Building a National Brand – Andrew Zavodney, CEO – KUSTOM

Today, we feature Andy Zavodney, CEO of KUSTOM. He takes us through the incredible journey of a family business – from the early days in roofing and sheet metal to KUSTOM’S current focus on building a national restoration brand. As a 3rd generation leader, Andy shares hard-earned wisdom from his career journey and how KUSTOM is growing by acquisition. If you like our podcast please subscribe!

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Transcription:

Bill Gullan:
Greetings one at all. This is Real-World Branding. I’m Bill Gullan, President of Finch Brands, a premier boutique brand consultancy and we’re grateful that you’re with us. A really great story today Andy Zavodney, president CEO of KUSTOM, which is a family business season. He’s a third generation leader within the company. And the business was founded in 1968 in Akron, Ohio. And over that period of time has evolved in a really interesting directions, starting with roofing and sheet metal work. But now in this current iteration becoming a national leadership brand in the restoration space, helping residential and commercial clients recover from losses sustained through disasters of various types, be it floods or fires or everything in between. There’s a tremendous amount of passion that Andy and his team bring to this. They’re always flying around to be with clients and to help them through these challenging times. And you’ll hear Andy talk about his own professional story as a third generation business person, and just the maturation of this company into the nationally facing leadership brand than it is today. Enjoy hearing from Andy Zavodney.

Bill Gullan:
We’re pleased today to be joined by Andy Zavodney who’s the CEO of KUSTOM US and we’re especially lucky because whenever we talk to Andy, he seems to be flying around, serving clients and really focused on this growing business. But we’re glad to steal a few minutes of your time.

Andy:
Bill, thank you for inviting me to join today. It’s a true pleasure.

Bill Gullan:
Great. And we feel the same. And so let’s start where we normally do with a little bit of your own backstory. I know that while you all are in greater Orlando today, the company and the family has strong roots in Akron and in Ohio. Could you talk a little bit about the sort of twists and turns that have led to your role today and the Custom of today? How’d you start out? What were you interested in to begin with? And then let’s go through it.

Andy:
Well, Bill, I started into my college career, like every new kid in their freshman year, not knowing what they wanted to do and took several twists and turns through four years of college. And at the end, I wasn’t quite sure what I wanted to do. So I decided to start working in the family business and figure it out. And I woke up 30 years later and here I am the CEO, and obviously it’s taken quite a few turns along the way.

Bill Gullan:
Yeah. And so you’re an Akron Zip, if I’m correct?

Andy:
Correct.

Bill Gullan:
With an undergrad interest in marketing, as well as accounting. Did you have a particular part of the business early on that really appealed to you versus any other? Did you see yourself as more of a finance guy or a sales and marketing guy, or… Obviously a family business, you get a broad exposure, but any particular interests early on?

Andy:
So, very early on, I was exploded child labor in the business. And after college, I was quote, unquote forced to start a five-year trades apprenticeship. It was a kick in the shorts to say the least as a newly, supposedly white collar graduate with a bachelor’s degree. I thought I was headed into an office and I got the right turn into an Ford F100 and a toolbox and coveralls and an indoctrination into life or working in the field, as my Hungarian immigrant grandfather did in his first years of his life, as well as my father.

Bill Gullan:
Nice. Very cool. That’s certainly an introduction. And KUSTOM, the company that you now lead, was very different at that time. It was founded in 1968. Originally I think sheet metal and roofing was really it’s focus. Could you talk about how over generations, the company has evolved along with you as a business person?

Andy:
Absolutely. So my grandfather and my father and uncle, and two aunts and grandmother founded the company July 29th of 1968 as a sheet metal and roofing contracting company based in Akron, Ohio. And we served largely commercial manufacturing and largely rubber industry businesses within a 10 to 15 mile radius of our office in Akron, Ohio. And that was our business. And at that time, we were good at taking orders and executing job orders in an industrial construction environment.

Bill Gullan:
Right. And so somewhere over that history, I know that there’s multiple generations here and many family members, KUSTOM began to move in the direction of the company that is today as a leader in restoration and sort of property loss. Could you talk a little bit about, so sheet metal and roofing is where it began, what about the evolution over the years?

Andy:
So in 1985, my father left KUSTOM, started his own organization and in 1989, merged with my grandfather. And at that point the company changed from sheet metal and roofing to sheet metal and industrial contracting. So that was in 1989. So that was the second evolution. And when I purchased the business in 2000, we changed again, and began subcontracting in the commercial insurance restoration space. We did the subcontracting work for a period of about eight years, eight and a half years. And in late 2008, 2009, we decided to become a general contractor in the insurance restoration space.

Bill Gullan:
What was it about that space that was so appealing to you? Was it market opportunity? Was there some sense of pride and accomplishment in helping folks bounce back from difficult moments? What was it?

Andy:
So, I think for me, I really enjoyed the pace, the immediate need that an insured might have to help an insured get their business and their operations back to generating revenue again, to pre-loss condition. And I got a great sense of accomplishment from that. I saw a broad market that was available, right? So it seemed like an interesting space to take the quote, unquote tool box that I had been given through my family’s legacy business and has since worked out quite well.

