A few weeks ago, Barry-Wehmiller CEO Bob Chapman and Barry-Wehmiller President Kyle Chapman gave a presentation to the St. Louis chapter of the Association for Corporate Growth.
The topic was on family businesses and family business transition, but it ended up being about much more.
Kyle and Bob detailed the history of Barry-Wehmiller -- the business strategy that led us to becoming a more than $3 Billion company and our journey to Truly Human Leadership from traditional business management.
But they also talked about the future of Barry-Wehmiller. They talked about the company we are trying to become, a model for business where people, purpose and performance work in harmony to provide value for all stakeholders, not one in sacrifice of the other.
And they issued a challenge to businesses everywhere -- be a force for good in the world.
You can listen to an edited version of Kyle and Bob's presentation through the link above.
Transcript:
Kyle Chapman:
Barry-Wehmiller is undergoing a major transformation. A major transformation of leadership, a major transformation of growth, and really the most important part, is the major transformation on the impact we're trying to have in the world. That's what we want you all to walk away with, to show how we can be an example of how business can be a source for goodness in the world versus brokenness.
So, what we're going to talk to you about today are these three things and a little bit about how we got here. What was our journey here? And talk to you about the benefits a bit of the business model that we've created – how it's worked in the great recession, the great pandemic and our path forward. And then we'll open it up for some questions.
These transformational things we're working on are not coming without obstacles, right? Anytime you are running a family business and you're thinking about transition, you're facing a few things. Now, the good thing is that family businesses are a critical part of our global economy, of our U.S. economy. I think it's like 60% of GDP, 60-ish percent of the workforce, hiring about 70-ish percent. That's amazing. But when you dig down and get deeper into the statistics, well, 40% of family businesses don't have a very good succession plan. About 30% make it from first generation to second generation, and about 12% make it from second generation to third generation.
Those statistics suck where I'm standing right now. My grandfather, William Chapman took over the business in the mid-60s. Technically, he's the first generation. It then quickly, in the '70s, passed to my dad, second generation. Number three CEO in the world, that's great. Bestselling author, pretty cool. (I’m) kind of coming in as unranked. I don't read that much, and I don't write very well, but ... There's no pressure for me here, but that's okay. I enjoy a good bit of pressure. The shadow that my dad cast doesn't make me too cold at night. It's a privilege to be here. It's a privilege to have the honor to attempt to take this into the third generation, and I'll explain some ways how I'm trying to break that mold a bit.
When you think about the growth we're trying to pursue, Barry-Wehmiller has been an M&A-centric business. We used to be weekly in the headlines about businesses we were buying. We've bought over 115 companies. We've deployed over a billion dollars of capital, right? Most of the businesses we bought over time have been broken or underperforming. And we breathe life back into those businesses with our business strategies. We breathe life back into those communities. But the M&A market is changing. It's not as easy, at $3 billion, to go out and buy a bunch of businesses that creates scale, right?
We have private equity that's infiltrated our business, driven up market valuations to 12 to 14 times. I mean, we bought businesses you couldn't multiply EBITDA because there wasn't any. The multiple would've been infinite. At $3 billion, for us to buy businesses, we have to go into larger transactions, which creates a different level of risk. There's another headwind in our transformation, right? Transitioning a family business, going from M&A, we've got to figure out a different way to grow than we have in the past.
The biggest obstacle to our transformation is this, work is the leading cause of stress in the world, and stress is the leading cause of heart attacks. So, we are actually hurting our people. Most people would say that their supervisor is more important to their health than their primary care physician. In fact, most folks would forego a pay raise in order to fire their boss. That is sad. Think about the environment that we're in right now. So, we're trying to go out (and say) that business can be the most powerful source for good in the world if we would embrace the awesome responsibility of leadership. If we could just simply show the people that we have the privilege to lead that we can care for them, we can change the view of business.
So, those are the obstacles we're facing at this pretty big pivot point in our organization and we're up for the challenge, I believe. I'll step back a little bit. Dad, anything you wanted to say on this?
