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HATTIE: Hi, I'm Hattie Bryant. This is the only place on television where you can learn how business works from the inside out. If you want to build a business customers love to visit, employees want to work for, and big corporations want to buy, there is no better teacher than Tom Gegax.

In the first half of this program you will see Tom and his partner, Don Gullet, in action as we found them at their Minneapolis headquarters in 1996.

Then we'll revisit with Tom to learn how these two cashed out for double digit millions.

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In Minnesota:

TEAM PLAYER: I'd like you to give a warm round of applause to our leader and head coach Tom Gegax.

HATTIE: (Voiceover) The Tires Plus recruits attend spring training session to hear from their head coach Tom Gegax.

TOM: (addressing his teammates) We try to create an environment where you can get the best of both worlds. You can make as much money as you would ever make in a business of your own. Yet, being members of a brain trust, a team and that's why you would want to stay here.

HATTIE: (Voiceover) While Tom was the internal and external communicator, Don Gullet, his partner worked on internal operations, store relations and expansion. The two started Tires Plus in 1976. Both left Shell Oil and each put up their own cash to buy three gas stations which they converted to tire stores. When they sold the business in 2000, there were 150 stores with 2,000 employees generating 200 million in annual sales.

TOM: Interesting story. Ten banks I had to go to before I was able to get a loan.

HATTIE: Why?

TOM: They kept saying no, no. And the main reason, you don't have experience.

HATTIE: Have you done an initial public offering?

TOM: No, all our growth has been our retained earnings. In some earlier years where our growth exceeded our profit-making abilities, manufacturers assisted some in our growth there.

HATTIE: So you did get some partnership ...

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Understand the Downside of Taking Investors

2

TOM: We paid that back and our growth was out of retained earnings. We did consider: do we do a public offering? Do we take on a larger financial partner? And we have decided, "No."

HATTIE: Why?

TOM: I believe that there are two things to keep your eye on. One is your guests or customers. The other is your teammates.

HATTIE: Right.

TOM: Now if you inject a third thing like a public offering and have lots of shareholders, then we'd be spending a lot of time with regard to shareholders (and not on our customers and teammates).

HATTIE: What do you know now about tires that you didn't know then?

TOM: Well, we know alot about tires-- that's critical-- knowledge is one of the keys. But I think we need to know a lot about people, too, both our own people on our team as well as our guests. We call our employees teammates and we call our customers guests.

So if we know about our teammates, we know about our guests, and we know about ourselves. Because you first got to be able to understand yourself before you can understand your guests or our teammates. And you have that circle and then the wider circle, the community, and if your mission vision values all address all those needs, then you go forward.

There's got to be need at the very start, a niche, in order to be able to do it. I didn't figure I could improve on the computer industry, so we we went into something that we believed was not being done well and then went for it to make it better.

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Offer Selection, Speed and Price

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HATTIE: (Voiceover) Tires Plus had some strategic, competitive advantages. First, it secured distributorships for seven major tire lines and several private brand lines which guarantees wide selection.

Next, they delivered speed. Customer guests were in and out within 30 to 60 minutes. Also, they had clean, modern stores.

This system is spelled out in the operations manual they called 'The Playbook,' and there is extensive employee education provided through Tires Plus University.

TOM: (addressing his teammates) I heard many of you talk about money and wanting to make money. And that's great. I think we deserve material abundance. But, I think that needs to be the by-product. If it's the focus -- we want money, money, money -- that doesn't work.

What does work is we talk about taking care of our guests, being good with our teammates and taking care of them, helping them. And then when that occurs you're taking care of guests and you're helping teammates. If your product and services are priced fairly and our compensation plans are correct then you're byproduct will be you'll make money. But don't try to make money. It doesn't work so well.

Selling sometimes gets a bad rap. Selling is communicating. It is the ability to communicate with guests about what their needs are and whether or not we can fill those needs in a proper way. People sense your purpose. If your purpose really is a greater good, and by the way material abundance is one of those, as I said byproducts of that. It can't be the primary reason, but if you're there and teammates feel you're serving them and caring about them, then they'll perform better.

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Avoid 50-50 Partnerships
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4

HATTIE: (asking Tom's partner, Don Gullett) Do you think you'd be where you are today with Tires Plus if Tom wasn't around?

