It was Todd Leebow’s great-grandfather who started the family in the steel business, launching a steel distribution and processing company in Jersey City called Baldwin Steel. That company employed Leebow’s father, Dennis Leebow, before it was sold in the mid-1970s. Then, after a transition period, he left for Cleveland in the late 1970s and started Majestic Steel USA.
At the time it was established, it was uncommon for steel companies to carry inventory that wasn’t pre-sold and sell it into the market. Instead, they took an order from a customer, milled the product and shipped it. Todd Leebow’s father took a different approach. He carried inventory that wasn’t pre-sold, targeting primarily the HVAC market with flat rolled coated prime product. That meant customers didn’t have to preorder or stock steel on their own floor.
“He knew that all of those end users carry those like-sizes and bought those like-sizes,” says Todd Leebow, president and CEO of Majestic Steel. “The model was to go out and stock those standard sizes in finished form to be able to sell into the market. We could sell that same product to Ohio to Maine to Washington because they all bought standard sizes for that end market.”
In its first five years, Majestic Steel realized fast success by tapping into a network of wholesale distribution and contractors. Once word spread that materials could be bought this way, Leebow’s father was able to connect with post-sale supply houses and larger mechanical contractors across regions. The company quickly went from zero to $100 million.
The business grew, and so did Todd Leebow within it. He went to school for entrepreneurship and business management, and then decided he had no plans to join his father’s company.
Change of mindset
“I actually moved out to Los Angeles after school to pursue a career in film production,” Leebow says. “I really had no intentions at that time of coming back into the business.”
But Leebow soon saw the opportunity within the industry. He believed that with a focus on investing in talent and technology, a sector that was seen as old and entrenched could become much more attractive.
So, in 2007, Leebow formally joined the company. He started off focusing on inventory and supply chain management, with particular attention given to innovation. He was looking for ways to help with inventory management and how to introduce new ideas through technology, adding talent to get different perspectives into the business and building the culture. He worked across sales, finance and operations, spending time in the plant and on banking relationships, all to get a 360-degree view of the business, so when the time came, he could lead it.
“At one point in a family business, somebody was the visionary, the entrepreneurial spirit, and that individual that understood all aspects of the business to get it off the ground,” Leebow says. “As you pass a business on from generation to generation, that’s something that gets lost. I wanted to come in and really understand what my father had created, go back to the core and the roots of that, but then be able to modernize that and take it to the next level.”
As Leebow entered the business, Majestic Steel was facing disruption caused by the Great Recession. That experience helped him see that the key to forecasting, especially during uncertainty, was frequency. But the approach at the company, and in much of the industry at the time, was static. It seemed to him that data and real-time information weren’t being used to their fullest. So, he drove an investment in transparency and visibility throughout the business, and in access to real-time data and information to make quick decisions.
“When you go into an environment like we did during the global economic recession, and you see demand fall off that quickly and you see the changes happen in the market, you have to adapt,” he says.
Another area of emphasis for Leebow was talent. He recognized that all companies, regardless of industry, are all fighting for the same talent. So, he worked to show prospective candidates what working in the steel industry could be.
“We really had to position Majestic against other industries and make it an attractive company against anybody,” he says. “So really the focus was, how do I build a culture that makes Majestic the employer of choice? How do I get people to buy in to the fact that we’re handling real product and making real things and the impact of that? Instead of positioning it as this old industry that’s only thought of through this lens of blue collar, it’s really, how do you attract talent across the board?”
When Leebow transitioned into the role of president and CEO in 2012, his focus turned to getting buy-in from the company and from the industry that he was ready to run the business. Some of the changes being made at that time, however, were met with some resistance because the prevailing feeling was that if it’s not broke, don’t fix it.
“I’ve always believed in myself in terms of what I’m able to do and always find a solution, but you can’t do it alone,” he says. “You need to get buy-in from your team and buy-in from your other stakeholders.”
There were challenges, but he says that any company making the handoff from one generation to the next creates an unknown. Still, it’s the responsibility of the individual coming into that leadership role to make sure that they earn that buy-in.
“I’ve always said that if you were the original founder/creator of the business, then you can command that. But if you’re that next generation, you can’t demand that, you have to earn that, because earning that respect will allow you to continue to foster the future success of the company,” he says.
To get that buy-in, Leebow says he listened.
“I think the greatest skill of leadership is listening, respectfully challenging, making tough decisions that maybe in the moment were not necessarily always understood, but then being able to show that those decisions have paid off,” Leebow says.
Entrepreneurs, he says, make a lot of mistakes. That can lead some to be afraid to make them. They become too risk-averse and the company starts to lose the edge that got it to where it is. So, for Leebow, it’s about taking calculated risks. And when mistakes are made, admit it and learn from it.
The company’s growth has led it to make acquisitions that added facilities in Florida, Texas and Nevada. Those acquisitions came as Majestic looked to fill out its footprint, seize on efficiencies and get closer to customers, in part by being where they’re going.
“We saw an opportunity to identify players that we liked either their assets or their market position to give us that geographic reach to better service our customers, as well as to focus on markets where we see high growth,” Leebow says. “So, it’s not a coincidence that at that time the focus was on Texas and Florida and the Nevada market, because our steel goes where consumption goes, and consumption goes where population and manufacturing goes. And so, we see those as high-growth markets and opportunities for us to continue to build the business.”
The company’s business model has also spread somewhat beyond its original stock approach to include contract and trade. However, the stock business is still big, and was a significant advantage for the company in 2021 because of the depletion of the supply chain and subsequent strain on available inventory.
All the moves under Leebow’s leadership appear to have paid off. He says Majestic Steel’s revenue was in the $300 million range in 2012 and he expects this year, revenue will land just shy of $1 billion.
Today, five members of the immediate family work in the business, and Leebow says the company has extended the concept of family to include all of the company’s associates. It emphasizes promoting from within to create an environment that drives tenure and referrals, helping the company attract and retain talent. However, Majestic Steel has made a point of hiring nonfamily leadership to join the executive team to bring in outside perspectives, experiences and diversity of thought.
“If you look at our leadership team, I’ve brought in people from different industries. I’ve brought in people from within the steel industry so that you have family members, nonfamily members, people with experience in steel, people that have come up the ranks at Majestic and people that have come from outside,” Leebow says. “I think of it like building a sports team. You have got to have some of the team in their prime, some veterans and some rookies. And you have to continue to make sure that you have the right mix and diversity of skill sets, capabilities, and life experiences and work experiences.”
Bringing in the outside leadership team is also part of the transition to the next generation. Leebow has three very young children who may one day come up through the business and take over the reins, much like he did. Having nonfamily leadership, he says, is a way to guard against the family dynamic disrupting the business, or letting the business disrupt the family dynamic.
“Having the approach that we’ve taken in terms of family and nonfamily helps in that regard, so that if they want to come into the family business and there’s a fit and it makes sense and the capability is there, absolutely. It’s a business, so business first,” Leebow says.” But if not, then that’s OK, too. And because I experienced that — I came in as second generation of Majestic but I’ve been around family business my whole life, fourth generation within the steel business and my great-grandfather and my dad are part of a family business — I understand all those dynamics.
“I wanted to build all of the great strengths that you get from a family business within the business, but I also wanted to remove some of the things that potentially cause the tension and the stresses on a family or an individual.”
- Leadership transitions require broad buy-in.
- Innovation wins in any industry.
- A family dynamic can extend to nonfamily members.