Ep 039 - Running Multi-Continental Businesses for Success with Cody Johnson

Transcript

Transcripts are generated by machine learning, so typos may be present.

Chris Hanslik: In today’s episode, you will meet Cody Johnson, not the country Western singer, but the CEO of National Science. Cody’s run several companies across multiple continents and credits his success to remaining focused and being intentional about how he builds a team around him and then frequently communicates his vision for the company’s success. Cody, I want to thank you for being on the show with me today. It’s good to see you again. Well, Chris, thank you very much for having me. I appreciate you asking me on. So let’s start with, tell the listeners kind of what is it you’re doing today in your current role as CEO.

Cody Johnson: So today I’m CEO of National Signs. National Signs is a 30 year old company here in Houston, Texas. It’s the largest sign company in Houston and one of if not the largest sign companies in the state of Texas.

Chris Hanslik: And that’s a company you’ve been with now going on a little two plus years? It’ll be three years in December. Okay. Now being CEO of National Science is not your first rodeo, so to speak, as being CEO of a company. Give the listeners a little bit of your background and how the companies you’ve been involved with and what roles that led you to where you are today. Sure.

Cody Johnson: So I’ve been a serial entrepreneur since I was 25 years old. I started my first company in Penang, Malaysia. It’s called One World Polymer Supply, Sundur and Berhad, which is Private Limited in Bahasa Malay. I did that, ran that company for five years in Penang, sold it to the Malaysian government. You don’t sound like a native from there. I don’t, but I can speak fluent Bahasa Malay as well as Indonesian. I did have to learn that and oddly enough there’s several people in that area that speak English with a Texas accent from learning it from me. So went from there to India, helped bought into and helped grow a company called Vajra Rubber Products in Kerala, India to the largest privately held rubber company in India, did a lot of government contracts, a lot of oil and gas things. Started a company here in the United States called Core Rubber and merged those things in together. Grew that. Started another business, Core Mexico and Cadetero Mexico. Grew that and in 2012, sold that to a local private equity group. Stayed with that company until 2019. When we merged the companies, I left and started in this role as CEO of National Science.

Chris Hanslik: Okay. So a very diverse and interesting background. So you’ve done both startup then, as well as I think what you were telling me before, national science has been more of a turnaround role.

Cody Johnson: Correct. I’ve done startup growth and turnaround. So national science was in need of A turnaround, I was hired by the owner’s private, local private equity group here in town to come in and turn it around in 2019. And so had to start from the ground up. We had to rebuild all the processes, rebuild the executive leadership team, rebuild the sales team, so on and so forth. Reach back out and repair relationships with all of our stakeholders, the banks, the customers. all our employees, our vendors, so on and so forth. And that turnaround is now with Ninsum. We’re on all of our KPIs, we’re setting historical company records by multiples. And so now it’s transitioning from a turnaround story, definitely into a growth story. Very good.

Chris Hanslik: Going back to the beginning as a self-described serial entrepreneur, what was your inspiration to at 25 start your own company?

Cody Johnson: My father-in-law. So I asked my wife of now 27 years to marry me back in the 1900s. And my father-in-law was, I’m sure, very concerned that I would be chronically unemployed because I was relatively strong-willed. And so he sat down and we had this great conversation one evening and he was a serial entrepreneur and one of the first guys to start a conveyor business in China, put conveyors in all the regional airports in the 1990s as China was opening up. And so sat down and really mentored me and tutored me. Literally, I left that night with like 15 books. Like, read these, and next time you come here with my daughter, there’s gonna be questions. That sort of thing. And we’ve been close ever since. My father-in-law, my mother-in-law are octogenarians now. They live with my wife and I, and he still coaches me every evening. I’ll be darned.

Chris Hanslik: Okay, so it’s kind of part of the family. Very much. And then, you know, what you’ve done as a startup, what have you experienced as far as building a team? What are the similarities in the startup versus kind of the position you’ve been in with National Science? similarities, differences that you can share.

