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Hi, and welcome to Power the Network. I'm your host, Tim Locker, Vice President of Broadband here at CBM. You know, 2025 is an exciting year for us. We're kicking off our 65 year anniversary celebration here at CBM. So Bob Cleaves established the business back in 1960. We've been going strong ever since. So to celebrate, we've got a former president, Mr. Duff Greenwood.
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and chairman of the board of CBM. So we're gonna bring him on and talk all things CBM and learn a little bit more about our ESOP and our culture. Please join us in welcoming Duff Greenwood.
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Duff, thank you so much for joining us today. Pleasure to be here. Thank you. You know, 2025 is a big year for CBM. getting ready to celebrate our 65th anniversary. Yes, sir. And I know you've been a big part of that over the years. So I just kind of wanted to hit it off with that. in your opinion, what are the three main keys that's made us successful?
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Well, the main key is people. We have probably the best people in our industry working at CBM. And the fact that the company was founded on sharing the prosperity of our company with our people and that we recognize we have to add value. It was John Marietti who said,
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there's no substitute for performance. So these people are performing all the time to serve the customers and add value for the manufacturers. Yeah. And that started from back in 1960. It did. And I didn't come on board until 1978. But at that time, the seeds of becoming an
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employee-owned company were already well-seated by Bob Cleaves, the founder of the company. Bob expected everyone to become an owner in the company after working there two years. He figured it took two years for someone to reach a point where they were comfortable in their position, knew the customer base and the manufacturers, and knew the products better than the manufacturer.
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Well, that's interesting because even now, you know, we bring new people in into the company and we say, you know, it takes two to three years to really lean into your job and understand your territory and really kind of be complete and hit the ground running, you know. So it's interesting that even way back then it's the same philosophy. That things, everything changes, but it stays the same. you know, we talk obviously a lot about our ESOP and that employee ownership.
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What did the employee ownership look like prior to the ESOP then? Prior to the ESOP, the ownership of the company was consolidated in a group of men. And that's what the society was like back then. And shares of stock were awarded based upon performance.
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But many of them we had to pay for. had to not only earn your spurs in the territory, but you had to submit your commitment to the corporation. Yeah, you're buying in. By buying in. Okay. What percentage of, I don't know if that matters so much, but I'm just curious, like at the time of the creation of the ESOP, was there a large percentage already that was, you know,
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held by company or was it still majority under the ESOP? Held by, I'm not sure I understand guess how many individuals within the company were shareholders versus not when the ESOP was created? Maybe it's not relevant, I don't No, well about 50 % of the company was held by employees. Okay. Bob Cleaves held 51%.
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Yeah, which is understandable. Yeah. Well, somebody in every situation, somebody has to be the final decision maker. Yeah. Otherwise, we may never make a decision. Yeah. You know, we've talked about, as long as I've been here, I've heard that phrase, you know, act like an owner. And I think it's important because we do have to make, you know, our own decisions relative to the business and relative to money and everything else.
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But that doesn't mean that there's not a structure and a hierarchy in terms of decision making and those things. So you have to take that with a little bit of a grain of salt, but be responsible. You know, act like you're spending your own money. Yes. But there's still decisions that are made at different levels. yeah, there were often times where Bob Cleaves felt like the owner.
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Bob Cleaves felt like you were spending his money. and it was, he was frugal and a hardworking gentleman. And he would never ask any employee to do something that he wouldn't do or hadn't already done. Yeah. I think that's one of the keys to leadership too. I mean, you have to be willing to go through the trenches if you're going to expect your folks to go through the trenches, right?
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The ESOP evolved over time after all of the paperwork was done and legal matters settled because it's a highly regulated atmosphere. whole different business structure, frankly. And the primary trustee of the ESOP is the final decision maker. And John Marietti carried forth Bob Cleaves
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idea by establishing, formally establishing that ESOP. At that time, he was the final decision maker. And my impression was that John continued to run the corporation as if it was a solely owned proprietorship. So when I had the opportunity to become the leader for CBM, I wanted to fully seat
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the Aesop. I wanted people to begin feeling like owners. it was, it's a cultural change. I was going to ask, what was that change like? So the Aesop was created in 88, correct? Did that change, did you start to see that right away? No. Or it took some time? No, again, it's a cultural change and those take time to function properly.
