Episode 122: Jeremy Lott with SanMar, A Family Business

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A picture on SanMar's very first catalog cover with a 2-year-old pedaling a big wheel proves it. Jeremy Lott has worked at SanMar for nearly his entire life. Today, Jeremy is an owner and president of the family-owned business. He works in partnership with his father Marty and his brother Jordan. Over the years, he learned the business from the inside out. From pulling orders to purchasing. SanMar is one of the most respected names in the industry, and they've earned this respect through a careful and conscientious focus on the customer. In today's episode, Mark Graham, Commonsku's co-founder and chief platform officer, chats with Jeremy about the ins and outs of running a successful family business. From succession planning to creating a board, it's a wide-ranging discussion. And even if you're not in a family-owned business, you'll appreciate Jeremy's insight on topics from private equity to how to manage your time as you scale and how a non-family business can influence their culture with family values. Hi friends, I'm Bobby LeHew, the Chief Content Officer at Commonsku, and I hope to see you at SKUCON in January. Registration just opened for the industries conference for innovators, explorers, and dreamers in the promotional products industry. It's a great conference to take your leadership team to and kick off your year. SKUCON sells out every year, so I recommend you get your tickets early. Visit skucon.com for more information. This episode is brought to you by CommonSkew, the platform that powers your connected workflow, enabling you to process more orders and dramatically grow your sales. Begin your free trial now at commonskew.com. And now here's Mark's conversation with Jeremy Lott from SanMar.

And it's such a great pleasure to have Jeremy Lott back onto the SkewCast. Jeremy, welcome, sir.

Thank you, Mark. It's great to be here.

All right, so let's jump right into it. Jeremy, can you give me, to the extent it's possible, a 60-second overview of how SanMar got its start 50 years ago?

Yeah, so my, my dad started the company in 1971, but I think when we think about kind of the modern SanMar, I'd fast forward a few years because he was screen printing And he had a bad experience with a company that at the time was the largest wholesaler in America. And he came home and he was upset about it. And my mom said to him, "Look, if they're the best, if they're the biggest, why don't you go compete with them?" And he called all the other screen printers in Seattle and said he was getting out of the printing business. In fact, he gave them his customer list. He said, "I'm not going to compete with you. I'm going to become a supplier." he moved into that business. So it was really an experience he had and maybe a bad experience and the fact that my mom told him if they were the best that he should go compete with them. That was probably in the mid-'70s.

Right. Isn't it always amazing you think about great businesses, how they get their start when the founder scratches an itch that's out there and they see something out in the market that is not quite right and they set about to go and correct that, that incorrect situation. So I love that for sure.

I mean, he didn't have kind of the vision of what CMR would become today. That was never kind of in place at the beginning. It was really a, you know, here's an opportunity and here's, yeah, here's something in the market that I think I could do well. I think I could do it better than the people who were there. And he'll tell you he had two values that from the beginning was, I want to tell the truth and I want to be nice. And if I could do that, I could be successful in this business. And, and that, and he really started with, with kind of those two ideas and a dollar. And here we are, you know, 40-some years later.

Yeah, that's amazing. So the thrust of our conversation today, Jeremy, is about the family business model. Can you tell me why the family business model was important to your parents when they were starting SanMar in 1971?

Yeah, so maybe I'll back up a minute because I went to business school at Kellogg or at Northwestern Chicago.. And I got to know a guy in there by the name of John Ward. John is like the dean of studying family businesses from an academic standpoint. One of the things that he told me was that until maybe 20 years ago, business schools didn't study family businesses. They almost looked down on them as kind of a capital model. And John started doing research and he started thinking, you know what, there's actually some really successful family businesses or family-controlled firms, even some really large public companies, think Ford or Walmart. And in fact, outperform a lot of their peers. Why is that? And started kind of really studying family business as a model. And so when I went to Kellogg, I got to know John really well and got really excited about family business as a structure and the potential of it because I was coming into my family business. And so I'm a fan of family businesses. I'm a cheerleader for them as a model because I think they can be really powerful. I think for my parents, when they started the business, it's all they really knew. They came out of family businesses. My mom, her family ran a small grocer in Seattle. Everybody worked in the business. It was the family who was there all day. It was just, it was part of the family. Similarly, my dad, my grandfather grew up in Annapolis, Maryland, working in his parents' kind of grocery. So I think that family history of growing up working in a small business where, where kids, aunts, uncles, relatives, everybody kind of pitches in as part of the business was what their experience was. And so, you know, when you think about SanMar in the '70s, you're thinking of a really small business. And so that family piece was there from the beginning because, you know, your kids are free labor. My uncle, my mom's brother-in-law, programmed our first computer system on the side because he worked at Boeing as a programmer and knew how to make computers work. I mean, it was just part of it. So what I came to study in business school with John Ward was this totally different model than I think the small family grocer that my parents came from. But that was the model I think they knew when my dad started this company in 1971. So, so part of it was there, I think, from the very beginning, because that's how they grew up.

