Progressive Business Strategies Pay Off for Strata Design
The middle of the 2007-2009 Great Recession seems like a uniquely poor time to buy a business, especially one related to construction. Undaunted, Tyler Cerny bought Traverse City-based Strata Design, a commercial cabinet and countertop manufacturer.
The gamble paid off. Armed with a materials science engineering degree from Michigan State Unversity, an MBA from Loyola University Chicago and industry experience, Cerny initiated a broad range of progressive business strategies that have grown Strata’s annual revenues from $2.5 million when he bought the company in 2008 to $7 million forecast for this year.
The question is: How did he do that?
As the recession gradually ebbed, Cerny was able to build Strata’s staff from a couple of dozen workers to 32 full-time, year-round employees. But that alone does not explain a 280% increase in revenues. Cerney made sure new hires had the skills the company needed – or at least that they were willing to learn on the job.
In fact, because he is a big believer in cross-training, pretty much everyone who works at Strata is expected to learn several jobs.
“It’s important because not every part of the process is busy every moment,” he said. “Cross-training makes us flexible.”
Cerny also wanted Strata to become a workplace of choice, so he instigated a quarterly profit-sharing program that over the past three years has distributed one-third of company profits – $250,000 in all – to employees.
“It means they have a share in the company,” Cerney said. “And it gets them fired up to work as a team.”
Strata also offers a 401(k) plan as well as health, dental and vision insurance.
To modernize production, Cerney added three new drafting engineers, who draw up machine code, he said.
“(The code) translates to our (computer numeric control) machines and high-tech panel saw,” he said. “So, as the saying goes, now we’re ‘thinking in the office, executing in the shop.’”
Expand Customers, Products, Reach
Cerny also expanded Strata’s customer base and its line of products. These days, the company serves three industry sectors: healthcare (which accounts for 50% of company revenues), various types of businesses (20% of revenues), and education (30%).
Like nearly all manufacturers, Strata has faced challenges during the COVID-19 pandemic. Some projects have been postponed. Others have been cancelled. But because it equips hospitals, medical office buildings and dental and optical facilities, Strata enjoys “essential provider” status in most states.
“That’s meant that we’ve had only two weeks when we shut down production,” Cerny said.
When asked what motivates him, Cerny, who in addition to his day job was recently named board president of the D.C.-based industry group Architectural Woodwork Institute, is quick to say he doesn’t want to work in the business, but wants to work on the business.
“When an owner or president or CEO is caught up in paperwork and other day-to-day things, they’re working ‘in’ the business,” he said. “Working ‘on’ it means you’re developing a strategic plan, getting the right people on the bus, and aligning yourself with customers who can help take the business where it needs to be.”