Fast-growth companies understand the power of transparency. Transparency happens when leaders dare to be open with their people. This openness provides a connection that endures all kinds of challenges. The power of transparency is clear to me after hundreds of founders and CEOs have told me how critical it has been to their growth. Today’s guest is Matthew Nix, CEO of Nix Companies. His company was ranked #1242 on the 2020 Inc 5000 list. Nix Companies provides metal fabrication services, industrial coatings, metal product manufacturing, equipment distribution, and repairs. Matthew talks about where he has drawn his transparency line, which is where they stop keeping secrets. The power of transparency is what makes many leaders true visionaries.
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Disclaimer: This transcript was created using YouTube’s translator tool and that may mean that some of the words, grammar, and typos come from a misinterpretation of the video.
Whether I have a $10 million business or 100 million dollar business, I’m gonna worry the same. The guy worried about making his house payment, it’s making $15 an hour, his worry is no more no less than my worry about making payroll. So once you understand those two concepts that he didn’t work any harder, he just had more zeros, and I’m gonna worry, no matter what the size of my company is, then you’d have to ask yourself, Well, why wouldn’t I do this? I mean, it’s almost slothful, if you don’t do it, you know, there’s some there’s some things in the scripture about that, too. So you know, you need to whom much has been given much as expected. So that’s really those kind of those things kind of came together. And that’s why we chose to go for it.
Welcome to Growth Think Tank. This is the one and only place where you would get insight from the founders and the CEOs, the fastest-growing, privately held companies. I am the host, my name is Gene Hammett. I help leaders and their teams navigate the defining moments of their growth. Are you ready to grow?
Gene Hammett [1:03]
How important is transparency to you? And the culture of the business? Have you thought about it? Have you thought about how open you are with your strategies of moving forward, maybe it’s mergers and acquisitions, there’s probably a place where you draw the line on transparency, we all have it, you will find that fast-growth companies lean toward a much more remarkable transparency. It’s one of the core factors of having people feel like owners and having them operate and behave that way. When you have transparency, you don’t have to sort through the good and the bad. We’re going to talk about that. In today’s interview. We have Matthew Nix, he’s the CEO and president of next companies, they were 2220. On the 2019 list, they’ve grown astronomically fast, because of the power of transparency, and how it develops leaders develops the people inside the organization. One thing I like about this conversation is I asked him, where do you draw the line to share the good and the bad, or just the good. And his response might surprise you. So tune in to today’s episode about the power of transparency, and what that means for your leadership development. Now, if you haven’t had a chance to connect with the 12 principles of fast-growth companies, make sure you sign up right now absolutely free. After all of these interviews, I’ve had the chance to codify some of the core principles of fast growth, just go to genehammett.com/principles. And you can download your free copy of the 12 principles. We’ve got it down to three pieces of paper. And we give you some examples of companies that are doing this well. So if you want to go check that out, just go to genehammett.com/principles. Now, here’s the interview with Matt.
Gene Hammett [2:50]
Hey, Matthew, how are you?
Matthew Nix [2:51]
Hey, good, Gene. Thanks for having me on. Excited to be here.
Gene Hammett [2:54]
Excited to have you on the podcast. I have already introduced you personally to our audience. But I’d love you to tell us about Nix’s company.
Matthew Nix [3:02]
Yeah, absolutely. So Nix company, we call ourselves a diversified metal solutions provider. And really, because we couldn’t think we could we couldn’t come up with anything better to call it so we, we started as a blacksmith, my great-great-grandfather started it and evolved into a little mom and pop welding, fabrication business. And what’s interesting about our businesses, although it’s multi-generational, it was mom and pop when my brother and I joined. And we’ve grown the business, we’re approaching 100 times growth, which is a goal of ours, we went from four family members to almost 100 employees and, you know, 20, approaching 25 million in annual revenue. So we got that dynamic of a long time legacy business and fast-growth startup business. So it’s kind of an interesting, dynamic there. We do industrial and commercial metal fabrication and industrial maintenance primarily.
Gene Hammett [3:59]
Well, I appreciate you being here, we’re going to talk about growth a little bit. We’re gonna mostly talk about leadership, because when we did the research on your company, we really looked at what was driving that growth and you thought strong, capable leaders was very important. So why is it so important?
