Taking Care of Your Own
Gary Stein, president of Houston-based Triple-S Steel, one of the largest distributors of structural steel in North America, is not a fan of email. “I have walked into managers’ offices and threatened to rip out their computers,” he says. “I’d say, ‘You just emailed something to the guy who sits two doors down the hall from you and he can’t see whether you’re smiling or laughing or you’re dead serious. Walk two doors down and go talk to the guy.’”
This tells you two important things about Stein. First, he’s not afraid to be frank. Second, he has a deep appreciation for the people who work for and with him: When you communicate, look your colleagues in the eye.
This combination of firmness and respect has helped him steer Triple-S through seven acquisitions, three recessions, multiple investments and the market’s twists and turns in the 31 years he has been the company’s president. His father, Bruce, who in 1960 founded Triple-S with his wife, Shirley, handed his son control of the $2-million-a-year company just after Stein graduated from the University of Texas. He was 22 years old. Since then, Triple-S has seen its revenue explode to $800 million annually, and has expanded to Georgia, Arizona, Utah, California, Colorado, Chile and Colombia.
Yet despite its dramatic expansion and international reach, for Stein, family and Triple-S are one and the same. He spoke with Forward about growth, company culture and making business a family affair.
In 54 years, Triple-S has gone from a small new-and-used steel distribution yard to one of the largest distributors of structural steel in North America, selling 750,000 tons of steel a year and generating $800 million in annual revenue. How do you think starting small and experiencing tremendous growth has shaped you as a leader?
I have often thought I would probably be a better executive if I hadn’t started small. I would be more willing to not deal with some of the small stuff. I miss talking to the really small customers—the little fab shops. I was their salesman 30 years ago; the president of the company, but still just a salesman. I helped them solve their problems some days. They were real people—little tiny shops struggling to get by, and so were we. You’re down there in the trenches with them. It was real face-to-face contact. It was a guy walking in to buy steel for a job he needed to do that day, and I really learned how to talk to all kinds of people.
I’d love to take an order once in a while. I’d rather do that than most anything I do now. One thing I don’t miss is loading trucks. Well—actually, I probably do, because I don’t get much exercise now.
What about in terms of how you run the company?
Maybe it has made us a little more risk-averse than if we had started large. Maybe we’re a little less comfortable with certain aspects of risk because we were so tiny once and had no capital: If you lost anything, you lost all of it. But I also think it made us tougher and scrappier.
Triple-S has branched out considerably from exclusively running a service center, with investments in a crane business, real estate ventures and a steel dust recycling business, among others. How do you evaluate potential business opportunities?
We don’t invest in shopping centers and apartments—we invest in stuff that looks like steel. For example, the real estate that we own is all in big industrial properties where we made tenants out of customers and customers out of tenants. The steel dust recycling business managed electric furnace steel dust—waste out of the same steel mills that we buy steel from, so it was something I knew a little bit about. It was connected. It’s also about finding people you believe in. The quickest way to judge someone’s character is to look at how he treats other people. If he yells at the waiter because they brought him pickles instead of tomatoes, he probably treats his employees and suppliers poorly too.
What have you learned from working with all these different lines of business that you’ve been able to apply to the service center?
You get out what you put in. If you are involved with people who work hard and are dedicated to the success of their business, they will probably be successful. Sometimes the market goes against you, but you want to have people on your team who have a good, old-fashioned work ethic and who check their egos at the door every day. I tell people all the time we’re not that smart; we just work really hard.
With your 2013 acquisitions in Colorado, New Mexico and Georgia, and those Triple-S made in the past, you have quite a few smaller facilities in a variety of markets. How did you manage these mergers as you blend possibly conflicting cultures, technology, operating systems and business objectives?
Operating systems we standardize. We have it all on a single platform, so nearly instantly, when we buy a company, they are part of the integrated network. They can see what the other divisions are doing and what the other divisions have. Culturally, we’re not going to buy somebody that’s an outrageous mismatch to our family’s structure or beliefs. We want good, decent, hardworking people who show respect. You’ll hear about companies’ reputations through the steel mills, and we listen to our sources. Maybe they’re a claims artist or they don’t pay their bills on time. Or if you go to lunch with them and they’re loud and obnoxious, they probably won’t fit here. Making the acquisition is just not that important. The only shareholders in this company are my brothers and myself. And whether we’re an $800 million company or a $3 billion company, Triple-S is the same for me personally. I don’t get a bigger bonus because we’re a bigger company. Our bonus system is pretty informal at the management level. But all of our employees, from the janitor on up, participate in a company-wide profit-sharing program based on the company’s return on assets.
So we’re only going to do things that fit and make sense and make us more complete. As a private company, we can do what we want to do and we’re never pressured to make an acquisition for the sake of making an acquisition.
