Latest / The Twenty One Clear Podcast / Tony Simmons - Part 1: "Do Not Plan Your Life On It"

Transcript

Tony Simmons - Part 1: "Do Not Plan Your Life On It" · The Twenty One Clear Podcast

0:00
Tony Simmons: Because I had been selling one red thing that cost about a million
0:04
dollars and turned over to selling about a million red things that cost about a buck.
0:10
' Cause Manitowoc painted all their cranes red too.
0:12
Adam Hatcher: That color's followed your career.
0:15
Tony Simmons: Yeah it does.
0:15
Red seems to followed me all the through.
0:23
Hey there.
0:24
Welcome to the 21 Clear Podcast.
0:26
I'm your host, Adam Hatcher, the founder of 21 Clear, a
0:29
family business consulting firm.
0:31
And with this and all of our other podcasts, we want to provide resources
0:36
to you that help you think about your inner family business, the
0:40
unique way your family works in and owns your family company together.
0:46
The voice you just heard is Tony Simmons, and the red things he was talking about
0:53
were both cranes and bottles of Tabasco.
0:57
For 25 years, Tony sold construction cranes, and he's gonna tell
1:03
you the story in this episode.
1:05
But then a phone call changed his career, and he ended up working in his
1:10
family's company, which is McIlhenny Company, the makers of Tabasco.
1:16
This is episode one of three, and I'll outline the three episodes
1:21
and how we'll do it at the end.
1:24
But for here, Tony's gonna start the episodeâ¦
1:27
He and I had a long conversation, and we began by talking about some
1:32
of the basics of McIlhenny Company.
1:34
What they make, roughly how much they make, some of the history,
1:37
how the company is structured.
1:39
And then we get into Tony's career.
1:43
How he started, and then how he made a pivot into the family company.
1:49
And as you listen, you may notice that Tony is pretty candid, and he
1:56
may be more candid than you and your family are at this point, or than
2:00
you've heard a lot of other people be about their family companies.
2:04
Tony has a deep affection for family businesses, and as a result, he will
2:10
tell a lot of stories and give a lot of insights to hopefully benefit the way you
2:17
work in and own your business together.
2:19
Not as a prescription, but again, getting ideas in your head that
2:24
you can then adapt and mold and bring into your family company.
2:27
So I hope you enjoy episode one with Tony Simmons, and then at the
2:31
end, I'll tell you what we'll do with the next couple of episodes.
2:34
And with that, here's Tony explaining Tabasco and McIlhenny Company.
2:44
Adam Hatcher: All right, so here are my numbers.
2:47
Tell me if I, tell me if I'm right.
2:50
The McIlhenny Company, 158 years old?
2:53
Yes.
2:54
195-plus companies.
2:59
Countries, sorry, 195-
3:00
Tony Simmons: We ship to 197 countries now.
3:03
Adam Hatcher: And that is 22 languages and dialects.
3:06
Tony Simmons: That we bottle in all at Avery Island, Louisiana.
3:08
Adam Hatcher: So they are grown aroundâ¦
3:10
They can be grown around the world, but they're all bottled in Avery Island.
3:13
Tony Simmons: Yes.
3:14
Once, once we grow the pepper, it's all shipped back to Avery Island to
3:19
be aged for three years, up to three years, before we bottle it and sell it.
3:25
Seed to table, actually, 'cause it takes us a year to grow the pepper for seed.
3:31
We then send the seed to our growers.
3:34
It takes them another year to grow it, harvest it, grind it, and ship it back to
3:38
us, and then we put it in oak barrels and age it for up to three years before we
3:44
open the barrels to make Tabasco with it.
3:47
So seed to table is five years.
3:50
Adam Hatcher: How close are these numbers?
3:51
So 200,000 two ounces bottles a day right now.
3:59
Tony Simmons: So what we normally will say that we have the capability to bottle up
4:08
to about 720,000 bottles of Tabasco a day.
