"Tell Me One Thing I Should Remember about You." A Conversation with Carey Smith - CEO, Big Ass Fans

I was at a team Christmas party this past year at a brewery in Northern Virginia when I noticed a fan on the ceiling that looked like it belonged atop a helicopter. I pointed it out to a colleague who said, "That's a big ass fan." I didn't realize how accurate that statement was; it turned out that the enormous contraption was a sophisticated industrial cooling system manufactured by none other than Big Ass Fans, the brainchild of founder and CEO Carey Smith. If his name sounds familiar, you might have come across his regular column On the Contrary that he writes for Inc, or any of the numerous interviews he has given to outlets such as Forbes and the Wall Street Journal. As the company's name suggests, Carey has a sense of humor, but he's also dead serious about making the best products in the world and continuing to push boundaries at the nearly $300 million-a-year business he built from scratch.

Carey's head of corporate communications invited me to interview him after reading one of my articles, and I jumped at the chance to pick his brain on hiring good people, what it takes to earn his trust, and preparing people for leadership. What followed was an unfiltered look into how this CEO (or "Chief Big Ass" as he goes by) sees the world. I wish everyone could hear the recording, but I'm sure you'll benefit from his thoughts here.

SLH: You’ve said that when you interview people, you like to push them out of their comfort zone and “make them uncomfortable.” What is it that you’re trying to learn about someone by doing that?

Putting people in a stressful situation is a good thing, because it’s not what they expect at an interview. Some people get frustrated, which tells you something about how the individual will be as an employee under pressure. So we try to be a little bit aggressive and see what people are made of.

I had somebody come in the other day with a product idea he thought we might be interested in that he had proved out a bit. To see how he’d react, after he finished his presentation I said, “Thanks, I think we’ve got what we need here. We’re going to begin work right away, and thanks for coming in today.” I just wanted to see how he’d respond. Obviously, I’d never do that to someone, but he reacted quite calmly, which I liked.

The reality is that it’s still a crap shoot even when you run a great interview process and think you’ve found a good one. I mean honestly, what the hell can you expect to glean from a thirty-minute conversation with somebody who’s been alive for thirty years? You really have to work at it over time to see through the person.

SLH: Does the emphasis you place on personality and culture fit mean you place less value on a person’s résumé?

In the main, I think résumés are crap -- especially for young people. They tell me very little about a person’s potential. We give paid student internships, and it amazes me some of the résumés these kids send to us. Eighteen pages (I’m not kidding) of French club and chess club and playing soccer and god knows what else. Really, who gives a s--- about that? I don’t.

I learn by asking a person what the one thing they want me to remember about them is. If all the person can come up with is something they did in school or under someone else’s direction that’s a red flag to me. For a business like ours that is growing rapidly, we need people who show creativity and can take the initiative. I hired somebody one time who bought a distressed ice cream shop in high school and turned it around over several summers, eventually selling it and paying for college with the money he made. That he was able to do that – and he didn’t come from money by the way - told me he had a good chance of solving the big problems here.

The programs we have in place put a lot on new hires’ plates quickly, so if it’s not going to work out we tend to know fast. I’m a peripatetic manager. I have an office but I’m very seldom there, and I talk to people constantly about what they’re doing or why they did something a certain way. The interview doesn’t really stop once you’re hired; it just changes shape.

SLH: Is it challenge to make that kind of hiring approach repeatable and spread your philosophy throughout the organization?

I wouldn’t call it a “challenge” for us, but it’s still important. If we’re looking at someone for a significantly senior role in the organization, I’ll obviously meet with those people. Our HR department tends to handle the people coming right out of school, but even then I tend to go to a lot of the student career fairs so I meet most of them too. The people in hiring roles here have a pretty good idea of the type of outside-the-norm person we look for, because we talk about it all the time.

All of that being said, I mentioned to someone the other day that if I retired from the business I would want to stay on and help drive HR. I truly believe it’s the most important position we have in the company.

