CEO Corner with Garry Ridge, CEO of WD-40 Company
Small-Cap Institute’s Amanda Gerut interviews WD-40 CEO, Garry Ridge. Mr. Ridge is president and chief executive officer of the WD-40 Company (NASDAQ:WDFC).
WD-40 Company is the maker of the ever-popular WD-40, as well as 3-IN-ONE Oil, Solvol and Lava heavy duty hand cleaners and X-14, Carpet Fresh, Spot Shot, 1001 and 2000 Flushes household cleaning products.
Garry has been with WD-40 since 1987 in various management positions, including executive vice president and chief operating officer and vice president of international. He has worked directly with WD-40 in 50 countries.
From the Show:
– Are You an Accidental Soul-Sucking CEO?
– Helping People Win at Work: A Business Philosophy Called “Don’t Mark My Paper, Help Me Get an A”
– The Learning Moment (Garry’s blog)
Transcript:
Amanda Gerut:
Today I’m talking with Garry Ridge, CEO of WD-40 Company. WD-40 is the product in practically every garage you’ve ever set foot in. It’s used in 80% of American households, but it’s also sold in more than 176 countries. In other words, it’s iconic. And even though the namesake product is also in the company name, it’s not a one product company. WD-40 is behind brands like Carpet Fresh, 2000 Flushes, and so many other cleaning and lubrication products. Garry, you’ve been with WD-40 for 31 years and you’ve been CEO for about 22 years. Sales have quadrupled and the company’s market cap has grown from 250 million to 2.5 billion. Annual compounded growth rate of total shareholder return is 15%.
So my fist question, Garry, is how did we get here? And more specifically, how did you get to WD-40?
Garry Ridge:
Well, how we got here is pretty simple. It’s all about the magnificent people that come to work every day at WD-40 Company. Now our job is to make sure we create an environment where our tribe members wake up each day inspired to go to work, feel safe while they’re here, learn something new, and go home at the end of the day fulfilled by the work that they do. A feeling that they’ve learned and really contributed to something deep in themselves. And this is the world that we envision and we envisioned some time ago. And if we create this world for our people, that will take care of our customers. And that, in turn, will take care of our stakeholders and our shareholders.
Amanda Gerut:
Great. Let’s dig in. Okay, so going back to that first year as CEO, you were promoted internally. You were an International Vice President. Were you ready to be the CEO when you became the CEO, Garry?
Garry Ridge:
Certainly I think that no, I wasn’t ready. I guess I was ready in the way that I understood our brand and I understood where the opportunities were. And we really believed that we could take the blue and yellow can with the little red top to the world. Back then, most of our revenue was in the United States. So I … Something became very clear to me, Amanda. And that was that micromanagement wasn’t scalable. And if we were to build a business, we had to do it around a set of values that set people free. We needed to remove fear from the organization.
A lot of what I’d read in a book called Everything You Need To Know You Learned In Kindergarten, which says treat people right and they’ll do well. It’s amazing Aristotle said in 384 BC, “Pleasure in the job puts perfection in the work.” So all of this was in my head and I said I need to go and really sharpen my source. So I went back to school soon after becoming the CEO and I did a masters degree in leadership at the University of San Diego. And I had a clear objective. I wanted to learn what I didn’t know and confirm what I thought I knew. And through that, I had … And a lot of my beliefs were strengthened because of the interactions I had with great people like Ken Blanchard, who I eventually wrote a book with, whose a great friend of mind. I was on his board for 10 years after. After a period of time. But it was really about how do we become great servant leaders and how do we unleash the power of our people. Because without people doing meaningful work, we’ll just had average outcomes.
Amanda Gerut:
Garry, I’ve heard you say before that you got very comfortable with saying I don’t know to the board, to anyone. Can you talk a little bit about why that was something you had to get comfortable with?
Garry Ridge:
Yeah. I’ve said that those three words are the three most powerful words I’ve ever learned in my life. And I had to get comfortable with it because it’s uncomfortable admitting you don’t know. I think our ego takes over. And what became clear to me is when I got comfortable not knowing, I’d learned so much. And so much came to me because as soon as you make out you know everything, you shut down all the opportunity to learn more and get different points of view. And even today, it even goes a little bit further when I think about it. I was reading a book a couple of weeks ago. And it was the follow on from Who Moved My Cheese, that was written by Spencer Johnson. Spencer passed away and the new book is called Out of the Maze. And it talks about him and hiring all of them. But it’s also … Now, it’s not only not knowing, but what do you believe? And he says in the book, a belief is a thought that you trust is true. Sometimes facts are just how you see things. So not only do I get comfortable with I don’t know, but even more today, I keep asking myself, “Why do I believe that?” Because the world’s changing so quickly.
