Sea Ray founder C.N. Ray personally visited many of his dealers in the 60’s and 70’s, flying his private jet cross country to big and small towns alike.
At the time, private jets were rare, and the townspeople would often gather to welcome him, placing the dealership being visited in a new light amongst the locals.
Sea Ray President Rick Stone knew Ray, having met him for the first time while employed by Arthur Andersen & Co., and remembers the stories of these visits. Sea Ray was Stone’s first client in his new job at the accounting firm — and when he was offered a position as Sea Ray controller almost eight years later, he quickly accepted.
Stone stayed at Sea Ray for 16 years — leaving only to work for its parent company, Brunswick Corp., mostly recently as Boat Group CFO. During this long tenure, he helped guide the company from various posts, most of which were within its finance department.
When the company called on Stone in 2006, however, it needed a different kind of guidance. Over the years, despite the ups and downs, back and forth of market conditions and product trends, Sea Ray had stuck close to many of the principles upon which it had been founded. But under Stone’s predecessor, it strayed from the well-worn path that had been so fundamental to its success, taking employee morale and dealer confidence with it.
In hiring Stone as president, Sea Ray was calling on him to look back into the company’s past and find the inspiration to lead it successfully into the future. Over the past year, he’s done just that.
More than 40 years after Ray’s dealer visits, it’s Stone flying across the country — albeit not in the pilot’s seat — visiting more than 20 dealerships in the past year alone to personally deliver the message that Sea Ray is now Back To The Future.
A bean counter and so much more
Why did the boat company hire the bean counter as president?
It sounds like the opening line to a bad joke, but it’s a good question — one that those who didn’t know him were asking when Sea Ray first named Stone president last February. It’s worth noting, however, that most people within Sea Ray, and its parent company Brunswick Corp., do know him.
Brunswick Chairman and CEO Dusty McCoy, who sat in the office next to Stone when they both worked for the Brunswick Boat Group, says he didn’t choose Stone because of his history at Sea Ray. Rather, Stone had the leadership qualities he was looking for.
“Rick was a very unique CFO,” McCoy explains. “He understood every piece of the business and how it translated into financial success. That made him an almost ideally perfect person to begin to run one of our boat businesses.”
But dealers and employees might answer the bean counter question differently, pointing to the changes Stone has brought about over the past year. Surely, much of the progress can be attributed to his ability to recreate the culture he spent 16 years immersed in.
During that time, Stone played a significant role in the company’s direction, going well beyond the numbers to influence areas as far removed as dealer relations. It’s Stone, in fact, that introduced Performance Groups to Sea Ray — a concept that helps its dealers be more successful. And despite being named president, he still serves as a member of one of the groups, attending all of its meetings.
But Stone isn’t just drawing on his experience to lead the company. Soon after taking the helm last year, he made some changes to his senior management team. These included bringing back long-time Sea Ray executive Terry McNew, who had been with Sea Ray for 17 years before leaving to become Correct Craft president, and promoting Rob Parmentier, a 23-year Sea Ray employee, to executive vice president.
Stone explains that the company has a tradition of creating and maintaining long-term relationships with employees, dealers and customers through empowerment. It has sought their input at every opportunity, resulting in long tenures amongst all three groups. (See “A wealth of experience,” page 30). After straying from that practice under his predecessor, Stone says Sea Ray is taking that path again, creating a “collaborative environment” at Sea Ray, one in which the employees are “as interested in the health of the company as I am.”
It’s clear that former Sea Ray President Cynthia Trudell had a different management style than those that came before her. Having been hired in the fall of 2001 to bring her automotive experience to the boating business, the former Saturn president was apparently — and perhaps understandably — less interested in the company’s roots and its executives’ past experience than in accomplishing the objectives her experience suggested were important. And in fact, she was responsible for introducing many processes and procedures that have helped boost repeatability and efficiency. But during her five years at the company’s helm, she failed to nurture the heart of the company — its people.
“When Cynthia was there, people were afraid to have input, products suffered and morale suffered,” comments Carlton Phillips of Sea Ray dealer Prince William Marina. “Sea Ray was separated into two classes of people — workers and management.”
By adopting a flat organizational structure through which decisions are made at every rung of the corporate ladder, Stone has begun to reverse that course. And that is something that has become evident not only to its employees, but also to its dealers.
“Rick brought Sea Ray back together as a group,” Phillips adds.
Stone’s other objective has been to strengthen the flow of new and innovative products coming out of the company. In 2006, the company only introduced three new boats. But Stone expects to introduce nine new models this summer — a pace of new product launches that he aims to exceed or maintain going forward.
“Introducing innovative new product … is a huge requirement in the industry,” Stone explains. “It’s what the dealers need and what the customers are looking for. And we are now back on track with that, reinvigorating some of the Sea Ray spirit at our product development operation.”
