Learning from Family Owned Businesses with Charlie Bailes

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This transcript was auto-generated from the original video recording using Otter Voice Meeting Notes. While the transcript has not been human edited, we hope it will still help you to quickly find or reference useful information from the interview.

0:05 

Deliberate Leaders I am your host Allison Dunn, Executive Coach and Founder of the Deliberate Leaders podcast dedicated to helping leaders build strong, thriving businesses. Each episode, we feature inspiring interviews to help you on your leadership journey. And today’s guest is no exception. Today we have joining us Charlie Bailes, who is a fourth generation family member running a $700 million family owned business as a VP of human resources, and internal distribution of ABC Fine Wine and Spirits. He oversees 120 stores in Florida, and oversees over 1600 employees, which I think is incredible. Over his career, Charlie has been able to develop real life experiences and lessons learned from being a top executive, and running of running a nine, nine figure family owned business that has been successful for over four generations. I am really looking forward to hearing more about on this topic and what Charlie thinks public companies can learn from running a family on business. Charlie, thank you so much for joining us today.

1:18 

Thanks for having me Alli. This is a pleasure. And that that intro makes me sound a lot better than I am. I’m not I we’ve got an unbelievable team. So which I’m sure we’ll be talking about?

1:34 

Absolutely. Well, I truly do believe that you need an incredible team to be able to have longevity, such as that for sure. I would like to kick these off with a deliberate conversation. And so, Charlie, what would be your number one leadership tip for our listeners today?

1:54 

Hmm, that’s a great, great question. And there’s so many good answers. But the one that just jumps straight to my head, is it’s okay to accept help. I think most leaders tried to do it themselves. You know, the ego and pride get in the way. And I am certainly guilty of that. But it’s lets your team help you. And then you’ll be helping the team by doing that. Listen to your mentors, listen to the people who have done it. And just don’t try to do it yourself. Just accept help. That’s not a sign of weakness. It’s actually a sign of intelligence.

2:37 

Yeah. I think that that also just really re emphasizes, you know, everyone who’s surrounding you, you know, like, we’re all in it together, as opposed to always looking to one person for the answer. So let people help you love that. That’s a great tip, Charlie, thank you. Um, one of the things that I don’t often share in the podcast interviews, but I was born and raised in a family business, we have four generations working in our business, back east, which is based in New Hampshire. And the third generation has just now done a full completion succession plan. So my sibling bought out my father. So he’s now officially done the transfer of the torch and whatnot, which is like a really big deal. And I hope that someone is interviewing my nephew or my nephews, children, you know, 20 years from now and they’re running the business like that would just make my heart so incredibly happy. So kudos to generation after generation. That’s amazing. So my question for you is why do you believe that such a big fraction of family owned businesses typically are not able to survive over the long term? What would be your insights?

Unknown Speaker  4:02 

Probably because, at some point, the foundation was cracked. And I can tell you what I mean by that, that the family businesses are really just businesses in general, that I think survive, are rooted in a deep foundation that the business is at the core of, it’s not about the individual. It’s not about the third generation, over the fourth generation or the second generation. And everybody understands that they understand that, you know, Charlie is not the person who’s most important. ABC is the company and the entity that’s most important, or a shareholder, that’s part of the family that isn’t even involved in the business is not the most important. It’s the business at the center. That’s the foundation And I would say that my opinion is that any time a company fails, it’s because somebody or something, thought they were bigger than the business itself. And they were somehow able to crack that foundation. And that’s that that’s not what has happened at ABC. And I think that the third generation who’s leading the company right now, which is my, my father, and my uncle, and an older cousin of mine, they, they put the foundation at the center, and taught us, the younger generation, fourth generation now that you’re not bigger than the company. And even though it be me speaking for myself, that was a hard lesson to learn that I fought for a while that, that they allow they being the third generation allowed me to figure out, you know, the right way, and that actually, there’s a reason why we’ve been around for 8586 years. And it’s because of this foundation. And if you think you’re bigger than that, this probably isn’t the right place for you. And, and it’s that that that was a an unbelievable lesson to learn that I think can transcend across any kind of business, private public family, you name it, it’s just the foundation needs to be the business and the success of the business. And everybody has to respect that. Right.

