Host Bryan Pearce, Director of Strategic Business Planning at Gray, Gray & Gray, interviews Marty Mazzella of Ti-SALES. Marty is Owner and President of Ti-SALES, which is located in Sudbury, Massachusetts. Ti-SALES has been an essential partner to municipal water utilities and other customers in the water industry since it was founded in 1963. Marty purchased Ti-SALES in 2018 from the family that founded the company and is now leading the growth and transformation of this successful business. During this interview, Marty discusses his experience with being a leader in the water industry and strategic business planning methods to position his business for future growth.
Bryan Pearce 0:12
Hello and welcome to Strategic Thinking - a new podcast series produced by Gray, Gray & Gray featuring CEOs, founders, and other senior business leaders discussing what's happening in their industry, and how they are strategically guiding their companies for growth. I am Bryan Pearce, Director of Strategic Business Planning for Gray, Gray & Gray, and your host for this series. I'm excited to share with you these conversations with innovative business leaders in New England and beyond and I am confident that our listeners will gain many insights that they will find valuable as they focus on rapidly growing their businesses regardless of their industry. My guest today is Marty Mazzella, Owner and President of Ti-SALES in Sudbury, Massachusetts. Ti-SALES has been an essential partner to municipal water utilities and other customers in the water industry since it was founded in 1963. Marty purchased Ti-SALES in 2018 from the family that founded the company and is now leading the growth and transformation of this successful business. Infrastructure in the US. water industry is in need of significant investment. In fact, one publication illustrated it this way, by saying that if the estimated 2.1 trillion (with a T) gallons of expensive treated water that leaks from the country's outdated systems each year somehow sloshed its way to New York City, that 298-foot deep flood would swallow Manhattan. Wow. Marty, thanks for joining me today. It sounds like transforming our aging water infrastructure is a great opportunity for Ti-SALES. And so I look forward to your insights. Marty - Ti-SALES is a leading distributor of products to water utilities and others in the northeast. You acquired Ti-SALES, as I mentioned in 2018, after a very successful career with several companies in the water industry. I just wonder if you could tell us a little bit about what strategic opportunities you saw that made you want to acquire a business in the water industry? Marty?
Marty Mazzella 2:18
Bryan, thanks for having me. It's good to be here this morning. Interestingly enough, I originally had no intention of acquiring a company when I was approached by Kevin Tighe, the former owner and the son of the founder, Bert Tighe, to purchase his business. Kevin and Bert had built a wonderful company, very profitable company. But when I acquired the company, there was not a lot that needed to be changed. However, there was not any future-looking plans. So what I saw was an opportunity to plan the growth versus just kind of go with the flow and letting the business ride, the way it had for years, kind of reacting to what was happening in the market as opposed to planning for it. We focus on customers, and I saw the need for some strategic planning so that we could be ready for the changing dynamics of the industry. The industry is changing almost slowly, much more slowly than a lot of industries. But it is changing - the workforce is changing. And there was an opportunity to create a plan and a vision for the company's growth and to set some expectations so that we can be ready for the change before it was too late. We're in a highly competitive market. People don't realize that there's a lot of industries and a lot of companies that compete for business to sell to the water companies into the municipal water space. And those changes are happening now. There's a younger workforce coming in, there's different buying patterns that are evolving - the use of e-commerce and the use of other types of electronic purchasing and bidding. So I felt that in order to make sure the company remains stable and profitable and growing, we had to have a strategic direction. And with your help, we were able to put some things in place. But that's kind of the nutshell of how this got started and I'm extremely grateful to the founders that they picked me to buy their company. I'm having a lot of fun doing it.
Bryan Pearce 4:27
That's great. You mentioned a number of ways where customers of today are changing and how Ti-SALES is responding. One of those that you mentioned is looking at the whole area of different buying patterns and perhaps even looking at buying solutions versus parts and various things like that. Comment a little bit more detail on those, please.