Bob Chapman:
Well, I'd say to this audience – M&A deal people – do you consider the people in the organizations that you're looking at acquiring, and do you look at them and say, you can give them a better future. Do you look at the people or the deal or the economics? So, we really, we want to be able to adopt new companies and tell them that they have a better future with us. Quite often people cry when we buy their company because they can't believe they finally get to work for a company that cares about them. Unfortunately, again, we launched the Forsyth Partners because I was concerned that this focus on buying at a dollar, selling it for $4, leveraging your capital, flipping it was destroying this country.
Remember, 88% of all people in this country feel they work for an organization that does not care about them. Those are your kids, your parents, your friends, your neighbors. Ok. Again, as Kyle said, 65% of all people would give up a salary increase if they could fire their boss. Why do you want your kids to go into business someday and be bought by one of your companies and bought and flipped and stripped? I would say to you that we have seen this evolution to Truly Human Leadership as a powerful force for good in the world, because we have people in our care for 40 hours a week.
When you look at your deals, can you look at the people in that organization you're acquiring saying, under our care, you have a better future. That's the standard of care I'd like you to think about.
Kyle Chapman:
Absolutely. Well, thanks. Well, let's set some context for who we are. Barry-Wehmiller can be viewed as a very complex organization. I like to keep it simple. We operate five platforms with kind of a growing consulting platform, Chapman & Co. We have some participants here today. We operate three equipment businesses and one service business, and then we have BW Forsyth Partners. The equipment that we make is fills, caps, labels, that's our packaging equipment. We touch everything that you all touch. We manufacture everything that you all touch on a daily basis. We also make equipment, and it's in our paper division that makes corrugated box board.
We actually make the corrugated board, we fold it, we print it. I'm sure you've seen some of those on your doorsteps from Amazon. We also have a big converting platform where we make equipment that makes toilet paper. We like to call a bathroom tissue. It makes it a little more sophisticated, but it's a fantastic ...
Bob Chapman:
Oh, we probably said hello to you this morning.
Kyle Chapman:
And then we have a Design Group, which is our engineering consulting firm, where we go out and advise some of the largest organizations on setting up manufacturing facilities etc.
Bob Chapman:
Because you're all St. Louisans and most of you know Emerson Electric. In my youth, I studied Emerson Electric, Chuck Knight, for years. I studied how he bought companies, etc. He was my business model mentor, and the word balance came from Emerson Electric's intense focus on balance.
Kyle Chapman:
We're going to speak a lot about balance, but as you can see, we have this platform. But when I think about it, a third of our business comes from highly engineered equipment. A third of our business comes from supporting that equipment out in the field, and a third of our business is in consulting services. I've got a simple brain, I can wrap my mind around that. What we do in each market is up to our local leaders. That's when you think about our business and our business strategy, that's really what we do.
We have over a hundred locations across the world in 28 different countries. We like to consider ourselves builders of people and business, and we're trying to reinforce it. You can run organizations with people and performance and harmony, not one in sacrifice of the other. We're going to spend a lot more time on that.
Bob Chapman:
I'll add to that. I was interviewed by Washington university professors, Organizational Development of Professors a few years ago. Hour and a half interview. At the end of the interview, they said, "You're the first CEO I've ever talked to that never talked about your product." I said, "I've been talking about our product for the last hour and a half, it's our people. I won't go to the grave proud of the machinery we build. I'll go to my grave proud of the people who built that machinery." So, our focus is on our people. It's called people, purpose, and performance.
It starts with our responsibility to your kids who may work for us someday, or your friends or colleagues around a purpose that inspires them and then we have to create value. So, it's the three Ps, people, purpose and performance, but it all starts with people, not numbers.
Kyle Chapman:
How did we get here? This has been a long journey. I was recently doing this because we just had a record year and reflecting on the fact that this record year has been decades in the making. There's a couple pivot points Barry-Wehmiller has had in the past. There's this pre-IPO phase, which there's a Harvard case study written on it. But in 1987, dad took a public, took a part of our business and spun it off. But before that, dad learned a lot of his leadership skills, or management skills, it was brute force management. He had a sick company serving a sick market with concentrated customers.
He was able to find elements of growth, areas that he thought would be pretty profitable that ended up coming back and biting him. In the mid '80s, he lived payroll to payroll and was able to get a piece of business together that somebody else valued more than he did fortunately and it saved the organization. In that up and down, in that fighting and payroll, he learned many of the lessons that fed our strategies going forward.
