Richard Robinson, Norfolk Iron & Metal
Steel Family Robinson
By Tim Triplett, Editor-in-Chief
Norfolk Iron & Metal and its leader Dick Robinson represent the very definition of service center excellence.
If there were a dictionary with the term “steel service center” in it, next to the definition would be a picture of Norfolk Iron & Metal.
|Norfolk Iron & Metal
3001 N. Victory Road, P.O. Box 1129
Norfolk, NE 68701
2010 Performance: $400 million in annual revenues, shipments of 450,000 tons
Management Team: Richard Robinson, president; Arnold Robinson, executive vice president; Jeff Robinson, vice president of corporate accounts; Steve Ball, chief financial officer; Mike Bamsey, vice president of operations; John Lubischer, vice president of purchasing; Mike Jedlicka, vice president of sales
Facilities: Norfolk, Neb.; Emporia, Kan.; Durant, Iowa; Greeley, Colo.; Rock Island, Ill.
Products: Full line of carbon steel plate, sheet, beams, bar, structurals, pipe, tubing
Processing: Coil processing, tempering, sawing, laser cutting, plasma cutting, shearing, press braking, shot blasting
With its roots dating back to 1908, this prototypical carbon steel distributor located deep in America’s heartland is a prime example of the power of basic business principles and quality customer service, meticulously executed under the watchful eye of the company’s third-generation leader. Metal Center News is pleased to honor Norfolk Iron & Metal President Richard Robinson as its 2010 Service Center Executive of the Year.
Each year, MCN recognizes an individual whose career and business strategies represent a model for the rest of the industry. As the chief steward of his family’s business for the past 35 years, 56-year-old Dick Robinson embodies all the essential characteristics of effective leadership, in good times and bad.
Norfolk Iron & Metal (NIM) is a general-line carbon steel distributor headquartered in a modern, 500,000-square-foot facility in Norfolk, Neb. Surrounded by corn and cattle about two hours northwest of Omaha, the remoteness of the company’s main location is offset by four well-positioned branches. NIM operates 250,000-square-foot warehouse processing centers in Emporia, Kan., and Durant, Iowa, plus a 120,000-square-foot facility in Greeley, Colo. Rounding out its strong foothold in the Midwest is a processing joint venture with Steel Warehouse Co. in Rock Island, Ill.
NIM’s customer base includes various agri-business ventures, fabrication shops, many OEMs and their parts suppliers, the metal buildings industry and smaller metals distributors. Master distribution is about 15 percent of NIM’s volume. “We are not real good at selling 300 pounds to 80 different customers each day in downtown Kansas City. We would rather sell a few smaller distributors and let them do that business,” Robinson says.
Like every other service center, NIM took a hit last year as the economy stalled. It was ranked No. 26 in the Metal Center News Service Center Top 50 with about $300 million in 2009 revenues. In 2010, it made a substantial rebound as its 600 employees shipped 450,000 tons of sheet, plate, beam, bar, structurals, pipe and tubing, generating revenues of nearly $400 million.
Even though its revenues are up over 30 percent, Robinson discounts that figure. “We don’t look at 2009 as a comparative. You are not going to excel by comparing yourself to the worst year ever,” he says.
The market’s worst conditions may actually have brought out the best in NIM’s executive team. “I think we did our best managing in 2009. In the first half, there was the smell of panic in the air. Our people did a good job, and I’m proud of them,” Robinson says.
Robinson’s senior management team includes sons Arnie and Jeff, Chief Financial Officer Steve Ball, Vice President of Operations Mike Bamsey, Vice President of Purchasing John Lubischer and Vice President of Sales Mike Jedlicka. Jedlicka and Lubischer began working for the company over 35 years ago, even before the company’s president. “We have a wonderful team, people who have been here for years, as well as new people,” Robinson says. “You need to give nonfamily members important responsibility and leadership roles, otherwise how could you ever attract good talent?”