Marty Mazzella 4:57
Yes, so like I said the industry is evolving. And technology and the need or desire for a lot more data is driving a lot of our customers. They want to explore ways to get more information so they can run the utility better. They can manage water better. They can reduce non-revenue water - what we call non-revenue water, which is a lot of what you mentioned in the introduction and providing better customer service. All of that has to be done with fewer people, budget restrictions, and all kinds of other challenges. So our strategy is really to provide solutions to address the challenges and offer them a different way to buy things to fit their business models, and some of the restraints that they may have on them. So, in the past, I think that both Ti-SALES and a lot of our competitors - they had a single solution. And the idea was to sell that solution, almost force-feed a single option to the customer. So as an example, in order to address the needs that our customers are faced with, we tried to offer multiple ways for the customers to buy a solution to get them that information and the data that they all really want to run their businesses better and run their utilities better. So as an example, we offer a solution now called Network as a Service. So when a customer needs to replace their metering system, most of them want to go to a sophisticated system where they can acquire the data via radio waves over a network. And the networks can be somewhat sophisticated. So we've allowed what we've put together as a package where the customers get all the benefits of these advanced metering systems, get all the data, but they may not want to own and manage the network that's necessary, that's part of the solution. So we can build out a network owned and operated for the customer for an annual fee and that allows them the time and the freedom to go out and do other tasks within the utility and not worry about a network going down or not worry about getting their data in a timely basis. So that's one example of how our customers are changing number one, but how we've offered the solution as a way to get the necessary components to them without taking on a lot of risk.
Bryan Pearce 7:39
Yeah, I think that's great, Marty. I'm certainly old enough to remember having somebody knocking at the door a few times a year and asking to go in the basement to read the water meter. And obviously, we've come a long way since then, over the years, in terms of efficiency. And I think what's really interesting is also not only the way technology is being applied to reading the meters and gathering the data, data being so important to every business these days, but also how you've changed or are changing your business model to also encompass this Network as a Service as you described it, and really owning and operating assets so that the utilities can focus on the distribution of what they do best. So very, very interesting change and one that I'm sure will continue to evolve very quickly for you and for your customers. Marty, I wonder if we could shift for a moment to the strategic planning process that you've referred to already for Ti-SALES? And how are you ensuring that all the good ideas that you and your team come up with in terms of strategy, including these new solutions, are being executed and obviously executed on a timely basis in a highly competitive business?
Marty Mazzella 9:02
Yeah, so great question and a great challenge. So compiling and writing the plan with your help, was the first challenge. And I think when we first met, Bryan, we talked about a strategic plan and I told you that I had a lot of ideas swirling around in my head, but I hadn't gotten any down on paper yet. So with the help of Gray, Gray & Gray, we were able to put some organization to that, and then we were able to come up with what I thought was a really good plan. But implementation is I'm finding an even bigger challenge mainly because our day-to-day business has picked up significantly after COVID. So setting aside the time to work on implementation and do the things that we need to do has been a challenge. However, we have taken some of the key ideas, and we've executed on a number of the tests that we included in the plan. The Network as a Service that I just mentioned before, is a good example. We've been able to pull together the processes for doing that. We've been able to pull together the legal agreements and so forth that we can show our customers that it's a viable solution. We've also been able to build a really good return on investment model for that solution. So if the customer wants to justify the direction, you can help them do that to their financial managers to make sure that they're saying that it's a good investment. But really, one of the big keys is communication. We delivered the plan to the entire company back in March and we set the expectations about the future growth and how we plan to get there. And during that meeting, we were able to explain to people why it's important to have a strategic plan and the work it's going to take to actually execute everything that needs to be done within the plan. I heard a statistic that more than 50% of strategic plans never really get off the ground because they didn't take the time to really plan out the execution. So we're in the process of - can we allow that now - the planning and developing of the execution plan? So we have another company-wide meeting next week. We're going to reinforce everything to ensure everybody's on board, we're all rowing in the same direction, and we all know what we're doing. And at that meeting, we'll talk about some specific things that are being developed with assignments, with milestones, with deadlines, and so forth for each of the different pillars that we put in the plan. So that everybody knows what they're going to have to do in order to achieve the growth. Like I said before, the previous owners did not have a strategic, future-thinking mindset. They ran a great business, but everything was done, and I'm not going to say by the seat of your pants, but they did it on a year to year basis, as opposed to looking at three, five, ten years on where they wanted the company to go. So with this plan, we think that we can now communicate to everybody that we have a plan, we have a direction. It's pretty straightforward that if we execute the things that we put in the plan, that there'll be a lot more growth, and there'll be a big benefit to everybody. So that's what we're doing right now, again it's a challenge. Trying to run the day-to-day business and getting people to say, by the way, while you're doing your regular job, you have to also focus on some of these future thinking, future-looking things. And so we're working through it.
