Tell us about how The Great Little Box Company started.
I bought the assets of the company out of receivership just as the economy was going into a recession. I thought the company had potential, so I got hold of the then-owner and agreed to buy the assets.
I kept a couple of the previous staffers: a machine operator, and a salesperson. And then we started The Great Little Box Company over again. I kept operating the company under the name because it was already listed in the Yellow Pages, and we wanted to use the same phone number.
What was it like when you started?
Prior to owning the company, I had visited it and the phones were always ringing and no one was answering them. I realized that there was a lot potential. As I was saying, this was the start of the recession, early 1982, one of the worst economic downturns we’ve ever had. Some days there were just no orders. I kept on going, though, because I knew times would get better, and I believed in the company.
What was your background?
I was 36 at the time. I’m a certified management accountant, and before starting up The Great Little Box Company, I would work with various companies, all manufacturers. I knew manufacturing was what I wanted to go into.
Did you have any entrepreneurial experience before getting into The Great Little Box Company?
I always had many ventures on the go. I owned part of an import repair shop downtown. My wife and I always had more than one job. We had accumulated quite a few rental properties, and even had a small apartment block. Then the ’82 recession hit, and the market prices nearly dropped in half. It was very stressful. I lost 15 pounds in the first five months. It was not a pretty time.
How close were you to going under?
Close. Really close. The banks had no idea of our financial situation. We were just at the limit.
And now, in 2010, you have a thriving company with more than 200 employees?
About 220 right now.
You’ve garnered a lot of accolades: the Best Company to Work For, Canada’s Top 100 Employers …
I’ve always believed in profit-sharing. We started that 15 years ago. People think our profit margins range between 15 and 33 per cent, but in actuality it’s usually one or two percent. People are surprised to hear that. Profit-sharing is well worthwhile in terms of building a sense of being part of a company, of being more than just a job.
I’m open with my people about the financials. It’s important to be open. It raises the sense of trust in the company.
And, from the beginning, we’ve always had social events, even when we were a company of just three to five people. I’ve always noticed that people who do not attend the social events do not last very long. It’s important to enjoy the people you work with.
Are you surprised by the amount of recognition you’ve got for being a good company, and a good place to work for?
When we won the Best Managed Company in Canada Award in 1995, it was quite a surprise to me. I thought we were doing everything right, and the award organization agreed. We’re currently in the application process to achieve Platinum status for the 50 Best Managed Companies.
Folks have called The Great Little Box Company “great” in all senses. What’s your definition of a great company?
The number one thing is people. People make a difference. If you enjoy your job, you will work harder and everybody benefits because of profit-sharing. Like I said, we have a number of social events. One thing that sets The Great Little Box Company apart from many others is our BOX (Big Box eXtravaganza) goal. This is an annual profit goal and if it is achieved, we take the whole company on an all-inclusive trip. Previous trips have included Puerto Vallarta and Cabo San Lucas Mexico and Las Vegas.
You recognize people’s effort; you note when they keep doing better. It’s almost like when you play golf. You ever met a golfer who doesn’t keep score? Everybody keeps score. You measure. You keep score because you want to get better, whether you’re the guy operating the machines or a salesperson.
Can you give an example of one of the things that you’d measure in your company?
We track the company sales, but that’s an obvious one. Another example is that, in the plant, we track the machine operators’ average number of set-ups and average running speed. We do this every week. This way, they can see how they’ve done and how they can do better. Our people want to keep improving, to see how they’re doing. These are very motivating things. We also have meetings every month of our employees with open-book management – here we discuss the state of the company, and go over the income statements and balance sheets with everybody.
How much of your background as a CMA has influenced how you run the company?
Obviously, I understand financials well. But what’s really important is how you deal with people. As the recession began and the company began to decline in sales, I had employees in my plant approaching me with suggestions and ways to improve operations to help the company. That is the type of relationships that we have built in this company. They can be open with me because that’s the way I am with them, and it makes people feel a part of the company and a sense of responsibility over it.
Was this approach part of your psyche when you started The Great Little Box Company, or did it evolve?
I would say it evolved with the company. I learned by listening to other people. By being willing to learn, you get better and better all the time.
I had to learn this on my own, because I don’t come from a background of entrepreneurs. My father was a civil servant, and my mother was a stay-at-home mom. There’s one characteristic that all entrepreneurs have: driven personalities! You need that trait if you are going to make your company work.
Did you purchase the building your company is in?
No. We built it. It’s the second building that we’ve owned. Our first building was 140,000 sq ft, and after 10 years we outgrew it. Our current building is 250,000 square feet located on Mitchell Island, and was built to maximize employee comfort. It has natural lighting in all offices and a state-of-the-art on-site gym with personal training.
Obviously, you have a philosophy about purchasing vs. leasing.
Yes. We buy everything. Sure, some people would say, “You’re tying up your equity.” My philosophy is, we own the building, and we can leverage our equity. Our building is a source of revenue. Most companies don’t have that, certainly not companies in packaging. We’ve made more on the building than we have on the company.
How has the strengthening Canadian dollar affected The Great Little Box Company?
The last four years have been terrible. In 2006-07, our top 100 customers’ business fell five percent. In 2008 their business fell 13 percent, and fell 22 percent in 2009.
Although we struggled as many manufacturing companies did, we actually benefitted from the recession because we had the ability to purchase companies that did not have the equity to continue through the tough economic times. Our sales were at a plateau at around $30 million. However through our acquisitions and growing customers, we’ll probably reach around $36 million in 2010. We’re stronger because of our acquisitions as well as our customer base having grown.
What is the single most important attribute in the hiring process for you?
A person has got to fit into our culture. Obviously, they should have the education you want, whatever background requirements and so on. But the biggest thing we’re after is fit, and the problem is you don’t necessarily find that out in one or two interviews. That is why every person hired at The Great Little Box Company has between seven to nine interviews; that is when the real person comes out.