What was it like growing up as a young kid in your household? You know, you've got parents that started this business. I'm sure that they brought business home with them and. It was around the kitchen table as you were doing your homework and having your dinner. What was that like? Can you give me some color into maybe some of the conversations that might have happened when you were a 12-year-old?

Yeah. Yeah. So I think it was, like I said before, you have kids, they're free labor. So we would go on weekends as kids and we'd stuff invoices into envelopes. My parents would talk about the business at the dinner table. We didn't really talk about sports or politics. That's not we talked about the business. And then I think my dad engaged me in the business in a really great way early on. So this is in like the '80s, we would take these fishing trips, we were on allocation, you could get everything you could sell, but there was a shortage of t-shirts in the world. And so we would take all of our vendors, Hanes, Fruit of the Loom, and Panel Knitting, and Oneida, and all these companies that don't exist anymore. And we would take them up to Canada, and we'd stay at these fishing lodges, and we'd do these fishing trips. And I would come as a 12-year-old, and all these guys, they taught me how to bartend. And I would make Bloody Marys for them every morning before they would go out fishing. And, and I thought it was the coolest thing ever. Then I'd go fishing with these guys and come back, and, you know, they would play cards, and I would make them more drinks at night, and, you know, and Bloody Marys the next morning. And it was a great experience. I would— at 13 or 14, my dad took me to a trade shows. I'd go to trade shows with him. I would hand out catalogs to people as they walked by. If you think about it, as a 13-year-old, there was a couple of things that were really cool. One, I got to miss school for a few days, so that was a win. Two, I got to go on a trip with my dad, which was really cool. As a 13-year-old, you're capable of going and handing out catalogs to people who walk by, but for me, it engaged me in the business. Gave me a real affinity for the business. And so I've been around it kind of my whole life. And it's an interesting thing. I mentioned John Ward, the Kellogg professor. I heard him talk one time and he was talking about, you know, one of the things people think in family businesses is of all the people in the world, why is the founder's kid the right one to take, you know, to lead the business into the next year? How is that possible? And I think the interesting thing is that you get this amazing— if it's done smart— this amazing training to be the right person that nobody else has because you were there in 1984 bartending for these guys and you're listening and you're paying attention. And so you have this amazing understanding of the business that frankly it's really hard to get somewhere else. And so that kitchen table conversation for your entire childhood, those trade show experiences as a kid, those things where you got your kids involved, That's what makes the founder's son or daughter often the right person to lead the business into the next generation. And that's really unique to family businesses.

And did you, did you know at an early age that this was the business you were going to get into? Or did you, as a 10-year-old, say you want to be an investment banker or you want to be a doctor? Or was it just, were you just so taken by your dad's experience in the business that you that you had your heart set on following his footsteps?

Yeah, you know, I used to like blow out birthday candles and like wish to be the president of Sandmarc. Like, I, I know, I mean, like, I always, I always wanted to do that, you know, from an early age, because I think some of these things were— I thought there was so much affinity there and so much, it was just part of our family. I think when I got older, I wanted to— it was important to me to work outside business for a few years. It was important to me to know that I could be successful independently of my family business on my own. I got to college and everybody was pre-professional in something. They were going to be a lawyer or a doctor in business. Again, I was kind of taken by investment banking. It sounded really kind of a sexy job. It's a terrible job. You learn a lot, but it's a terrible job. I'm really glad I did that. I was there for 3 years and then 2001 happened, the tech bubble crashed, my whole office got laid off, I got fired, which was a great— not great, but a good life experience. And then I went to business school, which is what every out-of-work investment banker did in 2001. And then came back and joined the family business at the right time, I think, for me. So, yeah, it's always something that I wanted to do. Yeah.

Well, I'll say as a side note, Jeremy, you and I share investment banking in common. I didn't know this about you, but I spent not 3 years, but I spent 3 months in investment banking in 1997. And I, like you, hated it. Or I don't know if I'm putting words in your mouth, but I did not like it. I was an investment banking analyst in Toronto, and I got out of it, and I then found my way into the promotional products industry. So, you know, there you go. Lots of parallels between your experience and mine.

But that's the subject of maybe another podcast. Yeah, yeah. No, no, for sure. We'll have to have a beer one night. We can trade war stories. That it's a I stuck it out, but it's a tough gig. It was a good experience, but I wouldn't wish the job on anyone.

Yeah, although I can tell you that when I left that industry, they became a pretty good industry or pretty good end clients for a fledgling Right Sleeve in the early days. All right, good, good. They do buy a lot of t-shirts and golf shirts. So can you tell me about those early years when Marty brought you into the business? And specifically what I'm wondering about here is, was there any awkwardness as you set out to prove yourself? So here you've got Marty Lott. A god at SanMar at this point. And then young Jeremy comes in and Jeremy is being groomed to be the president of the company. Was there awkwardness or maybe relationships or personalities you needed to navigate to prove to the company that you were the real deal as opposed to just being the boss's son?