Amanda Gerut:
Mm-hmm (affirmative). Can you talk a little bit about what it was like to work with a board when you became CEO? First time CEO? And then saying to that board I don’t know when they’re looking to you for answers?
Garry Ridge:
It’s scary. I mean, I was … I’d never been the CEO of a public company, obviously. And here I am with this group of people that a lot of them I knew or had got to know because I had been with the company for a while. But initially, I found it very difficult until I realized that they had the same objectives that we had, which was to build an enduring company over time. So it wasn’t just I don’t know. It’s like I don’t know, but I know I can find the answers. And thank you for making me aware of where that opportunity is. And then I got comfortable. And again, they don’t have all the answers either. So if you think about the purpose of a board, it’s getting that collective brain trust together with all the diversity you can have and all the learning experiences you can have to come out with a better outcome than the one you went in with. So it was learning for me that I took a little time to get comfortable with.
Amanda Gerut:
Mm-hmm (affirmative). So it seems like the company … Like you said, the company took that little can. I used to use that can to put into my Rollerblade wheels when I was 12 years old. But taking it global. Can you talk about how you approached sort of this global growth challenge?
Garry Ridge:
Yeah. Well, we knew that WD-40 was a product that … If you think about what our purpose is or our why is, we exist to create positive lasting memories solving problems in factories, homes, and workshops of the world. Now, what was clear to us was these problems were in these factories around the world and we could bring the solution to them. So the first question we ask ourselves is do you need me as a product? And we looked at the world, and we asked that question, and we force ranked the countries that needed us more than needed us less at that time. And then after we determined that we said, “Okay, now is there a business case for having them know us and be able to buy us?” And we ran that analysis and then we came up with the list of where we wanted to go first. And then it’s a day by day, week by week, month by month process of making the end user aware of our product and making it easy for them to buy.
I can give you an interesting example. China is a country that we set up a subsidiary there about 12 years ago. We’ve been growing China at 15 to 25% a year over time. When I first went to China in the mid-80s when I was looking after a lot of our international business … In fact, based out of Sydney at that time, I went to China and I asked the question do you need me of the market? And by observing, I observed that they didn’t really need a shed because dirty diesel oil, or a hammer, or ignorance was solving the problem. So by being able to answer those questions, you can time when was the kind of roughly right time to go into a market. And that helped us allocate our assets because we only have time, talent, treasure, and technology. And none of them were abundant so you have to decide where to go first, second, and third.
Amanda Gerut:
That’s really interesting. So one of the topics that comes up again and again in the Small-Cap universe is revenues. Whether it’s selling a new product, growing sales, managing a sales force, most small-cap companies are in the business of figuring out how to sell a new product or service. Can you talk a little bit about the process that has worked for WD-40? Or a sales commission structure? Or what advice, any advice you might give to companies struggling to find their first wins with a new product?
Garry Ridge:
Well, again, I think a lot of companies need to be sure that they focus in. I often say that opportunities are abundant. Focus is a gift. In fact, Seth Godin just wrote a great book called This Is Marketing where he talks about how we really need to focus in on where our first opportunities are. So you can’t be all things to all people all at once. And I think what happens is you get out of step between what you think you need to invest to generate revenues and what the revenues really are. And sometimes, you cannot grow fast enough to be able to serve the huge market.
So Al Ries wrote a great book many years ago called The Future of Your Company Depends On It and its focus. So I think new companies need to say, “Okay, we know one day we can be the world.” And WD-40 is the same. We knew 21 years ago that we could be a $400 million company. But we couldn’t get there over night. So we had to pick our places, prioritize, and be comfortable to build our business step by step, day by day.
Amanda Gerut:
So I want to … I saw that you wrote recently that it’s become really trendy to talk about culture right now. But I know even from your blog that you’ve been talking about this for a really long time. But I do want to spend some time talking about workplace culture. So can you explain, Garry, how you sort of married your global growth goals with your views about people and workplace culture?
Garry Ridge:
Yeah, again, it goes back to the basic belief that pleasure in the job puts perfection in the work. So then how do you build an environment where people do go to work every day and feel like they’re making a contribution to something bigger than themselves? They feel safe, they learn something new, and go home happy. And I get a poll that at the employee engagement of most companies in the world … To think that today on average, 67% of people who go to work today are either disengaged or actively disengaged. Which means they’re not doing their best work and they’re not happy.