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So when I became the leader, I decided we need to take advantage of the fact that it is an ESOP, that everyone who works there has the opportunity to become an owner in the company and fully participate in the profits generated by the company. Important, I guess, to point out that
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full participation would be in the losses also. Now, we've never experienced that. Thank goodness. But in order to do that, I started talking to individuals about the fact that you are an owner in the company. And one person came in my office one day and said, I don't feel like an owner. And I said, well,
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there's a trick to that, to feel like an owner, you have to act like an owner. And he said, what do you mean? I said, well, you came in early this morning, I saw you coming in early, that's great, that's how an owner does. But I noticed, I was watching you out the window and I noticed that you walked, there was trash laying in the parking lot and you walked right past it. An owner would stop and pick up that trash.
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So, yeah, you need to start acting like a full owner of the company in order to feel like an owner. Yeah, that makes sense. So there's some personal responsibility within that as well. Absolutely. It's interesting that, you know, just that you would pick up on that. You you see the small things that maybe seem insignificant to, you know, people just in their day-to-day realm, but...
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Those little things matter, don't they? They do. And I felt good after about an 18-month period of concentrating on making everyone feel like an owner. And I was walking through the office and I heard the receptionist on the phone with one of our account managers who was out in field working and I heard her say,
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What do you mean you're going to Wichita? You were just in Wichita. Do you know what that cost to go to Wichita? So she was acting like an owner. And I thought, yeah, it's working. It's working. And I guess it's still working. That's awesome. Yeah, I'm sure there's tons of stories like that over the years. What do you think in the 65 years, what would you say has been the most consistent, and what would you say is one of the biggest changes that you've seen?
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Well, the most consistent is the performance. We recognize the fact that our customer base and our relationships with those customers are the only things we own. We don't own trucks or manufacturing plants or any of those things. We own a relationship with our customers. And that is what adds value for our manufacturers.
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They recognize that Cleves, Bessemer, Marietti, CBM has those relationships and we own them. So that helps them in their effort to sell quality products. Talk about the value of the ESOP for a manufacturer in terms of, you know, the legacy planning and those kinds of...
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Continuity is a big deal with manufacturers who use independent representatives. They want to feel comfortable that that manufacturer's representative is going to be around for a while. And I've talked to different manufacturers and different representatives who tell me that some rep firms, their answer when they're asked about
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longevity or continuity is, oh, I'm not going anywhere. Nobody can say that. You can't say that. You might get hit by that proverbial bus tomorrow. So the manufacturer needs to feel comfortable that somebody's going to be around to step in and take over.
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What's different about CBM? First and foremost, it's our ESOP. Employee owners have more control and more ability to make decisions that are right for our customers and right for our company and right for our manufacturers. We've got the flexibility to put people where they need to be and use our experts wisely. If you need help with a project or need representation from an excellent sales force here in the Midwest, look no further than CBM.
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dot com.
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Let's talk a little bit about, you know, your leadership style. Kind of describe how it is, maybe where it comes from. Did your military background have a lot of influence? You know, my time in the Marine Corps, if you talk to anybody who's been in the Marine Corps, that's nothing you can shed. Yeah. But it was a struggle not to resort to.
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Marine Corps tactics in most situations. You know, in the military, it's critical that reaction time be short, that action needs to be taken quickly. Not so in civilian life. And there are occasions where it's best to let something stew, to sleep on it overnight before reacting to it. And that takes, it takes patience.
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which is not something that's issued in the Marine Corps. So there were adjustments, but I did spend some time with a major corporation, international corporation, before coming with CBM. So I learned some management skills there. But a lot of what I learned came from Bob Cleaves and John Marietti. Yeah, on the job. What do you think in terms of management?