4:13
Now, we don't necessarily bottle that much, and we do
4:17
that in two ounce equivalents.
4:19
So if we're running five ounce or 12 ounce, you know, we're still measuring
4:25
the output in terms of what would that have been in two ounce equivalents.
4:29
So we have the capability right now to run about 720,000 bottles a day.
4:34
Adam Hatcher: I've heard you say it before.
4:36
Is it now the company could produce more in a day than Edmund
4:41
McIlhenny produced in his lifetime?
4:44
What's the statistic you use?
4:45
Tony Simmons: So Edmund McIlhenny actually was a banker from New Orleans.
4:49
He was born in Hagerstown, Maryland in 1815.
4:53
We don't know a whole lot about his young life, but we do know that he
4:55
ended up in New Orleans, by the 1840s.
5:00
Sometime in the 1840s, he ended up in New Orleans.
5:03
He ended up, buying five branches from Bank of Louisiana and
5:11
becoming an independent banker.
5:13
And he traveled around to his various banks, and that's how he met Daniel
5:19
Avery, whose family was at Avery Island and had been there since 1818.
5:26
And Edmund got to know Daniel Avery, and he eventually married into the family.
5:32
But at the end of the Civil War, Edmund was destitute because a Southern banker,
5:38
Confederate currency was worth nothing.
5:40
So Edmund was destitute, and he was forced to live at Avery Island in
5:45
his father-in-law's house 'cause he couldn't support his family.
5:49
And they encouraged him to take his Tabasco pepper sauce, bottle
5:55
it, and take it to New Orleans and try to sell it, which he did.
5:59
And it, by 1868, he decided it was enough of a commercial
6:03
success to start the company.
6:06
So he started McIlhenny Company in 1868.
6:10
Basically, it was a cottage industry, and he died in 1890.
6:17
He kept meticulous records, and we know from his ledgers and his records
6:24
that during his lifetime, he produced about 367,000 bottles of Tabasco.
6:31
And we currently have the capability to produce about twice that every day.
6:35
Adam Hatcher: And quickly, can you describe: there is Avery Island, the
6:39
McIlhenny Company, and then Tabasco.
6:42
Which for the longest time I thought Tabasco was the name of the company.
6:45
I bet a lot of people do that.
6:47
Can you talk about where those three names have significance,
6:51
but they're very distinct?
6:52
Can you explain that for people who just don't know?
6:55
Tony Simmons: So
6:57
Avery Island is our family home that we've had for 208 years.
7:03
And about 450 cousins that are able to be part of our family there.
7:11
McIlhenny Company was started at Avery Island by Edmund McIlhenny
7:17
to produce Tabasco after the war.
7:21
And has remained there.
7:23
And it's still owned and operated by members of the McIlhenny family.
7:30
We employ a full-time historian, PhD in history, as our
7:36
historian and archivist, Dr.
7:38
Shane Bernard, who does a very good job of trying to separate
7:44
the truth from family stories.
7:48
And he has done an enormous amount of research trying to determine why Edmund
7:59
McIlhenny named the product Tabasco.
8:03
And he can't.
8:05
He has anecdotal evidence.
8:08
He has stories, he has things that have been said by some of my ancestors
8:14
about why they believed he did it.
8:17
But as a historian, unless he can find first, you know, person evidence, he
8:27
refuses to say, "we know this is exact."
8:31
So we don't know exactly why Edmund used the term Tabasco.
8:36
We do know that what he originally proposed, before the island
8:41
was called Avery Island, it was called Petit Toss Island.
8:44
Petit Toss, little goose or little bay, in French.
8:48
And he had proposed originally to call it Petit Toss sauce.
8:54
And his father-in-law said, "No, you're not gonna name your sauce,
8:57
your p- your commercial product after my home, so you can't use it."
9:03
So he came up with Tabasco, but we don't know why.
9:08
And it's always been a mystery that we've been trying to solve.
