coach sports all year round. And so that’s a very good experience. But I knew that. I mean, I signed my first contract for $7,850 a year a year. It wasn’t going to be my lifelong profession at that rate. But as a small town, I could do lots of things, but I decided it wasn’t that’s not what I wanted to do, and that’s why I chose to go to law school to figure out what was next. And in law, you can choose a whole variety of things. I just decided didn’t really want to do criminal law. In hindsight, maybe I should have, you know, yeah, but I was drawn to business law, and then the tax law was just appealing to me. I can’t tell you exactly why, but and then trying to figure out how to do structures and deals and estate planning were fun for me.

Susan Kearney  24:02

Yeah, that’s also very impactful for businesses and individuals those particular disciplines, right?

Tom Carney  24:08

Well, I think so, because if you can structure your company correctly. I mean, when I was growing up in the business world, mostly people wanted to do pass through entities, so you have one level attacks and stuff, so structuring it that way was very important. Nowadays. Are some other techniques out there that people can use, but still, pastors are still the most efficient way to run a business, whether it be an S corporation or a limited liability company or other partnership even. But that’s not as common.

Susan Kearney  24:36

Yeah, yeah. So Tom I know that presidents and CEOs of businesses are busy. They’re they have their own families to raise. They’re involved in their community. They have a lot to do at the office. And so I’m wondering if you’ve developed any daily rituals that help you stay focused, stay organized. Have been material and contributing to your success.

Tom Carney  24:58

Like I said, I’ve been like. Keep hiring a lot of good people, and then part of it is trying not to let things sit on your desk. I’m failing miserably at that right the moment. If you could have the if the camera pan down, you would see it’s terrible, but I’m not going to do that. But in general, if you can, I think, don’t freeze, make a decision, move on if you need to adjust, adjust. You know, don’t be bound by what’s happened in the past. You know, you got to always be forward looking in, trying to see the next issue as it comes up, and deal with it. Don’t just put it

Susan Kearney  25:35

aside. Yeah, yeah. I’m not very good at that, particularly as it comes to my inbox. I have I’m sorry to say, Are there any books or articles you’ve read, people you’ve heard speak over the past few years that you have found inspirational or that have changed the way you think about being a successful leader?

Tom Carney  25:58

Early on, I read a book called The Goal that was about a small manufacturing company and how this guy had to turn it around or be fired and stuff. And that inspired me to look more and more about Lean Manufacturing and identifying bottlenecks in the manufacturing workplace, by Eliyahu Goldratt, I think is his name, and they developed the whole thing. And then the other book that I read early on was The 7 Habits of Highly Effective People. I go back and read that from time to time by Stephen Covey. Of course, recently, there’s all kinds of different, different help, AIDS and stuff that are, that are out there. The most impactful one in the last 10 years has been the book Traction. And Traction is what we adopted as at our company, as a method of operating. It’s called the EEO EOS system. Yep, might have to edit that one out, but we use the we try and do our best to walk through and use the EOS system. And that’s what kind of helped me force the structure in place to truly be the entrepreneur I was sitting in both seats, both the entrepreneur and the implementer. I decided it was very important to try and get the vision things going. As you get larger, you really can’t do both. So trying, that was the reason that kind of forced me. So using the traction model in the Eos model of running our businesses helped me really focused. I think for all small and mid sized companies, it’s brilliant, too. Oh, and I would definitely not try to self implement. We tried that for a year, but call the EOS people and they can find an implement in your area. For you, really, it’s worth every penny

Susan Kearney  27:36

get a pro to help you with that. Yeah, great. Here’s my last question, and that is, what’s your best advice for your peers, other CEOs in the middle market, love what you do.

Tom Carney  27:53

If you don’t love it, change something. You’re in control a lot more than you realize, right?

Susan Kearney  28:00

For good or worse, right? You’re in control. You have the power.

Tom Carney  28:03

Well, if something isn’t right, you’re the ones. Got to fix it. Let me put it that way,

Susan Kearney  28:09

that’s right, that’s right.

Tom Carney  28:11

Hold yourself accountable. Sometimes it’s not easy. You got to look in the mirror and say, I screwed up that decision in there. Why didn’t I ask that question sooner and be honest about it. It’s like, yeah, I should have known that, you know, six months ago, what the heck?

Susan Kearney  28:26

Yeah, accountability is a whole topic. We can we could spend a whole interview just on that, right? And it’s a difficult one for many owners. Sounds like one that you’ve been able to sort out successfully?

Tom Carney  28:36

Well, not, not till recently. I’m the owner. You can do whatever you want. No, there’s a banker, there’s the lawyers, there’s the tax guys. You think, you think, there’s your customers, obviously, without your customers, you have nothing, and without your people, you have nothing. So it’s a whole mix of of team that you have to put together and point all in the same direction and and, like I said, and have fun doing it. I mean, who would have thought basket trucks could be exciting? Yeah, you

Susan Kearney  29:01

you, did you get it? I

Tom Carney  29:02

didn’t know at first, but I grew into it.

Susan Kearney  29:05

Well, you’ve been there for quite a long time, and you’ve been very successful, so you must get great enjoyment and intellectual stimulation from it at the same time. Absolutely, that’s great. That’s great. Well, this is a growth plus exit podcast, and I’ve been talking with Tom Carney, who’s the CEO of Royal Basket Trucks in the wild Midwest of our country. Tom, any last thoughts before we part?

Tom Carney  29:31

No, I didn’t know what quite what to think when you asked me to do a podcast I had I didn’t know if I was supposed to do it with myself, I was supposed to bring other people or what. But this has been a very interesting experience. I want to thank you for the opportunity.

Susan Kearney  29:44

Yeah, well, it’s been great to have you, and I’ll be watching you and your company and your success, and I really appreciate you being here, folks. You can learn more about Tom and about Royal Basket Trucks if you go to Royal Dallas. Dash basket com and see what they’re up to and where they’re headed.

Tom Carney  30:04

One final comment, yeah, when you look at a Basket Truck in the world that has black topping and white stripes, it’s one of ours.

Susan Kearney  30:11

Okay? I thought you were gonna say, if you when you see a basket in the world, don’t mess with it, because there might be a convict in there.

Tom Carney  30:19

That would have been a better statement.

Susan Kearney  30:23

All right, thank you so much. Tom, thank you find out.

Outro 30:33

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