Bryan Pearce 12:34
Well, I commend you, Marty, because I think communicating the strategy is really important and as you say, often one of the things that a small group of people go away and come up with a series of bright ideas, but if the whole team doesn't know what the ideas are, and the prioritization of those ideas, and the benefits that they will see for executing on those ideas, then often things do not go as originally planned. So I commend you certainly for communicating that vision throughout the company as effectively as you have. And then continuing like you're meeting next week to bring people back together and see how we're doing. One model that is often referred to as a ACI model, or ACI, which is looking at who is responsible? Who are those people accountable to? Who has to be consulted on these decisions? And what information is required to be able to do them? And so I think having clarity around that, whether it's with your full team, or whether it's a leadership team that is responsible for handling a lot of the execution, just having clarity around that, and being able to get to it on a regular basis is really important. Clearly, every business has to prioritize the things that are in front of it. And that's probably even more difficult now, in the post COVID environment, if I can call it that because we are seeing companies come out of the chute being very busy. In many cases, it's a struggle to hire the right kind of people to do the job. So people are doing a double duty in many cases, but still, customers are evolving, and it needs to be an area of focus for every successful business. So congratulations on keeping the ball rolling well. So a second thing I wanted to explore a little bit is this whole aspect of corporate culture, Marty. Peter Drucker, the famous management consultant, and writer is quoted as saying "culture eats strategy for breakfast". And he didn't really mean I don't think that strategy is unimportant, but rather that the culture of a business is really a powerful and empowering tool for essential organizational success. And I just wonder if you might share what you think are two or three important aspects of the culture that you've been trying to build at Ti-SALES since you acquired it in 2018? And how have you done that, and what have been some of the challenges?
Marty Mazzella 15:30
So, first of all, as I mentioned before, I inherited a great culture when I bought the business from the Tighe family. They really set the tone that everybody from the management team, to the salespeople to the warehouse staff to the inside sales group - everybody in the company was focused on the customer. Customers, and keeping customers happy, and knowing how to help them - it was really a culture within the company, and we have a healthy culture. So we plan, and all of our efforts are really focused on helping customers and then helping each other within the company, and also helping our suppliers and vendors succeed so that we have a strong, ongoing growing business. So, that was something that I luckily inherited, and everybody has a great attitude and a great team approach. But in addition to that culture, one of the things that drive our business is a very generous profit-sharing program. So everyone in the business really understands that we try to maximize our profits by selling more products, servicing our customers extremely well, managing our costs, doing all the things that maximize the profitability, because when everybody pulls together, and they hold each other accountable, at the end of the year, everybody gets a nice check, and they have a chance to share in the success of the company. So, that was something that was in place before I bought the company, and I continued it. We've actually enhanced that a little bit, in order to try to make sure that everybody still understands that helping customers is number one, but as you help customers and deliver solutions to their problems, somebody can make some money, and then we all share that. But beyond that, I really think that what's at the core of our company is that we believe that water is essential. Water is essential for life. Water is essential for the public health. And our little business is part of that big system, that big process of delivering clean, safe water to the public. And so everything we do is to help our customers, which are typically Public Works Directors and Water Superintendents and foremen, and all the guys that are out there, working in the streets, working in water treatment plants, billing people that actually put the bills out to the customers. We help them do their job better so that they can deliver clean fresh water to people, and even though people take water for granted in the United States, clean water, that's not going to make them sick, we recognize that our little company is part of that whole process and part of that big, like a small cog in the big machine that makes sure that every day when you turn your tap on, you're getting fresh, clean water that is not going to cause you any health issues. So those three things, the idea of helping customers and helping each other, making sure that we're working towards a profitable enterprise, and then most importantly, understanding that water is essential. And that if we do our jobs well, hopefully, our customers can do their jobs well, and they can deliver safe water and be able to deliver it and measure it and bill for it and keep their municipal operation running pretty smoothly.
Bryan Pearce 18:58
Marty, I really like that. I think certainly one of the great sayings is "without customers, you don't have a business" and I think your focus on customers there has been very evident and has obviously been the success of Ti-SALES since it was founded way back in 1963 and you've continued that legacy and grown it in your culture. I think the other thing that you mentioned, is really around having your employees think like owners and the way that you've accomplished that with profit sharing. If everybody's thinking like an owner of the business, it really should continue to thrive. And then finally, I think you've hit it right on the head, as so many companies have today, is really linking your growth to purpose and making the world a better place. And I think purpose is very evident in your industry and in the water industry. And as you say it's essential for life. It's essential for health. And we're very fortunate in this part of the world to have reliable, potable water and certainly, your company has been an important part here in the northeast of making that a reality. So customer purpose and people that think like owners, I think are all excellent parts of the elements of your culture. So well done. The final thing I wanted to just explore with you, Marty, was as President and CEO of Ti-SALES, how do you keep on track and on top of all of these developments that are taking place in the industry? Whether it's technology, whether it's changing people and your customers and there are new expectations, particularly as the next generation comes along into some of those roles. How do you keep track of all of that? And how do you use those insights to continually shape the strategy of Ti-SALES as you go forward?