9:12
Now having been at the same place for 208 years, and as my wife will tell
9:18
you, my family tend to be pack rats.
9:23
We have an enormous amount of stuff, and Dr.
9:28
Bernard has an entire building full of archives, records,
9:35
artifacts, things from the family.
9:41
And even with help from the local university, University of Lafayette,
9:45
Louisiana, with interns, we have entire collections that haven't been
9:52
archived yet, that are just sitting there waiting to be included, you
9:57
know, and documented and then, you know, put in the right places and cross
10:03
indexed so we can find them again.
10:06
And at some point we may uncover letters or documents or things that allow
10:11
us to say, "this is why he did it."
10:14
But at this point, we're not sure.
10:15
Adam Hatcher: So we've wound into some of the company and how it's structured,
10:19
talked a little bit about what it's like today, but I find your story
10:23
interesting for people who either are thinking of hiring family members or
10:27
working with their family, or who may look at you and say, you know, "He got
10:31
to be part of-- He's been part of a great multi-hundred-year family story."
10:35
But that wasn't, that's never your, that was never your
10:38
intention setting out, right?
10:41
Can you talk, like, for people who don't know you or maybe all they've
10:45
read about you is some of the articles that you can find online, the journey
10:48
of Tony Simmons to running McIlhenny Company, my impression is both is not
10:54
inevitable and there was no straight line that you were always marching on.
10:59
So can you talk about you, like, where you grow up, just quickly, school, and
11:04
then where your career went before it took the t- the family business turn?
11:09
Sure.
11:09
Tony Simmons: Sure.
11:09
So as a young person
11:15
you were told,
11:18
"Don't plan your life on being involved in your family business because
11:22
you're probably not going to be."
11:24
Our history is to have two to four family members actively involved in the business,
11:29
and we just don't hire a lot of family.
11:32
Adam Hatcher: And for anyone who may imagine, 'cause I used to, I imagined
11:36
Tabasco being this, putting 10,000 people to work across the globe
11:40
because everybody knows the brand.
11:43
But roughly how many people work there?
11:46
Tony Simmons: I think we're at around 240 or 260 right now.
11:49
Adam Hatcher: So if anyone who thinks your number of four is really low, it's
11:52
not four people in the middle of 2,500.
11:55
We're not even over 275 employees in the Cor McElhany company.
11:59
Okay.
12:00
All right.
12:00
So you're told young-
12:02
Tony Simmons: Yeah, don't plan on it 'cause you're probably not gonna.
12:04
But if you're interested, let us know, and if we're interested, we'll let you know.
12:11
Adam Hatcher: And let us, let one of us four who work here know?
12:14
Mm-hmm.
12:15
Okay.
12:16
Tony Simmons: So, I got out of college in 1974 and married as soon as I graduated,
12:25
and my wife and I moved to Houston.
12:28
I went to work in the heavy equipment business for a company that was
12:32
actually the distributor for Manitowoc Crane Products, which were
12:37
produced in Manitowoc, Wisconsin.
12:40
And for folks that don't know, Manitowoc is probably the premier
12:46
heavy crane manufacturer in the world.
12:49
And they're equivalent to how people think, say, about Caterpillar
12:54
in that part of the industry, in the big crane business.
12:58
Adam Hatcher: And publicly traded?
12:59
Tony Simmons: Publicly traded.
13:00
Publicly traded.
13:00
Mm-hmm.
13:01
And I worked for the distributor, which was a private company,
13:06
and in Houston for nine years.
13:09
Then they sent me to Singapore for three years and I lived in Singapore
13:15
for three years as a sales and marketing rep for Southeast Asia, and traveled
13:21
all over Southeast Asia for three years.
13:24
When I came back into United States at the end of 1985,
13:31
Manitowoc hired me away from the distributor and made me the brand manager
13:37
of the products we were making in McAllen.
13:40
And we were there for three years.