6:34 

As a coach, I do a lot of work on repairing foundations, I sort of feel like sometimes I’m a construction worker. Because every business does have a foundation. But if it if it’s not a solid foundation, it does. It’s hard to grow on, it’s hard to scale on. And I commend you for 126 stores that are all family owned and operated, correct?

7:01 

Yeah, correct.

7:04 

How many of your 1600 employees or family members?

Unknown Speaker  7:10 

Well, interest? I’ll give you an interesting answer. Technically, nine, maybe 10. But that, I would say 1600. Because that’s, that’s the culture of our company. It’s one of family. And, you know, that doesn’t mean it’s all rainbows and unicorns all the time, because families fight too. However, that’s how we look at our team members, we look at them as part of our family. And I think that that’s key to the foundation of who we are. So two answers to your question 10 or 1600?

7:57 

I feel like I feel like there is that’s an important component to bring up because I think you almost have to have that in order to have the longevity and the seniority and the like the length of the lifetime success. I mean, I’m have employees staying for a long time and having them feel like they’re part of the family, in your family business.

8:20 

I love that.

8:21 

I’m of one of the things that you pointed out in your topics is that there’s a lot of things that public companies can learn from family businesses, and I would love to dive into that.

8:35 

Sure, the one that just pops straight into my head is long term thinking, where most public companies and not all of them, there are some great public companies, but so many of them, just think quarterly. And I get it, that’s you kind of have to or even yearly, because your shareholders want either a quarterly dividend or a yearly dividend or something. That’s that that’s what they’ve come to expect. So we don’t have that obligation. And for our executive team, to put together, you know, three, four or five year plan to present to our board, which actually we have an outside board of directors. So I think that’s another cheat code to a privately held company. Get some get people outside to be your advisory slash boss of the executive team.

9:35 

Yeah. Not all family members.

9:38 

Oh, correct. No, we’ve got a non family outside executive board.

9:45 

Excellent.

9:47 

So but if you still have to present to them, so here’s our four year plan. We’re not going to make money for three years. But on the fourth year, this is what’s going to happen, where that’s never going to work. In a publicly traded company, but that’s exactly what we did in in the, you know, teens of the 2000s. And yeah, once once COVID hit, we were prepared, because we had invested in talent, guest experience, team member experience everything, which our outside board approved. And also, the company was allowed to think that strategically and that far out, were just public companies don’t and I don’t know if they’re, I shouldn’t say don’t, that’s a broad statement, because there are some companies that do, but you know what I mean. But I just, I don’t know if that’s something that can really be changed in a lot of companies. Because people are so impatient about results, and wanting to get a financial result where with a privately held family owned business, you can really look long term. And that’ll separates you from everybody else.

11:05 

Knowing that you’re able to make kind of long term investments, and you know, thinking, you know, I under I, you know, I think I have a general idea of what ABC fine wine and spirits does, but maybe I could take a little bit of step back. And also with that, I’d love to understand how COVID where we are like, right here right now, today, how, how is your organization handling it?

11:31 

Yeah, so I heard her two questions on there. The first one, I will tell you about how our brand has changed in the past 30 years, and it’s an unbelievable change. And then I’ll talk about COVID. So, in the early 1990s, the third generation took over the business. And when they took over, we had 200 corner liquor stores. So small, little liquor stores, and 100 bars attached to those liquor stores.

12:08 

Smart.

12:10 

Yeah, absolutely. But yeah, it creates its own set of nightmares. But thank God, we’re not in anymore. So when you compare what we were in the early 90s, to what we are now, which is 100 an hour, I should say, our average store size, that corner liquor store, it was two or 3000 square feet, it was just tiny. And we weren’t even in the wine business. So now you’ve got 126 stores. 30 of those stores are two stories, the stockroom is upstairs. And the average size of the store is 10,000 square feet. And we sell over 5000 wines. And we’ve become just an absolute destination. Our stores are bright, they’re clean, they’re safe. They’re actually beautiful when we enter into a new market, and we bet we show our building to the group that’s going to approve or deny it. They look at it like this is a liquor store. This is unbelievable. It’s a nice building. It’ll be the nicest, nicest building in town. And that’s, that’s the legacy of what our third generation of leadership has done is they took over, you know, a business that was doing fine, I’ll say but it, it wasn’t the character that we were looking for. You know, we didn’t want to be open until two in the morning selling lottery tickets and every other thing. We’re now we’re this, you know, wine destination. That is just a beautiful store a beautiful experience. And our team members are even pretty beautiful on the inside as well, because they offer such great service. So I feel like hopefully that answered your first question.

