He grew his company from $26 million to $71 million in annual revenue by using the Scaling Up platform
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Master Electronics is a 55-year-old family run business in Phoenix, Arizona that has scaled up in a big way, to 650 employees and $650 million in annual revenue. The distributor, founded by Ike Nizam in 1967, sells products that facilitate human-machine communication.
His sons Riad and Jamal run the company as president and CEO respectively. They put Master Electronics on the path to growth after the leadership team attended a 3-day Rockefeller Habits seminar hosted by Young Presidents’ Organization’s Las Vegas chapter that I taught in 2013. (The Rockefeller Habits were a predecessor to the Scaling Up platform.)
“We connected to it in a major way,” says Riad. “We wanted to scale. We were at $100 million in revenue, but we ran it like a family business.”
The leadership team knew the company needed to invest more in its people and empower them but weren’t sure how best to do that. So, after that seminar, Master Electronics worked with a coach, Alan Gehringer, to learn how to apply the Scaling Up platform, for about a year and a half.
Prioritizing strategic planning
One of their first steps was completing the One-Page Strategic Plan, to establish a clear strategy for the business. At the time, they set a Big Hairy Audacious Goal (BHAG) of $250 million in annual revenue—a goal they since have greatly exceeded.
Celebrating Core Values
The leadership team also established Core Values: We Care. Be Dedicated and Loyal. Embrace Visionary Thinking. Be Entrepreneurial. “Those Core Values revolutionized the company,” says Riad.
“Every time I spoke to the company, I talked about Core Values,” says Riad. “There was heavy overcommunication.”
On a quarterly basis, the company introduced a couple of initiatives to integrate the Core Values into Master Electronics’ culture. For instance, they would hold sessions with their team to discuss what the values are and how they can be applied or ask team members to submit videos about the values.
The company also made the Core Values part of its interview and onboarding strategy—and baked them into its culture. Every year, it announces Core Values awards, in which employees had to submit an essay on someone else in the company who embodies these principles. The executive team reviews the essays and picks the winners—who are publicly recognized at a ceremony and win an expense-paid trip to a tropical place. This year, 50 employees who received these awards, or others sales awards, the past couple of years went to Cabo San Lucas.
Establishing accountability
Execution also became a priority for Master Electronics. One first step was establishing key performance indicators (KPIs), which the company did not have before using the Scaling Up platform. These were tied to metrics such as bookings, on-time delivery, and profit. There were daily and monthly KPIs, which team members reported on in weekly meetings. The company also put concrete, trackable initiatives in place, such as hiring for key roles or putting up a new website.
To set priorities, they used the concept of “winning loose.” “It’s a way to rank priorities, and see if they make sense to tackle,” Riad explains. “There’s a scale of what is the impact from 1-10? How hard is it to execute from 1-10? The goal is to do things that are a 7 or above in impact, but a 7 and below in terms of how hard they are. That helps us prioritize the important things we are going to do. It’s very, very effective.”
To keep everything organized, they use a specialized execution software. “It is organized and transparent,” says Riad. “There is no hiding.”
Supporting “A players”
Investing in People was also critical as Master Electronics scaled up. “We parted ways with ‘C players’ and invested in ‘A players.’ And we just created a high-performance, high-reward culture, where if you did well as a company, you’re going to win. We did that through compensation, communication, responsibility—many different ways,” says Riad.
The company also invested in education, sending its leadership team to Scaling Up Summits. “The company has become a very big learning company,” says Riad.
With priorities ike this in place, Master Electronics is well-positioned for future growth. At 55 years old, it is just starting to tap its full potential.