During the downturn, the company reduced employment, mostly through attrition. Today, its workforce is up about 50 employees from the low point of the recession, but still well below previous levels. Robinson is in no particular hurry to add back labor cost. Like most companies that have learned to do more with less, NIM’s productivity has increased significantly. “No one will go back to the same employment levels until they have substantially higher sales than they did before. That’s why bottom line numbers come back so much faster, because people drove so much cost out of their business,” he observes.
NIM sources metal from all the major mills, including Nucor, U.S. Steel, Gerdau and ArcelorMittal. Nucor’s Nebraska bar mill, a major source of supply, is right down the road. NIM’s inventory on hand totals about 100,000 tons—perhaps 20 percent higher than during the depths of the recession, but still 20 percent lower than peaks of the past. “We don’t try to outguess the market,” Robinson says. “It’s easy to get burned doing that.”
Under Robinson’s leadership, NIM has grown from about $24 million in sales from a single location to over $400 million from five locations today. He forecasts 7.5 percent growth in 2011. “I am a big believer in setting ambitious goals. If you set the bar too low, anyone can step over it. We don’t operate that way.”
He attributes much of the company’s growth to its ongoing investment in new processing equipment—from basic saws and shears to high-tech coil lines and laser cutters. Today, the majority of all NIM’s orders undergo some type of processing before they are shipped.
Robinson’s most recent investment was in a DBI temper mill and cut-to-length line, which began processing steel this summer. Equipped with a four-high temper mill, two levelers, a six-roll brush cleaning system and a rotary shear, the line is capable of processing coils up to 0.787-inch thick and 96 inches wide at 100,000 psi yield strength.
Robinson admits his timing is not always the best. The company opened its warehouse in Emporia, Kan., in 2001, and its Durant, Iowa, facility in 2008, just prior to the last two recessions. Likewise, the temper mill, a $22 million corporate investment, was dedicated on Sept. 11, 2008, during the company’s 100th birthday celebration.
“We managed to erect the building and install the temper mill during the worst recession we can all remember. We seem to have the ability to reverse forecast things with the best of them. But at the end of the day it all washes out. I have no regrets. We build for the future. I’m sort of a look-forward, glass-half-full type of guy.”
NIM limits its processing to first-step operations. “We will cut it to the right length, shear it, laser it, bend it, but we don’t assemble. People have asked us to look at that, but then I’d be competing with my customers. I don’t want to be a manufacturer,” Robinson says.
In an age when many service centers rely on common carriers or choose to outsource shipping, NIM considers delivery an important core competency. Partly a function of its remote locations and its 15-state market area, the company operates a truck fleet numbering over 100 tractors and nearly 200 trailers. With its widely dispersed inventory and large trucking capacity, the company can offer next-day delivery on nearly 90 percent of its orders.
“Steel is a commodity,” Robinson notes. “When you are in a commodity business, how can you differentiate yourself? Through processing and logistics. A steel service center is a logistics business. We study it and will continue to refine it.”
Robinson considers NIM’s truck drivers, who have the most frequent contact with customers, to be “the unsung heroes of our industry. We look at them as an extension of our salespeople. Customers need steel at a certain time, loaded a certain way. I wouldn’t want to rely on outsourced people to take care of them,” he adds.
Robinson counts on technology to give his company a competitive edge. One example is the GPS tracking system that allows the company to monitor the location, speed, load and estimated arrival time of every truck on the road. Using a computer to broadcast an interactive map onto to the conference room wall, he pointed to the scores of NIM trucks spread out from the Rockies eastward past the Mississippi. If a customer calls to inquire about the status of their order, a simple click on one of the tiny truck icons immediately brings up its location and ETA.
NIM’s computer system is another differentiator. What began as an off-the-shelf software program has been modified and nurtured over the years by NIM’s talented IT department into a one-of-a-kind information system with unique capabilities. “We are an information processor. We have to know what our customers need and when they need it. We have to look at trends. We don’t wait for them to come to us, we always strive to be proactive,” Robinson says.