14:02 

Yes, it did. And I’ll just add, I’m heading to Florida. At the end of March. I’m going to seek one out. I’m intrigued. I’ve not been doing ABC.

14:12 

Please reach out to me and I will. I will help you out. Big time. So and then your second question just to talk about COVID and what it’s done to us. So as I mentioned earlier, we were in the building phase and in the investment phase for the past multiple number of years. And that’s investing in talent at the director and higher level. I mean, our executive leadership team which is about 30 people, when I look at it when I entered the business about 12 years ago, I look at it now. It is unbelievable. I mean that just the talent that we had and really we went out and got that And developed a lot of that talent in house to when it wasn’t really financially. Or we didn’t have the financial ability to do so. But we did it because of our long term planning. So then COVID comes. And what COVID has done in a lot of the businesses that are still in business, is it sped up time by about five or seven years. So things that we were working on, we were working on buying online and being able to pick up in our store or being able to pick it up on the curbside delivery. And, and these resources like instacart and shipped and drizzly that are all household names. Now, we’re just getting started in 2017 2018. So we were working on all of that. And then COVID hits in 2020, I really the beginning of it. And all of that just got blown up. But we’re already working on it. So it was easy to just put the foot on the gas. And we already had biome I pick up in store. So we get curbside up and running in 12 days instead of two years. Because we have the team to do it because we invested in it. And we get rewarded for that. Because we’re doing it to offer a better experience to the guests, and to give our team members you know, the ability to satisfy the guests need. And then in something like COVID, which is totally up beyond your control happens. But we’re ready.

16:41 

That’s awesome.

16:44 

I am. So you are the VP of human resources that the role that you currently are. And so you’re in talent acquisition, this is the sort of your zone of genius. Okay. I preach on this all the time. But can you take a few minutes and just talk about how you’ve had what your focus was in talent acquisition and getting the right people in the right seat?

17:10 

Yeah, that’s, we could all probably write a book on that, right.

17:19 

So I think it starts with and our perfect example of this, with the third generation allowing me to figure out what seat I wanted to sit in. And it’s not so much because I didn’t know where I wanted to sit. You got to find your natural talents and abilities. And I think that’s, that’s something that we have gone the direction of over the past few years is fake, figuring out what see do people want to sit in? So it’s not so much what Charlie thinks. This individual part of our team, I think you should sit over here. Well, we’re Where do you think you should sit? Where do you want to sit? I think that switch flipped a couple of years ago, I think that we were the business that were or that that was looking to put people into the right seat, when really I got to do is ask what, which seat Do you want to sit in? And then it’s my job at a higher level to make that decision of Okay, do I think you can be in that seat? Can you do what’s involved in that seat? But instead of just saying yes or no, it’s, let me tell you about that seat. Let me tell you about the expectations of that seat. And it’s just opening up a line of communication between driver and passenger. And maybe, maybe the driver and passenger need to be flipped after that line of communication. And that’s fine. Because even if something like that has to happen, it’s not like the driver or the passenger are going to get off the bus. You’re just in your new seat and the company benefits. So that’s, that’s the way that that we try to look at it as an open dialogue of figuring out between team members, which seat Do you want to sit in and then giving them the tools necessary to succeed once we all decide on that seat together?

19:26 

Are you faced with a similar challenge as to whether you’re having everyone on site working in office or the like, what is your current work environment in the 1600 people?