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when you obviously think things are going to change over 65 years, what do you think has changed from kind of that old school legacy, hard military type of leadership to now? That's a great question. The changes over that period of time were subtle. There were
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adjustments made, but nothing that happened overnight. What I found is that the strongest tool available to management is peer pressure. Everyone's an owner. And if someone is viewed as being a slacker of letting things slide, then
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their peers will put the appropriate amount of pressure on. That person, in my experience, will eventually feel the heat and move on. Yeah, that makes sense. And we don't have a lot of that. No, we don't. I was going to mention, you know, we've seen a lot of longevity and a lot of people retire with 20, 30-plus years from CBM.
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I guess is that a generational thing or is that a tribute to the culture or maybe some of both? That's an interesting question. for a period of about 10 or 15 years, I kept a spreadsheet on people who had worked at CBM and left. And there were
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many names on that list. The successful people, the ones that worked their career there and retired, was a minority on that list. But when I looked at the list, I thought these are the people who were the performers, who really acted like owners and reaped the rewards of that. That's interesting.
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We've got, if you've not been in the office, I know you have, but for folks listening, we have our ESOP wall, all the pictures of all the employees in order in terms of how long they've been with the company. it matters to everybody in that office where they sit. If somebody leaves or retires and they They want to move up. Or we got somebody new that comes on and they're down on the bottom right. It's important to everybody where you're at on that.
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It is. That's part of that ownership culture. Yeah. I want to give a shout out to Janie. I think behind every good salesperson, there's a spouse at home that really keeps everything working. There is. And it was a big adjustment for Janie in 1978 when
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We had started raising a family and I changed from this major corporation to Cleves Bestmer Marietti. And the major change was that I was going to be traveling three and four nights a week. That was part of earning your spurs back then with Bob Cleves. So, it became a situation where I was no longer home every night. Actually, I was three or four days a week home for lunch.
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Not anymore. And it took a strong spouse, a strong person to step into that role and see that things were handled on the home front. Because if I'm in Ardmore, Oklahoma, the last thing I want to hear when I call home is
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The pipe broke. the basement's flooding. She just took care of it. And when I look back at the employee owners at CBM who have been successful over the years, they had that strong spousal support. Yeah. And I've mentioned this on the show a bunch of times, but I'll mention it again. One of the things that really impressed me when I was hired is
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that CBN brought in my wife for the interview. They wanted to know that our relationship could stand the pressure of me traveling. And that speaks volumes, too. It does. And it's an important step in the interview process. When I interviewed, I knew Bob Cleaves for five years before I came to work at CBN. I knew his company for eight years before I came to
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And yet when I started, when Bob approached me about coming to work for the company. Were you in the same industry at the time? Yes. And Bob called on me. I was with a major, at the time, a major wholesale electrical distributor. Okay. And one of his key accounts was in my territory, and we worked together on that account. With his efforts, and I'd like to think some of my efforts, I had
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50 % of their day-to-day requirements on the shelves and I was selling to them. Bob called me up one day and he said, know, when we're bidding something, I'd like to have last look. Well, I want to have last look on you. So, we started talking and
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eventually got to a point where I had to go through an interview process with my wife, Janie, and every employee and spouse at CBM. Wow. It was an all-day Saturday affair from going from house to house. And I left there with my head spinning thinking, I'll never hear from these guys, you know.
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But I did. eventually we got together. So, Janie got you the job. I think she did. Well, and I'll tell you a little sidebar on that. She had heard about Bob Cleaves from other sources plus people during that day. And he and Daisy Cleaves were the last one we met with. And Bob asked her, do you think? She said, I think you're a tyrant.
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Thank goodness Bob laughed like you did. And we ended up getting the job. And he could come on as being a little gruff, a little curmudgeon, but again, he was very successful and he produced. How popular was a manufacturer's rep type of solution back then? mean, was he on the cutting edge or was that very common?
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you know, back in 1960? As you know, the key to a manufacturer's rep are those relationships with the customers. for a manufacturer to put a direct person into a territory, they have to invest two years of salary and benefits, taxes, and then they have to have support in that market. So an inside person's salary, you know, et cetera. So...
