A Turnaround CEO
Jerry Meyer, CEO of Walls Industries, has a knack for common business sense—and reinventing troubled companies.
Jerry Meyer says he owes his successful management philosophy to two cases of bad timing that, nonetheless, had happy endings.
|PEOPLE PERSON: Walls Industries CEO Jerry Meyer puts people first in business. photography by Jeremy Sharp
The first involved his acquisition in 1978 of Kilgore, Texas-based Skeeter Boats. Meyer’s timing was perfect—perfectly awful. “In the late 1970s, oil went to $50 a barrel, interest rates to 22 percent, and no one wanted to buy fishing boats,” he recalls. In no time, Skeeter’s sales had dropped by two-thirds.
Meyer slashed expenses and staff, but, instead of laying people off, he recalls, “we went to work two days a week. We all took the same pay cut.” Even so, Skeeter came within two weeks of bankruptcy. “I bought a one-way ticket to California and told my CFO, ‘If I don’t come back with $1 million of business, we’re bankrupt, and I’ll find my own way home,’” Meyer remembers.
That didn’t prove to be necessary. Meyer came back with $3 million worth of sales, built up the business, and sold it to Coleman Co. Inc. of Wichita, Kan., where he became Coleman’s executive vice president and CEO of its Water Sports Group.
The second instance of bad timing came a few years later, when Meyer was asked by New York-based Oak Hill Capital Partners, a Robert M. Bass affiliate, to become CEO of Pinnacle Brands, a Dallas maker of baseball, hockey, and football trading cards. It might have been a very good business—except the year was 1994. You might recall ’94 as the year that Major League Baseball players went on strike. So did professional hockey players. Once again, two-thirds of Meyer’s business dried up.
Employees at rival Fleer Trading Cards in New Jersey came to work and found the gates locked, the machinery carted off, and pink slips waiting for them. Pinnacle employees came to work dreading they’d find the same thing. Instead of pink slips, though, Meyer called the workers together and repeated his business mantra: “Sell the best product. Sell at a fair price, not too high and not too low. Treat employees with dignity and respect. Treat your customers better than any other company treats them.
“I truly believe people are the business,” Meyer told the employees. “They have to do the cost-cutting. They come up with new products. People have to buy in.” In a speech that caught the attention of Ted Koppel and Nightline
in 1995, along with author Robert E. Kelley, who featured Meyer in his book, How to be a Star at Work
, the Pinnacle CEO continued, “This company doesn’t owe you anything. From now on, you’re going to create your own security.”
After the initial shock wore off, the employees proved Meyer right. They successfully brought out new types of holographic cards and multiple cards featuring the most popular athletes. A legal assistant who had been sending trademark applications to Pinnacle’s law firm to file decided she could handle the applications herself, saving the company $100,000 annually.
Eventually, Pinnacle recovered. However, Meyer took a hard look at its industry and came to a difficult conclusion. Although investors were willing and eager to pump money into Pinnacle because of Meyer’s track record of reinventing companies, he told the finance people, “Times have changed. The market has shrunk. Technology has made us outdated. Don’t put more money in. I wouldn’t.” Pinnacle was liquidated.
>> Excellent customer service should always be a priority.
>> Your employees deserve to be treated with dignity and respect.
>> Compensation— including the CEO’s—should be performance-based.
Its employees, however, have done well for themselves. Says Meyer: “You’ll find them in very senior positions at places like CNN, JPMorgan Chase, and other companies.” And what about the investors? Many are still with Meyer today because of his business acumen. “He’s the most instinctively accurate person I’ve ever known in business,” says Mark Stephens of Dallas’ Challenger Capital, who was instrumental in recruiting Meyer to Pinnacle. “He’s accurate with a stunning degree of consistency, and his value to us is that you get very good advice.”
Meyer didn’t dream of being a CEO as a kid in Amarillo, but he saw William Holden in Executive Suite
—a movie about the inner workings of a corporation—and “was totally smitten and fascinated,” he says. He also found that “business came naturally” to him.
It may have come naturally, but it didn’t come easily. His first job was working as a lumberjack. At the age of 14, Meyer and three friends went to Colorado to work on a dude ranch. His mother opposed the trip. When they got there, they found all the jobs had been taken. Two of Meyer’s three friends left. “We had a quarter-tank of gas, half a loaf of bread, and a can of sardines,” he says. “But I was not about to go home and tell my mother I failed.” At the end of a summer spent atop spiked logs, he netted a grand total of $30.
