Why are you in business? It’s not a bad idea for all business owners to ask that soul-searching question of themselves. Many no doubt would concede that making money is the name of the game. Some might cite with varying degrees of truthfulness a commitment to their employees and customers. Others might emphasize that they simply love their work.
Then there is Kip Miller, president and CEO of Greenville, SC-based Eastern Industrial Supplies Inc., a PVF supply house commonly known by most insiders and customers simply as “Eastern.” To Miller, business is a means to put into action his deep-seated Christian convictions, which revolve around caring for people.
Folks of a secular mindset tend to roll their eyes when faith and business get mentioned in the same breath. I count myself among the secular ranks and going into this story was more interested in how Eastern handled PVF distribution than its faith-based involvement.
It didn’t take long to understand that it’s impossible to separate the business of Eastern from the principled Christianity that is its bedrock. The cynic within me came away disarmed by the realization that Eastern’s melding of business and faith has helped improve the lives of thousands of individuals ranging from Eastern employees and extending outward all the way to Africa. That’s where the company has been instrumental in founding the Daily Bread Life Children’s Home in rural Tanzania, which provides sustenance and education for dozens of orphans or youngsters whose parents are otherwise unable to care for them. In between the near and far are dozens of local and national charities that have benefited from the largesse of Eastern personnel and the vision of its leaders.
Sermonizing is not part of their agenda. Not once during my visit did Miller or any other Eastern associate try to proselytize, and I don’t even know what denominations any of them subscribe to. I never asked and nobody bothered to volunteer that information.
“Life is about more than pipe, valves and fittings to me, but we don’t beat anyone over the head with our beliefs,” Miller told me. “We try to live our beliefs.”
The result is an astounding breadth of charitable commitments funneled through a subsidiary organization called Eastern Cares (www.easterncares.org).
Eastern CaresMiller calls Eastern Cares his company’s brand and “its DNA.” It defines a business culture shared by many if not all of Eastern’s 160 or so employees, in which a substantial amount of business profits and employee contributions go toward good deeds.
Eastern Cares was established in 2002 to promote a vision of a caring company reaching out to what it identifies as the four “C’s” – Company, Community, Country and Cultures. These correspond to charitable works on behalf of fellow employees, local communities, national causes and worldwide charitable endeavors. Key elements include:
Eastern Cares is directed by Floyd Parker, an ordained minister who has been associated with Eastern since 2001, when he came aboard as its first chaplain. Parker is employed by an organization called Teleios Services, a profit-making arm of the nonprofit 501(c)3 organization, Teleios Ministry.
“Businesses usually don’t work through nonprofits,” Parker advised. “Teleios Services was formed as a profit-making organization to demonstrate to other businesses that you can be profitable fulfilling a charitable mission.”
Teleios Services is headed by Garry Freeman, a financial planner who offers financial advice to Eastern associates as part of the Eastern Cares package. Parker is paid by Eastern to administer Eastern Cares, and his duties include coordinating missionary assignments and the chaplain program. Prior to 2008, chaplains were centralized in Eastern’s headquarters location in Greenville. Miller decided it would better serve to spread that culture companywide using local chaplains, and Parker has helped recruit them.
A handful of other Greenville area businesses, including a Subway franchise, were inspired by Eastern Cares to adopt similar programs, Parker said. He and Miller also have spread the word worldwide speaking to business groups in Romania, Canada and anywhere else they can gain an audience willing to listen to the “Cares” philosophy of doing business.
“I don’t want to take credit for all of the ideas,” Miller insisted. “I’ve learned a lot from going to different conferences about God in the workplace and how to be a Christian businessman in deeds rather than words.”
Eastern Cares About Business, TooMoney has to be generated before it can be given away. To that end Eastern has built an impressive PVF business serving mechanical contractors and industrial customers from 10 operating locations in the Carolinas, Georgia, Alabama and Florida. Corporate headquarters in Greenville occupies a separate building, giving Eastern 11 locations altogether. Six years ago they started a commercial plumbing division that now accounts for around 20% of revenues.
Kip Miller did not grow up in the business like most PVF veterans. He started with Eastern in 1980 after nine months of searching for work as a young college graduate in that recession-wracked year. George Bagwell, Eastern’s owner, was impressed with the young man and by 1985 promoted Miller to vice president and put him in charge of sales. Around that time Bagwell also created a succession plan aimed at having Miller acquire ownership of the company through a buy-sell agreement.
Eastern was a small company at the time with only 13 employees and about $3 million in revenues. News spread of Miller’s talent and he was on the cusp of accepting a job offer from one of the industry’s giants when word came on New Year’s Eve of 1986 that Eastern’s owner had died suddenly of a heart attack. Miller was faced with a momentous decision. “I didn’t really have aspirations to own the company,” he told me. On the other hand, Miller said that he felt a sense of obligation to the other employees and to fulfill Bagwell’s faith in him. “It just didn’t feel right to leave.”