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A manufacturer's rep is attractive to a manufacturer because we're only paid if we sell something. That direct person in the field is going to be expensive to the point that when he finally sells something or that she finally sells something, what's the cost of sales? Well, it's all of that money spent until we got that order. With a rep like CBM, it's an upfront cost. Let's talk a little bit about how maybe the markets have changed since
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you know, since we got started. CBM started really in the electrical market, right? But now we cover three different markets. We do. You know, we're in the communications market, commercial, industrial, and, you know, power utility. talk about some of those changes throughout the years. When I started in the electrical industry in 1970, the man who hired me said, the only constant in our industry is change.
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And had I known the magnitude of what she was speaking, I probably would have run away. change is something that is going to occur with or without our participation. And over the years, CBM's decided to embrace that change. An example is that Bob Cleaves, the founder of the company, started out literally working on a card table at his house.
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He had come from Pennsylvania. He didn't know anybody in Kansas City. had one or two manufacturers he was representing. So he was scrambling. He was working hard. And he was driving home from an account, from a sales call, and he noticed there was a big sign on a building that referred to it as an electric company. And I think it was called Murphy's Electric. And he thought, oh, I got electric stuff.
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turned around and went in and introduced himself and said, I'm in the electric market. And the guy kind of laughed. He said, yeah, but we're not. And he said, well, it says electric on your door. And he said, that's correct. But you know, Western Electric is not in the electric business. They're in the telecommunications business. And so are we. And it turned out to be the supply arm for
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think it was Western Telecom or something out of Seattle and eventually became Sprint North Supply. But at that time, Bob said, well, do you buy ground rods? Yes. I sell ground rods. Do you buy clamps, ground rod clamps? Yes. I sell ground rod clamps.
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So that's how the whole thing started in the telecom. And we've grown since then. Now at the time, Bob's primary market was the electric utility market. That's where we started out. And the people that serve that market for a great deal are wholesale electrical distributors. And they buy a lot more products that aren't used in the electric utility market.
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So we started expanding our line offering, what we call our market basket, to include more contractor industrial, telecom, contractor industrial products. And for many years in our existence, our income was basically split into thirds, a third from utility, a third from telecom, and a third from commercial industrial.
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And that just kind of, you know, it's fairly consistent now, but it goes up and down each year. That's, you know, one of the values of our company and that leads into that ESOP too is the diversification. You can have a good year in one market and a down year in another market and, you know, kind of soften the blow. We're still in business. Yeah. Or if you have good years in all, then, you know, then we'll... One of the tactics I learned from Bob was
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you know, when the economy goes down and we don't think people are buying much. His philosophy was you increase call frequency. Yep. And he said one year when they were talking gloom and doom for the economy, he said, we're going to travel more this year. Yep. We're going to be in front of those customers. Because he was smart enough to know that most of our competition, either independent representatives,
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or direct manufacturers were going to pull in their horns. And we were going to be there to pull up the slack. And that message has been consistent. Obviously, I never worked for Bob, but I've heard that same message. The couple of down cycles that I've been through here, that same message has been spread. And I think it's spot on. If you add value for the customer and the manufacturer, they'll make time for you. Yeah.
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How much of that do you think just plain comes with experience? mean, I've been here for 17 years now, but it's taken a while to really understand adding value and what that truly means, you know what I'm saying? And I feel that now, but how does a guy that's one year, two years, three years in really...
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you know, bring that home and add that value for the customer. I think I said earlier that we try to know more about the products we're selling than the people that manufacture them. And the way we do that is by going into the field, you've done this, and working with the craftsmen who are using these products. And quite honestly, if a manufacturer comes to us with a product that does not add value,
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doesn't work. We tell them that. And when they don't listen, there was a time when we got the president of a company who was making a particular product to come to our territory. We set up an appointment at what he would consider a key account. And the night before, we were going to call on that account to show this new product that we knew would work. We said, before we go in there, we want to put this product together to apply it.