Matthew Nix [4:17]
Well, I can’t think of anything that’s more important than a strong leadership team. We’ve been really fortunate and blessed to have had the opportunity to do some acquisitions in the last few years. And so I’ve become a student of businesses in our industry. And you know, what, it’s a very fragmented blue-collar industry. And, and I, there’s a thing that I’ve, I’ve kind of have a term internally, we call it maximum complexity. And what I what I’ve noticed is there’s a revenue threshold that so many of these businesses get to if I’m looking at businesses out there, there’s just band of revenue. That’s like, why do they all do about the same amount of revenue? What I uncovered was, it’s that What I call maximum complexity. So it’s you’ve got the founder of the president, and he’s the chief cook and bottle washer. And the business, whatever industry you’re in each business has a threshold that it’ll allow itself to grow to before you become the Roadblock, to scaling that business further, and that net number changes depending on the industry you’re in. But so if you’re going to break beyond that, you’re only going to do it by multiplying, you know, your yourself and your leaders in the organization. And so there’s nothing, nothing more important than that.
Gene Hammett [5:31]
I love that. Because I’ve seen that and in my clients work and people even interview, they have to go through these kind of reinventions. And you were describing to me that this was kind of a family-owned business, and you wanted to take it to another level with you and your brother. Why was it so important to grow the company?
Matthew Nix [5:50]
Well, you know, early on, I’ll be honest, we probably, you know, we’re sort of growing for growth’s sake, you know, you’re young, you’re trying to prove to yourself and prove to others, you know, that you can do it, there’s, you know, possibly, you know, some ego involved and things of that nature, but as you grow and mature, our reasons, I think, have become more founded. And really, I think, you know, you know, there’s an old saying, if you’re not growing, you’re dying, it’s kind of overused, but but you to some degree, it’s true. And a mentor of mine told me once he said, if you have a tiger, you don’t grab its tail, you feed it me. And, you know, we’re, we are, we’re open to growing. And I was, I was wrestling with that idea. I think a lot of us, entrepreneurs and business leaders wrestle with that idea about growth.
Matthew Nix [6:43]
And something I really wanted to share with, with all these other business leaders out there, if you’re thinking about whether or not to grow your business, or if you’re wrestling with that question, I got a short story, I had this kind of aha moment that happened. All in a course of I really think it was kind of divine intervention came together, I spent a lot of time discerning and praying it. And all in the course of a short amount of time, these things happen.
Matthew Nix [7:08]
So first, I was talking to a mentor of mine, who’s the CEO of a very big tech company, and they ended up selling it for like $4 billion, or something. And we were talking one evening, and he said, kind of half-jokingly said, Matthew, I don’t work any harder than you do. My work just has more zeros behind it. So that was that was number one that I was like, Huh, that’s interesting. And then very shortly after that, I was reading a book. It was a was just I wrote it down. So I wouldn’t forget here Oh, it was Man’s Search for Meaning Viktor Frankl. And in that book, that it’s about surviving concentration camps in the Holocaust. And the author talks about worried and he says worry is like oxygen, it feels every cubic inch of any space that it’s in.
Matthew Nix [7:57]
So kind of, you know, what I took away from that was, you know, whether I have a $10 million business or 100 million dollar business, I’m gonna worry the same that the guy worried about making his house payment that’s making $15 an hour, his worry is no more or no less than my worry about making payroll. So once you understand those two concepts, that he didn’t work any harder, he just had more zeroes, and I’m gonna worry, no matter what the size of my company is, then then you’d have to ask yourself, Well, why wouldn’t I do this? I mean, it’s almost slothful, you know, if you don’t do it, you know, there’s some things in the scripture about that, too. So you know, you, you to whom much has been given much as expected. So that’s really those, those things kind of came together. And that’s, that’s why we chose to go for it.
Gene Hammett [8:46]
Well, Matthew, you have been putting together and building and optimizing your leadership team. And that’s such an important piece. Do you remember like, kind of the signs when you were kind of in the number of employees you had when you’re like, we really need a stronger leadership team.
Matthew Nix [9:02]
Yeah, I don’t know. That’s a great question. I don’t know the exact number and again, it varies depending on the business you’re in but but I definitely remember the moment you get to that point where you you know, you you can’t be every everything to everybody and and you realize to go the next level, we’ve got to put this team in place. I probably did it proactively a little bit sooner than most would it was sort of the if you build it, they will come model that made some people around me pretty nervous. You know, we were bringing on bringing on salaries for leadership people that maybe when we couldn’t justify them, but, you know, we have we have some good luck and things fell into place. But But if we hadn’t had those pieces of the puzzle in place, we would not have been able to capitalize and to really grow like we did. So yeah, I mean, it’s it was it was somewhere you know, we’re about 100 folks now. I mean, somewhere in that 30 to 40 range is when had to have that level next level layer of, you know, leadership.