DON GULLETT: Oh, absolutely not. And I think he'd respond the same, too. It's just like a marriage. It's a relationship that two people have to have a good understanding of their strengths and weaknesses. And it's the understanding how they compliment each other and so, building together on that. One partner can take some tasks that might be difficult for the other partner, and they compliment each other in their -- their search for success.

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Choose Words Carefully

5

TOM: (addressing his teammates) We're looking for people that care about others. We're looking for people that truly want to help others. Some of you heard me say earlier that many people say when they come to work for a company, they say, "Well let's see, what do you want to do?" The answer, 'I want to work with people.'

And after they work with people for X amount of time, they say, 'Oh my God, these people.'

Well, you know, that's not what we're about. We're looking for people who want to serve people. Really, really want to help people, not, "Let's see how much can I make off of you." But, "How can I serve you? How can I help you?"

And when that occurs, good things happen. It's a karmic effect ... what you give, it comes back. But don't do it because it comes back. Do it because it's right universally.

DON: It's more of a giving individual that's willing to sit back and explain things to people and realize that they need to serve. You know, they need to serve someone's needs and so many times people will jump at conclusions or they'll snap back at people and that's easy to determine in interviews. So.

HATTIE: So almost a pacing thing.

DON: Yes.

HATTIE: For example if I finish your sentence for you. I'll do that to a customer and you don't want me to do that to a customer.

DON: Exactly. You want them to understand, to be patient with them, to understand what their needs are and then serve those needs. And in a really sincere manner. By recruiting people like that up front -- and you can't educate people on that -- they have to have that desire up front. You know, their parents have taught that need.

HATTIE: So you hire people who had good parents.

DON: I think that's it.

HATTIE: At what point did you say to yourself, I'm not going to call myself the owner, the founder, the president, I'm going to call myself coach?

TOM: Yeah, I saw NBA coaches on the sideline, college basketball coaches, and I said, 'You know what, I like the way they're giving constant feedback.' So I said, 'People really don't want to be managed.' Do you want to be managed, Hattie?

HATTIE: No. I don't want you to tell me what to do.

TOM: But, would you like an acting coach? Would you mind a tennis coach?

HATTIE: I would love a coach.

TOM: People say, 'Oh that's kind of, just trickery language.' No, it's just verbalizing what our expectation is of our people.

HATTIE: Okay.

TOM: If we're calling them manager everyday then they're going to manage. If we call them coaches every day, then that coach gets into their thinking about what we want them doing as coaching.

HATTIE: People love to play games. People love to play sports.

TOM: Yeah, that's true. Yeah.

HATTIE: So, if I come to work …

TOM: Play my work, yes.

HATTIE: … and I'm coached, then it's like I'm playing.

TOM: Yeah, I like that. Yeah, playing.

HATTIE: This is great. And oh by the way, I get to make some money, too.

TOM: You're exactly right. I want to tell you one story on the coach thing. I heard Lee Iacocca speak at an EFI, Executive Focus International Conference in Florida. And afterwards I went up, talked to him briefly, and I said, 'Yeah, I'd like to hear more about that.' He says, 'Well I have the company that does this, I'd like to get in contact with you.' I said, 'Well here's my card.'

He looked at my card, it said head coach, and he says, 'What's wrong boy, don't you want to be a CEO?'

I said, 'No, I want to be a head coach.' He definitely disapproved.

HATTIE: Not everybody sees it the way you see it.

TOM: That's okay. It's okay that they're different. But, I just think that coaching is more of what people are looking for. This old school hierarchical top down, I don't think works.

HATTIE: It doesn't work.

TOM: I think it's more like an accordion.

HATTIE: So we find him in his white shirt which is required dressing for everyone who works at a Tires Plus, in his lovely suit and tennis shoes. This is the foot of the coach of Tires Plus. Do you take these in for retreading?

TOM: No. No I don't, no I don't.

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Install Systems to Smooth the Path to Growth

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6

In the studio:

HATTIE: Tom and Don had the right idea at the right time. The idea was to clean up a dirty business. Back in 1976 when they started, getting your tires changed was greasy. But at their Tires Plus stores, children played in clean areas designed for them while their moms sipped free Cappuccino.