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And after four hours, he said, this damn thing doesn't work. And he was right. Yeah. Okay. So adding value to the manufacturer by showing him what products are needed to the customer by being able to apply the product and show them the safe application of. don't know how many times you showed splice closures and how to make fiber optic splices. Yeah. Okay. You can do it. You know what
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problems the customer runs into. And for me as a sales guy, you know, if I didn't believe in the product, I can't sell it. That's just a, you know, if it's your conscience or whatever, but you have to fully believe that it's the right thing for the customer. We're here for the long term. In order to maintain that position, we can't introduce products that we know don't work. And we won't.
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Well, and if we do, we have to be honest about it, Like, you know, how important is honesty? you know, sales gets a bad rap a lot of times, you know. Oh, we're the middle man. Yeah, we're the middle man. A middle man doesn't have value. We add value. We lie all the time. No, we don't. We're kneaving and all these things. We don't. And if I'm introducing a new sales guy in the electric utility market especially,
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And we're talking to an engineer at an investor-owned utility. I told him, and see. While you're talking, he may be using his calculator. He's checking your numbers. And then later, you may notice that he's opened his desk drawer and he's fooling around. He's using his slide rule to check his calculator. That's how cautious they are. my point is never.
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Be dishonest with a customer. Honesty is key. And if you don't believe in a product, you can't be honest about it. Couldn't have said it better myself. Totally agree. You know, it's funny because I pride myself on not lying. And I was reading the other day, and it talked about, even though you think you don't lie, you lie to yourself a lot.
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For instance, I'm going to get up and work out tomorrow morning, and then you don't do it. Or I'm not going to have that donut, and then you eat the donut. And I never looked at it from that perspective, because I do. I pride myself on not lying. But then I thought about it. I lie to myself every day. So I'm making an effort to change that.
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You're going to eat the doughnut. Okay. Oh, I'm going to pass it. You know, when I say I'm going to do it, then I have to be true to your word. But, you know, so I think, you know, self-improvement is a big thing. You know, now that you're retired, are you continuing to do things, you know, for yourself or self-improvement? I am. You know, in addition to being chairman of the board for CBM, which I consider to be a great honor, I don't want to retire.
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to the house and watch daytime TV, that's a death sentence. I don't golf, so I needed to continue on the path that I've been on, and I consider my goal to be that of Ikaigi, which is a Japanese word, and it means to continue to add value in your life and in your community. So I volunteer with an organization called Hemp.
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HEMP, Halesburg Entrepreneurial Mentoring Program here in Kansas City. And it's a group of volunteers of successful businessmen who continue to participate by mentoring entrepreneurs who want to take their companies to the next level. Okay. And that's been extremely rewarding. I also volunteer with an organization out of Washington, D.C. called American Corporate Partners.
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In American corporate partners, our goal is to mentor people leaving the military and going into civilian life, many of whom have never had a civilian job. All they know is military. They went out of high school and went into the military. So it's basic things like what do you wear for an interview and how do you take that 20-page resume and boil it down to one page that somebody's going to actually read and how to interpret military skills into civilian skills.
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Those are two things that I'm doing and my guilty pleasure is wood carving. I'm a wood carver and I do a lot of that at home but I also teach a class once a month. Like what's your favorite thing to carve? I love doing decorative decoys, duck decoys and birds of prey. Awesome. I'll have to look at some of stuff. My grandfather used to do wood carvings and when he passed the collection was
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kind of divvied out to the grandkids and I got a little cowboy boot that he did that I just keep feathers in it in the hunting room. It's fun. It's a fun hobby. Yeah, that's awesome. Well, Duff, I can't thank you enough for everything that you've done for our organization and we're happy that we're kicking off our 65 year anniversary here. Isn't it great? It's amazing. And it's hard to believe that I've been here as long as I have now, but you know.
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No complaints. been a good Stick it out, Tim. You're a good owner. Well, thank you. I appreciate that. All right. We'll wrap it up. Thanks, Duff. You're welcome.
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Thanks again, Duff, for joining us. Hopefully we've been able to give you a little bit more insight into the organization and some of our history, something we're real proud of here at CBM. Remember, if you need help on a project or you need representation from a great firm here in the Midwest, look no further than CBM. That's cbmrep.com. Once again, thanks for joining us on Power of the Network. And until next time, we'll see you next time.