19:37 

So that’s a crazy story. But you know, our corporate offices about 100 people. We have our own warehouse, where we supply about 40% of the products in our store coming from our distribution center and we also have our own maintenance department. You that builds a lot of furniture and displays and things for our stores. So we were the were the definition of that family business that still kind of does everything. I mean, we have our own plumber on staff, who is unbelievable. And, and wow, is it nice to have your own plumber when your bathroom of the store at our store Sports Center goes out. So a lot of those jobs, you cannot do remote, you can’t run a warehouse remote, you can’t work in a warehouse. But frankly, I would argue you cannot run a warehouse remote, because people need to see you. And as an HR department, it’s our job to be there for people that are on the job. So maintenance and warehouse, they never missed a day, they never skipped a beat. We’ve done substantial amounts of change and everything that we can to protect everybody in our stores to you can’t run a retail operation remotely. So of course we have, you can do marketing and it and a couple of jobs remotely. And we’ve done that our office has been Gosh, close for a year, I guess. But there’s still 1520 people at the office every day because we kind of I will say that we have to be however, everybody that goes there wants to be there. So it’s a it’s a big difference. And we’ve been extremely fortunate that we already had a somewhat relaxed store Support Center, which is what we call what we call our corporate office or store Support Center. That environment has always been somewhat relaxed. And we let people work from home and work remotely and take days to do that. So our productivity went up when everybody had to go home, and we’re forced to. So it’s been a wild ride that I think a lot of great lessons were learned that will stay as the norm. Well, well into the future, if not forever.

22:19 

Yeah. And I and I think that there’s a lot of really great changes that have happened because of that as well. So in addition to your role that you have at ABC, you also noted that you are a secret entrepreneur, can you explain what you’re currently working on? And then any advice you may have to our listeners who are starting something for the first time or planning? You know, another venture?

22:47 

Sure. Yeah, I, I have by so my great grandfather who started ABC, his name’s jack Holloway. He’s clearly an entrepreneur. Because he started our business when his boss told him now selling liquor is a dumb idea. Because prohibition just ended in Jack’s like, Okay, here we are. And of course I mean it there’s just everybody in our family just has their brains are always thinking I can think of dozens of things that my dad has always been involved in. However, ABC still the foundation and the core and gets the most attention of everything because it’s, it’s what everything sits on top of. But my passion project that I’ll call on the side came as a result of having kids and my wife and I we have seven, five and one they’re all half’s are all summer birthdays. So our houses very loud and busy and add fun. Our seven year old she’s the only girl. The other two are boys and Vivian is her name. She’s really the reason why she had she’s super healthy, great kid now, but it was a rough start. She was in and out of the emergency room a couple times for a number of things, including, you know, 160 degree temperature and not being able to breathe one time very well. That was a nerve wracking car right there. And it just got to the point where Leanne my wife and I were just like, we’ve taken all the drugs they told us to take. We’ve gone to the doctors, we don’t like the answers. So we need to fix this. So we both really just dove into books, podcasts, literature, everything, Google everything we could find. And you find this whole nother universe out there, of people just like Leanna die trying to do the same thing. And hey, read read this book, check out this podcast, I probably listened to 1000 podcasts about health and wellness and food in particular. And I’ve probably read about 50 books written by doctors who have their, their Doctor of Medicine, you know, their family physician, but they also are a best selling author about diet, nutrition. I mean, those have reading those people’s books, it’s like a cheat code to life that I wish more people knew of. So we started making substantial life changes with diet and sleep, and just our routine. And one of those being a, an emphasis on protein, and collagen protein as well. And most people when you say the word collagen, and they think that’s like lips and hair, right? Well, yeah, but it, it’s a lot more, it’s your stomach lining, and it’s your knees. And it’s your blood vessels. And it’s, it’s when you’re looking at somebody, you’re looking at water, gas, and collagen, essentially, the most abundant protein in the body. And we just we used to eat it a lot as a culture, maybe three, four generations ago. And now we just don’t use a boneless, skinless chicken breast. What in the world is bone broth? You know, is that that like chicken broth? No, it’s actually the bones not just the meat. We don’t even make it anymore. So that became a big part of our lives years ago. And I was getting my MBA at the time. And so I’m just thinking, I’m like, we’re spending a ton of money on collagen supplements, I feel like I could do something better. And that’s what, that’s what we’ve done. We’ve created a multi sources collagen supplement that’s available in a couple of different flavors and even for your pets. And that’s the that’s the side project that I could talk about for hours about more of why and what we’re doing and what the product does. But for the sake of your listeners, attention span. I won’t go too long.