I think so. So I came into the business and I think there were a couple things. I think certainly everyone knew I was Marty's son. I think everyone actually was rooting for me to be successful and to be there because I think that was important. It gave them stability and consistency. If I was, you know, not successful, it was— there was— it was a different level of kind of risk. And this is a business I want to be in. And, and I— but I didn't kind of start as you know, vice president of the company. I mean, I started in our pricing team, so I was, you know, working with customers, doing special pricing. Frankly, after, you know, 3 years of investment banking and my MBA, you know, it was a— it was not like this lofty, you know, job that I was starting in. And I also think I had— I recognized a couple things early on. One, I knew I needed to prove myself. I needed to work really hard. I needed to work kind of harder than the next person. I needed to be more successful than the other pricing analyst at Sam's Club. I needed to kind of do that. And I also knew that if I did that and earned people's respect, that, that I was going to grow and be successful and, and, and move up. My dad did a really great job, I think, of creating a career path that at every stage he gave me, you know, a little bit— frankly, often a little bit more responsibility than I was quite kind of ready for, but not enough that if I failed, I was going to really, you know, fail in a huge way. Yeah. And, and so he was really great. And then I had a lot of mentors at the company who really did a great job of kind of taking me and saying, hey, part of, you know, it's important to me that Jeremy's successful, kind of grows. And, and my dad certainly part of that, but these were other employees at Sam's, or many of them who'd been here for 20 or 30 years, who years later I was then managing them, but they had really mentored me and managed me, and I'm really thankful that I had those folks. People like Steve Feinstein and Dan Tushar and others who were just really so helpful. Marty Rask is helpful to me as I kind of grew my career at SanMar. That we started, we worked with a family business consultant actually from right when the time I joined the business. And he said to my dad, so this is, you know, now, I don't know, 17 years ago. And he said to my dad, we're going to start doing succession planning. And my dad said, well, I'm not going to, I'm not looking to retire anytime soon. The guy said, that's exactly why we're going to do it now. And our goal was that nobody noticed. It was not going to be this huge event, and Marty retired and Jeremy took over. It was this really slow process over a lot of years so that customers, vendors, employees— it felt a really natural kind of evolution to them. Yeah. And, and I think we've done a good job of that over the last couple of years. But, but absolutely, I, I had to— I certainly had to prove myself to people who were skeptical, but I was really fortunate to have a lot of people who were rooting for me and people who were willing to put time in to kind of help mentor me and, and build my kind of skills as a leader.

Well, and I'm, I'm reflecting on, on this and trying to see if there's a way to package some, some top, top pieces of advice. And you've, you've got a ton of advice here, but what, what seems to me from an outside perspective is that Marty had created an environment of, of respect in the organization, had brought you in and exposed you to the business at a very young age had also created an environment where you were coming in at a, as you say, you weren't coming in as the president, you were coming in in a mid-level role where you were learning from other people that, to be frank, had a lot more experience than you. And had you proved to be insufferable or incompetent in that role, not suggesting you were at all, but in a hypothetical way, that may have been the end of your SanMar career. But the fact that you were able to create great relationships, the fact that you were able to learn on the job, the fact that you were able to grow and mature and also surround yourself with mentors, to me seems like the very best way to bring a second-generation member into a business. Because I would imagine that you've got— you mentioned people like Dan Touchard that have been at the company for a long time. They're more of Marty's vintage. There's the potential that some of these established players could feel threatened. And the fact that that was not the environment that was created, I think speaks a lot to Marty, and I think also speaks a lot to you in terms of how you were able to grow and nurture those relationships and then ultimately get to a very well-deserved position as president, as opposed to just being plucked there, you know, out of thin air.

I think you said it really well. Absolutely. And I think that's the key to kind of that successful, you know, transition. If you don't have those things, it's really hard. I recently had lunch with somebody who's younger than me, but second generation kind of coming into his family business. And my two pieces of advice were be humble and work hard, you know. And I think that if you do that, you know, and this person's really smart, has all the capabilities to be incredibly successful, but if you take that approach where you're going to listen a lot more than you're going to talk, where you're going to learn from the people who have more experience and you work hard, I think you can really be successful. And I have no doubt, you know, he'll be running his family business in, you know, a decade from now. But those are the, I really think those are the key things. Yeah.

Jeremy, can you share any areas of the business where you and your family disagree? And if so, how have you overcome these disagreements to find common ground?