SLH: I’ve long believed that companies are destined, and sometimes doomed to take on the personalities of their founders. Do you see that with Big Ass Solutions?

Well, it would be difficult to imagine how if you started something and kept running it you would have anything other than a company that reflected your values. What’s more interesting to me is how that also works in reverse. At some of the companies that we’ve worked with, you can see into the personalities of the founders through the problems at their companies. Excessive ego in particular reflects itself in pretty ugly ways in how companies operate.

It’s difficult to judge yourself, but I think my perfectionism is a pervasive element of our makeup. It sounds like a cliché, but I always say to people it’s the best of times and the worst of times when I engage on a project. I can help get the product to the best place it can be and drive toward perfection, but I’ll rip it up if that’s what’s needed. The same goes for our organizational structure or internal processes. I think everybody understands that, but I know that it can feel disruptive at times when I get engaged and start scrapping things if I see a way to make them better.

SLH: You mention “creativity” and “curiosity” as two of the most important traits you look for in a new hire. How do you channel all of that creativity productively in a business?

Well, we have to keep people focused on the product. Unlike you software people, we don’t just change our business whenever we want to and call it a “pivot.” No offense.

SLH: None taken.

I love giving software people a hard time, although we have fifty or so people working on the software and firmware that goes into our products here. In any event, the name of game in business is defining a goal and then assembling creative people around that goal. You need people who can be creative in solving the problems that get the business closer to that goal. We have a department we call “the kitchen” which is mostly PhDs doing stuff that comes close to pure research. They’re not supposed to focus on generating income from their work in the short term, but they know that eventually we’re trying to develop something we can bring to market. They can’t spend a month figuring out why the sky is blue, and moreover they don’t want to. People are happier and better employees when they have goals to work toward.

SLH: With an employee base composed significantly of people in their 20s and early 30s, do you find that they have different expectations of their jobs than the more experienced cohorts?

Not really. In fact, a lot of the best people we have are the youngest employees. A lot of the “millennials” stuff you read and hear about just shows you how lazy people can be in forming their opinions. People fresh out of school have so much to offer. I started my business when I was in my late 20s, and the advantage of being at that age is that you’re so damn naïve you’ll do anything – at least I was. You can do a hell of a lot when you don’t know what you can’t do. If I told one of the younger folks that work for me to call the President of the United States, they’d probably go get on the phone and try to reach him. That lack of fear and willingness to work without boundaries is valuable whether you’re starting a business or starting a career.

The other big thing about the younger folks is that they’re very collaborative as a group. As I see it, when you’re surrounded by people from so many different disciplines with so many backgrounds, it’s foolish to make a decision without drawing on that collective talent for input. For the younger folks, most of them see things this way too and that aligns really well with our culture overall.

SLH: Let’s ditch the term “millennials” and the baggage it comes with then. Is there anything about younger employees that you just wish they understood but don’t seem to?

Only that work isn’t at all like school and that learning comes through failure. Sometimes the people who did really well in school turn out to be your worst employees because they’re way too worried about failure. I tell kids at every career fair that they are going to fail, and they need to learn how to learn from that if they want to succeed in whatever they do. The other thing I see lacking sometimes is self-direction. When you get out in the world it’s like being dropped in the middle of the ocean. Your college exams, however hard they were, had answers. In real life, nobody’s asking any questions, and nobody’s got any answers for you. You’ve got to figure that out on your own.

My job is to create the best work experience I can for all of our employees. I’ve worked for other people, and most of the time it was the most god-awful experience. I want our employees to have a great experience working here, and allowing people to move quickly through the ranks or into a role that best suits them is maybe the most important aspect of that. Being in growth mode like we have been gives us a lot of flexibility to find the best fit for someone even if it’s totally different from what they were hired for initially. Our first employee was an absolute killer salesman, but one day he came into my office and said, “Carey, I hate this. I’ve gotta do something else.” Today he runs a division of the company on the production side. People see that, and they like it, and it lets them envision a happy future for themselves here. I don’t know any other way to keep people engaged and happy.

