The Intersection of Culture and Analytics

January 1, 2017

There is an ongoing war in sports media between the “old school” and “new school.” Many in the old school contend that there is nothing more important than team chemistry and clubhouse culture. New school journalists, for the most part, are much more stats-oriented and place a much higher emphasis on analytics than culture or chemistry.

It’s one of the biggest knocks on the “Moneyball” era Oakland A’s. On one hand, you have people like John Henry, who in the movie said, “For forty-one million, you built a playoff team. You lost Damon, Giambi, Isringhausen, Pena and you won more games without them than you did with them. You won the exact same number of games that the Yankees won, but the Yankees spent one point four million per win and you paid two hundred and sixty thousand.”

And on the other hand, there are people like Joe Morgan who said, “They think they’ve devised a science to win games. They think it resides in a computer. They thumb their noses at fundamentals. At tradition. At baseball. They’re bean counters in Oakland. That’s bean with an ‘e’ at the end. They’re card counters at the blackjack table who forgot that the house always wins. Which is why they’re here again, on the brink of elimination.”

The truth, as always, is probably somewhere in the middle. You need culture and you need analytics, and without both, you’re probably not going to be very successful. Buddy Smith, owner and president of CMH Services (Columbia, SC) and incoming MHEDA Chairman of the Board, realizes this. It’s no coincidence that he cites culture and strategic planning as the two biggest factors in the company’s success. It’s also probably not a coincidence that he’s an avid sports fan. And by combining the “old school” with the “new school,” he has found a formula that “works in the playoffs.”

Company History
CMH Services was founded in 1968, as Carolina Forklifts, Inc. as a wholly owned subsidiary of Burton International Trucking. It was founded as a Datsun (later Nissan and now UniCarriers) dealership. In 1979, the company expanded to add the Crown line of electric forklifts, giving Carolina Forklifts quality manufacturing in all five classes of lift truck. In 1981, the company hired Buddy’s father, Grady Smith, as its general sales manager. After the founder of the company passed away, Grady purchased the company from the Burton Family in 1990.

That year, Grady, who would later serve on the MHEDA Board of Directors, asked Buddy to join Carolina Forklifts.

“I was working in finance and banking when my father asked me to join the company,” says Smith. “I joined the company in 1990 and stepped away briefly after three years to join a Fortune 100 company. I wanted to see what it was like working for a company that size. I rejoined the company in 1996 and have been here ever since.”

In 1997, the company went through another major milestone. Recognizing the need in the market for additional material handling solutions and services, the company changed its name from Carolina Forklift to Carolina Material Handling Services or CMH Services. This ability to identify the shifting direction of the marketplace and adapt to fill those needs would become a hallmark of the company that endures today.

In 2006, Grady Smith decided to retire from the business and Buddy bought his stock in the company and became the President and Owner.

“Shortly after that, I brought in John Gorman, who is our COO, and Mark Brown, our Vice President of Sales & Marketing,” Smith says. “Those two guys have been instrumental in our growth. It has been the three of us working together and trying to grow the company and solve customers’ problems and find out what we need to do better and take away those obstacles to growth.”

One of the first things that the three did was start an annual strategic planning process to map out the direction of the company.

“The planning process came from a book called Simplified Strategic Planning by Robert Bradford,” says Smith. “We follow that every year and I think that’s one of the things that has helped us grow. It’s taking the opportunity to step away from the business once per year and focus on where we need to go. Figuring out, ‘What’s the next thing we need to do to improve the business?’ And that’s been a big help.”

Strategic Planning and Growth
Part of the success that CMH Services has had in their strategic planning comes from Buddy’s experience in the world of finance.

In 2007, CMH Service created a systems engineering division offering racking, mezzanine, in plant offices and other engineered material handling systems. This was borne out of a careful reading of the market that indicated the need to be a more full-service distributor in the market place.

It was around this time that the Internet began to really impact not only CMH Services, but the industry as a whole.

“I think customers are more educated now than they were five years ago,” says Smith. “I think they have more information available to them. In the past, we would sit down with them and explain the products that we have. They already know that. They have it at their fingertips. So I think most of our work is really helping them understand the return on investment they will give if they purchase products and services from us. It’s more consultative now than it used to be. A little bit more analytical work. Proving our products will help them financially in terms of productivity and cost savings.”

He continues, “But those core business principles are timeless. No matter what you’re selling or offering, it’s really about getting a team of people to buy into what you’re doing and delivering a great experience to the customer. Our customers value what we bring to the table. They trust us. We want to put ourselves in a position where they’d rather talk to us than click on the Internet and buy something. That hasn’t changed. And I don’t think it ever will. ”

Smith and CMH Services have proven adept at changing with the times, but at their core, they’re still the same company that was founded all the way back in 1968.

