Stephen Ritchey transforms Ritchey Metals Co. by giving employees room to make mistakes

President and CEO Stephen Ritchey had a great job. As the head of PNC’s stadium finance division, he helped build sports facilities across the country. So the first time his father asked him to join Ritchey Metals Co., the family business, he turned him down.

Over the next several years, Ritchey watched his dad struggle.

The second-generation business’s employee base and revenue had doubled because of an expansion into alloyed steel coating and electroplating. His father’s management style, in which everything funneled through him, wasn’t working.

“At this point in his career, he wasn’t looking to learn a new way to run a business,” Ritchey says. “And so he approached me again, and I took a serious look. Frankly, I probably wouldn’t have, if it wasn’t caring about my dad and seeing how much he was aging — working his 70-, 80-hour weeks, trying to manage every employee, every furnace, everything in the company.”

The opportunity to lead an organization that was growing 5 to 10 percent a year in a mostly contracting industry was exciting. But while he had watched transitions from afar, he needed to not only fill the shoes of someone who successfully ran the company for 30 years, he also had to reshape how it ran.

Prepare for the role

Ritchey joined Ritchey Metals as CFO in the first quarter of 2018. He’d worked in the plant as a young adult.

“I was familiar at least with the operations,” he says. “I was familiar with the ideas of what we had done. But I certainly wasn’t familiar with the why behind what we were doing, the deep understanding of alloy and why are we mixing this metal together. What are we trying to accomplish? How are we doing this efficiently?”

Six months prior to his move, Ritchey started researching manufacturing and alloys. He spent Saturdays looking at the company’s financials and getting his arms around Ritchey Metals. One week of vacation was utilized working in the facility — something Ritchey hadn’t done for a decade.

“I wanted to see some of our new processes before anybody knew that I would be coming on as president, just working shoulder to shoulder with some of the guys, which I think is really important for any leader to do,” Ritchey says.

Even today, all new plant managers first spend time on the floor.

“When we’re looking at opportunities and saying, ‘Can we do this?’ the fact that I’ve been in the furnace room and understand what’s going to be hard and how long things are going to take really helps,” he says. “But I don’t know if you can fully prepare for this role until you step into it.”

Ritchey Metals’ nearly 60 employees were used to hands-on management across its two facilities, which Ritchey says is the most efficient way to operate on thin margins.

“You can’t even stub your toe in this industry, or you can end up in a lot of trouble,” he says.

But Ritchey couldn’t babysit the business his dad had built; he had to take the shackles of control off despite short-term efficiency loss.

“I was going to have to let people make mistakes,” Ritchey says. “I was going to have to let everybody get that autonomy and grow.”

Teach them to fish

The first two months, Ritchey kept the status quo, with his dad sitting back and coaching him.

Then, Ritchey called an executive meeting. He advocated the need to work within a structure and let people make mistakes. Growth comes from failure. Leadership couldn’t continue to fish while telling them to learn to fish.

“As long as they’re being fed and the fish are free coming from us, they’re not going to bother to learn,” Ritchey says.

For example, rather than stepping in to solve a problem, report it to the right channel. Otherwise you rob someone of an opportunity to learn.

The controversial decision split the room. Some didn’t want to fix what seemed to be working. Others saw the potential beyond the initial frustrations.

Ritchey’s father also knew, intellectually, that he needed to step back, but it was an emotional process. Fortunately, he had the humility and foresight to let the transition occur.

“It’s one thing to sell the company and go sit on a beach in Belize, but if you have to sit there and watch some of these changes, it’s a lot more difficult,” Ritchey says.

Over time Ritchey’s dad was able to retire to a part-time mentoring role. This past Thanksgiving, he said that 2020 was the best year of his life.

Stay in the lane

By the end of the first year, management shifted to engineered manufacturing with procedures, guardrails and layers. Everything follows the same process every time, as opposed to moving from here to there. That way may be more efficient, but it isn’t repeatable, teachable or learnable.

Ritchey sees autonomy as a big motivator. Employees get involved in decision-making and flourish. A satisfied and better-trained workforce creates a more stable business.

Once employees started working in their lanes, phase two was finding ways to elevate and let those under you handle their responsibilities.

The employers weren’t living up to their titles, Ritchey says. The director of operations acted more like a plant manager, and the plant managers were running as supervisors.

“It’s a hard thing to do overnight,” Ritchey says. “I’m sure there are people out there that could manage it faster than we are, but we have 55 years of culture that we’re working against.”

Not everyone made the transition. Some wanted the freedom to take on different roles. Others didn’t want to learn another way.

“When you want to make a major change in an organization, it’s never going to happen without ruffling feathers,” he says. “I think it’s never going to happen without upsetting the applecart a little bit. So we had some people that absolutely didn’t buy in. Some of those people left. We have some people who didn’t buy in, though, that are still here, and if we talk to them today — we were actually just talking about this as we’re launching phase two — those people now are far happier than I saw them the day I walked in the door.”

In hindsight, it took Ritchey too long to take on some tasks, especially when the change wouldn’t be popular.

“You just have to not be afraid of it,” he says. “You have to trust yourself. You have to trust in what you’re doing.”

Consult your management team or advisory board. Conduct a war room to gather ideas. But once you make a decision, don’t second guess. Ritchey says that’s not easy when 80 eyeballs stare blankly at you. He remembers calling a director from his board, questioning his decision. The response was, “We made this decision. We’re not talking about this anymore. We haven’t even let it stand long enough to know if it works or not. You made the decision, stick with it. Do the right thing. Stay true to this and let’s see what happens.”

Room for growth

The overhaul included disbanding senior leadership to build an executive team that ran the three legs of Ritchey Metals — operations, sales and financing. Later, Ritchey added human resources.

“My philosophy in management has always been I’d rather weed in than weed out. So, give people that are there the opportunity to grow,” he says.

Only after someone in house couldn’t fill an elevated position did he look outside.

Supervisors and plant managers were given raises and told more was expected of them. Weekly training sessions helped with this transition.

After six months, Ritchey says, one of the best workers came and said, “I don’t want to be a supervisor.” That wasn’t a problem — he became a team lead and someone greener took that role.

“It used to be whoever was at the company for the longest period of time de facto became in charge,” he says. “So, to say you don’t need to be here 30 years before you’re going to get leadership was another thing that motivates people. Our retention rates are dramatically improved.”

This is more important than ever. In addition to the usual turnover, Ritchey Metals’ workforce has quadrupled over the past decade.

Ritchey says companywide training has rolled out, and employees drive the program.

“The plant manager has 60 people he’s worried about. But if you have the opportunity to drive your training, you have one person that you’re worried about,” he says.

To get a raise in your work cell, you master certain tasks. Therefore, you start bugging your manager. Once you’ve mastered a cell, you can stay or bid for a shift change and go through the process again. The rebidding comes with a pay bump because it cross trains.

Defined career paths excite new hires, and 15 to 20 percent annual growth means new roles open up, Richey says. Giving people the ability to learn also helps identify superstars before they get bored and look for opportunities elsewhere.

“I was at PNC for a long time, managed a lot of fresh college graduates coming out,” he says. “Without a doubt, the No. 1 thing I looked for was people that were hungry and trying, self-driven and motivated.”

TAKEAWAYS

• Autonomy is the best motivator.
• Growth means leaving room for mistakes.
• Stick to your decisions, even the hard and unpopular ones.