Cody Johnson: So I think the first thing that I would advise people is be intentional. So ask yourself the exact question that you just asked me and write down the answers, talk to your advisors. It’s very important to understand what you’re good at, what you’re not good at, and what’s needed for the current situation. In a turnaround situation, for example, your finance team member is going to need to be strong with banking relationships and he’s going to really need to be strong on the balance sheet side. You’ve got to fix your balance sheet before you can fix your P&L. In a startup, you don’t have a balance sheet. Yeah, right. Your balance sheet doesn’t have much on it. And so it’s all about creating cash and creating a flow of business. And so you really need sales. So I think about that very much as sort of Maslow’s triangle, but for business. and trying to understand where you’re at on that pyramid, where you at. So, yeah, just understanding in each of those three phases what’s needed by the business, what’s needed by the macros in the economy at the time, in the region you’re operating in, and then building a team around that.

Chris Hanslik: So, irregardless of startup or mature company, this hiring the right people, the hiring process can be similar, it’s just you’re looking for different things as you’re implementing it. What have you found to be most effective for you in setting up a hiring process to be successful?

Cody Johnson: Sure. So I start with my vision for how things are going to look over the next three years and what needs to be accomplished to reach success. And then I make a list of what the issues are going to be. What are the obstacles going to be in getting there? What are the opportunities going to have to be that we’re going to have to be able to take advantage of? And then from that list of my opportunities and my issues to achieve my vision, I choose people, hire people that are able to accomplish those things.

Chris Hanslik: I like that. It seems like very clear, very direct, as you said earlier, very intentional about what it is you’re trying to accomplish. Have you, let’s just kind of bring it back down to the last couple of years, you take over national science and then pandemic kids. What have been the challenges and opportunities that you’ve had to navigate through to bring this company through that pandemic into the other side where you said you’re now kind of in a growth mode?

Cody Johnson: Sure. So the challenges for all of us, right, were revenue. And if you were in the sign industry, particularly the large format external signage industry, I mean, we’re going to either rebrand or refresh the brands of three professional sports stadiums just in Houston in 2023. Okay. But that is literally a million dollar investment on telling people where to socially aggregate, which is exactly during the pandemic what we were all forbidden to do. Nobody was spending money, millions of dollars on telling people where to come socially aggregate. So we had to replace our revenue stream. We did that by being socially responsible, which is a big part of our core values and how we live our life and run our company. And all of our government leaders, all of our civic leaders asked those with manufacturing capabilities and experience to figure out how to make personal protective equipment in the early days and so we have an amazing set of craftsmen. Within 24 hours we were making PPE and supplied most of Texas Medical Center, UTMB down in Galveston, hospitals all around the country. Ended up getting recognized on Jim Kramer, Mad Money. With that we had some time, four and a half minutes with Jim on Mad Money. That led to a lot of positive engagement and then As we came out of the pandemic, the relationships that we had made in just trying to do the right thing were very beneficial. The other opportunity was as we were betting on a positive outcome with the pandemic, because we felt like if there was a negative outcome, we’d probably all got worse problems. So we might as well plan on this. This thing is gonna resolve itself a reasonable period of time. And when it does, we wanna have the best staff, the best people in the state. And so as other companies around the state were furloughing their employees, we had a very intentional eye on who we felt like the best of breed in each category, particularly. customer-facing employees, salespeople, marketing people, project managers. And so as people were being furloughed from other companies, we were picking them up as fast as we could.

Chris Hanslik: So kind of building for that growth that you anticipated. Correct. So you mentioned social responsibility, core values. Those things sound like culture. Let’s talk a little bit about culture and what have you done over the course of your career and the companies that you’ve told us about to build a culture that can sustain the company from a growth perspective, which means you’ve got to have a good team. That’s right.

Cody Johnson: So it’s interesting, irregardless of the teams I’ve led in which country on which continent, language, culture, across the board, we typically come up with a similar set of what our core values are. And they end up being basically transparency, professionalism, and stakeholder focus. What’s interesting, though, depending on the vision, the obstacles, and the opportunities, how we flesh those three words out and what they mean that that exact group in that exact country at that exact time means something different. Do you have examples you can share? Sure. So for us, when I came in, when I come into a start around a situation, frequently the transparency issues revolve around financials with the employees. So frequently, whether it be all the stakeholders frequently don’t know how bad it is. And so, with the transparency approach in a turnaround situation, we take the Churchill approach. And we say, yeah, it’s really bad, got a lot of work to do, but if we do this, we can win. And we can be successful. And I’m not going to blow smoke at you that things aren’t tough, that we don’t have a steep hill to climb here. But I’m good at climbing hills. We’re good at climbing hills. We can do this together. And so transparency and letting people know that yeah, what the challenges are and sharing numbers with them.

