We were in Dallas, attending the Vistage International Conference. The ballroom was packed with 1,100 CEOs and Vistage Chairs from across the country and around the world. It’s exciting to be around successful business leaders, anticipating that with your next handshake you’ll meet someone whose story will be one you can’t forget. That’s when I met Dan Mollura, a second-generation leader of a family business, Vinyl Technology, from Southern California. They design and manufacture an array of vinyl and plastic products for customers including the Army, Air Force, Defense Department, and NASA. He’d realized over 300% growth ($8M to over $30M) in the 7 years since taking over from his father. That’s amazing. But that’s not what got my attention. He said the reason for his success was that he was more conservative, more analytical, than his entrepreneurial Dad. Wow. I had to learn more.
Breaking Up Before Breaking Out
Dad was an immigrant from Argentina. He had been a pioneer in the waterbed business until the industry softened; then he’d started Vinyl Tech. With several sons, Dad had his eyes on Dan and began grooming him as his potential successor. But Dad was not ready to let go, and a falling-out resulted in Dan quitting, leaving the family business to pursue real estate. Eventually, Dad recognized he needed Dan back in the business and approached the brothers to ask Dan to come back. And he did. This act of rebellion and reconciliation was clearly the moment of truth for their successful transition. It took Dad two more years to fully let go, but the process was underway, and the ground rules understood.
From “Ready. Fire. Aim.” to “Ready, Set, Consider”
Dad was a risk taker, unafraid to make leaps of faith. If an investment in facilities or process technology looked like a good bet, he’d make it. But these actions were not always rewarded with success. In fact, to be more accurate, the business swung between viable and insolvent more than once. Having seen the swings in the business, actually being inside the business and experiencing the trials, Dan took a different approach. When faced with opportunities to invest in the business, he’d go beyond “doing the homework to satisfy my gut” and would do enough due diligence “to satisfy my brain.” The core investments he made in machinery and automation allowed the business to position itself as an industry leader, and to attract and win large contracts.
Education Doesn’t Stop: Invest in Leadership
Dad was educated as an engineer prior to coming to the USA. Dan completed his undergrad work in small business management, and then received an MBA. Then two years ago his attorney suggested, “You need to join Vistage.” While Dan felt well equipped to manage, he believed he needed leadership training to be an effective president. With initial reluctance, both of his brothers eventually joined Vistage ‘key man’ groups. Dan says these investments have had phenomenal impact on their growth. One of the most powerful actions was their creation of a 5-year strategic plan. This plan is guiding their current decision making as they move the company towards a well-defined future picture.
Family Business Advice: Communicate
What advice does Dan have for other family businesses? Start with communicating. It’s easy to begin a course of succession without actually laying it out. But until the details of roles and timing have been discussed (let alone documented), misaligned assumptions on all parties will only put the business – as well as family relationships – into jeopardy.
Still, it’s not unusual for a family business to enjoy success as it’s passed from one generation to the next. But what’s unusual in Vinyl Tech’s case is how significantly growth was accelerated. And that it seemingly required the succeeding son to step away in order to get his father’s attention. At Chief Outsiders, we promote the notion that the CEO is the #1 Marketer in any business. In this case, Dan’s thoughtful planning, due diligence, and use of outside advice made all the difference in accelerating growth and positioning Vinyl Technology, Inc. for another generation of even greater success.