Bob Chapman:
In 1986, we were about 55 million in sales, pretty weak. I started doing acquisitions with no money. What do you buy when you have no money? Things nobody else wants. Okay? I patched together some acquisitions, had about 35 of our 55 million, and my English team came over and said, maybe we could spin off our part of the business, which was the acquisitions and you could pay down your debt because I couldn't borrow 5 million at the time.
We patched those companies together we bought that were each extremely unattractive businesses, and put them together and had a massively successful IPO in the London stock exchange. It was so phenomenal that Harvard wrote a case study on it that I began teaching. We put together a group of companies. The company that Kyle is talking about today was really reborn in 1988 after that public offering. Basically, I would say to you, I sat down for probably nine months, counted the 28 million I had in the bank because I couldn't believe it. Had no debt and I had a chance to do it again.
I designed a business model from the mistakes and experiences I had in the '80s that now reflects the company that we're talking about today. So, we had a chance to begin again, but now we had some money, no debt and some experience. The company we have today was again, the historic bottle washer and pasteurizer business, was not part of the public offering, and that was the foundation. Then we had 28 million in the bank and no debt. That's where we began, $20 million in 1988.
Kyle Chapman:
I always appreciate pausing at that milestone because it becomes a bit self-serving for me. This is where I like to say the real Barry-Wehmiller was built. That makes dad first generation and me second generation, so the statistics are three times as likely we're going to succeed. I like to think about Barry-Wehmiller 1.0 as some other business that I had nothing to do with. As dad said he spent about six months counting the money – I mean setting strategy – for the business going forward.
What he had learned is having a single product line, single technology, single customer is not a great business strategy. Instead, he wanted to build a $100 million packaging equipment business built on balance of customers, markets, technologies, and price points. So, he started doing that, probably the original strategic plan of Barry-Wehmiller and what we wanted to become. That happened in the late '80s and in through the '90s. But as we got into the late '90s, if anyone's read the book, Everybody Matters, you'll see that he started having a series of epiphanies.
One of the ones was in the late 90s with a customer service team. We realized that business could be fun if we incented them if they got excited about work. Just like people get excited about watching March madness. We made competitive games, etc. That was one of my dad's early signs of what it could be by giving back to people.
Then, as we moved into the 2000s, we started diversifying. Now, I wouldn't say it was intentional diversification. We were opportunistic diversification. We got into that corrugating market I talked about, we got into the tissue market that I've talked about.
We launched BW Forsyth Partners, but the really cool thing that was going on in the early 2000s through the late – because what's really important is our cultural momentum was building. We launched our guiding principles of leadership. We launched a university to teach people to listen, how to care, how to lead. That was all building up, and we all know what happened in 2008, 2009, right? The great recession. We could have easily thrown away a decade's worth of work through our actions. And we didn't. Instead, we made every decision through the filter of what it meant to measure success by the way we touched the lives of people. That's how did all of our decisions in the great recession. I'll show you later how we bounced out of that.
Bob Chapman:
I cannot remember an acquisition I ever brought to our board that they liked. Seriously. The corrugated business, which is now our largest business. Somebody brought us an opportunity to look at this company in Northern Wisconsin that was in bankruptcy. Machines that make corrugated box board, about $88 million business.
I really said, "No, no, I'm not interested." And they said, "Oh Bob, you could really help this company." I said, "No, no, no, we're in packaging. I'm going to stay focused in packaging." Said, "Bob, you got to look at it." And they got a runway right at the end of the plant. You could be up there and back in one day. I said, "Okay, well, we'll take a look at it." We flew up there, in five minutes, we knew we could fix it.
I went to my board, and my most senior board member at the time was a guy named Bob Lanigan who was chairman of Owens-Illinois, on the Chrysler-Daimler board. And Bob looked at me and said, "Bob, nobody makes money in corrugated box board because corrugated box board follows manufacturing. Don't do it." I said, "Bob, I'm going to do it and you're going to like it.”