So what are the elements of that that we felt were important? And as you may know, we’ve for a long time, we’ve called ourselves a tribe, not a team. And a tribe to us is describing what are the behaviors of leadership that are important. And the number one responsibility we have as a tribal leader here is to be a learner and a teacher. So all of our managers here are not called managers. They’re called coaches. And we’re here to do what we need to do to ensure that people are very clear of what they’re accountable for and what we are accountable for to them. And then our job as a coach is to be in the locker room and be on the sideline and help everybody play their best game every game. And if you do that, people know that you’re dedicated to helping them create a better them. So they put more into what they do. You build employee engagement. Our employee engagement is 93% globally. 99% of our people globally say they love to tell people they work at WD-40 Company. And if you visit anywhere at any of our operations around the world, you’ll find people who are actually laughing and having fun, which is pretty cool to me. Because if they’re laughing, and having fun, and doing worthwhile work, they’re benefiting, and our company is benefiting, and then our shareholders are benefiting.
Amanda Gerut:
I looked at Glassdoor just in anticipation of talking with you. And I mean, the reviews are all great place to work. Love working here. Exactly what you described. I mean, I thought your article, The Accidental Soul Sucking CEO, was really a great, such a clever way to get into some of these issues. Can you talk a little bit about what you’ve observed at small-cap companies, Garry, or with CEOs who you’ve spoken with or engaged with? Where do they kind of go astray in terms of culture, and thinking about people, and helping people understand what they’re accountable for and what good work is?
Garry Ridge:
Well, the number one is it’s hard work. And you’re starting with a small-cap. You’re busy every day. But firstly, they shouldn’t let their ego eat their empathy. Their empathy needs to eat their ego. And they have to behave and feel comfortable around that. Secondly, they have to be really convinced or they have to really believe that it’s all about people. We need to involve our people. We need to be in servant leadership mode enabling our people to do great things. One of the challenges they have is the short-termism of Wall Street from time to time that says, “You’re only as good as your last 90 days.” It’s a bit like one day the rooster, the next day the feather duster. And you’ve gotta have … Be able to put together a future plan that gives the investment community confidence around the fact that there are gonna be some 90 days that are better than other 90 days.
Garry Ridge:
But overall, we’re going to continue to build the company over time. And you’ve gotta have a good strategic plan and you’ve gotta be good at execution so that you can build that confidence. But we never give quarterly guidance. We give annual guidance. And we update people as we go. But our communication with Wall Street has virtually been the same for as long as I can remember. Here’s what we’re gonna do, here’s where we’re going, here’s what the risks are, here’s what can get in our way, here’s what we’re focusing on, and don’t follow us on 90 day intervals because if you do, you’ll jump off the cliff. It’s all about building the company over time. The end result of that, Amanda, is we’ve had a compounded annual growth rate of total shareholder return over a 15 year old plus period of 15%. Now there are times when we’ve had things go better than we wanted and sometimes things haven’t gone as well as we thought. But we’ve kept the course.
Amanda Gerut:
Do you .. So those interactions that you’ve had with Wall Street, I mean, can you talk a little bit about how you communicate with investors?
Garry Ridge:
In the normal ways that everyone else does. We have our quarterly conversations around earnings. We do roadshows, non-deal roadshows. We have our information up on our website. So here’s our corporate picture as we see it today. We talk to them about our business. We’ve had some shareholders that have been with us for 15 to 17 years. Which is pretty remarkable when you think … And I mean, big shareholders. And I said to one of them not long ago, “Why don’t you sell us?” And they said, “Come on. It’s hard enough to find companies like you. Why would we sell you?” And again, it’s interesting. As you said, the talk of the day now is all about culture. Well, okay. At the end of the day, it’s all about the people. And that’s what we have.
Amanda Gerut:
I do want to talk more about this. So I also have heard you talk in the past about silos at work. The more people know and the less they share, the more power they have. Can you talk about sort of how to break down those silos and how you work to break those down at WD-40?
Garry Ridge:
Yeah, I often said when we look back, we wanted to turn silos of knowledge into fields of learning. And it was obvious to me early on that the more people hoarded information, the more power they had. And the reason they were hoarding information is because they were afraid. And they wanted a defense to be able to protect them. So the first thing we said is, “Well, let’s take the word failure out of our business.” So we say we don’t make mistakes. We have learning moments. So we really turned everything around into it’s not about making a mistake. It’s about how do we learn from the experiences we’ve had. And if we give people a safe zone by surrounding them with a clear set of values in the organization and say to them, “Here are our values. If you live our values every day and you make a decision or you implement something that doesn’t particularly work as well as you think it is or would, we don’t call that outcome a failure. We call it a learning moment as long as you share it openly.”
