Lisa Ryan: Hey, it's Lisa Ryan, and welcome to the Manufacturers' Network podcast. I'm excited to introduce our guests today, Teresa Lindsey.
Teresa is the CEO of Channel Products, a privately held Cleveland-based manufacturer of components systems and technologies for the gas appliance industry and beyond. Recently she's launched two new divisions of Channel, Spotted Yak, an engineering design firm, and Haute Door Life, an online retail entity, offering high-end curated outdoor living products. Channel has manufacturing facilities in both United States and China and a distribution Center in Europe.
Under her leadership, the company's revenue has grown by over 100%; profitability has increased by over 1,000% the overall employee base has tripled. She has built a culture based on high levels of individual and corporate performance and charitable service. Teresa, welcome to the show.
Teresa Lindsey: Thank you for having me, Lisa.
Lisa Ryan: Well, that is quite a background. I'm so excited to hear about your journey regarding how you got to where you're at. We're going to talk about the culture you created. Please share with us a little bit about your background.
Teresa Lindsey: Thank you so much. I had a different life, a unique life. Some might say somewhat disadvantaged by comparison to others. I grew up in a world that I didn't have an emphasis on career or education. I had to navigate my way through all of that into adulthood and took several different paths. There are many splits in the road in that journey, but I finally ended up manufacturing several years ago.
I was going from General Motors into Haute corporation, a publicly held friction manufacturer. Then, after that, with the private equity firm who owned Haute and who owns Channel.
Through that ended up at Channel, and the way it got here is unique. We purchased Channel; I was with the private equity firm. We purchased the company, and I came in for about six months to help them operationally. Let's see how we can improve things; let's improve morale. Let's dig into the meat of the company. We felt like it had good bones. Let's see what we can accomplish.
During that time, we discovered that because it was a local company, we were busy on due diligence with several other companies. We missed some things, and so it ended up being not exactly what we thought we were getting when we purchased it. Let me say it that way. What ended up happening was an executive decision made by the private equity firm, the ownership, that they would replace the President. I was in that meeting sitting there with the owners, and I just felt it well up inside of me, and I just said, give it to me, I can do it. I can run this. I can fix it, and I can make that happen.
That was nine-plus years ago. They took a chance on me, and they gave me a shot. They had no reason to do that or to believe that I could do anything I was saying that I could do. But they did. They believed in me, and here we are today. So that's my journey here to Channel Products.
It's been a fun ride with many intricacies to it, a lot to overcome, and a lot to learn, as you can imagine. Many moments were growing moments for me, first times. Here we are. It's been fun, and I'm grateful I surrounded myself with people far better than me. That facilitated the climb.
Lisa Ryan: When you were looking at the first days of Channel nine years ago, you don't have to go into the details as far as what you thought you were getting but didn't. Share with us the journey as far as the culture, the way it was, and some of the things that you saw as an outsider coming in that oh I can fix that.
What happened with the employees? How did you finally get them to buy in - because we know this whole process takes time. It doesn't happen overnight. How did you take it from day one - brand spanking new off the street - to what you've created?
Teresa Lindsey: I would say that that we're still on the journey. Culture is an ever-evolving thing. The word culture is thrown around so lightly. These days, everybody uses it. We use it all the time. To me, there's so much more than the buzzword culture that goes on in an organization.
Unfortunately, when I first stepped in, it was a culture of fear and intimidation—lots of silos and a lot of breakdowns. I don't want to say infighting is strong, but dissension if you will. It was it was difficult. The culture mirrored the leadership, and the business mirrored all of that. It was walking into a great challenge as well as a tremendous opportunity. There was no place to go but up. To heal and to restore, we started to put into place concrete things.
The first thing I did was I stepped in, and I had scheduled a meeting with every employee, all of them. I called it "school, the Pres," and I sat down with each individual. I had a list of five questions at the time. I asked them all the same questions. I took a few minutes to get to know them personally -tell me about your life, your family, where do you come from? Then I asked them very specific questions.
One of them was, "We snap a finger, and you're me, you're now the President of Channel Products. What's the very first thing you change. What's the first thing that you think would have the greatest impact and make a difference here. What are you afraid of?" Having those conversations started to lay the groundwork for some much-needed change.
From there went to work, facilitating several different things, one of the early things that I did was 360-degree peer reviews. I did them a bit differently. Rather than doing a survey, having people fill out opinions, and all of that, I listed every employee's name and put an ABC D or F next to their name and then yes or no. I handed that list out to every employee, and I said I want you to go through, and we had in a team meeting defined all of the attributes of an A player. I made sure that it was their definition, not mine. What is your definition?
Here's what's interesting about culture back then. Everybody was listing A player attributes because it was almost like a finger-pointing exercise. "Communication is an A player," while they're looking over here at Sally, who is not good at communication. It was almost like that.