What Kyle's describing is what I would call a very eclectic journey. There's no business case, no MBA program that would ever say, go out and buy broken companies and put them together and create something great. Our eclectic journey and acquisitions, I felt I knew what I was good at. I was good at fixing companies that were challenged so I needed to do what I did well.
At the same time – Kyle’s starting to talk about our culture – our culture was just as eclectic. It wasn't a book we read, it wasn't somebody came in to fix anything. What you're going to see today is this picture of a very eclectic parallel journey from putting together these businesses that now look phenomenal in hindsight, but at the time, look kind of challenging. Why would you buy a bunch of broken business? Put them together and have something great.
But again, most of the companies, up until Kyle joined us, and Ryan, where we got into buying companies with a better future, I would say to you we were very challenged. Family businesses, quite often failed private equity investments and we'd walk in and we would fix it. We have never moved, we never bought a company and shut down and moved it to a low-cost country. We take a look at the people and we are very committed to the people. So, very eclectic journey. Go ahead.
Kyle Chapman:
So eclectic, we started really scaling up in the late 2000s. We snapped out of the great recession because we had our entire employee base still intact. We didn't let anyone go. We started building scale.
Also, our culture was gaining so much momentum, somebody told dad he should write a book. Dad also doesn't read many books, so he decided to write one. But this was ... When you do that, you really set the tone for your culture. You can't go back. It is written down. People can read it and say, "Hey, what happened to chapter six?" That's really what galvanized where we're going.
Now, this is where I started chirping a little bit more to my dad. I said, "Dad, the only way people are going to read your book is if we're performing at a top level as well. If we mess around with below average margins and below average performance, and aren't great innovators, people are going to say, oh, I now know why you can't afford that because you're too nice to your people.”
Bob Chapman:
I'm going to add a little color to that. Tim Sullivan, my partner, in developing this, you could never tell a multiple of EBITDA in a deal we made because they didn't have any EBITDA. We never talked about EBITDA multiples and our operating EBIDA performance was important to us because we had this unique EVA methodology for developing our share price. Our share price appreciation was spectacular because we were getting tremendous returns on our investment. But if you looked at it optically, like most people do, and well, what's your EBITDA percentage? How good are you? And what's your growth.
We didn't look as good from that angle, but we never looked at that angle. Because we had this measure that our shareholders like, which is EVA methodology. That was a reason we didn't see what ...
So, Kyle comes in from the professional field and says, "Dad, people are going to say, yeah, I could be nice to my people if I only wanted to make 7% EBITDA." We realized that we needed to take our game up to validate our culture. That became the inspiration to us. Because if you can't create human in economic value and harmony, people will say, "Yeah, I'd like to be nice to my people, but I can't perform like that."
Kyle Chapman:
Yeah. And you can see you over that day ... I mean, it's not like we were doing bad things. We doubled our business from 2008 to 2009, but we launched what's called our “step change” era where we are really focused on driving home people and performance in harmony, not one in sacrifice to the other. That is how people usually do it. I either have to be great to my people and thus don't care about profits or I'm going to be ruthless about making earnings no matter what I have to do to our people.
Bob Chapman:
Our share price has gone up over 14% a year for 25 years in a row. We were feeling good, even though Kyle came in and said, "You're not as good as you think you are because you're not performing at the levels of the industry." And we said, "Well, look, there's no reason if we have a great culture that allows people to share their best talents with us. We shouldn't perform above the industry standard to further validate our culture to many people."
Again, this is just a benchmark to say, we're not a nonprofit organization. We're a value creating organization, with both human and economic value in harmony.
Kyle Chapman:
It took dad a few Thanksgiving dinners to get over me telling him his baby was ugly, but he eventually got over it and got on board.
Bob Chapman:
He's my baby.
Kyle Chapman:
Yeah. That's also a good point. Walked right into that one, didn't I?
Bob Chapman:
Yeah.
Kyle Chapman:
This is just a scoreboard. It's critical, but you got to have multiple scores. Our share price was going up. There were other metrics. We were getting a bit insular in how we were looking at this business and so we started looking elsewhere. Now that you have an understanding of who we are and how we got here, I want to talk a bit more about balance. That's been so critical to us, especially in a couple of the major disruptions in our economy that we've had. One, as you can see dad in the '80s, as he talked about, he had one product line, one technology, one market, and it was all struggling.