So what happened is we turned those silos and said, “Okay, now hoarding information is not gonna benefit you anymore. Sharing information is where you’re gonna get applauded and rewarded.” So as people started to do that, we’d applaud and reward them. And show them how by doing that they were helping the company and they’re helping their other tribe members. So it’s all about openness and freedom and taking away fear. Fear is one of the most disabling emotions we have. So why do we want to create fear in an organization? Let’s be open and transparent and talk about things. As I often say, candor in our organization is no lying, no faking, no hiding. Most people don’t lie. A lot of people fake and hide. Why do they fake and hide? Because they’re afraid.
Amanda Gerut:
So can you talk a little bit, Garry, about how that influences sort of the company’s approach to a performance review?
Garry Ridge:
Sure. I wrote a book with Ken Blanchard called Helping People Win At Work. And the whole basis of that is don’t mark my paper. Help me get an A. And where most organizations fall down is they have these annual review things where it’s the 364th day of the year and suddenly they have to give someone some feedback to be able to initiate some process to be able to reward someone. So they sit down and have a meeting and they say, “Well, here’s what happened during the year and here’s how you could’ve improved.” And the person has the right to say, “Why didn’t you tell me that 362 days ago and helped me improve?” So we threw the normal review system out the door.
And now at WD-40 Company you only do one review a year. It’s your own. It starts at the beginning of the year where you and your coach decide what are the key drivers that you need to focus on. And more importantly describing what does an A look like? So if an A walked in the room today, what would it look like? And then we have … Apart from that, we have some specific goals that may be more short-term. And the final part is we include our values. And we talk about here are our values. This is what our values mean. And we have people every 90 days tell us how they’ve lived out values. So as I said, every 90 days then, or even more often, our coaches sit down with our people. They tell us how they’re performing against what we agreed. The accountability, they’re being held responsible for their own output. And our job as the coach is to help them get to where we agreed was really important.
So we don’t have annual reviews. We have ongoing leadership discussions. There is a formal part, but at least every 90 days people sit down and have a formal informal conversation to make sure that we’re taking time to identify where we need to help out people. And that’s one … We’ve implemented that since I think 2008 or 2007. And maybe a little even before that. And it’s been a key to us building the culture and the engagement we have because our people know that our leaders are dedicated to helping them be the very best they possibly can be.
Amanda Gerut:
So then how does compensation fit into those leadership conversations? Or does it not?
Garry Ridge:
Well, we’re a pay-for-performance organization. So the first thing we did is we threw out bonuses because I hate the word bonuses. And we changed our compensation to what we call GRP, which is a growth reward program. And everybody in the company is rewarded if we continue to grow our EBITDA by year. So without getting into details, what the basis is everybody in the company can earn a percentage of their base compensation in a earned incentive payment. Not a bonus. When I give them the check, I want to say, “You earned this and you know how you earned it.” And it’s all based on growing EBITDA, which everybody has the opportunity to influence whether they’re a salesperson, whether they work in supply chain, or whether they’re one of our tribe members that invest our treasure every day in building our business or you’re maintaining our business.
Amanda Gerut:
That’s really interesting. I mean, so you’ve mentioned tribe and I loved reading out the tribe at WD-40 and the maniac pledge. Can you talk a little bit about those two things?
Garry Ridge:
Yeah, well, one of the biggest desires we have as human beings is to belong. And you and I have probably left a party, and organization, an event, or even a relationship because we didn’t feel like we belong. So why do people leave companies? Because they don’t feel like they belong. Why? Because we don’t treat them as if we care for them. So we said a tribe has attributes that will build belonging. Like the number one attribute of our tribal leadership is learning and teaching. Then it then comes out values are very important. We’re future focused. We’re worriers. We celebrate. So we all live these tribal behaviors that show people that they truly do belong. Teams are very important within an organization. But a team is something you play on situationally to kind of win a certain event. A tribe is enduring it at the time. So the tribe is very important.
And then the maniac pledge is really the pledge to say, “I’m gonna be responsible.” And it says I’m responsible for taking action, asking questions, getting answers, and making decisions. I won’t wait for someone to tell me. If I need to know, I’m responsible for asking. I have no right to be offended that I didn’t get this sooner. And if I’m doing something others should know about, I’m responsible for telling them. And we all take that pledge which gives people permission to be able to ask questions. And also it really empowers them around communication and having a responsibility to be inclusive of those around them.
Amanda Gerut:
Do you find it helps to break down those silos making it okay for people to ask questions?
Garry Ridge:
Absolutely. It gives permission.
Amanda Gerut:
Do you find that some CEOs think of these kinds of ideas about culture and employee engagement, that they think of them as sort of soft or unimportant?
