Michael Erath recounts taking over his family's hardwood veneer manufacturing business, growing it substantially, then discovering in 2008 that his business partner had committed bank fraud and embezzled funds. The fraud led to prosecutions and the collapse of both businesses; Erath restarted in 2010, adopted and adapted business operating systems (EOS/Traction, Rockefeller habits, topgrading), and transitioned by the mid-2010s into coaching and building his own outcomes-based business operating approach.
Chapters
I grew up in a family manufacturing business back on the East Coast. We manufactured hardwood veneer for the furniture industry, kitchen cabinet companies. And one of our challenges, I took the business over in my mid-20s, and one of our challenges was sourcing raw material. And so through my journey as the CEO of the company, I took us through a vertical integration, and I brought in a partner, and we created a subsidiary business where his background was in timber merchandising. And so to expand our ability to source raw materials, we would buy standing timber. We would manage that. We would buy larger parcels of hardwood logs, we would take the veneer logs we wanted, and we. And he would merchandise everything else. So the business worked really well. We grew from about 8 to 45 million, had about 200 employees, and he and I became great friends. We vacationed together. I was his son's godfather. And in 2008, when the housing market started to collapse, I found out he had been committing bank fraud and embezzling. So he had embezzled over half a million dollars in 18 months. And as a result of the fraud that he was committing, both of the entities banked with the same lender. So I had the pleasure of one specific day going to the. The bank that we dealt with and also going to the U.S. attorney's office with everything we had discovered. So it took about four years. He ended up being prosecuted on two felonies, served two years in federal prison. But it caused both businesses to collapse. So I navigated that outside of bankruptcy and restarted a new business in 2010. And it was going through that that I came across the EOS system, the book Traction, and I started self implementing that. But through my prior career, I had also brought in tools from top grading, from. From Rockefeller habits and a number of different sources. And so where I felt like there was a better tool or approach to attack the same concept, I would make some substitutions and really customize the system to fit my company and what I needed. And it worked really well for us. But in 2015, one of my colleagues in Columbus, Ohio, where we were at the time, asked if I could help his leadership team implement the same system. And I did. When I started doing that work, I just. I fell in love with. With being on that side of the table and being more of a coach and mentor and a guide. And I really kind of looked at it at the time. I was in my mid-40s, and I kind of looked at that as almost a halftime of my life. And I don't know if you're familiar with the book Halftime by Bob Buford. But it really resonated with me and I looked at that as an opportunity to take everything that the first half of my life had given me and share it with others and in doing so, try to give it all back. And so that's where I started on this journey as a business guide and a coach. Broke away from EOS in 2020 and started working on building out my own approach that was much more outcomes based and about the client and their needs versus a one size fits all approach to a business operating system.