Bob Chapman:
Let me amplify that. Our largest customer was Anheuser-Busch. It was our first customer in 1901. We were getting all their businesses they were growing. One day a gentleman retired from engineering and a person was promoted from within, and he decided that, that hundred-year relationship needed to change. And overnight, we lost our largest company. We did nothing different. A gentleman retired, and all of a sudden, we 40% of our business. I just said, I will never put our people in that position again, ever, because there's nothing I could do about it. I recovered, I mean, I made it through, but that's why it amplified the work that Chuck Knight had shared with me in term of balance.
Kyle Chapman:
But when we think about balance, again, we pursued things that other people didn't necessarily like or see value in or wasn't the sexiest thing that we've ever invented. We're not that big of a technology company. I'm going to put some images up here. What do all these things have in common? A, they're boring as all get out, toilet paper, brown boxes, face masks, cans, pet food, semiconductor chips. The other thing is that they all were deemed incredibly essential during the pandemic and have been exploding in terms of the demand for each and every one of these things.
The last thing they have in common is they all come off our equipment or they all have to do something with our services, our consulting services. In the pandemic, we have just come off a record year and it's because of the balance and the business model that we put in place. That's one. We serve great markets. They may be boring, but they're stable, right? They're growing. They're global.
The really cool thing about what's gone on in the pandemic is how our culture has taken hold yet again. The way people cared for each other during this pandemic to keep our business healthy and protect the safety of our people – we were building machines for Clorox, sanitary wipes, getting a special incentive by the White House to get them out in a faster timeline all at the time when COVID was raging.
Our team members had to go show in build machines, arm and arm, and get it done. It showed incredible creativity, flexibility, and dedication. We didn't have to force them to go do it. It happened organically.
We had our German organization who makes mailing envelope equipment. You can imagine how good that market was when the pandemic was going. They didn't sit still. They showed incredible agility, creativity. They spun up a face mask machine in 90 days and sold $16 million worth of it. Unbelievable creativity. Why? Because they wanted to do right by the business.
When I think about what we experienced this year, would we experience the same robust growth, the creativity, the agility with a bunch of unfulfilled team members, a bunch of people that were worried more about themselves than the broader good of the organization? No, we wouldn't have.
What we've experienced this year just brings incredible joy to us, but it's not by accident. Intentional culture, intentional business model.
Bob Chapman:
We're very involved in the can industry and aluminum cans in terms of global sustainability have determined they're much more environmentally friendly than plastic bottles. So, the demand for cans is record. So, our single largest customer this year during the COVID was can industry, who can't buy enough cans.
So, several, and then e-commerce. You can't make enough boxes right now for all the overnight shipment of corrugated box board. So, that market that my director told me not to get in has exploded.
Kyle Chapman:
It's great to have a balance and diversified business model, but if it doesn't perform at the worst of times, what's the point?
During that '08/'09 downturn, we made less money. We didn't lose money and we didn't let anyone go. All of our competitors lost significant amounts of money.
Bob Chapman:
And our share price went up 11% in '08/'09. I would say to you, our culture and our business model were tested in '08/'09, the worst economic shock, and we came out really strong.
Kyle Chapman:
Yeah. As we look forward, we really start talking about building a legacy. As I talked about, the transition we're going through right now. I've been president for about a year. And you would think, just given our intentional diversification and intentional culture, we'd have an intentional succession planning. We didn't. That shouldn't be a shock to you all.
I was off on my merry way, I was in private equity on the dark side, (sorry, Holly,) and learning a bunch of new business models and things. And then went to a private equity owned business and felt that pressure of being owned by private equity and short-termism and things like that. Out of the blue, was asked to come back and start BW Forsyth Partners. What it ultimately ended up doing was providing a great leadership development opportunity to go buy and build organizations.
Bob Chapman:
The whole idea of Forsyth Partners is, what if we could combine the best of private equity with the best of our Truly Human Leadership strategic investing? So, the hybrid equity evolved from that.
