No one knows change like Correct Craft.
When the ski and wakeboard boat builder hired Bill Yeargin as president and CEO in September 2006, it sported a record of five CEOs in five years and had just moved into a completely new manufacturing facility a few months prior, expanding its production capacity by 70 percent. The man who had run production for more than 20 years, Mike Elrod, had passed away less than a year before, and Correct Craft — known for its employee loyalty — was experiencing high turnover as some workers decided they didn’t want to travel outside of town to its new location.
But that’s nothing compared to the change Correct Craft has undergone since Yeargin stepped in, including the creation of its own lean production system, the recruitment of a new wave of executive talent, the launch of its own employee development program and expansion of its dealer network.
At the core of those changes, and its many others, is the company’s three-year strategic plan, Yeargin’s “top priority” the day he walked in the door.
“Correct Craft never before had a strategic plan,” he explains. “The company was obviously very effective building an awesome brand, developing and producing great product and generating incredible customer loyalty.
“However, I believe that to really build the company to the point it can reach its true potential, the strategic plan was what we needed.”
The right man for the job
One might expect this kind of change from an 83-year-old, family-run company transitioning to professional management. It seems to fit the stereotype: warm, intimate family business handed over to cold, regimented professional executives. In many cases with similar circumstances, the new leaders, lacking the values upon which the company was founded, chase away the most loyal and experienced employees who hold the secrets to its success.
That’s not Correct Craft’s story. Yes, Yeargin is a Certified Public Accountant and has achieved a master’s in business administration. And he’s hired several new executives, two from outside the industry and five of whom are also M.B.A.s. He has even introduced what many people would call “trendy” concepts like Lean Six Sigma, 5S and a CEO blog. But it was the company’s values that ultimately attracted Yeargin to Correct Craft.
“You don’t have to dig real deep to learn that Correct Craft has been built on a foundation of ethics, integrity and faith,” says Yeargin. “That appealed to me.”
While he once was determined to remain in South Florida and believed that his next career step would more likely be to own and run a consulting firm, when the Orlando, Fla.-based Correct Craft opportunity was presented to him, it “felt right” and Yeargin now believes, “this is where I am supposed to be.”
Certainly, few people in the industry are as qualified to help Correct Craft plan a successful future. Prior to landing at Correct Craft, Yeargin had helped numerous companies craft their strategic plans, spoken on the topic at many conferences and even written about it in his book, “Yeargin on Management.” [See “5 steps to success,” above]
“I didn’t feel the need to bring in a consultant,” he explains. “However, I would caution many people about trying to do it themselves, not that they cannot muddle their way through it, but because there is way too much at risk.
“A strategic plan can have such a powerful impact on an organization that it is worth it to have a consultant help guide you through the process.”
Building a plan
While you don’t have to be an expert to create a strategic plan, it helps. If a company decides it wants to build a strategic plan internally, Yeargin recommends that its executives “buy books and go to classes.” There are dozens of books on strategic planning available, and lots of colleges and professional organizations offer classes on the subject.
The steps to building a strategic plan are actually pretty basic. The first involves getting your executive team to understand that what a company does today will impact its tomorrow. Yeargin had already witnessed the power of strategic planning in his previous jobs as an executive at yacht builder and service firm Rybovich and as an auditor and consultant at Coopers & Lybrand, so this concept wasn’t much of a leap for him at Correct Craft. But he needed to convince the rest of his team of its potential impact.
The second step — a situation analysis — was more complex, however. While he had many years of marine industry experience, as Correct Craft’s new president and CEO, he was getting his first look at the company as an insider. As part of the strategic planning process — but also as part of his new job — he had to get to know the employees and the company’s operations, as well as its position in the marketplace.
Yeargin quickly recognized Correct Craft was feeling the impact of the many changes it had endured in recent years. Before the company could proceed with strategic planning, it needed to stabilize. Yeargin and his team identified more than 100 short-term goals it would take to achieve stabilization, each with its own deadline. At about the same time, Yeargin began the process of evaluating the company’s more than 400-employee team, ensuring that the right people were in the right positions.
“I knew we had good people,” he explains. “My job was to determine whether they were the right people for the job.”