So I think there's a couple things. I think first is, you know, certainly strategy pieces. There's always things my dad and I will, will debate. Should we carry this brand or not? Should we be opening more warehouses, be more aggressive here, lower prices, raise prices? I mean, those are all strategy things that I think we can disagree on over time. I think we have a good, respectful dialogue about those. Sometimes I convince him, sometimes he convinces me. I mean, we, we were pretty good at those kind of strategy decisions. I think the bigger challenging ones are some of these kind of family decisions that are kind of what I'll call more ownership decisions than really management decisions. And we have worked really hard at putting in place kind of a process on how we make kind of some of those decisions. So we, I mentioned we worked with a family business consultant right when I came into the company. He helped us think about, because I have a younger brother who runs a business called Lake Washington Partners, which is our family owns. It's a real estate development and management business. It owns all of Sandmar's real estate and then some investment things we do as a family. He helped us think about kind of that structure and how we would work with my dad to make decisions, the three of us. And that's worked really well over the last 15 years. We have recently engaged a new consultant as we think about the time when my dad is less there and involved to kind of help make some of these decisions. And so we are kind of formalizing some of the governance structures that have been pretty informal at Sandbar. So I'll give you an example. We're recruiting people right now to create a board of directors for Sandbar. We've never had a board before, right? And it's going to be my dad, my brother, and I, and 2 independent directors to start with. It's an advisory board. It's not a fiduciary board. But I'm really looking forward to it. I'm looking forward to it because hopefully we're going to get 2 really smart people that are there to offer kind of great advice. It gives my brother and my dad a real governance role in the business as they are spending less time and becoming less active in kind of the day-to-day management side of it. And so when those decisions that we disagree on come up, we're going to have a better process for how we make those decisions. So we're family, so we disagree on, you know, on everything some days and nothing on others. I mean, we, like any family,. But I think hopefully we've been really good about not letting that historically hamper our ability to make decisions and move the business forward. And I'm really hopeful that with some things we're doing, that that's going to continue into the future.

Right, right. It's so interesting. It would be fascinating, I think, to be a fly on the wall at a big Lott dinner on a Sunday night. You know, all the things that, you know, you're hugging one another over and maybe some areas where you're like, oh, you You're totally wrong about that. But that's family. And I think about the two businesses that I own and operate with Catherine, of course, my wife. And I think about all the things that, well, we're incredibly aligned on all the key things. There's no question there's a healthy amount of debate on some of the maybe smaller tactical things or in terms of how we execute. And while that can be frustrating, I think sometimes in the moment, I think it's incredibly healthy to have those different opinions and different vantage points.

I hear you. Yeah.

So I, I want to shift the conversation to private equity and talk about it in the context of a family business. So one of the key arguments for private equity in our industry is that it provides growth capital. How has Sandmar been able to rapidly expand while still retaining family control over the business?

Yeah, so I think the first thing maybe I would say is I don't know that I— people will say to me, you know, how have you guys grown so big? And the first thing I say is, well, it took us 50 years. So it's not like we opened 3 years ago and, you know, we got to our size really quickly. It was really steady growth over, over a really long period of time. And I think that the biggest reason that we've been able to kind of grow over time is are— my dad has always had the philosophy, and we continue that, that we have reinvested the vast majority of the company's profits into regrowing the business, right? And so that's allowed us a lot of financial kind of flexibility today. You know, when I think about private equity, you know, if I was, uh, if I was going to, you know, go back to— if I was going to sell Sandmar, certainly there would be private equity that would be interested. In buying the business. They would take a business that today sits with no debt. They would put some equity in the business they would buy, and they would borrow a lot of money and put a significant amount of debt onto the business kind of going forward. So when you think about all of the financial kind of flexibility that we have today to grow the business and our ability to kind of reinvest versus if we were private equity owned and we had significant amount of our profits went to servicing that debt, I think our ability to kind of grow is dramatically more as a private family-owned business than as a private equity kind of owned business. So when I, I reject a little bit the idea that, that it gives you more ability to grow, I actually think the opposite. In many cases is true. I also go back to my John Ward kind of stories. When you look at one of the main reasons family businesses over the long term outperform other types of capital structures, that debt load is a big piece of it. It allows us to be more recession-resistant than companies with a significant amount of leverage on them. If you think about kind of— and this is getting technical, but like investors can diversify away risk by having investments in lots of different companies, industries. And because of that, they expect companies that they've invested in, whether they're public companies especially, but even private equity, to take significant risk because they can diversify that risk. When you're privately owned, you really can't do that. You're all in on this one business. And so because of that, sometimes you see family businesses being a little bit more conservative in some of the acquisitions that they might make or the chances that they take because of that. But I, we don't feel constrained at all in kind of growth. In fact, we just, we think we have a significant, you know, financial flexibility to do the things we've wanted to do. We've grown at a pace that I think feels really comfortable for us given our level of risk tolerance and wanting to grow the business in a smart way so that it's here again kind of for future generations.

