Mike Mallaro on VGM’s turnaround, culture & founder

WATERLOO, Iowa – Success stories rarely happen without setbacks. In his new book, VGM: Stories & Lessons of a Great American ESOP Company, former CEO Mike Mallaro details the challenges, tough decisions and leadership lessons that shaped the company over the past 40 years. He spoke with HME News recently about the occasional “messiness” of running a business and why it’s important to take a step back and “sleep on it.”

HME News: What surprised you when you revisited the history of VGM to research your book?

Mike Mallaro: You know, when you’re in there every day and you deal with whatever's going on, sometimes you don't have the perspective or the context of kind of stepping back to look at the whole thing. So, when I went back in with clear eyes and without working there anymore and having just time to think about it and to talk to different people, it really changed my perspective on a number of things about the company.

HME: In the book, you talk about VGM's near fall in 2000 and its subsequent turnaround. What do you think was the single most important decision that leaders made to help the company survive – and thrive?

Mallaro: They were running it in a fairly loose and entrepreneurial way, and they didn't have the infrastructure and the accountability and the capital in 2000 to really be doing everything that they were doing, so they got in trouble. Van (Miller, who founded the company,) had to mortgage his house to make payroll. So, one of the tough decisions they made was that the gentleman who was president of the company had reached retirement age and Van made the decision to force that individual to retire because the company had outgrown his skill set. And then he went outside of his circle to hire Ron Bendell, who had a different style but was the right guy at the right time to bring on.

HME: VGM is known for its workplace culture – something that really started to gain steam when the company became an employee stock ownership plan (ESOP). What practices or values have been critical in building and sustaining that culture? 

Mallaro: In 2016, we pivoted and said, “We’re going all in on employee ownership.” The other thing is, I have a chapter in the book on pouring into people and this idea that if we're going to grow and continue to be what we think we can be, we're going to need a lot more people and a lot more leaders. And the way to get them is to develop them internally and invest in them, whether that be specialized training programs or special awards programs. It's made a lot of people a lot happier to work there because they're constantly challenged and they know that if they want to move to something else, they're going to have an opportunity to do it.

HME: There’s a chapter in the book on nine lessons you learned from Van Miller. What lesson had the greatest impact on your own leadership style? 

Mallaro: The idea of “Let’s sleep on it.” It is sort of countercultural in the environment we're in today, which is very fast paced. Give me the information. I need to be decisive; let's make a decision; let's figure this out. Don't procrastinate. It's not about procrastination. It's really about, let's take a pause to make sure we get the answer right.

HME: What do you hope readers outside of VGM take away from the book?

Mallaro: I intentionally made sure in the book that I talked about our successes, but I also talked about a lot of the stuff that was done wrong. People aren't perfect. People make mistakes. Companies make mistakes. Things happen that you didn't anticipate, and it is messy, and I wanted to tell the full story of the messiness, the excitement and the successes of 40 years. I think they'll really have some stuff to grab onto and that they can take away and use in their business life.