12 Aug PeopleWise: Tom Levitz
Tom Levitz is living the American dream. From his humble beginnings sweeping the warehouse and loading trucks for the family business in Miami, Florida, Tom moved up to become the CEO. Tom, now an independent management consultant, began his career as an electrician’s apprentice. After completing the four-year program, equivalent to an associate’s degree, he began working for his family’s company: Stanley Electric. However, after only a handful of years Tom and his brothers were forced to take over the family business when their father, and CEO at the time, passed away.
Faced with both challenge and opportunity, Tom and his brothers rallied to rebuild the company all the while managing the funeral and other family affairs. Tom learned early on the importance of relationships in business as all of the contractors and developers his father used to employ parted ways upon his death. “Most of our previous relationships died with him,” but they were not deterred and continued to build new relationships with contractors and developers. In fact, under Tom’s management, Stanley Electric increased revenue by 5x and profitability by 10x. This made Stanley Electric a target for acquisition and were eventually purchased by a national contracting company expanding to South Florida. Tom attributes their success on their ability to foster relationships and trust.
You have to treat everybody like they are the president of the company. You have to follow through with your word, help them if you can, step out of your way to help. Those are the things that build trust and give you a competitive advantage.
Looking to move into new markets, Tom and his brothers started the consulting and distribution company LBI International, servicing large industrial projects in the Caribbean. LBI was able to get distribution rights from manufacturers and leverage them to make a killing selling construction equipment and services. Tom saw another opportunity, once again based on the relationships he had formed and nurtured.
All while directing operations for LBI, Tom founded an electrical service company called–as you might have guessed–Levitz Electric Service. Tom saw the opportunity after hearing from his previous customers that they were no longer being served by the corporation that bought out Stanley Electric. Through his new company, Levitz Electric Service, he provided customers with the electrical equipment and services to build large-scale industrial projects. With commercial success and a desire to move, Tom sold Levitz Electric Service and left LBI to move to Austin, Texas.
Once again, a previous relationship led Tom to his next venture. One of his best friends, who recently moved to Austin, informed Tom that the area was a prime market. Tom struck a deal with Atco Nutrition and began to develop several GNC franchises throughout the Greater-Austin area. Tom put his management skills to work and developed the top-selling stores in the region. They performed so well, in fact, that Atco Nutrition eventually bought them back from Tom. While Tom was managing these GNC stores, he was going back to school to get a bachelor’s degree in computer systems management from St. Edward’s University.
At the time he graduated from St. Edward’s, Tom had sold all of his stores and his daughter was headed off to Texas A&M University. Naturally, Tom’s competitive nature kicked in. “I’ve got to get a graduate degree because she already thinks she is smarter than me.” After applying to Harvard Business School, Tuck School of Business at Dartmouth, and the Jones Graduate School of Business at Rice, Tom was accepted to all three. Even though the other big names were tempting, Tom knew that he couldn’t find a community like Rice anywhere else after visiting just one time.
I visited Rice University with my son when he was looking at schools and I kind of fell in love with Rice. I loved the culture, I loved the friendliness, I loved the campus.
Tom had nothing but good things to say about his MBA experience. Once again, relationships were the main thing he fostered out of the experience. Meeting the likes of Vicky Bredhauer, interim CEO of DHL Airways, Sam Zell, real estate and business magnate and finally, Stephen Miller, the chairman of the board at Shell Oil Company. In fact, after Tom got to know Stephen Miller, he even agreed to mentor him.
The most valuable part of my Rice experience was the network of people that I met. Not only my classmates but the businesses in Houston really nurture Rice students, and the academic environment here. I got some phenomenal friendships and relationships here. To have the chairman of the board of Shell Oil Company as your mentor was pretty amazing. I know I wouldn’t have had that opportunity at Harvard or Tuck.
After finishing his MBA, Tom began to look for his next work opportunity, when he heard from an old friend and partner from his time with LBI International, Bill Katz. At the time, Bill Katz was running a contracting and construction company, Katz Management, that was rebuilding condominiums in the Caribbean and he asked Tom to help him run business development. Not only were they financially successful, but they were some of the first people to get residents back in their homes following a devastating hurricane season in 2004. However, following a period of commercial success, Bill Katz decided to retire when the housing market bubble finally burst knowing that the economic horizons were not going to be favorable.
After his time with Katz Management, Tom began doing independent consulting work in Houston and became a prominent member of the Houston Angel Network assembling sidecar funds. Essentially, Tom would select companies and assemble funds for investors who were less knowledgeable to make angel investments to early stage companies. Through that network, Tom found his next opportunity working as a General Manager and VP for HBI, a manufacturer of turbines for power plants. Using his managerial acumen, Tom helped take a division of the company that was underperforming and bring it to the point where it was providing 45% of the profit margin while only bringing in 25% of the revenue. In the six years Tom was at HBI the company grew from $8-10 million in revenue annually to $140-160 million. Tom, however, will be the first to tell you it wasn’t a solo job.
I can’t take credit for all of that, but what I can take credit for is taking all the headaches away from the owners and the upper level management so that they could go out and pursue other opportunities. My saying was always, ‘My job is to make sure you can sleep at night, I’ll stay up.
After leaving HBI last year, Tom has floated around in Houston continuing his work as an independent consultant helping new ventures organize themselves and operate strategically. When asked what the most important part of operating and managing a company is, the answer was simple: communication.
Communication all the way down the line from the CEO to the guy sweeping up the shop floor, you have to communicate. Communication is not just sending an e-mail, it’s following through with making sure people understand what is going on. Communicate with the customer to manage their expectations and their outcomes, help them to feel like they got more in the transaction than the money that they gave you.
Even with a technical background in electrical services, Tom has been able to grow and expand his expertise in different fields and industries. What he doesn’t know, he goes out of his way to learn.
That’s one of the things that really drives me, right off the bat when you walk into a new situation you are actually at an advantage because you can act more ignorant than you truly are to find out what the customer or people in the industry think and talk about.
Tom has learned significantly from those that have worked under him as well.
What you got to do is hire the best people and allow them to do their job. I encourage people to challenge my way of thinking if I make a decision. It makes me sit back and truly substantiate my position and to understand their position. In many cases, I learn a lot and follow through with that.
On the topic of learning, Tom has gathered quite a bit of knowledge himself in his time in the business world. When asked what advice he had for our founders he had a couple of suggestions.
The biggest thing I would say is to go beyond what your initial concept or technology is and look at how it affects a business’s problem or a person’s problem. Try to sell the solution of that problem instead of selling your product or your service.
So many teams come in right off the start, ‘This is how it’s going to be.' Then three months later they’ve pivoted four or five times because of the interviews they’ve had. That’s an important thing in business, you’re learning you’re adapting, it’s a very important process.