27:32 

They have to bring me back for a second interview on that deep dive specifically. I’m just curious, what is the what is the call name for your side, passion project.

27:45 

So it’s a horrible name because I’m not a marketing guy. And all of that I just called it CB Charlie Bailes supplements. Yeah, so our website CCsupplements.com and I should have called my brother in law, who is a marketing genius before I did this, but I was just so centered. I’m like, let me just get the domain name and buy it and like boom, Alright, we’re done. And now we’re still called CBD supplements today. And I’m actively trying to convince all of my partners can we change the name?

28:22 

That’s funny, but it’s it rolls off the tongue like I work at ABC my passion project CB.

28:29 

Actually, I’ve never thought about that. That works pretty well. It’s only three letters of the alphabet. Everything I do.

28:37 

So I’m going to tie it actually back. I’m going to close the loop on this one. Where does the name ABC come from? What does that stand for? What was the thinking behind that?

28:47 

So that’s a great story. So when Jack started a company in 1936 ABC was the first number in the phonebook. Now it’s really as simple as that you have other states that have ABC packaged liquor stores that are usually government run because when prohibition ended it gave every state the right to tax alcohol however they want and a lot of states choose to run the retail side of alcohol themselves. So it will stay in for you know, Alcohol Beverage Control and a lot of states

29:30 

Okay, all right. He is first in the phone book also. So it’s double win.

29:36 

Yeah, exactly. Except now that that genius brother in law was talking about, we’ve rebranded it to stand for always be celebrating.

29:48 

I love that.

29:51 

Well, we sell a celebration in a bottle if you think about it, most folks, and by most I mean if you came to work a shift in our store, you would see that 95- 97% of people, when they come into our store are just happy. And they’re like, this is unbelievable that this is like a quote unquote liquor store is beautiful. The selections are unbelievable. Like, the people are nice, I’m just gonna go celebrate. And you know, that’s, that’s what that that’s what we get to do for a living, you know nothing against the people that sell widgets for a living. But it’s a lot easier to sell celebrations.

30:32 

Oh, for sure. My token, so my husband is, is amazing. And he is the first to procure a celebratory bottle of wine every time I land a new, you know, client company to work with. And so that is always our celebration token to honor, you know, and be grateful for what we get. So I love that always be celebrating. That is a that’s a golden, actually.

31:00 

Oh, that’s a that’s a really good husband you got there.

31:07 

I have a couple of kind of off topic questions. I’m super curious. Right now, with I work across a ton of different industries. And I’m just curious, is Supply Chain Management an issue for your industry right now?

31:26 

Yes, it just depends on where and that’s I wear a couple of hats for distribution as well as the title. So can we talk about that? Because it’s a big issue in a lot of industries?

31:38 

Yeah. So I’m the internal side. So that warehouse I was talking about actually oversee that operation as well. Which is super fascinating to do two really different jobs.

31:53 

And then system.

31:54 

Exactly. It’s what’s really aware of warehouse is unbelievable. It’s just this big box of it that you know, you can you’re only as good as that it system. So it’s fascinating, although the team we have out there not to discredit them by that statement of it, because they would probably do the job. Just as good without any it. We’re extremely fortunate that team’s unbelievable. But yeah, it we’re seeing issues all over the place, excuse me. Like, we can’t seem to get a lot of construction materials for our maintenance team. lightbulbs, for one is an issue. I mean, the price of wood and metal has gone through the roof. And even on the liquid side, I’ll call it the actual product that we sell. You know, Mexico shut down for a couple months. So items coming from Mexico Corona ended up being fine, because they make it here most part, but a lot of the boutique items that we sell, it was hard to get, because people couldn’t work down there. It is same with other parts of the world. You know, New Zealand, Australia, a couple of other places that were responsive fear lockdown. It was hard, but and even ports to get people to work at the big port in Savannah or the big port in New Jersey, where most of our product comes into that’s important. It can sit there for a while. And we there’s not really much you can do about it. But except pray I guess. So it’s certainly impacted. But it’s also a huge testament to how quickly people when they do get back to work, fix the problems, because it’s, I would say that our consumers who shop at our stores, our guests, I don’t think they felt much of anything. Because we would just figure out ways to do it, because that’s our job. That’s our duty and our obligation to our team members really to have the product to sell to our guests.