While Stone defends his accounting background — a strong understanding of finance is a good arrow for a company president to hold in his quiver, he says — it’s clear that his skills go far beyond numbers. And once you meet him, it quickly becomes obvious he doesn’t fit the one-dimensional stereotype of a CFO. He has a wide smile and a relaxed manner that puts people at ease. In fact, MarineMax President and CEO Bill McGill, who has known Rick since he first joined Sea Ray, compares him to C.N. Ray.
“Rick has a talent to get to the heart of problems and opportunities by listening to all involved and then objectively making decisions based upon the facts,” McGill says. “Rick is always fair and honest when Sea Ray makes mistakes, looking for the opportunities to correct them, and, at the same time, fair in sharing and coaching the dealer when mistakes are made or opportunities exist.
“His passion for life, the Sea Ray brand, his team, our customers, and the dealers in the past and the future makes Rick a great leader of the most successful brand in our industry.”
Imitation as flattery
By almost any measure, Sea Ray is successful.
Its brand is the most considered in the marine industry by consumers and the most searched for boat brand on the Web. It sells more fiberglass plearsure boats than any other brand in the world. Its biggest dealer — MarineMax Inc. — was ranked the No. 1 Dealer in North America by Boating Industry magazine, and it has more dealers on the Top 100 Dealers list than any other brand.
The ups and downs of the past few years have served as a test of its ability to persevere, which it seems to have passed with flying colors.
Its parent company, Brunswick Corp., certainly recognizes Sea Ray’s strengths. In fact, it uses the company as an example from which its other boat brands can learn, making its future success under Stone’s leadership that much more important.
“What Sea Ray brings to our boat business is fantastic talent in every operational and functional area of the boat business, a deep understanding of the industry, and a set of best practices that we began in 2001 to migrate to our other companies,” says McCoy. “Sea Ray continues to mature, and we use much of the Sea Ray best practice activity as a foundation upon which to work on improvement in our other boat companies.”
This is particularly so when it comes to its dealer partnerships, which McCoy says have allowed Sea Ray to create the best dealer network in the industry.
“We, because of our experience with Sea Ray, understand that dealer certification, through a process that is oriented toward a particular brand’s needs, produces much more successful dealer-OEM relationships, permits the dealer to be more profitable and permits the dealer to be more successful in his or her market,” McCoy explains. “We learned that from Sea Ray — and because of that learning, we’ve been so very focused on bringing to all of our brands certification processes.”
Not only do about 80 percent of Sea Ray dealers participate in its Master Dealer certification program, two-thirds of Sea Ray’s sales are through exclusive dealers — something Brunswick would like its other brands to take inspiration from.
“The reason we have good dealers is because our dealers tend to make money selling our boats,” Stone says, “and to the extent that they can make enough money, given their territory and the products that we offer, that they can be exclusive, more power to us and to them.”
He adds that another differentiator is the attitude with which Sea Ray approaches its dealer relationships.
“You have to recognize their net worth is on the line every day,” he says. “And you have to make the dealer believe you agonize over their success.”
His understanding of Sea Ray dealers’ needs and his drive to help them succeed are a big part of Stone’s success thus far as president. But when it comes down to it, Sea Ray’s brilliance in dealer relations — or any other area of its business — doesn’t come down to one man, but rather to one man’s team.
“I call Rick with problems once in a while,” says Phillips. “He’ll say, ‘I’m a numbers guy, but let me get in touch with someone.’ And I get an immediate response.”
That’s the power of the team Stone has built around him and the strength of the tradition Sea Ray is carrying forward into what seems a bright future indeed.
ON WHY HE WAS SELECTED AS PRESIDENT …
“I think one of the primary reasons was that I have a pretty good relationship with a lot of our dealers. A lot of that relationship started … when I was involved with dealer credit and finance. In that role, I had the opportunity to spend some time with just about every one of our dealers, not selling boats but talking to them about their business and their credit and finance situation. I had face time with a lot of our dealers, and that’s how you get relationships is with face time.”
“Then I started the Performance Inc. program, this 20 Group concept, with a lot of our dealers, and that afforded me yet another opportunity to spend quality time with our dealers talking about their businesses from a profitability standpoint. Not just obtaining lines of credit but also how you run your business and how you make money.”
“In the early ’90s, there were a fair number of dealerships that went out of business, and Sea Ray had some. On virtually every one of those, I had something to do with a review of what happened, a post mortem, and I think I learned a lot of landmines that dealers can find themselves in as well as things that an OEM can do to precipitate such.”
“There are things that go on in the market that no one has control over, there are things that a dealer can do that precipitate bad things happening to their business, and there are things that an OEM can do to precipitate bad things to happen to not only their business but potentially their customers’ business. I think when you go through that — several dealerships going out of business — you learn a lot. And therein lies probably some knowledge that I have that a lot of other people don’t have that would make us less likely to walk into the same situation.”
ON THE CONDITION OF THE COMPANY WHEN HE BECAME PRESIDENT …
“The financial condition was strong. Its position in relation to the dealerships was strong. The manufacturing operations were running efficiently. The only thing that wasn’t completely up to par was the rate at which the company was introducing new product.”