Right. Well, I think it's a really— I mean, there's no question that what's embedded in your comments there is extremely astute financial management over the years and reinvesting those profits back into the business to give you that leverage and just give you that flexibility is really the word I was looking for. And I think Part of that question, and if I go back to the reason why some businesses will go and bring in private equity or other outside funding, is because they find themselves at a point where there's this inflection point in their business where they have to rapidly expand. So in your case, it could have been building 5 warehouses in 1 year to meet the demand of the business. And even if you had invested your profits responsibly, you may have just found yourself at a point where you just were not able to go build those 5 warehouses because you just didn't have the money. And I think that that's an example of where some people will reach into private equity. And it sounds like you never had that extreme inflection point in the business that required you to go outside beyond what you had been able to keep in the business.

Is that right? I think so. And, you know, when I think about, you know, I'm in, I live in Seattle, so we've got a lot of really innovative technology companies here that early on take on, you know, venture capital. I have a friend who's a founder of a really successful biotech. They just went public 2 weeks ago. You know, they had to take on significant venture funding because they were doing, they were, you know, pre-revenue with huge amounts of research dollars going into, you know, and they're going to solve really complicated diseases because they have this really amazing technology. And so I think, you know, when you have those huge capital needs and you don't have the ability to fund it and you need to get big really fast from a competitive standpoint, and I, and I certainly get it from in that world. And I also get private equity from the standpoint of if I was a, you know, if I owned a company, I didn't have successors that were coming into the business. I didn't have kids that I wanted to leave the company to. I wanted to sell, you know, I wanted to, you know, take chips off the table, so to speak. You know, private equity can be a great answer to that for companies that going public isn't a solution, or there's not a really strong strategic buyer, you know, or you still want to own part of the company and continue to run it, but you want to take part of, you know, money off the table. Private equity can fill that need really well for from kind of that owner standpoint. But again, private equity's goal is to run the business and sell it in a number of years. And that creates, I think, really different decisions.

You shared with me a little while ago this website that you're about to launch called Canvas for Good. And there's this great lead video about the founding of SanMar. And you talk a lot about your grandfather, Manny, in terms of, you know, how he had played a role or his value system had played a role in supporting your parents in starting the business. And then there's a big sequence in the video where you stress how business is personal. And to a cynic, they may say, "Well, what are you talking about? Business is— I get it. That's a buzzword." But I think when you watch that video and knowing you as long as I've known you, Jeremy, it is definitely not a buzzword. Can you talk about why the theme of business is personal is important to you. And then as a second question, how has the theme of business is personal allowed you to turbocharge your growth over the years?

So I think when we think about the business is personal, for us it meant that this was not separate from our personal lives, that we didn't have this kind of wall that said, well, here's my job and here's my family, my friends, my personal life, that at SanMar, at least for our family, that these things were really connected in a deep way, that this business was part of our family, that, and that we cared about it in a really different way. If I get an email from a customer who's upset about something that happened, my first priority is to call that customer back and try and make it right. If I hear from an employee that's disappointed in their experience at Sandmarc, I don't just think about it from the lens of, well, I want everyone, of course, to have a good work experience here, and happy employees are, you know, productive, and that helps us do better. It affects me on a really personal level. We care, I think, very much about our customers, about our employees, about our vendors, people who make our product. I think that level of care has very much been part of our secret for success. And it's not much of a secret, I guess, but I don't mean to suggest that people at other businesses don't care about their business because, of course, that's not true. But I think for us, my dad and I, because it's so personal to us, it is a different level of care. And I do think that's been a really big piece of our success. I was meeting a banker. We were switching banks a few years ago, and I was talking to the guy and I said, We have really like no intellectual property, like we don't own any patents on anything. We don't have any contracts with our customers. They can buy from us today and buy from somebody else tomorrow. I said our product isn't that differentiated. You know, we sell blue polos and white t-shirts and so do 10 other people. And I said, and we're, and you know, we're often more expensive than our competitors, but we've grown to be the largest in this channel. And he goes, okay, so tell me how you've done that because, you know, it sounds like a recipe for total failure. And I said, we are so focused on our customers' experience and on their success and on doing service for our customers. And I said, I truly believe this. And of course, I'm, you know, I drink all the Kool-Aid here at SanMar, but I believe our customers make more money buying from SanMar than our competitors, even if they pay 5 cents more for polo shirt because of that commitment of service level. And I think that comes from a sense of really caring that we have, that we try to permeate throughout the organization, that we really try to have everybody from the person who works in our warehouse pulling the orders to the people taking the phones to every— everyone understanding how important what their job is and what they do. Yeah, we try to treat people really well. And so I think that personal piece goes to our success. We are in a people kind of business. You know, my friend the scientist with the biotech, like, you know, he has this amazing invention. Doesn't mean he doesn't treat people well. He's a great guy, but that's not— I don't have that, you know, invention. I have to go and kind of earn my customer's business every single day by offering amazing service, and we work really, really hard at that.