34:16 

And thank you for sharing that insight. If you had, well maybe you already know, maybe this is already laid out in the foundation of what is to come for the next decade. Next Generation. Like what do you Where do you see ABC going?

34:37 

Well, we’re certainly looking to meet the guests where they want to do their shopping. So that’s a multi channel approach with strictly online delivery store experience, store experience on the website. What exactly that in store experience means now, because we’ve got beautiful tasting areas in our stores that we couldn’t use for months. Now we’re getting back to using them, but it’s a different style now with you have wine taps that you’re getting samples from instead of pouring a bottle. And how do you bring that experience to a delivery? I don’t know. But luckily, we’ve got really smart people that are working on that. And we’re just, we’re trying to meet what the customer actually wants. And that’s, that’s on an individual level. So I could see us continuing down that path, because that’s what we’re trying to do before COVID. It’s just like I said, Everything got sped up. But we’re going to adjust to this new normal, whatever that is, if that’s the summer, this fall or next fall, you know, I think at some point, we’ll  get back to what we all considered might have been normal. Because we actually see on our side as being a brick and mortar company that has a great ecommerce platform, people like to touch the bottle. Because wine is different than shoes or sunglasses. People like to touch it, they like to talk about it. And we’ve got unbelievable sales people in our stores that wine at my if my passion project is collagen, protein and health, their passion for everything is wine, and they’re addicted to the craft of making an excellent product. And I think that people like to talk to them. So, you know, we’re finding ways to get the online customer access to that individual. But I still think the majority of people like to interact with

37:21 

You know, by chance have any plans to build outside of Florida, you know, like Idaho, or, you know, other places?

37:28 

We get asked that question, I probably get asked a question every day by somebody.

37:32 

One in Boise, that would be lovely.

37:36 

I mean, you know, you, you, I’m one of those people never say never. Right. However, the laws of every state are different. So Florida is is growing. It’s not cold here, which is a big benefit. And I don’t see us going outside of Florida anytime soon. Because you know, if we want her to go to Georgia, we could open up two stores. Because that would be the most feasible thing to do go to Atlanta or go to Savannah, but you can open up two stores in Georgia. That’s it because their laws are just so much different than Florida. We are and like we you’re not you can’t go to Alabama, because the it’s Alabama, Alabama, various control. So, you know, I don’t know. It’s a really, really good question. And there’s obviously other retailers, some of our competitors that are in multiple states. So it’s certainly doable. But our business is just so much different. Our business models so much different than any competitor that I can tell you about, but it’s a it’s a great question. And you know, I wish it were an easy answer, but it’s just not enough.

38:55 

I’d be remiss if I didn’t point out that I if you’ve not, I assume that you do have Idaho wines, somewhere  in your store somewhere. But if it is not hit the radar, our wines are fantastic. And I questioned it first but I am a big thing.

39:17 

And that actually doesn’t surprise me just being a little bit of a wine geek. Because I think Washington State is one of the best kept secrets in the wine world. And Idaho it’s almost the identical climate. So make perfect sense.

39:38 

Yeah, Charlie, I want to just kind of put it out there I’ve kind of led the conversation is there anything that I didn’t think to ask you that you were hoping to kind of touch on today cuz I I’m coming to a close but I don’t want to let it go without opening it up.

39:55 

Know that this has been this has been really fun. I just I love talking To really engaging people like yourself. And it’s just I just love talking to people. I love talking about what we do great and what we don’t do great. And if there’s, you know, an audience that wants to hear it, I’m just grateful for you, Alex and giving me this platform. So I really appreciate it and let me know where you’re coming for

40:23 

My pleasure. I, I love family owned businesses. I love them the fact that they last for generations, and it is because of the great leadership that they continue. So keep it going, Charlie, I will let you know when I am headed your way, I promise and I would like to find a location. All right.

40:44 

We can make that happen.

40:46 

Fantastic. Thank you so much.

40:49 

Thank you.

Transcribed by https://otter.ai