Bill Gullan:
Yeah. And so for our listeners, restoration, this is flood, this is fire. This is any sort of form of disaster, be it natural or otherwise.

Andy:
Correct.

Bill Gullan:
Is there a particular type of restoration or sort of disaster type that KUSTOM may be more adept at handling, or it seems like it might be across the board restoration?

Andy:
So we do across the board restoration and we serve a variety of verticals from healthcare to hospitality, automotive, retail, heavy industrial, but I would tell you that over the course of time, uniquely, we excel in heavy industrial and manufacturing environments. It’s not a huge percentage of our business, but it’s definitely a skill set that we’re broadly known for.

Bill Gullan:
Yeah. And across that, you and your team have built a group of guiding principles to build and manage businesses as well as to make this really strong, personal commitment that we know is central to your leadership and how KUSTOM operates. Could you speak about some of the philosophies that you and your team have brought to bear to help grow KUSTOM and to serve clients at, in some cases their biggest moment of need?

Andy:
Well, I think this goes back to graduating from college and starting in the business. And today we identify the guiding principles. Back then they were just… It was a logical path of doing things, right? It was doing the right things for the right reason. And one day we sat down as a team and we identified. And now we look at them and we talk about them in our leadership meetings, but it’s been an evolution over time. And we did not sit down and say, all right, let’s talk about our guiding principles. Here they are and this is what we’re going to start doing. It really happened in reverse. And I would say it happened organically over time and for the right reasons through good practice.

Bill Gullan:
And these principles today seem to be, and there’s eight of them, you can find them on KUSTOM.US, the website, seem to act almost as values. It seems like they may play an important part of how you think about team members.

Andy:
Absolutely. So for new people that are coming on board Bill, it is really important to continue to communicate and publish these and talk about them for the new generations, right? The older generations such as myself, we’ve done it, we’ve lived by it. And it’s really important to discuss them, promote them and talk about them very publicly. So that’s when we recently, not recently, five years ago updated our website, we decided it was time to publish them to the world.

Bill Gullan:
Right. Yeah. Powerful stuff. And they’re very powerful and they’re phrased… One of the things we like about them, I think at Finch Brands because we always talk about making values actionable as opposed to having a guiding principle that was just, innovation. That doesn’t tell people what that means and what to do, and what’s expected of them.

Andy:
No.

Bill Gullan:
Whereas something like take risks or act with resolve. These are behaviors-

Andy:
Absolutely.

Bill Gullan:
…within people. And particularly now, Andy, these come in handy, I would think given… And I’d love you to sort of sharp this path for us. The growth that KUSTOM has experienced, I mean, up to probably 15 plus locations around the US and growing very rapidly through the acquisition of restoration businesses that may have regional or local strength. Could you talk about M&A as a growth path? And I guess it probably becomes ever more important again, that these values are sort of published and palpable, the more team members join over time.

Andy:
Absolutely. So we began our acquisition or our inorganic growth strategy December of 2015. I remember picking my first trip, my first set of meetings and really not knowing about it, right? And as we fast forward to today, I’ve had well over 125, possibly 150 meetings in markets through North America and Europe and we’ve completed eight transactions. And I would tell you that it’s a very protracted process. And just because there’s a willing seller doesn’t necessarily mean that there’s a willing buyer. As we look at these things and we look at our guiding principles and what’s important to us in this new partnership, we’re really, really in search for culture and operations, right?

Andy:
So I would tell you that I was possibly a little naive in the beginning of this in 2015 and what an acquisition strategy was and how it was going to be executed. And it’s been a great learning experience. I’ve met a lot of great people, a lot of people that I’ve become friends with, and that’s maybe where it’s going to stop and others that I’ve found great long-term relationships where we’re going to collectively build a business together.

Bill Gullan:
Yeah. Absolutely. And we know the data indicates that on the commercial side of your business, which is the dominant side, although you do have residential services too, but on the commercial side, there is this sort of desire for strong personal relationships, but at the same time a partner with sort of a broad wingspan and really broad shoulders in terms of being able to accomplish a lot. Both in terms of services, as well as geography. As you make the decision you acquire really good culture fits, who have built strong local relationships around the country, they become part of this larger KUSTOM umbrella. You’re really building a national brand here. Could you speak a little bit, I guess about reputationally and in terms of brand, why that’s really important and the power that comes from a brand that will soon be known nationwide?

Andy:
Yeah. I mean the culture, the broad shoulders, the people or the organizations that we have acquired, it’s about the people, and it’s not a… Unlike other acquirers in our space, this is not a vehicle for retirement. The people that have come on board through acquisition, they’ve been people in their forties. They’re very entrepreneurially minded people. They have aspirations to continue to grow. And for whatever reason, they’ve hit a glass ceiling, whether it’s capital or process, it could be a variety of reasons or a combination of all. But we see the strength in numbers, right?