Garry Ridge:
Yeah, I think a lot of them think that the word love in business is a soft business. But it’s really not. Caring for people … Leadership is a balance. It’s a balance between being tough minded and tender hearted. And the genius is in the middle. And there’s been a lot of research. I think Harvard wrote up some time ago. People who work in organizations where big leadership is too tough minded feel vulnerable and at risk. Where it’s too tender hearted, they feel vulnerable and at risk. So you’ve gotta get in the middle. But to get in the middle, you’ve gotta have a framework around it. You’ve gotta have a people culture. You’ve gotta have a clear set of values. You’ve gotta have a dedication to learning and a dedication to helping develop your people. And if you have that confidence and you truly believe that it’s all about the people and you do your best to serve them every day … Because our job as a leader is to serve our people. Simon Sinek says leadership is not about being in charge. Leadership is about taking care of the people in your charge.
Amanda Gerut:
Do you find it personally challenging to strike that balance between being tough minded and tender hearted?
Garry Ridge:
One of the hardest things I ever do. I mean, I can go either end of that real quickly. So it’s something that I need to be very, very aware of. And that’s important to me. I catch myself often going, “Wait a minute. Where am I on this scale here?” And I have to take a deep breath. And I have to dwell and think and go, “Okay, I need to be deliberate around this.”
Amanda Gerut:
Garry, so can you talk … I’m sure it hasn’t all been easy. Can you talk a little bit about some of the learning moments that you’ve had over the years? I mean, thinking back over two decades.
Garry Ridge:
Yeah. It goes back to the start. My learning moment about getting comfortable with vulnerability and the whole the three words of I don’t know is all about getting comfortable with being vulnerable. The learning moment around understanding that micromanagement isn’t scalable. By having courage and being brave enough to trust people. But also to check and verify is really important. The learning moment around being able to talk about faking and hiding. When I heard that in the first place … How you do you create an environment where people … Where their natural behaviors is not to fake and hide? I mean, that’s around building trust. And again, this is … This whole thing is simple, not easy. And time is not your friend. Leadership is a 24 hour a day, seven day a week, 365 days a year role. It’s like being on Broadway with the bright lights on all the time. People are watching you and you just have to be very aware and really know that whatever you do can impact others. And if you’re not prepared as a leader to take on that responsibility, do yourself and others a favor, don’t try.
Amanda Gerut:
Did you have sort of specific instances where you had to say to yourself, “It’s okay to say I don’t know,” or was it your own kind of reflection at the end of the day going, “I didn’t know that and I didn’t feel comfortable saying that. Why didn’t I,” that brought you sort of to the ability to be vulnerable? Can you sort of just talk about where it really clicked in for you?
Garry Ridge:
Well, I can tell you where it became very clear to me. But I don’t think it’s a either or or it’s a both end. I’ve had both. But I’ll tell you where it became very clear to me.
I’d moved to the United States. It was 1995. I wasn’t CEO yet. I was in a meeting and there was someone giving a presentation from an outside organization to a group of us in this meeting. And about 15 minutes into the meeting, I said, “You know what? I have no clue what this person’s talking about.” I am so out of my water here. I don’t know. They’re using words I don’t understand. Is it because I’m a dumb Aussie? I’m not long here. I don’t know. So for some reason, I put up my hand. I said, “Look, I apologize.” And I brought some humor into it. I said, “I’m just here from Australia. So please, forgive me, this dumb Aussie. But I have no clue what you’re talking about.”
And everyone in the room went … Because they didn’t know either. And no one knew. They were all in this kind of space of … Now we would’ve all left the meeting and wasted all that time. And I thought later, “Wow. Wow. Isn’t that interesting?” Because … And I … I was brave. I’ll use the word brave. But I don’t know if it was brave or I was just being naïve to go, “I don’t understand.” Well, the meeting changed. And what is it we don’t understand. And we were able to put up on the white board or the flip chart in those days, I guess. This is what you were saying. Can you please give us some clarity around this. The meeting completely changed and the outcome was one where we spent some positive time together. And it was like, my god, how often does that happen? And we don’t do anything about it. And we waste our life, waste our time, waste other people’s time, and don’t have a good outcome.
Amanda Gerut:
Was it those sorts of realizations that led you to get a masters degree when you were serving as CEO?
Garry Ridge:
I didn’t do it to get a masters degree. I did it to try and understand what I … To put some meat around what I thought I knew. I wrote something the other day that really hit me when I wrote it. I said, “What I don’t know is a vast variety of things. I’m probably always wrong and I’m probably always roughly right.” And I thought, “Wow, I just gotta get comfortable with that.” Think about it. I’m probably wrong and roughly right. So where does that put you when you think of things that way? And when you can say what I don’t know is a vast variety of things, which is so true. But I’m probably wrong and I’m roughly right.