Hold on for a second. Matthew just talked about the need to be proactive, and be proactive with his executive leadership team. A lot of people are showing up reactive as a default and think about it for a second. In your schedule, do you see reactive? Or do you see proactive? You feel overwhelmed? Or do you feel like you’re moving forward intentionally and have your strategies built around the company growing in the way that you see it growing? Or are you just reacting to the day, reacting to the moment reacting to the client, fast growth companies really embrace this, the sense of being proactive in all senses, and they’re at that level, and about 80% of the time, you may not truly get to 100% of proactiveness, because things happen. But most of my clients say that they would be closer to 80%, reactive, and 20% proactive before working with me. And it’s complete shift after that fact. Just keep that in mind. Back to the interview.
Gene Hammett [11:05]
You remember back then what was, what were some of the challenges you saw, and maybe even worried about, but they really didn’t become something you needed to worry about?
Matthew Nix [11:17]
I don’t know, I don’t recall, anything like that. I do recall a situation that really changed the landscape of what it looks like today. And a challenge we were working through, you know, we before we had the leadership team that we have, my brother and I were, you know, I was working in the shop all day, and then coming into the office in the evening, and I was really down and out. And we were having a lot of turnover. And my brother said, you know, what’s, what’s wrong with you? And I said, you know, this or that we were dealing with a situation and I said, I guess we’re just going to have to tolerate a certain amount of bullshit or, or we’re just never going to have any employees. And he said, Absolutely not.
Matthew Nix [11:59]
We’re not low or in our standards. You know, it kind of gave me a kick in the ass that I needed to, you know, just, I was kind of sulking. And so we made a decision right then and there that, that we were we were not going to make concessions that we were going to have good people, we were going to do things the right way. And it was very painful. I mean, we probably had five or 10 employees at that point in time. But I always remember that as a watershed moment, if if we hadn’t hadn’t made that decision right then and there, we would have went down that path just like every other business, we would have been mediocre and mediocrity breeds more mediocrity and the leadership team we have today wouldn’t be here. Had we not made that decision?
Matthew Nix [12:38]
Hold on for a minute here. Do you hear that tolerating? Does that mean to you? Are you tolerating your work the word culture, a mentor once said to me, You don’t get what you want, you get what you tolerate. And what that means here is that you have to identify the things that you’re tolerating, you have to really be look at this with a critical eye because it really is necessary for you to grow and create the kind of intention around the organization that’s necessary. I find most of the time leaders are tolerating way too much. And that’s the reason why they live in a place of frustration, and they deal with so much uncertainty. What are you tolerating back to the interview.
Gene Hammett [13:19]
I love that story. Because it’s so true. On you get what you tolerate. As your brother said, we’re not going to tolerate this. And that’s one reason why you are where you are. Matthew, I want to dive into this whole concept. What steps have you taken to ensure that your executive leadership team kind of grows together and is optimized?
Matthew Nix [13:41]
Yeah, absolutely. There’s, there’s some things, there’s a ,there’s some things that we’ve done. I think, Jim, I’ll come I’ll think of it in a minute. Jim Collins. He’s got a book about it’s a really short, little thin read, but but it’s like turning goals into reality. And he called talks about these catalytic mechanisms. And I was thinking on that.
Matthew Nix [14:10]
Gene Hammett [14:11]
Matthew Nix [14:12]
And so catalytic mechanisms. So it’s things that really transform goals into concrete, you know, realizable things, and I think looking back, we did some of those things, like, you know, just intuitively I guess, but the biggest thing was right out of the gate, you know, we really our leadership team had to have ownership both figuratively and now, literally. So you think about the fifth-generation family business and then giving ownership literal shareholder ship to executive-level leadership, you know, that was a big decision to do so but before we did that, we had to bring people in that would really take ownership in the company and believe in the vision you know, of course, have to cast that vision then, but what I mean by that is, almost everybody on our senior leadership team took a pay cut to be here, nobody got a pay raise, I can guarantee you that they left bigger benefits with fortune 500 companies are very well established companies took pay cuts to come here because they believed in what we were doing and wanted to be a part of this.