“I told my mother I would never again use my hands to make a living,” Meyer recalls. “I said, ‘I will go to school and I will find a real job.’” The fact that money might be a problem didn’t bother him at all. He worked his way through Texas Christian University and Baylor Law School (he attended to learn critical thinking) by selling ladies’ shoes in his off-hours.
“Fine ladies’ shoes. I could always get a job because I worked on commission,” he says. “That meant everyone else had first crack at the customers, but my philosophy was, ‘You eat what you kill.’ I could make $200 to $300 a week, and that was a lot of money then.”
The company Meyer is most excited about today is his current venture, Cleburne-based Walls Industries, a work- and sports-apparel manufacturer. Meyer’s investment company, Valhalla Holdings Ltd. of Dallas, purchased Walls jointly with Brazos Private Equity Partners LLC, also of Dallas, in 2004. Walls makes insulated gear that’s popular with hunters and outdoor types, as well as a famous brand of red coveralls worn by oil-well firefighter Red Adair and the iconic Big Smith line of striped work clothing.
“It’s a fun product; it’s creative; it’s needed by lots of people,” Meyer says. “It’s not fashion—you actually use it to make a living. It’s a consumer product and, as a business, it touches everything. Our manufacturing is outsourced, so we have all the international issues like currency fluctuation and risk. We sell to everyone from mom-and-pop stores to big-box stores and national retailers. We sell over the Internet. And our sales are almost all domestic, so our international potential is unlimited.”
Meyer’s reputation is to surround himself with exceptionally capable people, then to give them extremely high levels of direction, support, and encouragement. When he says “take care of the customer better than anyone else,” he’s first in line to practice what he preaches.
“We had a large industrial customer that we’d been trying to do business with,” remembers Roy Whitehead, who’s in charge of Walls’ sales and marketing efforts. “One of their regular vendors couldn’t fill an order, so they had a shortage and asked if we could help. They needed the product in a week. Jerry called the warehouses that day, got the products pulled, and the customer got them the next day. This wasn’t just Jerry. The warehouse people knew we were trying to get that customer.”
Despite—or perhaps because of—his own successes, Meyer is scathing in his criticism of many business-management practices today. “The No. 1 mistake, hands-down, is treating people like numbers,” he says. “Circuit City said they were going to fire people so they could hire them back at a lower salary. That’s demoralizing, and oh, by the way, Best Buy is kicking their butt.
|SUIT UP: Walls makes
a variety of work and sports apparel, such as the 10x Scentrex hunting gear seen here.
“Not enough attention is paid to people,” he continues. “There’s a human side of business. If you hire someone, you have an obligation to provide them the tools to be successful. You can’t just lay them off. Too many businesses don’t really have any genuine concern for their people. This isn’t touchy-feely or paternalistic; it’s good business.”
What’s the second biggest mistake management makes? Compensation. Meyer thinks it should be “performance-based, pure and simple. Management [members] are employees like everyone else. If you cut wages, cut everyone’s wages.”
If members of the management team want equity, he says, they should be paid last. And employees, if they want good management, “have an obligation to call out bad employees,” he contends. Meyer’s analogy is that “on a football field, the coach can coach, but the decisions are made on the field. If an employee sees a co-worker who’s not pulling his weight, he has an obligation to say something. Otherwise, he’s really hurting himself, because he’s hurting the company. People need to be held accountable.”
Out of the office, Meyer says he has no real hobbies. “Work is my hobby,” he says. Nevertheless, he owns a ranch in Bosque County, collects wristwatches (he has 40 and wears them all), and is a gourmet cook. “Jerry knows all the maitre d’s in town,” says Jeff Fronterhouse of Brazos Private Equity Partners.
Meyer also loves reading about business and routinely devours a dozen publications. He points to the late Stanley Marcus of Dallas-based Neiman Marcus, the upscale department store, as someone he admires. He likes to read biographies, he says, “but the trick is to read them 15 years after they’re written. I loved [Apple honcho] John Scully’s Odyssey
, about the conflict between him and Steve Jobs. And the consensus [then] was that Jobs was an idiot. Now, 15 years later, who looks like the smart one?”
Meyer’s most important accomplishment may be his two sons, Carter and Brent, who are both entrepreneurs and CEOs in their own rights. Carter is chief executive of Dallas-based Scientific Health Development, a medical venture-capital fund, while Brent is CEO of McKinney-based Squirrel Brand Inc., the country’s oldest nut company.
Is it any wonder Carter and Brent have been successful? They certainly had a great teacher.
Merrie Spaeth is one of the pre-eminent crisis management strategists in the world. After serving as President Reagan’s director of media relations, she founded Dallas-based Spaeth Communications in 1987. She is also a lecturer at Southern Methodist University’s Cox School of Business.