Yeargin says letting employees go has been one of the hardest parts of this job, though one of the most important. He also has had the opportunity to promote several of the company’s long-standing employees, including two members of its founding family, the Meloons.
The third step in the strategic planning process is to identify the company’s strengths, weaknesses, opportunities and threats. Yeargin hired an M.B.A. intern to interview almost 20 people — including the company’s owners, managers, full-time employees, customers and field employees — to get a wide array of opinions about Correct Craft and then identify consensus amongst them. Finally, Yeargin went over the results of this SWOT analysis with his team to ensure its accuracy.
Planning the work
For a strategic plan to be successful, the employees carrying it out have to believe in it.
As a newcomer at Correct Craft, Yeargin inherently faced some challenges in achieving their buy-in. Not only was he still getting to know the company’s employees, but there were also four CEOs who had preceded him, each with their own ideas about where to lead the company.
While it’s always important to involve employees in the strategic planning process, Yeargin knew it was even more so in his case. So he invited groups of employees to his house for daylong planning sessions — intermingled with team-building trips out on the lake in his Nautique — for several weeks in a row. This allowed his employees to get to know him on a more personal basis, and to understand that he was willing to invest a lot of himself not only in the process but in the company.
The first step in the goal-setting process is to create one key company goal to be accomplished over the period of time chosen for the plan. Yeargin says there is no right period of time, but recommends the plan cover a minimum of three years. In Correct Craft’s case, Yeargin felt a sense of urgency around making certain changes, so he decided a three-year plan would be the best way to start.
Then, the team developed a goal for each major division of the company based on the following question: What does each division of the company have to do over the next three years to help Correct Craft achieve its overall goal?
To help each division reach its overall goal, the team created 10 smaller division goals. And for each of these smaller goals, Correct Craft executives created the step-by-step process that would be required to achieve it, including a list of who would be responsible for each step and when it must be completed.
In Correct Craft’s case, the end result on Nov. 1, 2007, was a 97-page binder. The first page listed the overall company goal and each division’s goal. Inside were tabs for each division of the company with that division’s 10 goals and the steps required to meet each of them carefully outlined.
Working the plan
While the creation of the plan was an impressive achievement, Correct Craft’s biggest accomplishment has been the diligence with which the company has set about implementing it. Many companies create strategic plans. Where they make their biggest mistake, says Yeargin, is in seeing its preparation as an end and not a beginning.
“I have seen many organizations go to all the effort of preparing a strategic plan like it was something they needed to check off their list,” he explains. “My gut tells me that more than 75 percent of strategic plans go on a shelf and rarely get looked at. Many organizations complete their strategic plan, breathe a sigh of relief, put it on a shelf and pull it off two years later to see how they’ve done.”
Building accountability into a strategic plan is critical to its success. Not only should a strategic plan guide a company in its everyday actions, a meeting schedule should be established to stay on top of how well the company is meeting its short- and long-term goals and adjust them accordingly.
For those who have been following Correct Craft in the news, it’s no surprise that, five months into its plan, the company is ahead of schedule. One of its goals, for instance, is to improve product quality by reducing the number of defects per product as measured by J.D. Power and Associates. The group’s most recent study suggests the company is already on the right path, not only improving its results over the prior year, but demonstrating the best quality in the ski and wakeboard niche and the second-best quality in the entire industry. Despite that accomplishment, the company aims for continued improvement.
“I tell our team, ‘No matter how good we get, we must get better,’ ” says Yeargin. “We cannot be satisfied with our past accomplishments; we need to build on them, and the best way to provide a roadmap to an even more successful future is through a strategic plan.”
Another of the company’s goals is to increase the number of people who consider a Nautique when buying a boat.
“We know that when people look at Nautiques, they buy Nautiques,” he explains, “so from a marketing perspective, we want to raise the level of consideration by a specific percentage and we know exactly how many additional sales it should generate.”
Under its strategic plan, Correct Craft now has measurable goals like for each and every part of its business. Yeargin has increased the level of professionalism throughout the company, while retaining the family-like culture based on ethics, integrity and faith, which has inspired so much loyalty over the years. And when the industry looks back on Correct Craft in 10 or 15 years, perhaps it will conclude that the key to its success was found not in what was done, but in how it was done.