Kyle Chapman:
Absolutely. And in the early days, it was a big sucking noise from us, from Barry-Wehmiller, just taking whatever strategy and resources we could. But we've done 40 acquisitions ourselves and we've grown about to 750 million. And we started, that's when my dad said, Kyle started saying, "Hey, your EBITDA margins could be higher." We started bringing things back into Barry-Wehmiller.
About five years ago, I was my dad's strategic finance partner. That was just a nice way of saying, I got to say a lot of things, but had no operating responsibility whatsoever and people didn't have to listen to me but was able to point out real opportunities for growth and performance improvement.
About two years ago, dad said, "All right, well, let's put your money where your mouth is, come in and serve as interim CFO." I was like, okay, well I can give that ago. So, we set a whole agenda of where we're going to take the business forward. That was January of 2020. We all know what happened in March of 2020. Now, what's interesting about the pandemic is that it provided this really unique opportunity to be thrust in front of the organization. I was controlling cash. I was looking at all the metrics about what was going well, what was not, and we were doing daily communication to the world.
Over that eight-month period, we were very lucky. There were a couple dark days where we were like, is this world ending? Are our orders going to stop? And they didn't. April, May, everything started coming, and we performed quite well over that period of time. I found a very capable CFO, he's in the crowd today. So, Mike Monarchi who joined, and I said, "Dad, what's next? What do you want me to do? I'll go back to Forsyth Partners, whatever." He said, well-
Bob Chapman:
Actually, that's not really what happened.
Kyle Chapman:
That's what happened. That's what happened. Don't let facts get in the way of a good story.
Bob Chapman:
Actually, the board came to me and said, "Bob, you've got to let Kyle step up into ..." I mean, Kyle had earned so much respect from the board over this 10-year period and what he did with Forsyth. The board came to me and said, "You got to let Kyle step up into a bigger role." I said, "Great." It was the board's idea that we promote Kyle to president and I become CEO. So, it was the perfect transition for Kyle.
Kyle Chapman:
All right. He is the control shareholder and chairman of the board. But he's right, it was the board's idea. The transition is going well. I have the great fortune of working with my dad, mentor, best friend business whatever, superhero, and all wrapped up in one guy that I get to work with. It's going incredibly well. I'd give him an A. Not quite an A plus. There's still some days he snaps back, but it's going really well.
Bob Chapman:
I'm just a simple accountant from Ferguson.
Kyle Chapman:
Yeah. But the key is, if people don't believe that I can take on the legacy that he's built, that's really my goal is to make sure his legacy extends well beyond his time and we can show the business as a force for good. If I can't do that, that I'm not doing my job, and so, when we think about where we're going next, we talk a lot about what we're going to change. Well, what's not going to change.
One, or why the filter through which we make all of our decisions, we measure success by the way we touch the lives of people is not going to change, not as long as I have the privilege of leading.
But what we are going to do is we're going to up our game. We're going to show that you can operate with people and performance in total harmony, not one in sacrifice of the other. You do not have to sacrifice your people in order to have top quartile financials. That is where we are going and we're going to prove that. I need you all to hold us accountable to that because that's what our goal is. The other part is, when we think about expanding, when we think about taking our culture outside of our four walls, I need to do this so that my dad and others can do this.
We have a lot to share with the world and we've got to have people believing in our business model, who we are, and where we're going in order to do it. What we like to talk about is that our business model is this kind of robust Ferrari engine. You can't put crappy fuel in your engine. Our culture is the premium fuel that makes the business model, the engine, perform at its highest level. It's not because we have a great culture, we do well. It's not because we have a great business model, we do well. It's a combination of both.
Bob Chapman:
To add to that, I was up at Harvard where they were introducing the Barry-Wehmiller. Harvard about six years ago, five years ago wrote a case study on our culture. I believe now all Harvard MBA students study Barry-Wehmiller's culture was just up there last week teaching. I went up there for when it was introduced to a group of about this size, 160 global executives came in for about a month-long leadership event at Harvard, and they used our case study.
I sat in there as they were discussing from the study they did the night before. They discussed it for a good hour, hour and a half. At the end, Jan Rivkin, the chair of the MBA program said to this group, "Is Barry-Wehmiller successful because of its culture or its strategy?" And again, I was just sitting there. I hadn't said a word. Jan didn't tell me what he was going to ask me. They discussed it for about 10 minutes more and then they voted. 75% of the people said, Barry-Wehmiller is successful because of our culture.