Marty Mazzella 21:03
Yeah, and that again, is a challenge because there are developments, there's changes, and trying to stay on top of everything in this industry is difficult, because there are constant changes. There's changes in regulations, there's changes in competition, there's changes in technology. There's all kinds of different things that happen and during COVID, a lot of the things that we would use, things that were at our disposal to stay on top of that really went away - things like trade shows, and ways to exhibit our products and learn more about what's going on in the industry as well as learn more about our competitors. We didn't have that opportunity any longer because everything was shut down. So it became an even bigger challenge. But we did fairly well through COVID. Our sales guys, we have a very good salesforce, we have a very strong, experienced, knowledgeable group of salespeople that are out on the road every week, meeting with customers, talking to them about challenges, talking to them about things we can do to help solve some of their problems. So that's a pipeline for us to get more information and to stay on top of what's happening in the industry. I think that this industry, unlike others that may have gone to a less personal type of selling, we get face to face with the customer as much as possible through our salesforce and then through our inside salesforce. Plus we have a lot of customers that come here to our office and our warehouses to pick up product and to buy things. So we try to stay on top of it by really interacting with customers. Secondly, I would say that just having the number of suppliers that we have that supply us product that we re-sell to our customers, keeps us on our toes. We have some of the biggest players in the industry as our suppliers. They do a great job of keeping us up to date on what's happening in terms of technology changes, regulation changes, different things that would affect our ability to solve problems and sell things to our customers. But it's going to be interesting to see what happens as we come out of COVID and we get back to the normal tradeshow circuit and our salespeople can actually go into a water department and see people for a change as opposed to doing virtual meetings or meetings in a parking lot where you can't get out of your vehicle and you have to wear a mask. It's going to be interesting to see how that evolves and if it goes back to normal, the way we used to do things. But I think that staying on top of the industry is always a challenge. Publications help, but just that interaction with our suppliers and with our customers and us being in between there really helps us stay on our toes and stay on top of what's going on in the industry.
Bryan Pearce 23:56
Well, here's hoping for a return to greater normalcy, which hopefully will happen very soon as it is already happening and I think what stands out to me, Marty, in the comments is the relationships that you have with your long-standing customers and long-standing suppliers seem much more like a partnership than just a traditional vendor-customer relationship. You learn from them, you bring solutions and ideas to them, and likewise. You work very closely with your suppliers to make sure that what you're offering is sort of state of the industry in terms of solutions and products. So I think there's good insight there for a lot of businesses is to have regular contact and everybody benefits when everyone has great communication and learning from each other.
Marty Mazzella 24:51
The products we sell and the solutions we sell, we try to make it easy for our customers to be able to do what they need to do - primarily when it comes to meter reading and bill processing. At the end of the day, a water utility and a municipal water utility are like a business. If they deliver their product, which is water, and they can get their bills out to their customers cleanly and easily and without any problems, that's where we take pride in doing our job well. If there's a problem with anything that we've sold them, we try to fix it quickly and make it so that when they get around to doing their billing at the end of the month, or whatever it is, they know they're not going to have a problem getting the data to their systems and be able to get their bills out to the customers. And then we also provide solutions that let their customers see what's going on at the water utility and with their own usage. So those kinds of things, I think, are critical to our success. And going to your last question - staying on top of the developments in understanding what our customers are looking for to provide better customer service and better visibility to their end-user, the person who's actually using the water - the residents of the town. That makes it better for everybody. So all good stuff.
Bryan Pearce 26:23
Great. Well, thank you, Marty, for your insights and for taking time with us today. I think your focus on customers, your focus on your people, and certainly, really making it efficient for customers to get the opportunity to acquire and make better use of the data that they have is essential like all businesses today making good use of the data to really run their businesses more effectively. So thanks for joining us and thank you to our listeners and please join us for other upcoming podcasts in our Gray, Gray & Gray Strategic Thinking podcast series. Thanks, Marty again. Have a great day.