Amanda Gerut:
How does that work with your … I do want to talk about your interactions with the board. I mean, how did you get comfortable approaching the board with vulnerability? With being probably wrong but roughly right? How does that work?
Garry Ridge:
I think on reflection now, they don’t expect us to be perfect. They’re not. So I think over time, boards, and let me put on the words, leaders who know that your vulnerability is important actually respect it. So there’s a difference between being probably wrong and roughly right and being irresponsible, right? But if you can say, “You know what? Yeah. I see that. I maybe I need to think about that a bit more or let me understand that better. Or what don’t I understand? How do I … What am I not seeing?” I often say that reasonable people who share the same values and absorb the same information will have a similar point of view. And in a board, when a board and leadership are out of sync, it’s not because … Well, you first have to ask are we being reasonable and are we sharing the same values? And if we’re not, then you’re either the wrong leader or you’ve got the wrong board.
And then most times, it’s we haven’t absorbed the same information. Boards have 89 day memory loss. So they come into a board meeting. And you talk about a lot of things. And you debate and you whatever. And then they go off and do busy stuff. And you’re in the business all the time. So when they come back 89 days later, the job we have as a CEO is to make sure we get them where we left them. And that’s why early on, we instigated mid quarter board update calls where mid quarter on a Friday, I’ll have a call. It’s not compulsory. And it’s not a board meeting. It’s like, “Here, I just want to talk about what do I like, what have I learned, what am I concerned about, and what am I doing about it?” And most times I’ll include things that we’re sort of carrying through our business so that when they get to the next board meeting, they still had that on their mind. They’re still thinking about it.
You can’t over communicate with a board. The more you communicate with them, the more you give them what you have … And bad news always is important. It goes there first. I love the scene out of The Godfather movie where the attorney gets up from the table after having a conversation with the Hollywood producer and says, “I have to leave now because the Godfather always wants to hear bad news fast.” You should always adapt that with a board.
Amanda Gerut:
That’s great. I was looking through the bios of the directors on the board. And I saw you have three new directors who joined in 2016 and another in 2017. And you can just sort of see the global risk, global financial expertise. Just a lot of really sort of that global kind of strategic perspective and risk. I mean, just across the board. Can you talk a little bit about how those insights, how you work them into your thought process?
Garry Ridge:
Yeah, well when we’re looking at how we want to make up our board, we look at what are the competencies, and what is the experiences that we need in the board room to help us be better at what we do and be more aware? And being a global company, as you said, we’ve got a lady based out of … Melissa Claassen, who works for the global company, Adidas, based in Germany. Eric Etchart, who is a French national that spends a lot of his time in Europe. He speaks French, Chinese, worked in China for many years. That’s just two examples of people we’ve … One of the new board members we’ve brought on from ResMed, Dave Pendarvis, who is the global, if you will, head of legal for that company. So these are companies or people that have built in many countries around the world because that’s where our future is. But we’ve been very fortunate. We’ve got a great diversity of nationalities and genders on our board. We’ve always had females on our board. We have two consistently. So we’re getting a good, broad … Not only diversity through gender, and race, and experiences, but through where they’re located in the world, which is so important.
Amanda Gerut:
Can you talk about your relationship with Linda Lang, the board chair who is also the former CEO of Jack in the Box.
Garry Ridge:
Yeah. Linda and I have a great working relationship. I respect her for her leadership. She has a similar view of development of people as I do, which makes it pretty handy. But Linda’s a great chair. I’ve enjoyed working with her. And I have a good relationship, in fact, with all of our board members. It’s one of respect and we don’t always agree, but that’s okay. Not agreeing is good. We can have good healthy conversations but always with respect and dignity.
Amanda Gerut:
We hear at Small-Cap Institute from successful CEOs that the board CEO relationship is really critical to achieving growth. And I’m sort of curious about whether the value of that relationship was always apparent to you or if it was something that you acquired over time?
Garry Ridge:
Well, when I first became CEO, again, I’d never been in the situation of what is a board. Now remember too, I’ve been on this journey for a little while. And it’s interesting how the role of board members changed over time. I remember at my early board meetings where you’d go in with a book that probably had 20 pages in it. And maybe board members weren’t … Maybe their job specification wasn’t as clear as it could’ve been. Where today, the job spec is very clear. There’s no doubt that in the corporate world that we’ve done a better job of defining the job of a board member. And they take it seriously.