Yeah, you know, as I hear, as I hear you say that, and it's very clear there's a ton of passion in your voice, and, you know, I, I'm always trying to just I feel like when you say business is personal and the approach one takes, I feel like there's this interesting tightrope that you walk as a founder. On one hand, your motto could be business is personal. I take everything very personally. And that can translate into negative things like micromanagement. It can tunnel vision. It can translate into taking things too personally. So then you harbor a grudge if there's a vendor disagreement or maybe a customer, if you feel they've wronged you, you can harbor a grudge because after all, business is personal. So that's one side of the tightrope. The other side of the tightrope is everything you're describing, which is you take it extremely personally, but you've somehow figured out, again, this is coming from my vantage point as an outsider, you figured out a way to scale that business's personal approach. And I don't mean to be degrading things by throwing things like scale and process into this because that's to some extent the opposite of business's personal, but it really feels like you've done that in such a great way because you've got such a huge company, you've got great systems, you've got a great way to resolve problems. And so I just, it's maybe just more of a comment from me because I feel like you can definitely see how there can be the downside of taking business too personally, but you've clearly navigated that and you've applied that into a force that's allowed you to scale and to touch these tens of thousands of customers that you have with this approach. But there's only one Jeremy Lott. You know, you can't call every customer if they're upset, right? Like there's only so many hours in a day. So I just, I really admire how you've been able to do that. My question, I suppose, would be, how do you feel you've navigated that? And have there been times where you feel that approach has drawn you into a small-minded way of thinking about the business?

I think it's a— that's a really great question. And I think that those things are, are real. And I think there's times that we have crossed over to micromanagement, to taking things that you know, grudge personally and letting that make us make bad, mad decisions, potentially, you know, limiting growth in some cases because of some of those things. Yeah, I, I think those things are all real, and I, and I think that the— like anything in life, I think there's kind of give and takes with a, with a business philosophy. I think we work— I recognize those, and so I try to be thoughtful about it. I would tell you that a few years ago, there was actually a real problem at Sandmarc. Not that people— I was the bottleneck for too many things. And it was, what does Jeremy think, became like too much of a question. And I couldn't make every decision. And I've had to be really— it's hard to do actually for me, but do a better job of empowering people to kind of make those decisions. We've had to add some layers of management, which has been really good because we have some really fantastic people, but it creates— there's this bureaucracy piece of that too that, you know, my dad for years— this again, like one of our secrets of success— people will come up to me all the time and said, you know, your dad came to visit me at my screen print shop in, you know, 1982, and it was really great. When he came. And I could spend, I could spend, you know, 365 days a year on the road visiting customers. I could spend the same time in our DCs. I could spend the same time overseas with vendors and factories, or, you know, at the office here. So how I manage my time, how I share it, I can't do it the same way we did, you know, 20 years ago when the business was smaller. And so I'm really cognizant of that. And so for me It's making sure that those folks that work with me also understand the, the kind of philosophy. I've, I've never really made a bad hire at Sandmarc that was around kind of skill set, that somebody couldn't kind of do the job. My bad hires have been because they weren't that right culture fit. They didn't share those same kind of values. And so making sure that we have really great people who understand kind of those values and that can kind really help me execute so that I don't commit some of those sins that you mentioned, because I think those things are real. And I think we walk that tightrope, but I am absolutely aware of them, which I think helps. And sometimes I go too far and there's times where, I mean, I, like I said, I will, you could have our biggest, you know, you have a room full of 50 Sandmar folks waiting for me to give a speech. But if I got that email from an upset customer, like I prioritize that and that for good or bad, but it's just kind of the way I was, you know, brought up in the business. You know, I go to, I was at the ASI show in Chicago 2 weeks ago. I was there for 2 days on the, on the trade show floor working with customers the whole time. Most of them don't know who I am. I'm just another, you know, rep in the booth. It's that show has all of my competitors are there. The senior management from those companies are there because they're there for the, you know, ASI awards dinner. Most of them don't work the booths at their show. For me, I find a lot of value in talking to small customers and hearing their issues and what they like about products. And I just, I think that's how staying close to them is what's allowed us to make good decisions and what's allowed us to be successful.

Yeah, that's a really interesting observation. And I think you're right. When you're when you're close to the customer, I mean, that's something that's invaluable perspective, that's invaluable feedback that you're going to get, that you're going to be able to bring to your very senior management team. If you're hearing from 4 people in a row, even if they're the smallest one-man-band distributors that are out there, 4 people in a row that say, you know what, SanMar misshipped my t-shirt order of 36 t-shirts, it's just something inconsequential like that. You hear that 3, 4 times in a row, you're the president of the company, you're going to start to see whether there's a trend out there. Is there something that you can take a look at? It's not like you're going to go and pick the next t-shirt order, but you may go and speak to the head of that particular DC and to see whether there's something that you can really dig into. And you're right, if you don't have that exposure, that may reach a junior level or front-end frontline person in your organization. It may never get to you. So I think that's really fascinating that you do that.