Matthew Nix [15:21]
And that was first and foremost, you can’t give someone literal ownership in a company and think that they’re magically going to treat it, you know, better, but if they already treat it like their own, and then you give them ownership, you know, look out because you’ve just really poured fuel on the fire. So we did that. Another thing we did was, it was really important if we were going to scale the business and and have a senior leadership team is that we, as a family treat the business like a business separate, it’s its own living, breathing thing. And we had to we had to do that. And I consulted some mentors that I highly respect multi-generation family businesses, about giving ownership or not giving, offering ownership to senior leadership. And I heard a lot of great arguments about why that wasn’t maybe the best for the family or the or the CEO, or what have you. But not one person gave me an argument for why it wasn’t best for the business. If you truly treat the business like a living breathing thing of its own, I couldn’t get one argument from these highly respected people for why that didn’t make sense. So we’ve tried to the business is its own thing. And there’s so many components, we can do a whole hour podcast on, you know, what comes out of that, but, and then bringing that senior leadership team into to real ownership, which they’re they’re buying, they’re putting their hard-earned money into. And it just it just really poor Porsche fuel to the fire.
Gene Hammett [16:50]
You know, I know you don’t know much about the work I do. But the next book I’m writing is all about this, this feeling of ownership. Even when employees don’t have a financial stake. Like it’s possible to actually have people committed to to the growth of the organization, even if they don’t have options and, and stock in that way.
Matthew Nix [17:14]
The opposite is true. Also, that’s a great point. It’s also a, you can have real stock in a company real equity and not feel ownership of it. That’s, that’s even more catastrophic. I mean, you just gave up equity your company, and people don’t have ownership. I’ve seen these companies that will have partners, and then it’s a secret of who the partners are. That’s the craziest damn thing I’ve ever heard of. There’s two parts of owning anything. There’s a financial reward of owning it, or financial downside owning it. And then there’s the pride. I mean, I always tell people, there’s there’s hardly no financial justification for owning a vacation home with Airbnb today. I mean, it’s hard to justify the math to own it. Why do people own it? Well, they own it, because they take pride and saying, I own two houses or whatever. I mean, business is the same thing. So yeah, you’re exactly right. ownership in your heart, and ownership on paper are not necessarily always go together.
Gene Hammett [18:10]
When you think about, you know, keeping the team aligned, and the things that you do consistently, the rituals of the organization, what come up to you, Matthew?
Matthew Nix [18:22]
The rituals of the organization?
Gene Hammett [18:25]
Matthew Nix [18:28]
Well, transparency, I mean, if you want to call that a ritual, I guess it’s more of a way of way of life. But it becomes a ritual, you know, when you have your, your monthly meetings, your review meetings, transparency, and and we talked about ownership, if people say accountability, I like ownership better, we’re talking about it in a figurative sense. I mean, so transparency and taking ownership. Our CFO knows I love to use the phrase all the time we’ve got if we want people to win, we have to tell them the score. So we always refer to our CFOs the scorekeeper. So, you know, we were really big on that we share, each division manager knows their financial position in the business and where they’re at week to week, month to month, quarter to quarter, we come together, we take ownership and the results good, bad or indifferent. And all try to keep, you know, pulling together to make this thing go. So there’s transparency and that ownership. accountability, I guess, has been really big.
Gene Hammett [19:28]
I just had a conversation with someone about transparency. So I’ll kind of see how you would answer the question. You know, there is there is some negative news inside the business. There’s some things that really, maybe, maybe you’re afraid to let the team know, because it’s not. It’s not good for the business. Do you hold those things back? Are you fairly transparent about about those moments?
Matthew Nix [19:53]
I think you’ve got to, if you’re going to be transparent, you got to do it both ways. Good, good and bad. You know, it can be equally uncomfortable going both both directions. So, yeah, I mean, we, you know, hey, we’re going through some tough times, like everybody right now with with this pandemic, and we’ve had a couple of unbelievable years leading up to this, where everybody was getting huge bonuses. And, you know, we were buying new equipment and new trucks. And, you know, it was, it was, it was great. And I had to have a discussion with everybody here a few months ago and say, Look, you know, we’ve got to really tighten up and, and we’re, we’re fine. You know, we’re financially healthy. But even even with that, here are some things we’re gonna have to do some concessions we’re have to make reducing bonuses is one of those, we can’t buy all those new toys we wanted this year.