I stood in front of this group of very prominent global executives. I said, "I understand why you think that's true, but it's not. Barry-Wehmiller is successful because we built a robust business model in the 1990s and we stayed true to that model, which is balance and prudence. But the culture is the premium that went into that, to amplify that. I would say, I want you to go away, our focus is on, do you have a business strategy that gives your people a grounded sense of hope for the future?
Because if you don't design your business model right, you are going to hurt people. Some people say it's about getting the right people on the bus. I don't agree with that. I believe it's about building a safe bus, which is your business model. And then you need drivers who are your leaders who know how to drive it and know where they're going. And then anybody you invite on the bus is going to be fine. But our primary responsibility as leaders is to design a safe business model. It gives our people a chance to raise kids, buy a home, live life in some sense of safety and comfort. We live in an environment of downsizing, right sizing, restructuring, and it is causing a high level of stress and anxiety in this country.
The statistics Kyle said earlier, that's because of us. Okay, because it's all numbers. The key is the focus on making sure that we're doing the right thing for the people we have the privilege of leading. Not the job of leading, the privilege of leading. You, in this room, could help heal this country. Because remember, prior to the pandemic, we had the lowest unemployment in 50 years, we had a strong economy, and we weren't sending young men and women out to war in the world.
Yeah, we had the highest level of anxiety and depression we've ever had. Why? We had peace and prosperity. Why would we have anxiety and depression? Because people feel used for somebody else's purpose. They don't feel cared for. That's what statistics say. It never occurred to me, in my education, nor in my experience through Young Presidents' Organization, all the other organization, that the way we run our businesses would affect the way people go home and treat their spouse, their kids and their health.
When you think about what you all are doing in your various roles in this field, are you caring for people as much as you care for the numbers? Are you giving the people, if you get a chance to step in and acquire a company, can you give them a better future? Can you look them in the eye and say, "Together, we can do good things. Now let's go do it." That's the standard of care we're trying to bring to business.
The beauty is you in this room, if everybody in the country in your role in this room would embrace a human side, not just an economic side, we could heal the brokenness that we're sending our kids out to.
Kyle Chapman:
Absolutely. That's probably the biggest lesson you could take away. All right. I know that Amy, I think I know we went overtime, so just to be clear, and really appreciate all of you all's time, listening to our story, hold us to everything that we're saying. We're at a pretty cool pivot point in our organization and just appreciate the opportunity to share it with you.
Unidentified Speaker 1:
All right. We'll take a few questions.
Unidentified Speaker 2:
Yeah. Kyle, Bob, that was great. Thank you. Obviously when you hear your story, there's a lot going on. How would you assess your abilities individually to hold yourself accountable to the values that you're laying in the foundation of your companies?
Kyle Chapman:
Yeah. I mean, it's a challenge every day, right? We're only as good as the person sitting in the furthest corner, in the furthest facility away from us. That's as good as we are on any given day. If that person isn't feeling our culture, then we're not doing a good enough job, and we're not there yet, honestly. What would I give us? I don't know, a six out of 10. I think we're further than most, but this is going to be a journey that continues forever.
It's honestly, when you think now, stripping all that away, it is easier to run businesses this way. It's easier to run business being nice to people, being open, communicating, doing teamwork. It's simpler. We have overcomplicated business.
Financial leverage, how we're talking about crazy transactions, how you manage people, boss them around, you have the bureaucratic, kind of hierarchies that exist. We have overcomplicated things. It is so much simpler to run a business the way we talk about it, because you're just out there operating things you know how to operate, treating people how they want to be treated and working as a team. It's so much simpler.
Bob Chapman:
We want to believe that we can bring value to the company and give people a better future. That's what's drives us. I would hope all of you would think about that in your deals. Can you look at the people that you're going to impact and say, "We can give you a better future?" Or are you just financial engineers who buy assets, strip out costs, flip it for different multiples? Because that's what's hurting.
These are not the kind of companies you want your kids to go work for someday, because people want to feel valued and you have a chance to show them we care about you.