It's a huge— you know, I have dozens of management reports that I can look at every day that show me all these different KPIs of our business, whether they're distribution or sales or profitability or, you know, across every metric you can imagine. And they tell a really good story and it's really important that I understand them and look at them. But the richness of When you hear a customer say, "That box came in and the shirts were red and I ordered black and I missed my deadline for delivering to my customer. I lost a customer and here's what it cost me." The impact of that is totally different than when you saw a report that said, "There's 36 boxes were wrong." To me, that speaks to the taking it personal. It's also why then when I get on the phone with the head of the DC and say, What happened here? Why did we ship them red shirts when they ordered black? It's because, listen, you should know that John missed his order and now upset his customer, and that's his livelihood, you know, on the line. It has a different level of impact.

So for me, it's critical. Yeah. I just have one or two more questions for you, Jeremy, and I feel like we could go on all day because this is such a rich conversation. So I know that there's a number of people that are listening to this podcast that are in a family business situation, and for them, they have just received a master masterclass on how to run a successful family business, how to bring a second generation into the business. You've just provided so many amazing tips. But at the same time, there's a number of people that are listening to this that are in more corporate environments that aren't family businesses, that may have brought on private equity, that may have sold their stakes, that may have non-family members that are now running a more corporate environment. How can a non-family business influence their culture with family values??

And is that even possible? I think so. I don't think family business has any sort of lock on values that are important. So, I think that every business, it's important that they, A, articulate what are the things that they really believe in as a business. I think that's more important than ever. And then B, I think it's really important that they communicate that so that everybody in the organization understands what those things are. It's not just— if it's just a sign on the wall when you walk in and you don't talk about it, you might as well just put a pretty picture on the wall. There's not a lot of value there. I'm a fan of storytelling. It's a huge— we think it's the most effective way of communicating kind of what those values are. Tell stories that back up your values. When you have real stories of how you— if service is a value, tell a story about how you, you know, kept the warehouse open late to pick the order to save the customer. You know, if honesty is a value, tell a story about how you, you know, whatever it is, whatever those values that are really core to you, storytelling is really important. And then use those values throughout the organization. We use them for recruiting. We try to screen people who share values. We use them in onboarding. We use them in our ongoing management. I mean, every year when you're doing your reviews with your people, you're kind of mapping people to how they are performing relative to your values. You know, if you're keeping people in your organization who don't share your values, that's saying something to the organization. So, you know, using that in your firing decisions. I mean, we really try to use it. And so I don't think being a family really gives us any sort of advantage there except for maybe that stability kind of over time. But there's a lot of great organizations, public companies, private equity owned that have that stability and those values are really important. So, I mean, I was speaking to any, you know, any company, I would tell them defining and articulating those values and using them is a really critical piece of your success as a company. If you don't mind, I'll tell you one story. In 2012, there was a factory that collapsed in Bangladesh. Yeah. And over 1,000 people kind of were killed. And For me, it was this real inflection point in our business. What do we believe in from a manufacturing standpoint? Because here's our industry, not just, you know, in apparel manufacturing, it can be exploitative, it can be dangerous kind of from an environmental standpoint, and it can be now people are dying and maybe there's unsafe working conditions. And so we really had to think about what are our values and how does it relate to our, you know, kind of global manufacturing. Sourcing. And so we said for us that making a difference, which is one of our core values, not just meant to the communities that we are in all around the country, but to the communities where our people, where people manufactured our products. And so we had a responsibility not just to manufacture in a compliant, safe way, but that we were actually improving the lives of the people who manufacture our products and the communities they live in. That became kind of a rallying cry for us at Sandmarc, something that we've engaged in kind of across the organization. And so, you know, when you think about kind of those values, here was this, you know, really a horrible event, but it's galvanized us to really try to use our sourcing kind of for good around the world. So I also think that those values pieces are really critical in decision-making again, in everything that you do regardless of how your company is owned.

Right. I think that's a great point. It would be silly to say that family businesses necessarily have some kind of strategic advantage or they've got a lock on, you know, great business models. If I give an example of, I believe Comcast, obviously outside of our industry in the telecommunications industry, is a family-owned business. And I'm not so sure that people would view Comcast in the same way that they would view SanMar. So, and, you know, I'm sure they're perfectly wonderful are wonderful people and try very hard, but I just, I'm not sure that it's necessarily worked out in the same way as it has for you.

So that is an important point. Yeah, no, I have to like open a bottle of wine before I call the customer service at Comcast because it's such a frustrating process.

