ABOUT TODAY’S GUEST | JIM STITT SR.
Jim Stitt Sr. is the Executive Chairman of Cutco Corporation. He came to the company in 1975, starting as a manager in Manufacturing and eventually advancing to the position of CEO. Jim and his family risked everything they had to be a part of the team that bought the company from ALCOA in the 1980s. Since that time, no one has been more responsible for the establishment of the Cutco culture over the years. Jim espouses values such as top-notch quality, mutual respect between manufacturing, sales, and management, and a true family environment. He led Cutco through a period of hyper-growth, and helped build the company into the well-known and widely respected brand that it is today. He has relinquished the role of CEO to his son, Jim Jr., but remains actively involved in shaping the future of the organization to this day. Jim Stitt Sr. is truly one of the finest leaders you’ll ever have a chance to get to know.
Q&A WITH JIM STITT SR.
Q: I love for our audience to learn a little bit of you, going all the way before college and before Cutco. Tell us about your personal background
- I grew up in Ohio. I grew up in a small retail family business.
- My grandfather bought the business in 1929, and my dad and uncles were there. That’s how I grew up knowing what small business was, taking care of customers and employees and products.
- I grew up with a love for business, and I know part of what makes Cutco great is the product and the service that we give to our customers.
- I guess indirectly I got this from my dad. I remember back in the days, it would be 7:30pm and 10 below 0, he’d get a phone call, and say I just got to go out and light Mrs. Jones’ boiler. I would be like why don’t you send some other guy who works for you? He would answer. He doesn’t have a car and will have to walk 7 blocks to the shop, get the truck and drive over to the house. Why have him go through that? Also, these are my customers. In fact a lot of these old ladies were his high school and pre-school teachers. He said when he took care of his customers, when the boilers go down and need to be replaced, where do you think they’ll go?
- Being in leadership doesn’t mean you don’t have to do things, that you sit back and take it easy. You have to do what everyone does. You participate. It was all about people, employees and customers
- I grew up in business. We weren’t wealthy. We were middle-class, but we vacationed by camping. My mom, brother and I would go to these campgrounds and would do these things. Mom wasn’t really excited about sleeping in a tent.
- In 1959 – 60, my dad was looking a camping trailers, which are currently really hot things in camping. My dad had done research and decided the best camper out their was the Apache brand. We bought the trailer he wanted AND we came home with a dealership as well
- The dealership was a way to make extra money, have new trailers, and get extra money to send the kids to college. And so we started another business.
- I would work with my dad on that for about 11 years. That got me into the love of business. I thought someday I’d like to be able to run a business or own a business.
Q: So then you went to college?
- I went to the University of Dayton and majored in mechanical engineering technology.
- I graduated in 1971. 1971 was a tough year for everyone. The technology industry was pretty down. Automotive was down.
- Secondly, this was still prime Vietnam War. At that point of time, there was still a draft. A lottery draft. It was my sophomore year at college. My number was not super-low and not super-high.
- I was looking for jobs, and back then, it was not illegal to say, now Jim, we can’t hire you, you’re going to be drafted in 2 weeks or 2 months, and we’re not going to save your job for 2 years. We can’t do that. I went through that for a month or 2.
- Carol and I were married then, and I just went back to work for my dad, which I’d done from the time I was 12. I did that through the end of the year.
- My mother heard some comments from somebody in church who ran an engineering department of Wear-ever Aluminum. She said, my son, can he get an interview with you? The interview got me a job.
- I was a project engineer designing new products. I went to work in February of 1972. I didn’t get drafted. I was at Wear-ever for 3 years.
- I remember getting called to the Vice President’s office and he said, I want to send you to Olean, New York. We talked about it at home and decided to move to Olean. Before that point, the New York plant was running at 30% to 35% capacity. What I was sent there for was to help design new products and get business other than Cutco, to build the volume of non-Cutco products, private label business.
- I did that for a few years, and Erick Lane came to the company in 1977.
Q: What was the story of Cutco from before you got there?
- It was started in 1949 by Wear-ever Aluminum that was a cookware business located in Ohio.
- Back in the early 40’s, Wear-ever was asking what could we sell besides pots and pans? They said it ought to be knives. They’d had this conversation with Case, which was probably one of the oldest cutlery businesses in the country and was family-owned.
- They talked to Case about making some knives. What became clear is if Cutco could grow big enough, Case couldn’t handle 2 businesses. So, they found this empty plant site, and said we’ll buy the plant, Case you’ll partner with us and show us how to make knives. You run the plant and we’ll own the plant. 51%-49% ownership.
- They then built this factory that opened in 1949 under the name of ALCAS. Case was renowned as the best highest quality manufacturer of cutlery in the US.
- Originally, they thought the same person would sell the knives, pots and pans. But when it kicked off, they became separate businesses. It remained that way for a few years up into the 70s, when they started to merge the businesses together.