Chris Hanslik: That goes a long way with people when they sense the transparency and maybe things they weren’t used to having shared with them, right? And I think what I’ve seen too, similar to that, you share that with them along with, but here’s the path to the light. And it is achievable.

Cody Johnson: It can’t be a pipe dream, but it is achievable. Correct. And that’s what I call the Churchill approach. I think that was Winston Churchill’s superpower, right? He was able to tell the English people and the allies in general, no matter how bad it is, yes, they’re bombing London. Yes, we’re living in the tunnels. Yes, this has been going on for years. But we can still win this thing. And being very honest and transparent and looking them in the eye. And again, whether that’s your employees, whether that’s your banker, whether that’s your community members, whether that’s your customers, your vendors, all those stakeholder groups, it’s important to do that with each and every stakeholder group.

Chris Hanslik: Going back to your startup days, what were some of the things that you did to kind of have that those foundational elements of the culture start to take hold and try to build from the ground up?

Cody Johnson: Well, with the first startup, I didn’t. And that’s why we weren’t as successful as we should have been, quite frankly. So in my 20s, I didn’t know a lot of these things. These were things I had to learn by getting scar tissue, quite frankly. Right. School of hard knocks. Yeah. I didn’t understand why, you know, didn’t understand why everybody didn’t understand what I knew, even though You know, my wife would frequently tell me, you’re not thinking loud enough. You have to, you have to communicate more. And so I had to really work on, cause it was always in my head and it was always in my heart. But in the early years of my career, I wasn’t as good at communicating it. So I had to become more intentional and purposeful. I had to make it, I didn’t realize how often people needed to hear it. One of the things that I’ve come to realize, we have something called a 90 day cadence and our people need to hear, from me and understand my vision. They need to understand where we’re at with the plan operationally as well as financially every 90 days. And if we go 100 days without me communicating with all the employees in the organization, we start feeling it. We start seeing it. And so didn’t understand that in the early years of my career and frequently, you know, had some results that were below what my vision was and couldn’t understand why. And again, the mentors in my life were able to point me in the right direction and help me understand how to become successful.

Chris Hanslik: I’m sorry, you can’t overestimate the power of communication within the company. And I agree. I mean, I think what I see sometimes you get busy. Busy is the worst excuse to have trying to get things done, but you’ve got to as a leader, no matter what level, stop and communicate.

Cody Johnson: Absolutely. And if you don’t, one of the things that I’ve learned over the years is all your stakeholders, it’s not just employees, all your stakeholders are creating a narrative in their mind. with or without your communication. And typically, obviously it’s not going to be correct and frequently it’s more negative.

Chris Hanslik: Right.

Cody Johnson: So it’s so important to communicate and it’s so important to build trust so that they believe what you’re communicating. That’s why it’s important to tell them the bad news along with the good. Sure. Because that trust that yes, they’re communicating on a regular basis, on a regular cadence. There’s a rhythm to it and it’s truthful and it’s not one-sided. That’s so important because again, they’re coming up and they’re continuing to progress a narrative. regardless of what you’re doing.

Chris Hanslik: There’s thoughts about building culture in different environments, different continents. What about, more recently, how are y’all dealing at National Science with the remote or hybrid work environments?