SLH: When you’re making a big decision and you want to pull in others’ opinions, how do you choose the people you bring in? In other words how does someone earn your trust enough that you want their opinion on something?

When someone shows they really know their lane and are committed to mastering it, that’s a big part of it. Partly it just takes time though. Even if you came in here as the ex-CEO of General Electric, I wouldn’t necessarily ask your opinion right away. But because we’re a collaborative group and I’m constantly in the mix with what’s going on throughout the company I have a good idea of with whom I can engage productively. Domain knowledge is important and what a person brings to the particular situation factors into whom I go to with questions.

SLH: I imagine the decision to promote someone into a managerial role is something you take seriously. How does that process play out in your company?

I do take it seriously, and it’s similar to the interview process. There’s no way to know for sure if someone’s going to be a good manager until they start doing it. I look for people who take initiative and are creative first, then how well they collaborate with their team and others. Most people aren’t natural managers right out of the box, and there are skills they need to work on in order to be effective. That’s no reason to not promote someone into management though. We promote people fairly quickly and continually pay attention to how well they’re doing.

Managing people boils down to giving direction and feedback. Provide a goal and vision and let the person tell you how they’re going to get it done. After that, it’s about establishing a constant feedback loop, which is what takes time for most people to really understand. Lots of people have “manager” in their title in other organizations but don’t really manage the way they should because they aren’t used to providing that feedback.

SLH: Running a “fluid” organization is a point of pride for you. Is it a challenge to be flexible in how you promote people with the desire to have a transparent process for everyone?

I should first point out that there is a hierarchy here, but it’s kind of a loose hierarchy. Getting too caught up in titles and that stuff is nonsense. In fact, when I started the company I was committed to having the flattest organization possible. No titles at all; you want to take a vacation, go right ahead.; that kind of thing. Flatness works for as long as the original manager can control the space. I found the boundaries of that model after around a hundred employees because I just couldn’t talk to everyone all of the time. That’s when you need a hierarchy with some people whom you trust that know how the different pieces of the business fit together.

You may have sensed this already, but when it comes to managers we prefer to grow our own. We have a difficult time bringing in people with deep experience at other companies, particularly large ones, because they are often so used to working in silos and keeping their own counsel. Obviously we have to recruit experience we can’t replicate internally, but we generally place a higher premium on people who are energetic and know how to work with others to get hard things done rather than what they did somewhere else.

SLH: So as the company has grown and become more hierarchical, has the way you evaluate performance across the company changed to prevent it from being uneven?

It’s changed to a degree. We’ve tried various review processes: once a month, once a quarter, twice a year, you name it. After a while we said screw this, we’re not doing annual reviews and emphasizing continuous feedback instead. Around here, if you don’t know what I or your manager thinks about your work, then you need to go to the doctor and get your hearing checked. As for the process being uneven, where that happens it’s a sign of weak management.

Getting a management team to provide feedback continuously so that everyone in the organization knows where they stand and what they’re doing well or need to work on is one of the most difficult things about running a company. Every way you can do it has shortcomings. One thing I know is that managers need to take notes and share observations constantly.

SLH: You’ve been generous with your time and thoughts, so I want to give you the last word. Anything you wish I’d asked or any other thoughts you want to share?

Well, people have a way of fixating on the name “Big Ass Solutions” and it kind of colors their opinion of our business before they know much about it. The name for us captures how we do business and our mentality, which is “the hell with convention” – we’re going to do things our way, because it works. We’re contrarians, but not because we’re trying to be different for the sake of it. Rather, we’re contrarians because a lot of the ways that people do things are sub-optimal.

However much the company changes as we keep growing, it will always be about getting the right people here and making them productive and happy. We set aside a quarter of the company for employee stock options, and we pay good bonuses every year for a reason. In my mind and all of our minds, the employees are the only thing you have. If you don’t treat people right and treat people fairly and show them a vision to unite around, then your company will be a mess.