- What occurred was the knives business became the predominant direct sales business. The President (Erick Laine) had made the case to ALCAS that ALCAS should own the Cutco product and the Cutco sales. In January of 1981, we took over the total business portion of the Cutco business. This was a big step to actually make this a fully-fledged business.
- In 1982, ALCOA owned a lot of companies, and cash had become very tight at that point of time for all kinds of businesses.They were looking for what they could sell.
- Erick Laine had contacts in Pittsburgh, and they were saying, why don’t you (management) buy this? They worked through that for 2 -3 months and came to an agreement. It was only a $6 million business at the time, when 5 of us bought the company from ALCOA (Erick Laine, Jim Stitt, Bob Lorenz, Dave Curtis, and Ray Kohler)
- We first went to Buffalo and hired a person to come in and start a Cutco office. We then kept going to every city trying to do what we did in Buffalo.
- We then decided to buy the biggest sales arm, Vector Marketing. We talked to Don Freda, the founder, about what we could do for the good of the company. We did that in 1985, and Vector joined us.
- From there, we said we’ve got the Northeast covered, then we bought CWE Industries in the West (owned by Don Muelrath) and BrekMar in Chicago (owned by Marty Domitrovich).We went from 13 offices to 26 offices, and had a foothold across most of the country. That was the beginning of the beginning.
Q: The seeds of the culture of the company we know today began being sown in those early days. You went through the buy-out and it was a critical period. How did you and Erick in particular shape the culture of the company?
- This was a company that was unfortunately riddled with strikes. There was a strike in 1969, 1972 and 1975.
- Erick came in 1977. There were negotiations in 1978. We were like we’ve got to work together. There can’t be a loser in the negotiations. There’s got be all winners. We didn’t have a strike in 1978, and we’ve never had a strike since 1975.
- We had good people. But management and the people were oil and water sometimes. Both did what they were expected to do, but there wasn’t a lot of trust either way.
- What we needed to do is know each other. We got to know people. Culture was family. We’re not just owners, you’re not just workers. We all did what it takes to be winners.
- From that point, it was people first. Customers, employees, the community. People first. With people first, the product was always going to be on top.
Q: When I think about the Cutco culture, I think about the words family and quality. What else comes to mind if we make the statement that Cutco culture is… what other words would you use to finish that statement?
- Love, appreciation, respect and thankful.
- Everyone is thankful for what we do for each other. Thankful that they’re here.
- We are a small community, 14,000 people. We employ over 700. We’re pretty important we don’t take that for granted. We take it as a responsibility.
- As a family, the employees and owners, we’re all responsible to this community, to our customers. We’ve got to do good work and we’ve got to do it on time.
- It’s a social responsibility. We owe it to the stakeholders. We’re responsible to the employees, to the community and to our customers.
Q: What do you think contributed to the rapid growth of the company in the 1990s and the 2000s?
- Back when we made the decision to buy Vector, we had these few offices. Now we’ve had as many as 700 offices in the US.
- It was building a company that would allow the opportunities to be spread nationwide. Entrepreneurship is owning what you do. Not just showing up and putting in 8 hours and then going home.
- That’s clearly in spades for all managers out there and that’s the real spirit that binds this company together.
Q: Over all these years, you’ve had a great partnership with Erick Laine. Can you speak about it?
- It’s very unique.
- You really don’t find many cases of people working together from 1977 to 2006.
- This has been the leadership of our company for almost 40 years.
- It was an amazing relationship.
- I had 2 dads, Eric was my 2nd
- I had such a great opportunity to have 2 great mentors, my dad and Erick.
- I was able to develop myself and help in the development of the company.
Q: So now your son Jim Jr. is leading the company. What do you think are his greatest strengths?
- He had the greatest mother in the world.
- Jim is a thoughtful person. He also has an engineering background. He’s great at that.
- He’s a thinker. He thinks through decisions.
- He’s committed to the people, the community. He’s a people person.
- He’s strategic, much better than me. I’m proud of him.
- He knows the culture. He’s lived in that culture for 47 years and he wants to build on that culture.
Q: As you look into the future, what’s exciting for you?
- For the last 10 weeks, I’ve being playing golf, 5 days a week! I never thought I could do so!
- During these trying times with COVID-19, to see how we can take this new evolution into the future.
- Everybody needs to do a fantastic job at how to do this and do it quickly and do it well.
- We’ve all learned so much these last 6-7 months … imagining what will happen when we really know how to do this is exciting!
- I found it really cool to hear how the seeds of the Cutco culture were born out of Jim’s experiences and family business.
- Things he learned from his parents and grandparents, that was really insightful.
- Also, how Jim and Erick worked to get to know people in the factory, on the floor and all levels of the company which they were in charge.
- They began building that family environment. The aspect of the stakeholder responsibility. A company that puts people first.
Show notes for this episode provided by Brian Njenga.
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