“If a bunch of people have entrusted their futures to you and their futures are greatly affected by political decisions, then it’s your duty to at least attempt to make sure those decisions are favorable to your company and to your people’s future.”
Obviously company culture is incredibly important to you. Is it hard to maintain a company culture when you have so many locations?
That’s hard, and it’s becoming more challenging every year as we have more locations. It comes back to trying to either hire people or buy businesses that share our family company belief structure. So while we may not implant our culture into some new venture, their culture will be similar: You come to work every day and you respect your colleagues. We do not tolerate screamers and yellers at Triple-S. If you can’t show respect to the people you work with, go work somewhere else.
The previous issue of Forward looked at manufacturing’s shift toward service. Service centers are increasingly fulfilling custom orders, and manufacturers are following a new model where they lease their products and service them, instead of just selling them. What’s your perspective on integrating that kind of service into metals distribution?
Everything is custom. If we’re burning a piece of plate, it’s to some customer’s drawing. Particularly in the Southwest, which is where most of our business is, the energy equipment manufacturing business—people building equipment for the oil field—is very customized. If I were a flat-rolled service center in the Midwest and I was selling steel to Chrysler, they’re going to build 5,000 of that same car every week, and they will use that same piece of steel over and over. But two drilling rigs of the same design is a big production run for us. There’s lots and lots of variation. So our customers, while they are manufacturers, their buying behavior is much more like a job shop. They do not use the same part over and over.
On the whole, the metals industry has struggled to recruit fresh talent. What do you think the industry needs to be doing better to attract and retain new talent?
I get this question a lot, but we just don’t have that problem. We recruit on campuses. We recruit in bars and restaurants. The most important thing for our business is that you’ve got to care about customers. And who is better at taking care of customers than a really good waiter or waitress? I can’t tell you how many times we handed out a business card to somebody and said, “Call me next week.” We just want people that have a good personality and care about others.
And look, I see the kids that are my son’s age. Gee, they would all like to work at Google. But Google is only going to hire a few of them. The rest of them need to go make a living, and Triple-S and all my colleagues in this business, we have companies that are a good place to build a life. People get hung up on this whole recruiting issue and it’s just not been mine and I can’t believe it’s anybody else’s, really.
Your grandfather, Johnny, owned a scrap yard, and your father, Bruce, and mother, Shirley, founded Triple-S. How do you think Triple-S’ legacy as a family-owned business has informed its success?
One time I was walking through a plant in San Antonio right after she died. One of my guys came up to me and said, “Gary, it’s such a loss. Your mom meant so much to us.” I asked him if he had met her at one of our Christmas parties. But he said, “No, I never met your mom. I had a sick child for a while, and your mother called me every week to check on my child, seeing if there was anything the family could do to help.”
I think that sort of thing has helped us get a higher degree of both employee loyalty and customer loyalty. Lots of the steel fabricators and job shops we sell to are family-owned businesses, so they can relate to transacting with another family-owned business. We try to get our acquisitions to behave like a family-owned business, too. We want our managers to continue to behave like owners. We really want decisions made at that local level.
Your father made you president of the company when you were right out of college. Will your children continue the family tradition?
One thing we’ve told all our kids since they were very young is, “You’re not getting your first job with us, so go find a job.” I think it’s good for our company that our employees know that there’s no privilege granted just because your last name is Stein. I’m sure more than one of my children is going to want to come into this business, because it’s a good place to be, but there’s certainly no pressure.
To what extent are you involved in political advocacy in connection with Triple-S? Do you visit Washington or work with local or federal lawmakers, and do you think that’s an important part of your job?
I don’t know that it’s an important part of my job; it’s important to me personally. If a bunch of people have entrusted their futures to you and their futures are greatly affected by political decisions, then it’s your duty to at least attempt to make sure those decisions are favorable to your company and to your people’s future. I’m not talking about trying to get some special-interest stuff passed, but getting good, solid, pro-business legislation passed. You owe it to your employees to participate in the local process, so I do, through visits with congressmen and senators when they’re here in Houston, but sometimes in D.C. Every year in our quarterly town hall meetings, I encourage our employees to vote, and I am not shy about telling them my views on political issues.
You’ve also served on a number of boards. How has focusing on community involvement and outreach been beneficial for your business?
It makes me feel more complete, more whole as a human being, that’s all. My grandfather came to Houston from Russia when he was five years old with no money, no skills, no grasp of the English language. We’ve done pretty well, and we’ve been blessed. You’ve just got to give back.
There’s a great teaching of the Jewish sage Hillel. He said, “If I am not for myself, who will be for me? But if I am only for myself, what am I? If not now, when?” So, you’ve got to be for yourself. You’ve got to push your business, you’ve got to grow your business. But you’ve got to take care of the community too, and you’ve got to do it now because you never know what tomorrow will bring.
Kelly Caldwell is a writer and editor in Chicago, and is managing editor of Forward.