Bill Canady, CEO of Arrowhead Engineered Products & Chairman of Ohio Transmission Corporation, is interviewed on the CEO show, which reaches 600,000 listeners across the USA. During the show, he discusses his unique process, PGOS (Profitable Growth Operating System), for quickly growing profitability in companies. He is running two different billion-dollar companies under the same private equity.
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Podcast Summary:
- Robert Reese introduces Bill Kennedy, who manages two billion-dollar companies under private equity using the PGOS (Profitable Growth Operating System).
- The show reaches 600,000 listeners.
- OTC Industrial Technologies:
- Formerly Ohio Transmission Corporation.
- Industrial products manufacturer and distributor.
- Headquartered in Columbus, Ohio.
- Approximately $1 billion in annual revenue.
- Deals with industrial products like pumps, compressors, and automotive-related items.
- Arrowhead Engineered Products:
- Based in Blaine, Minnesota.
- Approximately $1.5 billion in annual revenue.
- Focuses on power sports (motorcycles, ATVs, UTVs) and outdoor power equipment (lawn, tractor, agriculture).
- Approach varies based on the company’s condition.
- Easier to lead struggling companies due to increased openness to change.
- Emphasis on treating people with respect and dignity, even in difficult situations.
- Understanding the board’s goals is crucial.
- CEO’s primary roles: goal setting and accountability.
- Private equity goals: typically tripling equity within 3-5 years.
- Private company goals: aligned with owner’s needs.
- Public company goals: maximizing shareholder benefit.
- Initial team offsite meeting to discuss and align on goals.
- Example: $50 investment aiming for $150 return.
- CEO and team develop strategy, not the board.
- Importance of verifying the realism of board goals.
- Private equity’s advantage: typically money-motivated boards.
- CFO review to ensure financial feasibility.
- Ideal private equity growth: 10% top-line, 20% bottom-line.
- Example: OTC during the 2021 pandemic; required 9% growth and $100 million in acquisitions.
- Gaining team belief in the goal’s achievability.
- Team develops the strategy for ownership.
- 30-day strategy development timeframe.
- Focus on leveraging existing strengths.
- Example: identifying top 10 customers with $250 million growth potential.
- Visionary: CEO, sets the direction.
- Operators: Presidents and VPs, execute the strategy.
- Prophets: Trainers, provide knowledge and guidance.
- Includes five tools: talent, strategy, 80/20, M&A, and lean/segment.
- Ensures consistent language and processes.
- Focus on high-value customers and profitable products.
- Example: OTC’s dedicated team for Toyota, resulting in doubled business.
- Bill Canady's website: billcanady.com/.
- Author of “The 8020 CEO” and “From Panic to Profit.”