13:42
And in the end of 1989, Manitowoc came to me and said, "We wanna
13:49
open a new distribution facility to handle Virginia and the Carolinas,
13:55
and we want you to go do that."
13:57
So at the start of 1990, I moved to Charlotte and started
14:05
a new distribution facility for Manitowoc, that Manitowoc owned.
14:11
And in 1993, they called me and they said, "We've made a corporate
14:18
decision not to own our own distribution facilities anymore.
14:23
We're gonna sell them.
14:25
Do you wanna buy it?"
14:27
And I ended up buying the rights to be Manitowoc's distributor for their crane
14:34
products for Virginia, the Carolinas, Georgia, Florida, and the Caribbean.
14:42
And I had an office in Charlotte where I was living.
14:45
I had an office in Atlanta, and I had an office in Fort Lauderdale.
14:50
And in 1997, I got a call from my uncle, who was running McIlhenny Company.
14:58
And he said that the board had met and the board had decided to add three
15:08
Gen 5 board members, of which I was one, if I would accept the position.
15:15
Which I did.
15:16
Adam Hatcher: And that was not something youâ¦
15:18
Did you all have a process where you had to put your name in and say,
15:22
Tony Simmons: No I hadn't done anything.
15:23
It a complete surprise to me.
15:25
Adam Hatcher: You're in crane, you're nowhere near consumer packaged goods at
15:29
Tony Simmons: No.
15:29
No.
15:30
Anyway, so, in the spring of 1997, I joined McIlhenny's board, still running
15:38
my heavy equipment distributorship business on the East Coast.
15:43
And in 1999
15:48
My Uncle Ned had retired as president and CEO, and my cousin Paul McIlhenny had
15:55
taken over and was running the company.
15:58
And in 1999, a Caterpillar tractor dealer from Florida, wanted to be the
16:04
Manitowoc crane dealer way more than I did, and so I sold him my business.
16:10
And my cousin Paul McIlhenny called me and he said, "Tony,
16:14
did you sell your company?"
16:15
And I said, "Yeah."
16:16
And he said, "Well, if you wanna work, why don't you come down to Avery
16:20
Island and work for your family?"
16:23
And I said, "well, what would I do, Paul?"
16:24
And he said, "well, you'd be two things."
16:28
He said, "you'd be executive vice president.
16:30
Number two," he said, "I'm president, you'd be executive vice president."
16:33
And he said, "You'd also be my understudy, and I'll teach you the food business."
16:38
So I spent the next 12 years as Paul's understudy learning the food business,
16:45
because I had been selling one red thing that cost about a million dollars and
16:50
turned over to selling about a million red things that cost about a buck.
16:56
'Cause Manitowoc painted all their cranes red too.
17:00
Adam Hatcher: That color's followed your career.
17:02
Tony Simmons: Yeah it does.
17:02
Red seems to followed me all the through.
17:05
And then in 2012 the board made me the president.
17:10
Paul died unexpectedly in February of 2013.
17:15
And then I ran the company until 2019, June of 2019, when I retired at age 68.
17:24
So I've been retired, what is that?
17:26
Seven now.
17:27
Seven years.
17:27
Yeah.
17:29
Adam Hatcher: Looking back on that career now.
17:33
Working somewhere else with no intention of coming in, what benefits did that
17:39
give you once you finally got there?
17:42
And it could be skill benefits.
17:44
I'm assuming you were dealing with international logistics and
17:47
international business was not new to you when you joined McIlhenny.
17:51
But I'm sure there were also just perspective and approach that you had.
17:56
So what were some of the benefits from working outside the business for
18:01
as long as you did before joining?
18:04
Tony Simmons: Well, I think one of the biggest benefits I got from it is I got
18:09
a very good education in what a good manager looks like and what a bad manager
18:17
looks like and how to tell a difference.
18:20
And I think that was a very important learning for anyone.
18:27
And recognized that
18:34
the higher you get up in an organization, the more important it is to make sure
18:41
that you pick good people, the right people to be around you, because if
18:47
you cannot pick the right people to put around yourself, you're going to fail.