Being proactive about safety is also a big priority at NIM. It offers its own training programs and works with local community colleges to prepare workers for the potentially dangerous environment of a steel warehouse. Robinson is particularly proud of his Kansas facility, which has gone a remarkable 540 days and counting without a lost-time accident.
In keeping with his family-business approach, Robinson maintains a somewhat paternal, open-door management style. He describes himself as “an empowerer who is selectively hands on.” Wary of the temptation to micromanage, he adds, “When there is a problem, or something good happening, I want to be involved.”
He encourages all employees to speak up and share their ideas. “Some people complain about change. As part of our philosophy here, we embrace change. If you just stay the same, you stagnate and die.
“We have been accused of breaking our own model just to fix it and see if we can improve it. I’d rather have someone within my organization tell me a better way to do something than have a competitor force me to do it,” he says.
Robinson has no firm plans for future expansion, but both greenfield projects and acquisitions are possibilities. “Coming out of this recession has got us thinking about it again,” he says. If he does spot an opportunity, the move could be quick. One advantage of a family business is streamlined decision making, he notes. “We don’t have to go through several committees to make a decision. That makes us more nimble.”
Robinson has considered expanding into nonferrous sales, but the competition is fierce in stainless and aluminum and the market is already well served. He prefers to stay in his comfort zone. “We’ve been here for 102 years. We’re starting to get a feel for selling carbon steel,” he says.
‘Family Business’ Ponders Fourth-Generation Succession
Dick Robinson embraces the concept of “family” in describing Norfolk Iron & Metal. While in some people’s minds the term “family business” means “small and amateurish,” NIM is anything but, with 600 employees and annual revenues over $400 million. The Robinson family considers the label a badge of honor.
The company was founded as Norfolk Hide and Metal Co. in 1908 by John Robinson, Dick’s grandfather, who was a hard working Russian immigrant. When he passed away in 1960, his son, Arnold, took over and eventually shifted the company’s focus from scrap metal to steel sales.
Dick Robinson was a sophomore at the University of Arizona in 1974 when his father suffered a fatal heart attack while the two of them were playing golf. Dick’s mother, Margaret, stepped in to run the company while her son finished work on his degree in civil engineering before returning to Nebraska in 1976. After getting some seasoning working in all aspects of the business, Dick assumed the top management role in 1982, while his mother pursued her political aspirations and became one of the first two women elected to the University of Nebraska Board of Regents. Margaret Robinson died in late 2002.
As the third-generation Robinson to head the enterprise, which has survived and thrived for more than a century, Dick takes his responsibility to safeguard the family legacy very seriously. That’s why succession to the fourth generation gives him pause.
Dick had three siblings, all sisters, when their father passed away, “and none of them wanted to push iron, so it was easy,” he recalls. Today, one sister is a doctor, one a microbiologist and the other a communications consultant.
Dick and wife Betti, however, have three sons. Currently, son Arnie is executive vice president in charge of the branches, while son Jeff lives in Minneapolis where he oversees Minnesota sales and marketing to corporate accounts. Son Evan, 29, is a securities trader in Atlanta.
In cases where parents have multiple children in the business, they often use seniority to break the tie, passing on the top title to the eldest child. In the Robinson’s case, that’s not a good option as Arnie and Jeff, both 33, are twins.
“Succession planning is one area we may have to get help from an outside consultant. There is no playbook,” Dick says. “Regrettably, my father passed away suddenly, so that was kind of an instant succession plan. I’d prefer that we not handle it that way next time,” he adds jokingly.
Perhaps because of the way he was thrust prematurely into a leadership role, Dick requires his children to work outside the family business to get some real-world experience before committing to a career in steel distribution. Arnie worked in distribution and logistics for Omaha Steaks, Jeff sold advertising for trade magazines and Evan is a broker, at least until he decides to join his brothers and begin working for his dad.
“Being a benevolent dictator, I have a family rule. You can’t come into the business right away. Go out in the world and work elsewhere for a minimum of five years. It’s important to see how other people do things.
