My introduction to Bill Canady was through our work for a multi-billion dollar privately held manufacturing company in suburban Cleveland. In my time there, I developed marketing and corporate communications content for internal and external audiences and played a role in supporting executive communication.
Because Bill was replacing a long-serving chief executive, it was my impression that he was brought in, at least in part, to be a change agent. To evaluate everything based on the owner’s long-term goals, formulate a vision, and lead the leaders and thousands of associates to make the company more competitive. To enable more growth.
In our short time apart since then, Bill helped the current company he leads, Columbus-based Ohio Transmission Corporation, or OTC, focus on what matters most. Through his work there—helping OTC increase revenues from about $700 million to over $1 billion dollars—he has further tested his unique approach to leadership, business operations, and financial turnarounds, based on the Pareto Principle—a power law distribution or universality known to many of us as the 80/20 rule.
Bill calls his approach to business transformation the Profitable Growth Operating System (PGOS for short). PGOS underpinned his approach to change and growth at OTC and it is spelled out in compelling detail in his forthcoming book, The 80/20 CEO: Take Command of Your Business in 100 Days.
We spoke recently after I had the chance to dig into the content of his book, available everywhere late first quarter 2024. Reading the first 100 pages or so of his near-final draft, I was struck by Bill’s personal history growing up in rural North Carolina and his reverence for world history. The book is filled with highly relatable lessons we can glean from thought leaders who made their impact long before us.
I also spotted a similarity between communicators and CEOs (at least this one) that made me smile: Bill knows the value of asking questions. By my read, doing so is central to the success of anyone working toward newfound success in those first 100 days he prescribes in the book and as part of his PGOS.
Who do you expect could most benefit from learning and applying your Profitable Growth Operating System (PGOS)? Describe the types of people and types of companies where PGOS is likely to work best.
“When I look at it, focusing on your most profitable customers and most profitable products, anyone could benefit from that. But the model was really designed for middle market companies—companies that go from about $10 million to $2 billion in revenues. I would say the sweet spot is something around $100 million in annual revenue up to about $1 billion.
Others can benefit from it, but I find companies that are over $1 billion typically already have a model worked out, and companies under $100 million sometimes will not have the resources (people) to go do it right.
It's not really a model—in the way it’s laid out—for an individual entrepreneur. It's really designed to take a business and go after it, and today the companies that are most aligned towards that are private equity.
Private equity firms will take a company and get it running better—organically make it so that it starts growing. They’ll add companies on top of it. They’ll do acquisitions to go from being $50 million, $75 million, or $100 million. They’ll wind up having a very large company. It’s somewhat disjointed.
The perfect target for PGOS is a company that has some size and needs to grow. They need to focus on the critical few products and customers. They are the ones that can most quickly adopt it.”
What was your earliest introduction to 80/20 in business and how did PGOS take shape in your mind—was it a drip-drip-drip idea developed through multiple leadership roles, or did it land with clarity after a specific turnaround?
“It’s an interesting history for me. I was working for a large industrial company, a publicly held conglomerate, and our particular company had shown that we could grow profitably. We could grow our profit, but we were not growing organically.
One of our board members was the former leader of ITW (Illinois Tool Works, Inc.) and ITW was the first company I had ever known of who had used this to grow their business—to properly grow it. I think they were $15 to $18 billion in revenue. They used this model to grow all their businesses and they were doing extraordinarily well.
When we got a new CEO (at the conglomerate), he was looking for an organic process to grow the business and one recommendation he heard was to look at 80/20. So, myself and 11 other folks were picked from within the company to build out the operating model at the time, and it didn't even have a name on it. The heart of it was what skill sets we were going to use. We had lean and talent and all that and we added 80/20 to it.
At the end of the day, we had this tool set that consisted of everything: how to treat people, how to grow teams, how to use 80/20, M&A, and so forth. We put that together, presented it to the CEO, and he loved it.
Now the interesting thing was the first couple of years, we really didn't accomplish anything. We brought in a third-party consultant with ex-ITW people and they did a really nice job getting it in for us. I would say the results were just OK and as I've looked back, that became one of my key learning lessons. The reason that we didn't have the results that we felt we should have had was we were relying on a third-party consultant to do the work for us.
Doing the work to us versus us owning it ourselves.
As soon as we made that switch, owning it ourselves with the consultants as coaches guiding us, the company really took off. So that origin of 80/20 for me, it was my time with the conglomerate coming from ITW. And again, the consultants did a good job, but it was our ownership of the process that made the difference.”
THE POWER OF ASKING QUESTIONS
In reading the book and digging into Bill’s PGOS process, particularly those pivotal first 10 days of the 100 days to change, I noticed an admirable trait: he asks a lot of questions. He looks for facts and insights with the effectiveness of an old-school reporter.
In chapter three he noted: “I know that I can make a good beginning in analyzing any business by asking pertinent questions about the past.”
Where does your curiosity come from—are you hard-wired to ask great questions or is that something you developed over time? Getting answers certainly helps you think and analyze situations, right?
“You know, it's so funny. I think I've just failed a whole lot, right? So, I'm a naturally curious person to begin with, but I think one of my core traits is I'm a continuous learner and if all I ever do is just do the talking myself, I don't learn anything.
My biggest insights have come from listening to other people who have knowledge or experience that I don't have. So, first it's respect. Just listening to other people and seeking to understand so that I see where they're coming from versus just wanting to get my own point out.
I'm as guilty as anyone else, though, about talking too much sometimes.
But I have found, without question, the more I can get someone to share with me, the more buy-in they have, the more we are true partners. Then we absolutely understand what's happening and we'll go together. Many hands make light work and I find that asking questions gives people an opportunity to not only be heard, but also understood, and that is super important.”
Why is it so important for leaders to ask questions and what sorts of questions are most productive in the application of your PGOS approach?
“There are a couple points around asking questions. The first is that you have to be open to the answers. In my experience, people always have great ideas that the leader hasn’t necessarily thought of. They have experience that is vastly different than what the leader has. The second point, on asking questions, is that it allows you to get buy-in. It solidifies within the team’s mind what is going to happen.
But the interesting thing is that you have to be careful about how you respond to the input. You want people to feel safe and if every time they tell you something, you just tell them they’re wrong or not thinking about it right, or whatever the case may be, it will actually shut people down. It is like shooting the messenger.
Another thing to remember is that you don’t actually have to agree with them. There is no obligation when someone has said it has to be this way. It’s important that you don’t shut them down in the process. Let them be heard. Let them go through it, and if it's something that you don't agree with, sometimes you just need to set that aside and come back to it at a different time.
Seek to understand. Create a safe environment. Respond to the questions, even the difficult ones. Right in the moment if you can.”
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About the Author: Dave Schuellerman is a professional writer and communication consultant with 30 years of experience helping B2B and B2C companies inform and influence targeted audiences. Learn more about his background, perspective, and available services at www.FENDcommunication.com/services. Ready to engage on a project? Reach him directly at schuellerman@gmail.com.
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