So yeah, no, I hear you. Yeah, exactly. Okay, so I've got one. Here's my last question for you. What has your dad learned from you? And what are the most salient lessons you've learned from him?

So I think the, the, what I've learned from him is, is I can almost start with everything, but I think most important was how he treated people. And I think that that was something that was, he is, I think he treats everyone with respect. You know, I heard the great saying that, you know, everyone deserves kind of dignity, you know, respect kind of is earned. But I truly think he certainly treats everyone with dignity, but really with a level of respect. He will sit down in our distribution centers and he'll walk in and he'll sit down in the lunchroom. He'll just talk to the employees there and ask them about their job and how they're doing and how their day was, about their families, because A, he really kind cares, but B, I think that's just that value of treating people. These are our most entry-level kind of jobs. They are, you know, a lot of them English as a second language. We're in, you know, communities all across the United States that are extremely different and diverse, but he takes that time to sit and talk with those people. It means a lot to them. And I just think that's a really important life lesson, even maybe more than a business lesson, is really just if you treat everybody well, treat everyone, you know, you never know who you're talking to today might be where they're going to be in 5 years or 10 years. I mean, but I just think beyond that, I think it's just a really important skill and it's one that I really try to emulate and I try to teach my kids. I think that what he's learned from me is always a tough question. What do you learn from your kids? I think that I've helped him see that as we kind of scaled, that we had to run, manage the business in a little bit of a different way. And he was, most people would think like I'm in the weeds kind of on the business, but But my dad was, I mean, he was involved in every detail of the business. It's just how he founded it and learned. And so I think being able to hire great people, to empower them and kind of trust them and to manage them, not to, you know, kind of manage every detail. I think he kind of has learned that from me a little bit more because he was the founder.

So for him, that was a harder thing to do. Yeah. No, I can completely imagine that to be the case. I mean, you went off to do an MBA. Your dad doesn't have an MBA. You went off and worked in investment banking for 3 years. Your dad didn't work as an investment banker. So those perspectives that you were able to bring into the business and the fact that he was able to listen to you with open ears, even though he may have disagreed with some of it, I think is an interesting testament. And I'd love to just end it by also including your mom in this journey. How would you answer answer that question about your mom's impact on you.

Yeah. So, so first, let me just tell you, I'll tell you a story about her impact on the business because I think it's huge. And then, and then on me. So the first 7 years that Sandmar was in business, she was a public school teacher here in Washington State. The business was making a little bit of money, but not enough that my dad was able to take a salary. So he didn't pay, he didn't take a salary. He didn't take any, everything the company made, he was reinvesting. To grow the business. And the only reason he was able to do that was that she supported them and their young family on her salary as a public school teacher. So, you know, when you think about kind of those initial years, if it wasn't for her work and her ability to support the family, they wouldn't have been able to kind of build SanMar up. And I think she deserves a lot of credit for the success kind of of the business and her contribution kind of early on. I think that when, when you think about kind of what she's taught me over time, she's an incredibly selfless kind of person. She thinks about others kind of first. What makes her happy is seeing other people happy— her kids, her grandkids.. And I just, I really admire that about my mom and I really try to kind of copy that in that I really feel like, you know, when you're, when you can make up, when you can do things for other people and you can make other people happy, the joy that you get from that is often a lot more than when you chose to do something for yourself. And I just, but that's, you know, that's, that's my mom.. And that was my grandmother, her mom. And I just, she's just a really wonderful person.

And I really, I think that's the thing that I've really learned most from my mom. Yeah. It sounds like she's been a huge rock in the business and it's just, it's so, it's so exciting to speak to someone who puts both their parents on, on a pedestal, not only in how they parented you, but also in how they impacted you as a business person and a very successful one at that. And I appreciate you allowing me to get personal with you there, Jeremy, because I've, I've always been fascinated by that. I see how successful you've been and I'm cognizant of what it must have been like you coming into the business and who your mentors were and also just looking at that foundation that you had getting into the business. And you look right at your parents or we all look at our parents in terms of the influence that we had or sorry, they had on us. So, I really appreciate you sharing that very personal response. Well, Jeremy, I really appreciate this, this time. This has been a really wide-ranging discussion on, you know, the value of family business and, and how SanMar has been able to make such a great success of it, but all the while being aware of some of the pitfalls and how it is that you've navigated those. I think that the folks listening to this podcast that are family business owners, um, as well as those that are non-family, I think will really take a lot from this.

So I really appreciate you spending the time with us. Thank you, Mark.

I appreciate it. Really enjoyed the conversation. Thanks so much for tuning into this episode of SKU Cast. Be sure to keep up with our latest content by subscribing to SKU Cast on iTunes or to our blog at community.commsku.com.

Until next time, friends, thanks so much for listening. Mm-hmm.