Everybody was just frustrated. We defined 34-36 attributes. Then I rolled out the 360-degree review. It was for them to check to go down each name, are they in A player B, C D or F and then yes or no. If you started your own company today, would you hire them? It was very simple, very clean. There was a small comments section that you couldn't offer opinion or thoughts or complain, but what you could do is, if you mark them anything less than a player B or below, you could list up to three of those attributes that we had defined as an opportunity for them to work on. So no chance to shred somebody. I don't hear you're complaining but let's dig in.
I took the results for each individual and put their name down A, B, C D E, F, yes or no, and then just put a number, and you got seven a's 20 B's, 3 C's - type of thing. As it stands, only two people would hire you, and the rest would not. I put those in an envelope, sealed them, and pass them out at the next meeting, which we at the time called one team meetings, now they're called Channel chats, and pass them out. Then the real facilitation began. As you can imagine, as people open those envelopes and pulled that out, they saw that they're sitting in a room full of peers and all those peers had opinions about how they were not necessarily an A player. There were only just a couple of people who were viewed as being very strong A players.
That was a starting point. Then it was about facilitating. Okay, we are going to create a standard high in the company for performance. Today, we make it very difficult to get into our company - intentionally, it's by design. We're going to set the standard, really, really high, and then we're going to watch the fallout. Some people are going to make it. Some people aren't. For those of you who aren't going to make it, I'm going to help you transition into something that's an excellent fit for you. We're going to do this together because I care about you, and I want the best for you and your families. But this just might not be the right place for you going forward.
That was the beginning of it all. Since then, we've implemented a number of powerful cultural things that we do and maintain That have evolved over the years into a very mature, very rich, and robust culture.
Lisa Ryan: And for the people who had the three things that made them, not an A, was there some recourse? Did you offer them some training, some guidance support? I'm assuming that that meeting was probably filled with a lot of shock and hurt and all the other emotions that go along with that. When you're thinking you are "all that in a bag of chips," and you find out, well, maybe not.
Teresa Lindsey: I will say that I had a revolving door after that. People in tears, people angry. Other people took a position of indifference, "whatever, I don't care." Because they couldn't handle the results, the only person who saw the results were the staff members who had a specific group of people reported to them. They didn't get to see everybody's results. If they had, say ten direct reports, they got the results of those ten direct reports to help coach and mentor them through that process and help them develop the skills where the gaps were.
Lisa Ryan: It sounds like again, I'm going back to having that first conversation right off the bat before you even build that level of trust to have that in-depth conversation, so what was that process like? They were coming from command, control, and fearful environment. Here's this new person coming in - what's going to happen? What were some of the steps that you took to build that trust and to be able to have those difficult conversations?
Teresa Lindsey: One of my very first meetings with them when the ownership introduced me to the workforce, I said to them, look, there's only one thing that matters here, and that's trust. I am going to trust you to show up every single day and give 120% of yourselves. That's my expectation. I'm going to trust you to show up here and give everything you have to be loyal, supportive of our future to our growth to their culture and what we have going on.
In return, you have to trust me to make the very best decisions for you and this company. Some of it's going to feel personal but it's not. This is about us building a company, which we're all here to do. Everybody collects a paycheck here to do just that. It's about us building a company, but the way we're going to build the company is by building a culture. I was very clear with them that the only way to get to where we were going was that we had to blow up the culture and then reassemble it piece by piece.
In those initial three months, I talked to them a lot about vulnerability. This is going to hurt. We're going to be vulnerable with one another. I was very vulnerable with them. I was also very transparent with them. It's one of my key beliefs as a leader. I believe in leading people in the managing process. We never manage people here. I don't ever let my team say all I manage them, or that's not true. We lead. Nobody wants to be managed. They want to be lead. We lead people and manage the process.
The second element to that was stripped down vulnerability to rebuild that trust and so much so that. I put myself out there a lot of times and allowed for open comments and feedback on me. I would intentionally do that, so they could see me being very vulnerable. I believe in transparency.
In my years of leadership here at Channel, I am hyper transparent with the people here. The only thing we don't share our people's salaries. We share everything else - we don't break HIPAA laws, but I mean, we share everything else. Whether it's the company's performance or making a tough decision like building a facility in China, I knew that I would have to change my workforce here as a result of that and downsize.
I started telling them six months in advance. I started giving them a heads up – "Look, we're going to keep this many people, and I want all of you here. I need you to show me that you want to be here." Here are the requirements here the standards for that. This is how we're going to make decisions about who stays and who does not. This is not personal. It's business. I love all of you as if it is personal.
We're going to walk through this together. I met with them more than once a month—every three weeks. I met with the entire workforce, reminding them, this is what we're doing. This is the decision we're making.
