Steve Millstein used to laugh when people complained about the difficulties of managing growth.
While Millstein was working at another company, it went through a leveraged buyout, and a new financial officer came on board. The man arrived from a company that was growing and splitting at the seams, and he talked about the difficulties of managing growth.
“Here I am — excess capacity, had to lay off people,” Millstein says. “I’m thinking, ‘Nice problem to have. Managing growth couldn’t possibly be difficult.’”
Now, as president and CEO of ATX Group, which provides telematics services used in GPS devices, he understands growing pains, as the company hit $76.4 million in revenue last year with 425 employees.
Smart Business spoke with Millstein about how he manages and leads growth at ATX.
How do you manage growth?
If you grow too fast, the right hand doesn’t know what the left hand is doing. The quality to the customer starts going down. You start missing due dates.
It can’t just be mano-a-mano, talking, and it gets done. You have to put in more structure. You have to put in policies, procedures, controls, documentations of things — things when you’re a smaller start-up, you don’t have to do.
When you put those controls and processes in place, you’ve got to make sure they don’t stifle the creativity and don’t strangle the entrepreneurial spirit. They’re intended to facilitate the growth, and part of the growth is the spirit of what brought you that far.
How do you encourage that spirit?
It starts with hiring the right people and empowering them, giving them the accountability, the responsibility, the authority, finding people with the passion and skills. Hiring is always a crapshoot. People who can do the job — that’s kind of table stakes — but to grow a company, you want people with a passion.
We have employees that some of them will work 20 hours — we’ve had to send people home. They’ll go home, take a shower, take a catnap and come back into the office. There are single moms that will bring their kids in to work late at night, and we’ll provide cots, toothbrushes, blankets and pillows for them.
That kind of passion and dedication comes from recruiting the right people and giving (them) the right work environment in which to thrive and grow. Good people want to see the fruits of their labor. They want to see their company’s success.
A lot of times people come in, and it’s just a job. That can be the environment they’re walking into if you don’t give people the ability to use skills that they’ve got and to think and make decisions on their own.
How do you cultivate passion instead of stifling it?
You have to have a fine balance between controls, policies and procedures. Make sure they’re there to facilitate people doing their job, not to stand in the way. Give people their responsibility and let them do it.
As a kid, I had goldfish. They stayed relatively small until they died in that little bowl on my dresser. But when I got older, we bought some of those goldfish, threw them in a pond in our back yard, and they got to be eight, nine inches long.
You find the right people, and they will grow into the job you give them. If you give them a bigger pond to operate in, they will grow and fill that. It’s up to the supervisors to set the direction and then let the employees own it.
Let them run with it. Give them the authority and responsibility to grow and do their job.
How do you make decisions?
The ultimate decision, a lot of it is gut. People call it gut, but there is a lot of data that has gone into you. It is synthesizing a bunch of data from a bunch of sources, whether it’s life experiences, industry experiences, data people have provided, input from the board or whatever. It’s run through the best processor known — the human mind.
We call it gut, but it’s the human mind that does it. My gut isn’t always right, but it’s still something you shouldn’t forsake. If it says something’s wrong, it’s generally wrong; when it says something’s right, it’s not always right.
How do you proceed when you are wrong?
You’ve got to be wrong some of the time. I just like to look back over the year and see that there are more rights than wrongs. You make mistakes and you get smarter.
Employees said one of the things they like about (working) here is nobody’s ever fired for being wrong. We don’t terminate people because they tried something and they made a mistake. You might get terminated, but it’s because you did nothing.
It’s like a pit crew around here and everybody’s got to pull their weight to get it done on time.
HOW TO REACH: ATX Group, www.atxg.com