Second, this partnership was made in heaven. The two have great respect for each other and they were never ever equal partners. We've heard this before, a fifty-fifty relationship is nearly impossible. From the beginning Tom owned slightly more than 50%. The leadership style he developed was inclusive. But when a decision had to be made, it was clear who would make it and who would have to be responsible for it.

Third, all of the systems and the way to teach the systems were fine-tuned and improved continuously.

And finally, all of the leadership at Tires Plus left the old top down, autocratic my way or the highway style, and became coaches to the people they had carefully recruited. All easier said then done. But Tom and Don proved it's possible.

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Hire COPS

7

HATTIE: So do you think beauty has an impact on our feelings, our attitudes, our productivity?

TOM: Definitely.

HATTIE: Having sold the business, there are new challenges for Tom. But I wanted to learn more about why Tires Plus was so successful. I met him at his home in La Jolla (San Diego).

What were some of the key decisions that that two of you made that you know now looking

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Minneapolis, Minnesota: Meet two gentlemen who opened for business in 1976. By 2000, they had 150 stores with 2,000 employees generating $200 million in annual sales.

It wasn't easy. There were hills, then mountains and several very hard falls along the way. They talk about it all in this episode of the show.

"If I don't do this my life will be incomplete." You hear these words at the close of every episode of the show. Like so many of the people we profile, Tom and his partners started working in big business. They were readily promoted and had very good, big corporate jobs. But in time, they began thinking, "I can do more." So, in 1976 Tom and his partner, Don Gullett, quit the security of Shell Oil and bought a couple of gas stations. Quickly they discovered they made more profit selling tires than selling gas. They focused on systems and began expanding. But they were faced with total implosion in 1989 - divorce-debt-disease. So, they asked hard questions about themselves and began focusing on their people skills.

It all turned around. And, Tires Plus began selling more tires in the state of Minnesota than any other company. Tom attributed that growth to their commitment to employee education.

Words do matter. After 1989, when Tom and Don hit the wall and redefined their business and themselves, when they hired people to help them, there were team players. There were no more "employees." There was no, "You work for me; do as I say." And then when they needed some middle management, there were no bosses, only coaches. They decided that people are happier when they are learning and that they learn best from coaching, not bossing.

They also borrowed from Disney; customers became guests. Though these folks had just come to have their tires changed, balanced or rotated, Tom and Don wanted their customers to be treated as if each was a guest in their home. How refreshing it must be to come into a traditionally dirty business and find a clean, comfortable place to wait with a cappuccino and the Wall Street Journal.

Connected? Small Business SchoolTires Plus put up their web site in 1995. Though it provides customers with access to information about tires and stores, everyone agrees that using the web internally is even more powerful than using it as a sales and customer service tool. At one time their support center would e-mail and fax forms to the stores; now forms are accessed from the web. E-mail was quickly replaced by on-line internal bulletin boards, instant messaging and collaboration.
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» Words matter: The Big Book for Small BusinessTom Gegax says, "Nobody wants a boss but everybody wants a coach." He did not take the title of CEO of his company; he was the head coach. Today, this man does not need anything; yet, something deep is driving him. His love of people. His love of life. His pains throughout the years. One of his key drivers is simply that he wants to help others get over the hurdles and avoid the pitfalls of growing their business. We say that he is one of the graduate saints among those of us -- he is back to give back. First, he's writing! We especially recommend two books:
1.Winning in the Game of Life:
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2. The Big Book for Small Business.

Plus, he's speaking around the country and around the world. Listen up, because here is pure wisdom that will effect your bottomline within a month.

Tom's books are available in most bookstores or directly from his website.

» READ THE TRANSCRIPT. Small Business School To read and reflect on what happens as we go online all the time, read the dialogue from the show. The transcript of this show along with the study guides, profile/overview and streaming video equals a Master Class.

» CASE STUDY GUIDE: We start our business with a "big idea" but we sustain our business with key ideas. There are links (just above in the green box) to the fourteen key ideas from this episode of the show. Because these case study materials are now published as part of over 40 leading college textbooks in business schools, these materials are being used daily in virtually every college and university throughout the country.

So, please, spend some time with the eleven key ideas within the case study guide.

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