“The traditional Sea Ray spirit was not at a high point. And I believe it is now definitely headed in that direction, as evident by the amount of enthusiasm that’s come from the manufacturing facility as well as our product development organization in connection with the development and introduction of new product.”
“What I decided to do, which was probably a little different than the prior management, was take full advantage of the depth of experience within the company and allow people to make decisions at a lower level than in the past, and to encourage collaboration between the various functions and with our dealers, in particular with respect to new product development.”
ON THE ROLE OF EMPLOYEES IN SEA RAY’S SUCCESS …
“We have a lot of years of experience, and brands function better when they have lots of years of experience … The more experience you have, seemingly the better product you get. And I think we’ve been able to create a culture within the company that attracts really good people and encourages them to stay and to excel at whatever it is they do. In the long run, that benefits the dealers too.”
“It’s a fun business and it’s rewarding because each of our manufacturing plants starts out with sheets of plywood and bales of fiberglass and barrels of gelcoat and resin, and you walk to the other end of the 200,000 or 300,000 square feet and you have a magnificent finished boat that they actually can tell they had something to do with creating …”
ON THE ROLE OF THE DEALER IN SEA RAY’S SUCCESS …
“It is all about the dealer. The product has to be there, of course, and we have to be behind it with our big balance sheet and our ability to innovate new product and get it out on time and build it with the right quality and all that. But the dealer is an integral component in this delivery system.”
“I think it’s important that we think about our dealers and everything comes from that. Our goal is to make sure our dealers make a great living selling the boats that we offer and have a large enough territory to do that within because in essence that ensures our long-term success. [That philosophy] has been successful for almost 50 years and we haven’t diverted too far off that track during that time.”
“A Sea Ray dealer has a great opportunity to have a very successful life, financially speaking, and I think they respect that opportunity and look at it as a long-term opportunity as opposed to a short-term opportunity that changes depending on which OEM walks through the showroom with the latest and greatest to sell. We’re not perfect, but we strive to be. And we’re motivated to be. We know we’re not, but we keep working at it, and I think the dealers understand that.”
Carving out a new future
Dealers at this summer’s Open House will get a sneak peek at the Sea Ray of the future.
Parked at the dock will be a 60-foot Sundancer with an all-wood interior, which Sea Ray expects to introduce to the public in model year 2008.
As part of its effort to better compete with European boat builders, the company will be introducing all-wood interiors in many of its models over the next several years, something Stone says will be “a huge differentiator.”
A wealth of experience
Sea Ray President Rick Stone says his employees’ long tenure with the company is a huge part of its success.
Just look at the numbers. The companies eight top executives have 110-plus-years of collective Sea Ray experience. That’s an average of 14.5 years of experience per person.
Sea Ray’s top-40 executives share approximately 620 years of Sea Ray experience between them, for an average of 15.5 years per employee.
And together, the 4,400 Sea Ray employees have more than 30,000 years of collective experience at the company. That’s an average of almost seven years per person — impressive given the challenges inherent in the boat production environment.
Dealers weigh in
“I have known Rick as long as he has been with Sea Ray from a business and personal relationship. Rick is a man of utmost character who approaches business from the perspective that the dealer is the customer and the success of Sea Ray is tied to the success of the dealer like the original founder of Sea Ray, C.N. Ray. We feel secure with the leadership of Sea Ray with Rick at the helm and proud of his accomplishments.” Bill McGill, Chairman/President/CEO, MarineMax Inc.
“Rick Stone was our Brunswick and Sea Ray contact in our Performance Group. When he became president, he stayed with the group and still comes to the meetings. I was very impressed that he stayed.” Carlton Phillips, Owner, Prince William Marine Sales Inc.
“Rick is a warm, engaging, and caring person. His style is to govern on the “personal level.” He is experienced, articulate and possesses the skill-set to lead and manage a global entity like Sea Ray. He has the respect of co-workers and dealers. He immerses himself in issues that seek results, not place blame. He cares deeply about communication and is always available by
cell phone or e-mail, even when traveling overseas.” Larry Russo, Sr., President/CEO, Russo Marine
“Sea Ray was built on a few basic business principles: quality products, customer service, and distribution as a partnership, which have been neglected over the past 5 years in favor of earnings. Rick has been involved in developing the Sea Ray culture for many years and understands the value of building Sea Ray as a viable and powerful boat manufacturer. His core values and integrity are bringing back the pride of being part of Sea Ray in its employees, dealers and customers. He has a great team with more expertise in boat building and distribution that’s the envy of all other manufacturers in the industry.” Kevin Roggenbuck, President/CEO, Lake Union Sea Ray
“From the outset, Rick revitalized the new product development process, which had become a concern under his predecessor. He also set the tone for the Sea Ray plants with the insistence that they maintain the standards of excellence and quality that the Sea Ray dealers and consumers expect. In my opinion, Rick Stone’s appointment sparked a new energy and excitement throughout the Sea Ray organization and the dealer body that bodes well for the performance of Sea Ray in the future.” Rod Malone, President, Sail & Ski Inc.