results. Many people are shocked when
they join our company - they expect to
have to jump through hoops to do anything, and we really try to have a culture
that removes those hoops, so to speak.
CW: What is leadership to you?
SK: Leadership is about inspiring a team
to get more out of each individual and
the group than they could get without
you. Within the business world, the job
of a leader is to define a clear vision -
why does this company exist? Who do
we intend to be? What are we doing
that is different? You can’t be the best
company without the best people. My
dad is a boxing fan, and he used to say
“If I have Muhammed Ali in the ring, it
doesn’t matter who the other fighter is.”
So a leader needs to be able to assess
people and their fit with the organization, set the right incentives (formal and
informal), execute on the ground, allocate capital and avoid catastrophic risk.
CW: What does IFS do that sets it
apart... that is different?
SK: Our mission is to deliver unparalleled
service and product to the industry while
providing the environmentally responsible choice. We are a family company,
driven by a mission, focused on performance, culture and fun. I believe deeply
in the power of words. A mission is there
to drive decisions and a mission allows
a company to say NO to things. Three
key ideas define IFS Coatings - unparalleled service, product and environmental
responsibility. This is what makes us IFS.
It defines how we compete, how we go to
market, how we invest in the company,
and how we plan for our future.
Also, service is a tricky work, so we
have defined “IFS Coatings Four Pillars
of Unparalleled Service:” Responsiveness;
Expertise; Customization; and Reliability.
Our customers can expect this from us and
we internally expect each IFS family member to give this same service to each other.
CW: What is your view of the coatings
market and how has it changed?
SK: I believe the $130 billion coatings
market is a wonderful business. Our
product is the first thing our customers’
What has changed in the past ten
years is a huge shift in the number and
size of companies in the industry. Low
interest rates, ever increasing regulatory
burdens and a maturing market have led
to an M&A tidal wave never before seen.
This has and continues to lead to fewer
and fewer companies. We are uniquely
positioned in powder coatings as a result
- the only mid-size player with multiple
facilities that can serve global and fortune
500 companies.
Many players in the space talk about
“acquisition growth.” Acquisitions aren’t
growth – they are financial engineering.
I point this out since I believe almost no
major coatings companies are achieving
true organic growth anymore. A culture
of buy to build is the antithesis of organic
growth - it is inward facing, not about
customers. If you look at Dow/Dupont,
Sherwin/Valspar, and the drama around
PPG/Akzo, it all depends on “synergies”
which is a fancy way of saying firing
people and closing facilities. While these
companies are focused on digesting their
mergers, we have an opportunity to de-
liver unparalleled service to our prospects
and customers.
I feel proud of the growth IFS has
achieved. We have enjoyed continuity in
ownership and management since 1999.
We don’t have a bunch of people here
looking to come for 3-5 years, make a
bunch of changes so they can present
them in a PowerPoint to get their next
corporate promotion. We have a family here that has very low turnover, with
people looking to be here for their whole
career. Our team cares about IFS and
works hard for the company because
they believe in IFS and our mission.
We work together and we are friends
- I just got back from a family vacation
with the President and VP of Business
Development from IFS. Customers on
plant tours have commented they’re
amazed that I know everyone and everyone knows me - from the production
floor to the offices. This family culture is
very important to us and we work hard
to maintain it, including recognizing that
our customers are part of the family and
we treat them that way.
CW: What are the biggest challenges you
see facing the coatings industry?
SK: The industry as a whole has matured
and organic growth is hard to come by.
All of the major players get the bulk of
their revenue from liquid coatings, and
powder coatings are often the red headed
step child. As a result, incumbents often
try to steer customers to their profitable
cash cow, liquid. Increasingly, some of
the industry players are really focusing
on buying business. We have seen the
emergence of “prebates” - paying customers sometimes as much as 30% of a
year’s purchases upfront in cash to sign
a 5 year contract. I don’t believe this is
good for customers or the industry, but it
is certainly happening.
Technology wise, I see robotics / automation, and longer-term, 3D printing, as technologies that will really change our industry.
CW: Stephen, you ARE a very interesting entrepreneur. Any last words to
share with our readers?
SK: The best is yet to come. CW
“Leaders have to inspire
their team and show
people they are part of
something bigger than
themselves. Leaders have
to clear the way to allow
each team member to do
their job and not waste
their time on politics and
internal drama.”