Fortunately now, it’s digitized. But our board meetings are not just a three hour board meeting on a Tuesday afternoon. Our committees work very hard. We have a finance committee, an audit committee, a compensation committee, a governance committee. A lot of work is done in the committees so that when we get into the board meeting, we’re actually talking about the business, which I think is really, really cool. And I opened our leadership up. One of the most powerful pieces of advice I can give anybody is open the leadership group up and let the board get as deep in the company as is relevant or important to you. But our board meetings always have man of our leaders in there listening to the board’s point of view, sharing their experiences and their point of view so that everybody becomes more aware of what’s important.
But also having a very clear strategic path. We have our strategic drivers. We’ve been publishing them for years. They talk about where our outgrowth is. And sometimes in a board meeting when someone will say, “Why don’t we go off in this direction?” The great thing is they’ll say, “Hang on a minute. Then what we need to do is not talk about going off in that direction. We need to go back and talk about are our strategic drivers the ones that are gonna get us to where we want to go?” Because board members wander off the page sometime. And unless you’ve got a … I often say there’s nothing like the freedom of a tightly defined brief. And if you’re very clear on what you’re going to invest your time, talent, treasure, and technology on, and then you keep that focus, it’s okay to challenge that. It helps us stay in our lane, if you will. Now if we want to get out of the lane, let’s suspend the drive for a minute and let’s say, “Okay, we’re gonna suspend the drive and we’re gonna talk about whether we should change lanes.” But let’s not weave across the lanes and run into things we don’t want to run into.
Amanda Gerut:
That’s really interesting. I mean, do you find that that sort of apprehension about kind of going all over the place, all over the map is sort of why CEOs maybe are not as open to insights from the board and then in turn don’t really benefit from that relationship?
Garry Ridge:
Sure. They get scared. I’ve said in our board meetings, when particular as we’ve brought new board members on and we’ve got a very rigorous onboarding program. But a board member will say something and in my head I think, “Where did that come from? How did they get there?” And immediately, it’s because … What I’m reminding my … Is because they don’t … We have more information than they do. So I have to get to the board member. Hey, can I help you understand why we are where we are? And once you understand why we are where we are, I would welcome you, welcome you giving your guidance and your wisdom to why you think we should be going in a different direction. But let’s have the history first.
Amanda Gerut:
Does the board take the maniac pledge?
Garry Ridge:
Well, they’re aware of it. But I don’t know if they ever had them stand up and take it. They are very aware of it.
Amanda Gerut:
Can you talk, Garry, about how as the company grows globally, how you keep that WD-40 culture consistent and that feeling of being a part of something? Being a part of a tribe, how you keep it going?
Garry Ridge:
Well, it’s the number one thing we work on every day. And we’ve gotta act and be part of what is important. And so we’re all about … We’re very fortunate that about 70% of our growth in people comes from internal in the company. We have a thing called Leadership Lab where we’re teaching leadership skills around the company all the time because of our review system or our don’t mark my paper, help me get an A process. We’re talking about it all the time. So it’s real to us. It’s what we do every day. And then also what I’ve observed is as this culture has grown and the people within it love it, they really protect it as well. If they are aware of or they see opportunities to help other tribe members understand our culture better or even redirect them, they will also do that. So the people really do … Because they love being here, they protect it.
Amanda Gerut:
I want to also just spend a little bit more time … I mean, I know with your blog, it seems really directed at CEOs. And I’m just sort of curious about the feedback that you’ve gotten from there. And are you coaching CEOs now, Garry?
Garry Ridge:
I’m not coaching any CEOs. Most of the coaching that I do is with students, actually. Younger leaders. But my full-time job, I have an abundance of worthwhile work at WD-40. So with that and the teaching I do at USD and some of the speaking I do around the world, which is really focused on talking about the wonderful culture of WD-40. But I don’t know that I get honest feedback from some CEOs. I’m asked more about it these days and I share with them what I think are the tools around building this. I get some believers. I get others that don’t believe and that’s okay, I guess.
Amanda Gerut:
What leads to the skepticism? Do you have any thought? Do you know? Do you understand why people are skeptical?
Garry Ridge:
Fear of short-term need of results. Yeah. That’s basically it.
Amanda Gerut:
Do you find that that fear about the short-term results is what leads small-cap companies to go astray or where do you think companies go wrong?
