In the early 1970s, a young technician at an automobile assembly plant in Tennessee had been furloughed several times. He spent several months out of work waiting for the company to call him back as production volumes increased. He was a young hard working man with a burning need to earn a good living. This waiting was more than this young technician could stand. With no formal education beyond high school, he believed his options were limited. He knew he was a good worker with a lot of common sense. He found a small metal works shop not far from home and decided he could run it better.

Thirty-six years later, his products can be found in millions of vehicles of leading automobile manufacturers. He is now a key supplier to the industry, highly profitable, and growing. The metal works shop’s business performance speaks for itself. So many manufacturing related businesses are moving off-shore, or they struggle to compete and become industry consolidation targets. This shop continued to compete effectively and even built and occupied a larger facility funded entirely from cash from operations. In fact, refreshingly unlike many small business owners, the CEO recognizes the importance of cash flow: “Cash is the grease that keeps the cogs and gears of the engine running smoothly”.

In addition to being a high quality and highly reliable supplier to their customers, the metal works shop also seems to be a great place to work. The CEO’s steady hand is still at the helm of this company. His key team of managers and supervisors has been with the business for between 10 and 15 years. Employee turnover at this company is practically nonexistent. That is remarkable in an industry where shop floor workers jump from job to job. Companies struggle to hire reliable, skilled, and drug free workers.

“My mom told me as a little boy that I must have a 10 year plan, and write it down. If you don’t write it down, then your brain comes up with lots of other ideas and thoughts to distract you from your plan”, the CEO told me. He has stayed true to this excellent advice throughout his business and his personal life. How many small businesses develop long range plans? How many large businesses are able to commit reliably to a long term plan that doesn’t change at least every eighteen months? All too often they are driven by short term goals or the need to drive shareholder returns higher faster.

I asked the CEO how much has changed over the years, since the employees are so stable, and everything about his business seems so rock steady. A few things have change: he has an entirely new customer set; built and moved to a new facility; new plant metal working technology and equipment; and new operating processes several times. But wait – he’s doing it all again! He recently opened another new facility nearby and already that facility is planned to expand.

This metal working shop and its CEO are shining examples of how small (and large, for that matter) business leaders can be very successful in the face of major challenges. As I listened to the CEO tell his story, four key principles emerged:

1. Develop a long range plan and declare it to your employees. A clear mission and purpose communicated plainly with every employee on the direction of the company empowers them all to reach for the same dream. Stay abreast of new developments in the industry, with customers, and with suppliers. Proactively build changes into your business. Your long range plan needs to be updated each year and refreshed. Keep your eyes on the horizon.
2. Live and work and lead by a clear set of values or principles that set a good example for your employees. This will guide their behavior as well. Communicate regularly in both formal and informal ways to maintain a pulse and develop trusted relationships with employees.
3. Maintain financial discipline. Determine the optimal operating model for your business. Relentlessly focus on ensuring every function of the business operates within those parameters. Maintain careful control over spending, debt and investments to expand and grow your business. Cash flow is like grease.
4. Operate with quality. From the start, the CEO recognized there was a better way to run a metal shop. His focus on continuous improvement is as intense today as it was in the beginning. His shop is ISO 9000 certified, and he continually examines new technologies, supplier relationships, workflow processes, customer operations and integration, and employee productivity.

“The key to the ability to change is a changeless sense of who you are, what you are about and what you value”, Stephen R. Covey

What is the CEO’s dream for this business? In a very typical altruistic fashion, he replied: “The business dream has already happened. I’m doing this for them”. Who is “them”, you ask? His family and his employees, and sometimes it may be difficult to tell the difference. He talks about either with equal pride and respect. His primary concern is to provide long term prosperity for “them”. That caring attitude, along with the instinctive leadership factors discussed above, are the key ingredients that enabled this CEO to create and maintain this impressive example of a successful small business with a big heart.