Andy:
And no different as I go back to 2013, 2014, seeing where the industry is going and it’s headed down the various stages of the consolidation curve, right? And I recognize the fact that commercial customers wanted a single point of contact and they wanted to be able to service their property portfolios on a national basis. And it was time to make a decision to be acquired or to become an acquirer. And as I looked around Bill, I went down the list of acquirers at that time. And quickly, quickly rolled out the possible suitors and 2014, even 2015 and I’m like, you know what? I think that this is something that we’ll do ourselves. And I’ve never regretted it. I’ve never looked back. It has been certainly another inflection point for the business. And it’s just really, really been an incredible journey.

Bill Gullan:
Yeah, no doubt. Speaking of journeys that we’ve all been on, COVID-19, we’re recording this in early December. Maybe it’s the seventh. Is it the seventh? Pearl Harbor day. Anyway. December. How has a KUSTOM… What has been the effect of COVID on KUSTOM, both from a perspective of, I guess, sort of internal operations and obviously all that everybody needed to do to pivot, but also the nature of the client base. Could you take us through what the last sort of nine months have been like?

Andy:
So COVID has had an impact on the business. It’s required a different discipline around management, right? We, as a world, came into this COVID-19 world in March, and really nobody had a playbook. There were a lot of theories, there was incomplete scientific analysis. So we were flying blind. But we said, hey, you know what? This is really the industry we’re in. We were thrown into foreign situations on a daily basis with large commercial complex losses. And the coaching for our team was, guys, we need to look at this as a big, large loss that’s going to last 12, 18, 24 months. And we need to gather the facts for the day and make good decisions for tomorrow. And we need to do that every day.

Andy:
And we will persevere. So internally we’ve had a couple teammates that have been impacted by COVID. Fortunately everybody has recovered successfully. So that’s a great thing. We’ve adopted internal practices to mitigate the threat of COVID. And externally we have realized some impact both on the commercial space with additional cleaning and disinfection for our commercial closely held clients, as well as some of our residential clients in some of the markets that… They’ve decided to put their projects on hold where it’s possible.

Andy:
So I would tell you that as an organization, COVID has been net neutral, we’ve dealt with it both internally and externally. It certainly hasn’t hurt our business, but I would tell you that there hasn’t been an economic benefit as a result of COVID type cleaning and disinfection services.

Bill Gullan:
Right. Makes sense. And speaking of no playbook… Because yeah, everyone that we’ve talked to about this, that’s one of the first things, which is just the need to improvise. And I guess that’s part of what having a strong culture and set of values to guide one… That’s another area where it’s helpful and importantly.

Bill Gullan:
A segment of our listeners, Andy, we believe are sort of early stage in their own careers or thinking through the direction they want to take. When you think about your journey, going into college at Akron, not really knowing what you want to do, the family business, all the twists and turns. Are there sort of words of wisdom or beliefs or philosophies that you live by as a business person that you’d be willing to share?

Andy:
You know what Bill, absolutely. And as I look back over the course of my career, in the very beginning when I was serving my apprenticeship, if you will, I always enjoyed what I did and it didn’t matter whether I was in the very early stages as a college graduate, driving a truck, pushing a broom, painting, doing menial labor. I always got up in the morning and I did what I was asked to do. And I did it at 110% and I did it even when it was tough, right? But I always absolutely enjoyed what I did and for a variety of reasons.

Andy:
And it’s been… It’s what has allowed doors to open throughout my career and the various changes of the business of KUSTOM over the course of time, right? And it’s that mindset that permeates through the organization. And it’s the culture that we build, right? Very much like the guiding principles that… we were like, hey, you know what? These are the behaviors that we’re doing. Let’s commit them to writing. Let’s talk about them, let’s promote them to the younger generations. So I think it’s really important to do what you love and do it with passion and the doors will open, right?

Andy:
I mean, as I sit here and talk to you about my journey and to think about in August of 1989, I was first day on the job. I was bent over in a parking lot painting I-beams because that’s what I was asked to do. We were a very small organization, less than a million dollars in revenue at that time. And it’s what the business needed. And I did it. And I got to tell you, as I was bent over in the summer sun and Akron, Ohio, slopping red oxide primer on I-beams, I was like, what in the hell did I go to college for? And that evening I had to go to my first night of apprenticeship school. And in my mind, I’m going, all right, I just graduated bachelor’s degree. I’m going to a trade school now. And it was what my grandfather and my father did and what they asked me to do. And, did I love it? No, but I went and I did it and I kept an open mind and I did everything with passion. And as I look back, everything contributed to where I’m at today.

Bill Gullan:
Yeah. No doubt. What a great story and a great place to leave it from those beginnings and this incredible family business, several generations in to now building this really strong leadership brand in the restoration space. Growing every day, new locations, new services, new business partners, new opportunities. Andy, we’re really grateful for your time.

Andy:
Bill, thank you for asking me to join. It’s been a pleasure.

Bill Gullan:
Many thanks to Andy for his time and insight and not easy to get on his calendar, given the client focus and passion that he has for the work and for the business that he and his team continue to build. So we’re grateful for him and for the insight that he shared with all of us today.

Bill Gullan:
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Bill Gullan:
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Bill Gullan:
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