Cody Johnson: Sure. We’re leaning into it. We think it’s something that is positive. We think it’s something here to stay. When I was leading a company that had offices in four different countries on four different continents, I had to work remote most of the time because I was more frequently in the middle of traveling from one office to the next. I couldn’t be at all of them at one time. So it was very natural for me. develop tools for our project managers, our designers, our salespeople, to be able to work remote. And we’ve got Project Web. One of our best project managers lives in Miami. She comes in once every other month. One of our very best designers lives in Indiana. He comes in twice a year. And so we’ve really leaned into the difficulty. And I think we’ve reached a balance point where everybody understands, but particularly during the pandemic, what was very difficult was running an organization that has a manufacturing component to it, a large manufacturing component to it. We have 70 people that actually manufacture signs. They can’t do that at home. We have 70 people that are going out there and installing signs. They can’t do that at home. Managing the expectations of the two groups, you know, and it was interesting to see that the groups that were working from home By and large, 80% of them really wanted to come in and work at the office. They missed the camaraderie. They missed being together and the meetings and what we picked up in the hallway, around the coffee pot, so on and so forth. And they were really jealous of the folks that were getting to come into the shop and build the signs and go out and install the signs. Because we were to keep our social density as low as possible. We we didn’t we made our office people work from home on the other hand A large contingent of our folks that were in the shop manufacturing signs and installing signs were jealous of the people that got the course. You want what you can’t have. Something like that. So again, communication and helping everyone understand, you know, their role and how things were changing. And so our cadence picked up instead of every 90 days during the pandemic, our cadence was every two weeks we were talking like this.

Chris Hanslik: Sure.

Cody Johnson: And so really, it was even more important, I think, during the pandemic. But now that things have settled down and we’re back more to a, you know, a normal or regular environment, business environment, you know, we actually require our project managers to work from home at least one day a week. And what we see is it’s really about one to two days a week working remote is really good because Then on those days you’re working remote, you have almost no distractions and you get a lot of your tasks done. The task type work. The three to four days that you’re in the office, you get a lot of the communication, a lot of the culture, a lot of the understanding, a lot of the empathy. a lot of the understanding of where we’re going, the teamwork, but both are important. Sometimes you need to go and get in a quiet environment where you can just bang out your task and get them done. Then at other times you need to come and be part of a team and collaborate.

Chris Hanslik: So really good, at least what you’re experiencing is the full benefit of that hybrid model. Yes. I’m curious, some companies, and I think most have some portion of their workforce that can’t do their job from home or remote. Anything you’re doing to acknowledge that through some kind of extra benefit or something for those versus the other side of the house that does get a day or two to work remotely or from home? Sure.

Cody Johnson: So what we’re doing, a lot of it is small benefits. We have Taco Tuesday and Taco Thursday. Okay. That’s not just because you like tacos, right? That’s not just because we have tacos. I like tacos. We’ve got snacks out for the employees. We’ve got, you know, you used to have to buy your snacks from a vending machine or your drinks. Now those are provided. We like to do, we’ve got the guys in the shop. They had their first record month a few months ago. We asked them, what do you want? They said, we want a basketball court. So luckily we have a lot of great fabricators and installers. So now National Science has its own basketball court. That being said, most of us can’t jump over a credit card, so it’s not very pretty. But they have a lot of fun. So a lot of camaraderie.

Chris Hanslik: Okay, so we kind of talked around a bunch of things. I want to kind of focus in, you know, on leadership styles. How would you describe your leadership style, your leadership philosophy?

Cody Johnson: So, intentional, intentional. Having a vision that everyone understands that’s written down. That vision is translated in the strategy, that strategy is translated into tactics. From those tactics, we know exactly what processes we need, what data we need to collect and study, what people we need to execute on it. We know what rhythm of meeting and collaboration that we have to do. And we do that through thinking about what we think of as the five pillars of leadership. So we think of ourselves as leaders as architects, leaders as coaches, leaders as beacons, leaders as innovators, and leaders as change agents. And so we very intentionally go through and say, okay, for the situation we’re in right now today, how do we fill out each and every one of these categories? How do we supply that to the organization? How do we supply that to the stakeholders? For example, at National Science we’re growing so fast and we’re experiencing so much success at the moment that being leaders as architects leaders as coaches is so important for our leadership team. So we’re having to rewrite processes to run a much bigger company. We’re having to put systems in place that can run a much bigger, much more professional company to give our customers the experiences that they want and that they need. And then once we’ve been the architects of those processes and systems and procedures, we have to then go and coach. We can’t expect people to just pick it up. So, and I’d sit with my team and they have to explain to me, how are you coaching your team? Give me concrete examples on how you’re coaching your team. How are you being leaders coach? Show me if I don’t see you being leaders beacon. In other words, you have to be not only talking the talk, but walk the walk. Do I see you as a leader walking the walk? And so we very intentionally and purposefully go through each of those categories to make sure that we’ve covered the full gamut of what the situation requires.