Matthew Nix [20:42]
And here’s why. But but here’s where we’re going to get to. And when we get to this point, then we’ll turn it back on. And we’ll go again, and you can’t be afraid. Thank you, people disrespect you so much more if you just be honest with him, and the good and the bad. And then the other last thing I’ll say on that is when people, people, it’s so disrespectful to act like people don’t know what’s going on. I mean, if the owner pulls in, in a new vehicle, and you try to tell them that, you know, things are terrible. I mean, how disrespectful. And then on the flip side, when things are tough, they know things are tough, and you try to pretend like it’s all great. And then and then then they their mind goes to, you know, 10 times worse than it really is. So you got to be honest, good or bad.
Gene Hammett [21:26]
I’m with you on that one, Matthew, you know, transparency is a hard one, but but fast-growth companies like yourself, and those that really do believe, and people feeling like owners embrace transparency to the point of it’s a little bit remarkable how transparent they are. I know that we could go in a many different directions, I want to kind of wrap this up today with, you know, the defining moments of leadership are hard. You’ve been through many moments, does something come to mind about a moment where you had to grow as a leader, and let go of some of the old beliefs behind?
Matthew Nix [22:06]
Yeah, I’m still working, working harder at that than ever. And failing at it more than ever, I think, yeah, we’re, you know, we’re, I do think we’re going through another one of those moments that now the growth has flattened off this year, we’re getting ready, I we’re in a rebuilding year, you know, we’re getting ready to go again, when when the Kami comes back, and we’re setting, setting the pieces in place right now. But yeah, you know, you lead different when you’re 30 people, and when you’re at 100, and then you know, we’re getting ready to go, you know, try to go to 200 or so. So you you lead different, and we’ve got five locations, and, you know, we’re looking at another one in the near future. So you change that all the time, I think that a couple big things I’ve realized lately is that I can’t be the one solving all the problems.
Matthew Nix [22:55]
And so I’ve got to really work on, you know, promoting my team to solve those problems and just be there to lean on. So to be the go to, and then the other big one I’ve learned is that an idea that I come up with, is not nearly as good as an idea that’s maybe 70 or 80%, of what I think it should be that somebody else comes up with. It’s gonna they’re gonna, because because they are now the ones that have to go make it happen. Those senior leaders beneath me, they’re the ones that have got to go carry it out, execute, make it all happen. And if they don’t buy into it and believe in it, it’s not it’s not gonna go anywhere. And I can as much as I want to push to make things go. We’ve got that complexity now, where were they have to do that. So I’ve learned to, you know, let them develop, say, Hey, guys, here’s, here’s where I think the challenge is, and here’s kind of where I think we should go. You figure out how to get there. And then let’s run with that. And I’ll give you the resources to do that. So those are a couple things. I’m, and believe me, I’m not getting it right all the time. But I’m working on that right now.
Gene Hammett [24:01]
Well, all of the things you just talked about Matthew are in alignment with what does it take to make people feel like owners, you’ve got to welcome their ideas, not just yours, you got to include them in these decisions that are allowed to move forward, you get to empower them in a way that allows them to not only provide their ideas, but also make the decisions of how we move forward. And maybe even being okay with failure. So there’s a lot of things you wrapped into that are really critical to having a culture where people feel like owners, even when they don’t have that financial stake. So Matthew, thanks for being here, sharing your journey of leadership and really appreciate it.
Matthew Nix [24:38]
Yeah, thanks for having me. It was fun.
Gene Hammett [24:40]
I love interviews like this when we talk about this sense of ownership and it really becomes a core theme for the interview. Sometimes you don’t know if you’ll get to it, but I believe in this so much that you want people to feel that sense of ownership. So they feel it in your company. Do you feel it across the people that you look at Can you see it in their eye?
Gene Hammett [25:00]
Once had an interview with someone that says, You know, I can look someone in the eye within a few seconds, I can tell you if they’ve got that spark of ownership. And it’s a great feeling when I know that because I’ve seen it so many times. And I can identify when someone’s not showing up with that spark in their eye, it’s a pretty cool way to look at it. My job is to help leaders continue to evolve and create the kind of place within leadership where they actually are evolving. I work with those leaders in the defining moments of their own leadership. Everyone has it, we all have to level up to at some point, my job is to help you do that. If you feel like you want to reach out to me and make sure you check out send me an email gene, a genehammett.com if you are in the midst of some kind of little company is going if you can have the ability to slow down yourself. Be great to have a conversation with someone else. And I’d love to have that conversation with you. All right.
Gene Hammett [25:54]
That’s our piece today. The power of transparency as it relates to growing your company and developing leaders inside your company. Hopefully, you’ve enjoyed this episode. Share it with a friend, as always lead with courage. We’ll see you next time.
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