18:53
There's just no doubt about it.
18:55
And that ability to pick people, the right people, is huge.
19:02
It is a huge skill that you've gotta have, and the higher you
19:06
rise in an organization, the more important that skill becomes.
19:10
Adam Hatcher: All right, so 1997, you joined the board,
19:14
then you joined the business.
19:16
How long were you CEO?
19:18
Tony Simmons: Seven years.
19:20
Adam Hatcher: In the succession of CEOs, what number were you?
19:24
Tony Simmons: Let's see.
19:25
Edmund, John, EA, Walter, Ned.
19:35
Oh, it's
19:35
the Seventh.
19:37
Adam Hatcher: Remember Jim Collins teaching this idea that in family
19:40
companies resonates, you need to preserve the core and stimulate progress.
19:45
That's the tension of any business.
19:48
I'm curious, when you think about those, that idea, so you have a line
19:53
of six CEOs and there's a, there are ideas and a core there I'm guessing
19:58
you felt were wise or a responsibility to preserve, but the company you
20:04
ran was not the same company Edmond founded and not the same environment.
20:09
How did you wrestle with that tension of preserving something
20:13
while also pushing forward?
20:17
Tony Simmons: My personal way of doing it
20:19
Adam Hatcher: Yeah
20:20
Tony Simmons: Was to think about what I did for my family
20:25
like a physician thinks about.
20:28
First, do no harm.
20:30
Adam Hatcher: Mm-hmm
20:33
Tony Simmons: Then once you've made sure you're not running the thing off
20:39
a cliff, then let's figure out how we can grow it as best we can grow it.
20:44
But grow it recognizing that as the seventh family CEO of 150-year-old
20:52
business, you're really a steward who is in charge for some period of time,
21:00
and you wanna pass it to the next CEO in better shape than you got it.
21:09
And meet the family's expectations for what they believe the family
21:13
and the business should do.
21:15
Adam Hatcher: Is there something that you can think of in your tenure that you
21:19
did that was uniquely Tony Simmons that none of your predecessors would've done?
21:27
Maybe you had to do it, or a decision you made, or something you chose
21:30
to take on and wrestle with that none of them had to deal with.
21:35
And it was distinctly you?
21:36
Tony Simmons: I can't think of anything other than the challenge that I was
21:42
in charge of the company when it celebrated its 150 years in business.
21:52
So this was a big deal for us, you know, 150-year-old family business.
21:57
Adam Hatcher: Yeah, the statistics on family companies that make
21:59
it that far is pretty small.
22:03
Tony Simmons: 2-4% make it to the fourth generation.
22:06
Yeah.
22:06
Adam Hatcher: 150 years.
22:07
Tony Simmons: Long time.
22:08
Adam Hatcher: Long time.
22:09
Tony Simmons: In 1894
22:14
a playwright in Boston, Massachusetts, wrote a play called The Burlesque
22:21
Opera of Tabasco for the Boston Corps Cadets to put on to raise money.
22:29
Now, in 1894, a burlesque opera was not a girly show.
22:35
A burlesque opera was operatic singing with lowbrow comedy.
22:42
It was so popular it went to Broadway.
22:45
And then they decided they wanted to put it on the road and with a
22:50
traveling group and tour the US.
22:53
And at that point, they reached out to us and said, "would youâ¦
23:00
This thing is very positive about your product, and it talks about using
23:06
it in food and doing all this stuff.
23:09
Would you help sponsor it to go around the country?
23:13
Because it'll give you much higher brand recognition."
23:16
And John McIlhenny was running the company at the time, and he
23:19
said, "Yes, with one proviso.
23:22
At the end of the performance, you have to have someone stand at
23:26
the back of the room and hand out samples to all of the patrons."
23:31
And that's where the eight-ounce mini came out.