Garry Ridge:
I think the starting place is do they have a clearly defined purpose and why they exist? And then is there a business plan underneath that that they can project for a reasonable time into the future that will create an economic engine that supports the growth of the company and also rewards the shareholders? And then are they communicating that with their shareholders? One of the things that I learned early on is you can have the wrong shareholders. And if you do, your life is gonna be hell. You can have them because you invited them in. You can have them because your actions like … Or your deliverables are not acceptable. That’s when you get activists in. Or you can have them because you haven’t clearly articulated what an A looks like as far as you’re concerned in the business. So I’ve been in meetings where I’ve said, “I don’t think that you being one of our shareholders is gonna be something that’s gonna be a pleasure for you or a pleasure for me because we are not aligned in what success looks like.”
Amanda Gerut:
That’s really interesting. I mean, there’s that candor again. I mean, is that a productive conversation that being that candid with a shareholder?
Garry Ridge:
Why not? Our purpose in life is to make people happy. If we can’t make them happy, at least don’t hurt them. And if I can’t make a shareholder happy, why do I want to hurt them?
Amanda Gerut:
Yeah. I think that makes sense. I also wanted to ask you just a couple of more personal questions, Garry. You seem like a very open person. I saw you at an event this month and walked up to you. And we said hello. There were other CEOs there that I would walk Up to and that immediately were just sort of flanked by PR people and other people. And I wondered if you sort of very purposefully tried to remain normal if that makes sense?
Garry Ridge:
Yeah, I mean, I’m just the basic guy bumbling my way down the road of life bumping into stuff. And a long time ago, I guess, or I don’t even know when. Growing up in Australia was fun and we are a pretty down to Earth sort of people. You treat people with responsible and dignity. Say please and thank you, pick up after yourself, be candid but caring at the same time. I think it’s fun. And funnily enough, I’m truly an introvert. A lot of people … I can act as an extrovert, but I’m truly an introvert. I don’t go to galas. I don’t like big functions. I don’t like places where people are playing to a tune that I’m not part of. I don’t take myself too seriously. I am who I am.
Amanda Gerut:
And I also wanted to ask sort of things that you do that … Or whether there’s anything … You just mentioned being an introvert which is really surprising. But are there other things that would surprise people to know about you? Or other sort of interests that you have outside of WD-40 that keep you grounded and keep you sort of authentic to who you are?
Garry Ridge:
I love the work that I do with the universities where I get to go and share what I call the dog bites on my buttocks with students. Either grad students or undergrads. I’ve been doing that at San Diego State University for 15 or 16 years. I go to UCSD. I’m an adjunct professor at USD where I teach in the masters of science in executive leadership. I do some work with UPenn. I’ve been able to build up relationships with people like Marshall Goldsmith, Ken Blanchard, Simon Sinek where I’m really curious about the things they’re talking about and what they do. I travel a lot because of my job. I do about 200 plus thousand air miles a year with my tribe. So my wife and I get to see the world, which is exciting. I do like being in cultures, and observing behavior, and trying to understand why people are what they are. So I’m naturally very curious, which I find fun. I don’t play golf very well. So that’s okay. I love my family. My two grandboys are my favorite fellas. They’re seven and four or five. So I enjoy them. And life is good.
Amanda Gerut:
That’s good. Pleasure in the job puts perfection in the work.
Garry Ridge:
Pleasure in the job puts perfection in the work.
Amanda Gerut:
Garry, it’s been a pleasure speaking with you. Thanks so much for talking with Small-Cap Institute Presents.
For everyone listening, to learn more about Gary’s approach to being a CEO, you can read his blog at TheLearningMoment.net. He wrote an article recently about The Accidental Soul Sucking CEO. It’s basically a list of what not to do if you want employees to be engaged. And for more about WD-40, you can visit www.wd40company.com.
Amanda Gerut:
Garry, thank you so much. It’s so great to get to spend this time on the phone with you. I was really so excited to get to talk with you. And I don’t know if you remember, but you were the first CEO I spoke with when I first started covering publicly traded companies. And just looking back at those notes that I took in that conversation in anticipation of just getting ready to do this interview today, I was like, “Oh my god, I asked such bananas questions and you were so kind.” You were so sweet about it. And you just took them all so seriously. And you really didn’t make me feel dumb. So I thank you eight years later for that. I really appreciate it. And so it’s great to talk with you again about all these things. And I love your blog. I love your Linkedin. All of the articles that you post. It’s always so fun to read those.
Garry Ridge:
Well, thank you. And thank you for what you do to help people step into the best version of their personal self. Because it’s important that we try and create these organizations where people do go to work every day. They do feel like they’re making a contribution to something bigger than themselves. They do learn something new. They do feel safe. And they go home happy because happy families build happy communities. And happy communities will build a happy world. And by god, we need a happy world. So you’re making a difference, Amanda. Thank you.