The Eastern he inherited was a company with a good reputation for customer service but operationally backward. Vendors were slow to get paid. The company was still using a Kardex inventory control system long after most competitors had computerized. Miller spent the ensuing years modernizing operations via Eclipse’s distribution management system and then turned attention to growth. In 1995 the company opened its first new branch in Anderson, SC. Then came eight more branch openings or acquisitions between 1998 and 2008, with revenues climbing in excess of $60 million.
According to Todd Michalak, Eastern’s regional manager for upstate South Carolina, along the way the company managed a transition from servicing mainly textile manufacturers, an industry that’s all but disappeared from the region as production moved to cheap labor markets overseas, to more diverse industrial markets that include automotive, power generation, chemical plants and the paper industry. Most recently, Eastern has done a significant amount of business with Boeing’s new Dreamliner plant in North Charleston, SC, whose labor force issues have been much in the news lately.
Dealing With Tough TimesLike almost every other company in the industry, Eastern got socked hard by the economic downturn starting in 2008 and saw revenues decline. Eastern’s culture of caring was put to the test. To avoid layoffs Miller initiated a 31-point plan of large and small cost-cutting measures, along with reducing staff through natural attrition. During this time, none of the Eastern Cares initiatives were cancelled or delayed.
“In the last three years I’ve learned more about accounts receivable than I ever wanted to know,” said Vice President-Sales/Marketing Richy Milligan. “We’ve seen accounts that we’ve been doing business with for 20 years go out of business, something I never dreamed would happen. Performance bonds have come into play on a lot of jobs.”
CFO Robby Davis works closely with Milligan and other managers on major projects and he told me of a $120 million mechanical contractor going out of business and a $320 million GC shutting down. “The good news is that the big companies are getting smarter in their bidding and business models,” Davis said. “They are learning not to take every job they can possibly get, because it can come back to haunt you when you start bidding jobs you’re not familiar with.”
Last year the company started growing again, and this year looks headed for another double-digit percentage gain. Miller’s long-range vision for the company is enveloped in a concept he calls “PVF150.” The 150 refers to a long-range plan of business growth to reach annual revenues of $150 million in the next five to seven years. PVF stands not for what you think, but for People, Values and Faith.
“We will strive for excellence in providing our customers with unsurpassed service and aspire to be recognized as the best PVF/plumbing organization in the Southeast,” reads in part Eastern’s PVF150 message to associates.
Core ValuesThe company defines its core values as honesty, integrity, caring, self-responsibility and being positive. These values came into focus around the time Eastern Cares was formed in 2002. That coincided with an epidemic of corporate sleaze in which business news was dominated by scandals associated with Enron, WorldCom and other perpetrators. “Corporate America wasn’t trusted anymore,” Miller said. “They all seemed to lose sight of the God-given values we grew up with, but which sometimes get lost in the business world.”
“Honesty is paramount,” he continued. “Sometimes it seems that in the supply business, if you’re honest, you’re an exception.” Miller clarified that statement to make sure everyone understands he’s not accusing competitors of cheating or illegal behavior, but of the little white lies that casually get told day after day in the business world – “I can get that by tomorrow … The check’s in the mail.” Eastern core values require associates to level with customers, vendors and one another about what can and cannot be achieved.
The “Faith” component of PVF150 refers to the religious faith that guides Eastern and its associates through difficulties. “Where there is no risk, there is no faith … Fa
United In CultureI’m not sure how many of Eastern’s 160 associates are motivated by Christian beliefs. It’s not part of any job description and I was told it plays no part in hiring decisions. Yet it’s obvious that the corporate culture of caring spawned by the leadership’s faith is infectious.
Spartanburg Branch Manager Rita Davis, who has been with Eastern since 1982, gave a good account of this phenomenon when I asked her to identify the biggest business challenges she faced.
“I hate to lose an order, yet things have gotten so competitive we’re losing jobs where we’re 2% high. It used to be a cause for joy when we got within 2%, now we lose out and it gets people down.
“All of us managers are concerned about our people,” she continued. “If one of us hurts, we all hurt, so there are a lot of times I stay awake at night thinking about that. On the other hand, I know that I can count on our team if I need them to come in early, stay late or do whatever it takes to get by.
“This is a family-oriented company of people working together to exceed customer expectations. Everybody here is willing to help out each other no matter what.”
Todd Michalak, who came aboard as the 11th employee of Eastern, said the company’s family atmosphere is a major reason why he’s stayed on so long. “It’s been a challenge to keep that family unity as we grew,” he said. “Simply taking the time to say a few friendly words to people day after day means a lot. It helps drive the whole vehicle.”