23:35
But as we were approaching the 150th anniversary or birthday, and I was
23:43
trying to find something special to do, a composer approached me and told me he
23:54
actually had all of the music and the records of the Tabasco opera, and would
24:04
I be interested in trying to produce it?
24:09
And we did.
24:10
And for our 150th anniversary we redid the Burlesque Opera of Tabasco and
24:18
put on, I think it was five or seven performances at the Little Theater
24:23
in New Orleans with a full cast.
24:26
It was very well received, and it was a lot of fun.
24:29
It was actually pretty funny.
24:31
And, you know, it's something Tony did that none of the other CEOs had done.
24:36
Yeah.
24:37
I recreated the Burlesque Opera of Tabasco, and we've
24:40
actually got it on disks to use.
24:42
And, you know, every now and then I'll hear from one of the family
24:45
that's only just seen it and call to tell me how much they think it's
24:48
fun and what a good thing it is.
24:50
Adam Hatcher: Oh, that's something that youâ¦
24:52
Just so uniquely family company.
24:54
And when you think about all it takes to get as far as you all have
24:57
gotten, are the fun things you can go pull back from the past and-
25:02
Tony Simmons: So the samples- that they gave out in in 1895
25:06
the eighth ounce mini bottle.
25:08
We did 37 million of them last year.
25:12
We're still doing it, you know, all of these many years later, we're still
25:15
doing, we're still using that a- as one of our, you know, one of our best products.
25:21
Adam Hatcher: And somewhere someone probably thought that the mini
25:23
bottle was a brilliant stroke of marketing or product innovation.
25:28
It's just in the back of a theater being given out at an opera.
25:32
Tony Simmons: Yeah, as a sample.
25:34
Adam Hatcher: One of the dangerous words to me in family
25:36
business is the word drift.
25:38
So family members drift into the business.
25:41
Long time people who may not be developing at the pace the business is growing
25:46
just drift along in their careers.
25:48
And then one day people wake up and realize they're in a seat
25:51
that they're not supposed to be in, that they're overwhelmed by,
25:54
the business is starting to drag.
25:56
You didn't have that luxury in a publicly traded company.
25:59
Tony Simmons: Well, you can get it, but it usually doesn't last long.
26:02
Adam Hatcher: Right.
26:02
â¦ Tony Simmons: Quarterly earnings start to be affected, and normally
26:06
things get pretty testy pretty quick.
26:08
In a family business, as you know, family businesses have the advantage of
26:12
being able to look at a longer horizon.
26:15
As long as the family is comfortable with how the family business is doing.
26:21
Which is a huge asset for a family business.
26:24
But at the same time, it can lead to a complacency that can
26:28
cause problems down the road.
26:31
Adam Hatcher: I hope you heard the shift in the conversation
26:33
with Tony right there at the end.
26:36
While we'd been talking about his career and the basics of the company, right
26:43
at the end, Tony started to get into insights, his stories about how they run
26:50
the inner family business of McIlhenny Company, between the business, the board,
26:55
and his thoughts on family councils and how they're working with that.
26:59
That's where the conversation was starting to go, and that
27:02
is going to be episode two.
27:05
So listen for that when it comes out, where we start to get into
27:09
some of Tony's experience with running the inner family business.
27:13
And then episode three, we're gonna put out as a video episode because Tony
27:18
takes me on a tasting of some of their products, and needless to say, they are
27:23
both more delicious than I expected, and they have a few I was unaware of
27:27
that are way hotter than I thought.
27:30
So I hope you enjoy those as they come out over the next couple of months.
27:35
Everything we do with 21 Clear is meant to either provide supportive consulting or
27:40
resources to family companies to help you think about your inner family business.
27:47
You can follow our newsletter and learn more about us.
27:49
There are links in the show notes that you can click on.
27:52
I hope you've enjoyed this episode and part one of the
27:54
conversation with Tony Simmons.
27:57
I hope you'll join us next time in the next episode, and as my
28:01
grandfather would've said, thank you so very, very much for listening.