Chris Hanslik: That’s very helpful, I think, for anyone listening about how to break down the issue and think about it from the different aspects of leadership and what’s required. So let me ask you this, thinking back over your career, where’s a failure or setback that you’ve encountered, whether in the business or decision that you were wrong about? Tell us about that situation, what it was, what did you learn from it and how did it make you better? How did the organization that you were in at the time grow and learn from the circumstance? Well, you told me we only have an hour And you got to limit it to one, maybe two.

Cody Johnson: So no, it always boils down to people and in the first half of my career, I always thought that every person would be successful in my organization. And if they weren’t being successful, it was because I wasn’t coaching them enough. I wasn’t being a good enough architect. I wasn’t being a good enough beacon. And I took that on myself. And I didn’t realize that the people as a leader, I think we frequently want to attract people and we think about how to attract people and retain people, I don’t think we think enough about intentionally repelling people. I think we’re actually, we’re more defined, we’re more clearly defined. by the stakeholders we repel than by the ones that we attract. And so in my early years, the failures that I made was I would repel people, stakeholders. That was the healthiest thing for the company and the healthiest thing for them, by the way. was to let them go and go find an organization or a person that you are attracted to and that you can buy into. And I kept trying to save the relationship instead of understanding that this is the best thing that could possibly happen is just like attracting the right person or the right stakeholder is so beneficial. Repelling the wrong one and early is so important to success because otherwise the greatest failure that leaders make is we end up spending all of our time with people who are either cultural mismatches or technically they don’t know how to do their job, instead of spending time coaching our rock stars.

Chris Hanslik: That’s right. You’re so right. I mean, I love the way you say it. I’ve never heard that from the repelling people that you need to let go of. People talk about, you know, fire fast, which I haven’t talked to any business leader that’d say, That’s one of the keys to success and one of the hardest things to do, right? To learn to do over time.

Cody Johnson: It’s one of the things that I’ve noticed that a really, again, intentional, strong culture can do is it can help people, and we own it. Look, if this isn’t, this is who we are. This is what we’re doing. If this isn’t for you, that doesn’t make you a bad person. It doesn’t make us a bad person. Let us know and we’ll help you transition to something that’s right for you. But let’s not waste each other’s time, energy, resources on trying to make something work that’s never going to work.

Chris Hanslik: Cody, I use those same words here. We’re passionate and intentional about our mission, which is our purpose. And your company has one as well. And I tell people, if you don’t connect emotionally and intellectually with our passion as an organization, quote, it doesn’t make you a bad person. It just means it’s in the right organization for you, but the right organization is out there somewhere, you just gotta go find it. But I think you’re so right about the time that any leader’s got to be mindful of not being drugged down and having more of your focus on those problems. You’re right, we so easily ignore the superstars because we think, oh, they know they’re good, right? And they’re doing such a good job, they know it. No, they need to be told, they need to be coached up some more, they need to be enhanced to keep the company going. I was going to ask you if you had any kind of takeaways maybe for business owners, aspiring entrepreneurs. You may have others, but that’s got to be at the top of the list, right?

Cody Johnson: It is. Another one would be, again, understand most entrepreneurs start a business because they have a better mousetrap, right? They have figured out, they’ve probably gotten frustrated at their current employment situation because they have figured out a better way of doing something. They potentially brought it to leadership and leadership didn’t support it. Right. What’s so important is to understand, definitely take that leap, but understand a better mousetrap doesn’t make a company. It makes a product or a service. And so understand that you need to surround yourself with people, with advisors, whether they be professional advisors, mentors, employees as you hire them. that are able to turn your product or service, your better mousetrap, from a product or service into a company. And really understanding what that’s going to take is so important. Financial literacy is typically one that entrepreneurs don’t think about early enough. Right.

Chris Hanslik: For example. That’s good. You’ve mentioned several times, and obviously your father-in-law may be at the top of the list, but mentors you had along the way that helped you get to where you are today.