The interesting thing about that is when it came time to sit down and have those one-on-one meetings with people to let them know who was coming with us to our new headquarters - because simultaneously, we were building a new headquarters - and who was coming to the new headquarters, who would no longer be joining us on our journey as a company.
We brought in a firm to help us, transition folks. We gave them all the support in the world, the softest landing you can imagine. We gave them a heads up 60 to 90 days in advance. We had those meetings 60 to 90 days in advance of them having to have a replacement in a job.
The firm we worked with actually sat me down afterward and said, "we've been doing this for over 30 years. Never in our history have we had people who have just been told they were exiting the company say through tears, I will miss Teresa and this company. This is the best thing that's ever happened to me. I'm so sad I'm not going forward with them, but I don't blame her. I could have done more. I should have done more."
When you talk about transparency and culture, we have a very low churn rate on less than 2-3% of our people leave independently. If we're exiting someone, it's a different story. Most people come, and they plant themselves. It's for reasons, just like that, and that blowing up of the culture and rebuilding it is what has made us what we are.
Lisa Ryan: So what's your favorite part of your culture, right now, out of all the good things that you've done.
Teresa Lindsey: It's hard for me to narrow it down because there's so much that I love about Channel Products, our people, and who we are. I would say that everybody here is excited and focus and loyal about being a part of something bigger than themselves. That's important to me, and it extends throughout our organization. It permeates in many different ways, and it manifests itself in a lot of different ways in our culture. We go above and beyond for employees.
We do unique things. We are a unique culture. We have all the normal stuff - a game room and a gym in our building. We're unique in the way we approach our people. They have the option to work four 10s and take Fridays off. We give them paydays off to volunteer every year. We have a program where they all year long get chips poker chips in exchange for swag and gift certificates and tickets and airlines stuff. We have a lot of different events throughout the year. We do charitable things throughout the year.
Our people appreciate all of that, but they're fiercely loyal to just the company's vision and making it successful. We support people on the back end. We've had many people here who have been diagnosed with, unfortunately, life-threatening illnesses that happen when you have many people. I believe we reap what we sow as an organization.
I had one associate who did not show up to work for over a year because he struggled with cancer and unfortunately passed away. I never took him off of our payroll. I kept him on our payroll to continue to get benefits to continue to take care of him, even though he was not contributing from an actual business standpoint.
We've done that a number of times here for folks. I believe that when you're good to people, and it goes beyond, "we had a party for them and gave them pizza." When you're genuinely good to people and they show up, and they see those examples, and they show up every single day, knowing wow if I were in that situation, this is how they would treat me. This is what I can expect from Theresa in the organization.
That goes a long way to creating loyalty and fostering teamwork and camaraderie and stuff so.
Lisa Ryan: Well, and when you give your employees time off to do volunteer work, what does that look like.
Teresa Lindsey: So we have our Channel cares portion of our organization, and we do some pretty cool philanthropic stuff. COVID obviously, last year was a bit challenging with those things, but we've done things.
One example that I give because everybody loves it and other people have emulated it is that we took the entire company into four teams. We surprised them. They showed up that day, and we said, surprise, this is what we're doing today. We sent them out on limo buses. Each team had a limo bus, and $250, we bought them matching T-shirts for their teams and everything it was a competition for Channel chips. I mentioned our elevate program with the Channel chips.
Employees had to go out into the surrounding community. They had three hours to do as many random acts of kindness that they could do. They just had to figure it out as a team and tell the driver where they wanted to go.
Where do they go, and what are they going to do? And it was the spur-of-the moment. There are categories like who can do the most random acts of kindness? Who does the coolest, most unique thing? Who can bring back the most money? Who can just do genuine random acts of kindness without spending money? We had all these categories for winning, and that day they went out and did over in three hours.
We did over 100 random acts of kindness - everything from coloring books and crayons to the hospital's children's unit. They took stuff to the fire department and the police department. They took Gatorade to construction workers. They stopped and paid for gas. They went to a drugstore, found a woman standing in line, and paid for her prescription. They had to take a picture of everything they did, verify, and text it back to us while they were out doing this. We were keeping trackback at the home base. One team took a picture around a woman in a dental chair - they paid her copay that day—so unique things.
That extends over into the volunteer days. We allow our people to volunteer any place they want. There is a form they have to fill out and have signed. It's not a day on the boat. They have to go and give up themselves, but we pay them to do that. A lot of times, they'll get together as a department, or different people in the organization will pull together. We did shut down one entire day, and we paid all of our employees to go and work at the Cleveland food bank.
We do a number of things like that as part of our philanthropic arm. We try to be unique rather than just cutting a check. I feel like anybody can do that. We try to approach it with maybe some more teeth and grit.
Lisa Ryan: Right, so what are some of the things that keep you up at night.
Teresa Lindsey: Thinking of how to leverage this wave that we're on as a company. I almost feel guilty saying this amid the challenges of a...