“We’ve stuck to our core,” says Smith. “We’ve tried different things but at the end of the day felt like it was more of a distraction than a help. So we’ve added a presence in the racking and mezzanine and in plants, but we’ve stuck to our core suppliers, Crown and UniCarriers, and found that to help with our focus.”

Having those strong relationships has been a tremendous boon for CMH Services.

“We have very good relationships with our manufacturers,” he says. “We spend time with them. We sit in rooms and discuss our prospects. I’ve had several conversations with one of my manufacturers on several customers on how we can put something together for the customer so that the customer doesn’t look at us as two companies, they really look at us as one. That’s something I value. It’s very important to me that we have a good relationship, that we support each other and are each other’s biggest cheerleaders.”

That approach to business has paid off handsomely for the company. In 2008, they were named one of the fastest growing companies in America by INC Magazine. CMH Services has also been a MHEDA Most Valuable Partner every year since 2011, when the award was started.

And as the industry continues to change, CMH Services is nimble enough to change with it.

“I find that with change comes opportunity,” Smith says. “Several years ago we saw the government change the training related to the industry and we saw a business opportunity to offer training to our customers. And now we’re seeing interest in the automation and telematics and we see an opportunity to hook up with some good partners in those areas.”

Company Culture
No company would be able to adapt to the ever-shifting landscape of the industry without the complete buy-in of a committed team. And on that front, CMH Services is the 1927 Yankees.

“Our mission is to actively partner with our customers in order to provide them with the best performing material handling equipment at the lowest total cost of ownership,” Smith says. “My long-term vision is to be a provider and an employer of choice. That’s what we want to position ourselves in the marketplace as. And then, we have four things we value: Relationships, Empowerment, Learning and Integrity. They spell out the acronym RELI.”

After reading Fundamentally Different by David Friedman, Smith learned the importance of making the values of the company action oriented.

“A lot of companies will have values that sound nice, and they’re on the wall and they look great, but instilling those values into the behaviors of your employees is a challenge.”

It’s a challenge that Smith and the team at CMH Services take extremely seriously.

“We took those values and we came up with 18 specific things that support those values that we talk about just about every day here. We write articles and emails about them. We begin our meetings talking about one of those essentials. This week is essential number four and somebody has already sent out an email discussing what that essential means to them. We take it very seriously and we discuss examples of how we support those values.”

Like every MHEDA member, CMH Services is on the constant look out for technicians. But Smith stresses the importance of finding a candidate that will fit the company culture.

“Sometimes we see good candidates come through but sometimes the well runs dry and there’s a temptation to just bring somebody in who might not be a great fit just because the business is strong and we want to keep up,” says Smith. “But I challenge our managers to not lower those standards and those values just to get a warm body in here. As difficult as it may be and as much overtime as we might have to put in, it’s a short-term situation and I believe that getting that right person who fits into our culture and our values is critical. And hiring the wrong person, I believe, is worse than going without for a little while.”

Every new employee that comes into the company sits down with Buddy to discuss those 18 essentials and how they shape the CMH Services Culture.

One of those essentials is to embrace change. Smith, who, as the incoming MHEDA Chairman of the Board, was instrumental in forming the 2017 MHEDA Critical Impact Factors, knows how important that essential is in today’s business landscape.

There are two Critical Impact Factors that deal with the ascension of millennials into corporate America. Critical Impact Factor number 2 says, “Members must be prepared to modify their internal structure and sales process to meet the demands of multi-generational buyers and new purchasing trends.” Critical Impact Factor number 14 says, “Members must create a culture that recognizes and blends generational differences. It is imperative to understand the millennial’s desire for corporate consciousness and how this will impact their willingness to stay in place long term.”

“We have several millennials work for us,” says Smith. “It has been a very positive experience for us. We’ve felt more energy, more creativity, and more interest in culture. And that has inspired me. I’ve learned more from them, honestly, than what they’ve learned from us. They’ve brought a whole different perspective into our business.”

Going Forward
That marriage of analytics and culture has allowed CMH Services to blossom into the company it is today. But Smith and his team realize that it has also positioned them to continue that growth long-term.

“My goal is to double in size every five years,” says Smith. “That means double digit growth, about 14 to 15 percent growth, every year. In order to do that, we’ve got to stay true to our values and to our mission and we’ve got to continue to deliver a great experience to our customers.”

Under the tutelage of Buddy Smith, 2017 promises to be an exciting year for CMH Services and for MHEDA.