The 2010s were a pivotal decade for Top Value Fabrics (“TVF”), a leading fabric supplier, and Empowered Venture’s founding operating company. Here’s eight quick highlights and takeaways from a decade that created a new foundation for TVF’s future:
TVF became 100% employee-owned. Funded by a loan from TVF’s co-founder Dick Hanzel, TVF was sold to an ESOP (“employee stock ownership plan”), which is a retirement plan that benefits all TVF employees. Dick negotiated a fair market price with an independent trustee that the TVF Board hired to oversee the newly created TVF ESOP Trust, which became the sole shareholder of TVF. Takeaway: ESOPs can be an excellent succession option for business sellers.
TVF successfully completed a major ERP (“Enterprise resource planning”) implementation. Led by Tad Calahan, CFO, TVF successfully converted from a legacy “green screen” system to Microsoft Dynamics AX. Amazingly, within a few months, over 90% of the team couldn’t imagine being on the old system anymore. Takeaway: An ERP conversion is scary and hard, but involving all the right people and trying to hit a single or double instead of a home run can lead to a great outcome.
TVF paid off the seller debt from the ESOP purchase. After four years of steady sales, profits, and cash flow growth, TVF fully paid off the seller debt four years early. Paying off the debt early was the team’s first BHAG (“big hairy audacious goal”) as an employee-owned company and helped them rally around a common shared goal. The team later achieved its 2nd BHAG, a share price goal, two years early in 2018. Takeaway: Setting a big, important, shared multi-year goal can be a great way to create team-wide engagement if it’s a truly meaningful goal.
TVF acquired Pacific Coast Fabrics (“PCF”). After a few years of talking to the owners of PCF about the possibility, PCF with TVF completed the deal at the end of June 2017. Mike Sanders, Brian Vieweg, and their team joined later that year. This was TVF’s first acquisition and led to many lessons learned that will help us improve for the next time. With the benefit of hindsight, the acquisition has been an incredible success. Takeaway: Acquiring and integrating a company will bring challenges no matter how great the people and cultures of the two merging companies are; both groups fully understanding that and having a shared vision heading into the process will help when things get difficult.
TVF started measuring team member engagement using Emplify. After using a common, basic engagement survey since 2010, TVF switched to Emplify in order to have more useful, dynamic data and actionable insights. The survey confirmed what leadership expected: the team was very engaged overall and cared deeply about the success of the business. It also revealed opportunities for improvement and specific areas to focus on. Now leadership can’t imagine going without consistent engagement data. Takeaway: Leadership always needs to be improving and growing. Having the right approach to gathering data and insights to help guide improvement efforts is critical.
TVF’s team redefined its Vision and Core Values. The team worked together to define these critical elements of a modern, proactive organization. Even more important, various TVF team members have taken the lead to integrate the Vision and Values into the company’s processes and practices. Takeaway: It’s never too late to take a big step back and redefine what’s truly important. Organizations and teams evolve. Having a clear and strong vision and values that aren’t just words on a wall will help ensure the culture evolves how you want it to.
2010, 2015 & 2019
TVF added experienced independent executives to its Board of Directors, which is now the Empowered Ventures Board. The Board provides critical oversight and guidance to Empowered Ventures’ and TVF’s leadership. Bruce Kidd (2010), Joe Slaughter, John Craun (2015), and Lisa Reardon (2019 – to replace Joe after he retired) all joined during the decade. Takeaway: Don’t underestimate the value and importance of having great advisers and mentors. We all need help so find people you trust, who care about you and will also challenge you to be better.
In mid-2019, TVF’s Board made the decision to build a diversified employee-owned holding company to provide business owners an attractive new option when they consider selling. This led to the formation of Empowered Ventures in early 2020, and a bright new future for current and future employee-owners of Empowered Ventures operating companies.
TVF had an incredible decade and the team is proud of all they accomplished. The TVF team is excited about its future as part of the Empowered Ventures employee-owned holding company.