“Any time you do anything new you’re going to make mistakes,” he says. “We do a lot of lessons learned.”
Focus on the numbers
To make sure these new lines of business are successful, Tomko has strengthened the company’s reporting system and worked to control the growth.
“There has to be more focus on the numbers. The margins are locked tighter. There’s less work,” he says. “You have to constantly be reviewing the numbers and making sure that you make budget.”
At the beginning of the year, management develops a strategic budget that focuses on volume and profit. Once everyone on the sales team buys in, Tomko says he tries to make sure they keep to those numbers as close as they can.
“In 2014, we hit those numbers by 1 percent, both on the profit and the revenue. And they were all set in January,” he says. “This year, we should be within 10 percent of the revenue and within 15 percent of the profit.”
Every job reports every month with real budgets. Monthly cost control meetings help management catch something before it gets out of hand, which is especially important when you’re just getting into a new business area.
“When you put in the numbers and set the budget, you’ve got to have everybody on board and meeting and discussing and tracking,” Tomko says. “Because if you don’t do that, it’s all for naught.”
Not all of the new business units have been successful, but enough have that W.G. Tomko is now locked into a pattern of growth.
In the proper place
As a family company that just celebrated 60 years, W.G. Tomko is a little unusual. Tomko is an owner, along with his father, sister and brother. They all play varying roles in the operations. Tomko’s father, however, has stepped down from overall leadership and does what he likes to do — manage the fabrication shop, the warehouse, the construction of new additions, etc.
Tomko is the only one of his siblings who had an interest in leading the whole company, although his sister is the corporate secretary, treasurer and CFO.
“When I first started, I wanted to do everything myself and I wanted to make everything perfect,” he says. “But I quickly figured out that you have to, at the size we were, have more leaders.
“I cannot run the entire company. I have got to have good leadership underneath of me.”
And having the right leadership is even more important now that the business has diversified into more areas and locations.
He was handling operations himself and thought W.G. Tomko couldn’t afford to hire someone to take on that part of his job. He found out how wrong he was when a vice president of operations started focusing on the day to day.
“It’s been the opposite. It’s saved us so much money by having someone who can handle that full time,” Tomko says.
You may think you’re saving money by doing it yourself, but really you’re not handling it the way it needs to be handled because you’re not focused on it all the time, he says.
A business leader needs to hire people smarter than his or herself, and then focus on what he or she is good at.
“If you’re the president, your job is to put the best people in the proper positions. And if you’re good at operations and you’re the president, then do operations,” he says. “It just so happens that I don’t feel that I’m best for operations.”
Tomko spends more time looking ahead, putting strategic budgets together and making decisions about whether to grow and how much.
“That’s the stuff that I like to do, and I’m comfortable doing,” he says.
Takeaways:
- Growth follows profitability and professionalism.
- Manage tighter margins with constant tracking.
- Focus on what you’re good at, and delegate to other leaders.
The Tomko File:
Name: William G. “Bill” Tomko III
Title: President and CEO
Company: W.G. Tomko Inc.
Born: Pittsburgh
Education: Master plumber certification
What was your first job and what did you learn from it? I never did anything but this — I started working for the family company in sixth grade. I worked in the shop, sorting fittings. I learned work ethic and about making money. I liked making money.
You never wanted to do anything else? Nope. Well, I wanted to be a pro hockey player and a pro baseball player, like all other kids. Then when I figured out it wasn’t going to work, like when I was 8 or 9, I decided to go into the family business.
What is the best business advice you ever received? I did a job with a competitor. We actually subbed a job off of it.
And again, I was so concerned about, when I was younger, about growing the business. We wanted to be bigger, bigger, bigger.
And he just let me focus on what was important, which was not growth, it was perfecting the company and just being a better company. And profits were more important than growth.
I learned from being around their culture, and that was the best learning experience I ever had.
What do you like to do when you’re not working? I like to spend time with my family.