Cody Johnson: Yeah, I’ve had so many, it definitely, again, we only have an hour, so don’t want anybody that I leave out to have their feelings hurt. But yeah, my father taught me how to work hard and my father-in-law taught me how to work smart. And so my father was the hardest working man I ever knew. My first job was when I was five years old. He duct taped my legs into a saddle and he charged ranches around the area $7 a day for my brother and I’s labor and he got 20. And we day worked for years until the truancy officers at Hampshire for that ISD figured out how good we could play football. And then they really wanted to make sure we were at school. But yeah, my dad taught me, taught us how to work hard. My father-in-law taught me how to work smart and then had so many people along the way. One of the, one of the guys that I owe a lot in teaching me financial literacy, one of the, one of the private equity groups here in town that I sold the company to Rock Hill, Jeff Christman. One of their partners was the partner we interacted the most with. And Jeff, I mean, he really tutored me up and taught me about financial literacy in the private equity world, in the middle market space, and that was a big deal. So yeah, several along the way. I’m working with Tolkien Management at the moment. I talk with Louis Girard with Work Blaffer every single week. And every week I learn something from those guys. And so very grateful for all the mentors I’ve had past and present along the way. And again, if I could talk all day about those. So, so many and been very blessed to have the right person at the right time in my life to help me along the way.

Chris Hanslik: That’s good. You mentioned two good groups in Rock Hill and Tolkien for sure here in Houston. The important thing I think you just mentioned is you’ve had a lot of people come across your path, you also had the awareness and humility to ask for the help and seek the help and listen to it. It takes both.

Cody Johnson: Well, I appreciate that. It’s been a great journey and Houston’s been a great place to be for this. You know, another couple of guys I could mention is Steve Keston, one of your shareholders here. Yep. Steve has helped me and mentored me on the legal and on the business side. for 25 years. Colt Loody over at Golf Star Group on the investment banking side. I couldn’t spell investment banking or what they did. He helped me sell a company and that was an incredible learning process. Houston has been, in my lifetime, Houston has been such an incredible place to be an entrepreneur and to be a CEO in the middle market because there’s just such a great group of professional advisors that were there to help and to mentor along the way.

Chris Hanslik: Anything you do to kind of just stay fresh, learn new things, book seminars you’ve read along the way to kind of help, you know, grow your toolbox?

Cody Johnson: Sure, so several things. I’m an avid home learner. That’s a big deal for me. I’m currently going to Harvard Business School for senior executives for a

Chris Hanslik: The music is brought to you by Cody’s phone.

Cody Johnson: Yes, I’m currently going to Harvard Business to get a certificate in senior leadership, really learning a lot there. I belong to a CEO roundtable, a tab group that’s led by Rusty Smith here in town. I get a lot from those guys. We meet once a month. The ability to sit and talk about our problems, the obstacles, opportunities, macro environment, and understand how that’s going in business is very helpful. And then also I’m a big believer in the system I use. One of the leadership systems I use is called EOS Worldwide. It’s a traction Geno Whitman. And so pretty active at keeping up with what Geno Whitman is putting out and implementing that. Very good.

Chris Hanslik: Well, lots of good stuff for their listeners to take away to try to apply in their world. Let’s wrap things up, talk a little personal here. You’re from a small town outside Houston, right?

Cody Johnson: Yes, Finet, Texas.

Chris Hanslik: Finet, Texas, and you already told us, they usually ask people their first job, and you already told us that at the age of five. So being a lifelong Texan, Tex-Mex or barbecue? Tex-Mex. Okay. That’s right, this is Taco Tuesday and Thursday. I should have known.

Cody Johnson: What do you like to do for hobbies? So I like to play chess when the weather’s bad and I like to play golf when the weather’s good All right.

Chris Hanslik: That’s good. Yeah, and then if you could take a 30-day sabbatical, where would you go? What would you do? I would stay here in Houston.

Cody Johnson: So I have traveled and lived all over the world. Very blessed. My wife and I were able to do that when we were younger. We just bought a new brownstone over in the museum district a few weeks ago and we are really enjoying just walking around and love the pedestrian areas around the museum district here in Houston. We’ve traveled so much we’ve never got to know our own home city as well as we want to. So we are really enjoying getting to learn and know Houston either on foot or on bicycle.

Chris Hanslik: Okay, that’s great. Well Cody, you know, thanks for coming on and sharing your story. It’s a unique story and congratulations on all the success you’re having. Thank you.