“My friends claim I want my kids to make their mistakes on someone else’s dime—which is not entirely untrue. But I don’t want my kids to feel like they had to come work here, I want them to want to. Too often I’ve seen people come into a family business and it becomes a life sentence. When you’re 22, do you really want your dad looking over your shoulder?”
The Robinson brothers grew up in and around Norfolk Iron & Metal and appreciate how rare it is for a family business to survive for over 100 years. They feel just as passionately about protecting the company legacy that extends back to the days their great-grandfather traveled the region loading his wagon with scrap metal and hides. They remain relatively unconcerned about the transition to the fourth generation.
“I’ve never really worried about how it’s going to shake out. I’ve always envisioned the three of us running it together,” says Jeff Robinson, echoing his brothers’ sentiments. “To me, it’s a great problem for us to have, to figure out how to combine our talents to make this place even better.”
The fourth generation is already breeding new talent for the future. Jeff is the father of twins and Arnie has one child and a second on the way. “Dad has always taught us that the interests of the company and the interests of the family must go beyond any self interest. As long as we maintain that attitude, the rest of it will probably take care of itself,” Jeff adds.
‘Brutal Honesty’ Sets Executive Apart
More than any other leadership trait, Dick Robinson is recognized for his personal integrity by suppliers, customers and company insiders, alike.
“The biggest factor that resonates with me is his blunt honesty. You never have to question the motives behind anything he does. It always comes from an honest place,” says son Jeff, vice president of corporate accounts.
“What personal characteristics make dad a good leader? Complete and brutal honesty. There is not a person in this company who doesn’t know where they stand with him,” agrees son Arnie, company executive vice president.
Mogens Bay, chairman and CEO of Omaha-based Valmont Industries Inc., has been both a supplier and a customer of Robinson’s for over 15 years. Valmont engineers steel tubing for structures ranging from lighting and traffic poles to automated irrigation equipment.
“Norfolk Iron offers good quality and quick cycle times, which of course helps us turn our inventory faster,” Bay says. “Their performance has consistently earned them high scores in our supplier assessments.”
NIM is also a customer, acquiring mostly thin-walled tubing from Valmont. “As good as they are as a supplier, they are equally good as a customer in the sense that they are tough,” Bay says. “They are used to giving high levels of service, so they demand it in return. They make sure their suppliers stay on their toes. I think that is good. It makes both companies better.”
Bay has known Dick Robinson personally for 20 years, having met through the Young Presidents Organization. “He’s a very good businessman, very knowledgeable about the steel industry. He and his family are great contributors to the community, including the University of Nebraska. Anything I have ever been involved in, both personally and business-wise, with Dick Robinson is first class.”
NIM is the No. 1 supplier for Kolberg-Pioneer Inc. Yankton, S.D., which builds aggregate processing equipment for the construction industry. Mike Rhorer, purchasing manager, says NIM has a tremendous staff and business plan. “Their price and their service sets them apart from anyone else in the area. Their on-time performance is excellent.” Despite being in the market for over 100 years, “they are just a little bit more hungry and aggressive than their competitors,” he adds.
John Ferriola, COO of steelmaking operations at Nucor Corp., is a long-time supplier and personal friend of Dick’s. “He has done an outstanding job of growing Norfolk Iron & Metal into a well-known, well-respected, high-quality company. He’s an excellent businessman. He has taken some prudent risks along the way, which takes courage, and they have paid off. I know his dad would be very proud of what he has accomplished,” Ferriola says.
Robinson’s personal integrity is reflected in his company, Ferriola says. “In the service center business, it’s all about respecting the deal you have made in a market that changes quickly, and standing by your word and commitment. His integrity is second to none.”
Having lived in Norfolk for a short time, Ferriola observed firsthand how the Robinson family has generously supported numerous civic and charitable causes. “He is committed to growing Norfolk Iron & Metal, but he is also committed to his teammates, his employees and his community,” Ferriola adds.
Robinson also currently serves on the Executive Committee of the Metals Service Center Institute.