PHILADELPHIA – The inground pool business, which took a deep dive during the recession, is just beginning to emerge from the depths. Somehow, though, Anthony & Sylvan Pools, one of the nation's largest pool and spa construction companies, managed to stay afloat the whole time.
"The good news is that anyone who was casually in the business got out," said Mark Koide, 53, chief executive of the company, based outside Philadelphia. "Now there's a true weeding-out going on in the industry. We've seen three or four major companies that we compete against in different parts of the country go out of business."
Q: What happened during the recession?
A: In 2006, 250,000 pools were built. It went down to 45,000 in 2009, so 75 percent of the business disappeared. Last year's number of new pools was only 65,000, The nice thing is that we're growing. We've outperformed the industry in this recovery.
Q: Who's buying?
A: Aging baby boomers. They want leisure pools. They're retired, so they aren't going to the office. They want something in their backyards. Another group is looking for fitness, and water is a low-impact medium, so it's much better than running or tennis.
Q: What's popular in pool architecture these days?
A: The big thing is the whole integration of pools with a complete backyard, with the pool as the anchor. There are water features, a bar, kitchenettes, refrigerators, fire pits, hot tubs, all sorts of terracing. Out in Las Vegas, we even have integration with the house itself – like half inside the house.
Q: What's out?
A: Diving boards. Long term, there's a lot of liability around that.
Q: You have a chart on your table that names each executive and lists their personality attributes in order, from high ability to where they face challenges. Everybody has a copy of it. What's your thinking?
A: The Gallup organization has something called Strengths Finder. You go online and answer 100 questions. The top five, they call them strengths, but I think of them as weaknesses, because the top five are things you will naturally do. You can't help yourself. You can be overbearing with them. The bottom five are things you don't have. You can understand how you might come off with others. We've been doing this as an organization as a way for us to be more self-aware.
Q: The chart says you're low on empathy.
A: I'm not going to naturally wake up and be more empathetic. What you can do is surround yourself with people who are and give them the license to say, "No, Mark, you're not empathetic." Our human resources head, she has actually said to me in meetings: "Hey, Mark, let's try that one more time. And this time, try to be a little bit more human."
Q: What are your top attributes?
A: Command, ideation, strategic, input. Input is when you see folks on trains and planes and you sit next to them and they're tearing articles out of magazines and stuffing them in their briefcases. They're intellectually curious. Ideation means you're constantly coming up with ideas.
Q: Over your career, you've been brought into troubled companies. What tends to cause trouble?
A: It's typically around mission and a misalignment with where the company is going. There's something wrong in culture, there's tension in the culture.
Q: Why is there tension?
A: There could be a compromise on values. Management and leadership isn't doing what they say they want to do. There's an inconsistency of vision. It usually goes back to leadership. Actually, not usually. I can't remember it ever not going back to leadership.
Q: How does being Asian influence your leadership?
A: The room is automatically diverse because I'm in the room. There are certain behaviors that won't happen, like racial epithets. It would be unheard of in my experience because it can't happen in a room where I'm in, especially now that I'm the CEO. It elevates the bar around behavior.
Mid-size is the right size, exec says
Mark Koide, 53, has a long of list of corporate titles, from startup honcho to various high-ranking posts at big companies, such as Pepperidge Farms, Mars, and Kraft General Foods.
Now he's at a mid-size company, Anthony & Sylvan Pools, a national in-ground swimming pool construction company, and not surprisingly, given that he's working there, he says he likes that size best.
With small companies, "you're constantly challenged on resources," he said. With large companies, "there's the ability for you to have an impact," but, he said, making that happen in the short-term can be kind of daunting. "The pace of a midsize company is terrific," he said.
Q: You're not worried that you're going to run out of staples for the stapler, like you would in a small company.
A: Not worried about that and not worried about where the next round of funding is coming from. For us, there's stability here, there's strength here and the brand stands for quite a bit.
Q: Tell me a little bit about the disadvantages of a large company.
A: In large companies, there are a lot of advantages. There's stability. There is the opportunity for increasing leadership responsibilities. You are actually challenged at the very high-end of your skill set, so it's about mission and vision, and strategy, so you're able to do that with tremendous resources. Those are all the advantages.
The only issue in a large multi-national that I found is that you aren't as nimble. Speed to market can really be challenging. There are things that you want to do that you just can't get through the system and other smaller companies are going to beat you to the punch. That's a major concern I have with large companies. In terms of strategy and being able to have long-term impact and craft a vision, we were able to do that at the large companies. The tough thing was you weren't as nimble in the marketplace.
Q: Right. You could craft all the vision you want, but having the vision actually coming to fruition must be frustrating.
A: And it takes years, even decades to see it. But if you've done it well, it's sustainable. So I walk by the Pepperidge Farm shelf probably once a week. If you have done your job well, you can see your legacy in the products and the way they manage that brand on the shelf. It's very cool. My wife hates going to the grocery with me, because she's got to drag me away from that section.
Q: That makes sense. When you get involved in something, you like to look at what you did. Tell me a little bit being in startup. Describe your most panicked moment.
A: Can I go back to large companies? I've been in two different types of large companies: publicly traded and privately held. The real disadvantage of publicly traded large companies is they are so tied up in SEC reporting. It is a very tough thing now to be at a large publicly traded company because the reporting requirements.
Q: OK, back to the small ones.
A: I walked out of Mars in 2008 – first quarter 2008 – into what I didn't realize was the recession. At the time, it wasn't quite clear. I was at a conference with 300 CEOs. We were funded because we put nutraceuticals in one of our products. That's the foo foo dust that makes food or beverages healthier. It's in supplements, products like that.
Q: So what happened?
A: This was the craziest meeting I've ever been in. We were out in California someplace – a big resort overlooking the Pacific Ocean. There were 300 CEOs of early stage biotech companies in the room. Keynote speaker was supposed to be the Goldman Sachs head of biotech, and he was fired the day before. The conference opens, and G. Steven Burrill, who was the head of this fund, and the life science conference, opened by saying, "They are 300 CEOs in this room, five of you have revenue. The other 295 need roughly $200 million of testing to get your product to market. For the next two days all we're going to do is talk about how, and all you should think about is how you're going actually survive. This is more than a correction in the marketplace."
(Update: In March 2016, Burrill agreed to be permanently barred from the securities industry after settling a case with U.S. Securities and Exchange Commission. The SEC had charged him with siphoning money from his investors to prop up other failing businesses and to fund a lavish lifestyle.)
If you're an early stage drug, it takes at least $200 million, could be as much as half a billion dollars, now to actually get to market. This was in the conference of just early stage CEOs. All had something that they proved in mice cured some cancer or something, but you to scale out all the way through human trials and nobody had any funds. There was no capital for early stage at that point. It was the first thing to go when the bubble burst, even before housing.
Q: Did your venture have any money?
A: At that point in time we had 12 months of cash.
Q: Twelve months?
A: The good news was we were among the five that had revenue, but the line at the bar that night was long and deep. That was the worst.
Q: For the others, that was the wake-up call.
A: Oh, it was over for them because they were all $2 to $5 million away and three to five years. I don't know how many of them made it through.
Q: Did you ever get in a situation where you almost didn't make payroll? That would be my nightmare.
A: We never got there. We never got to that. Like a lot of companies between 2008 and 2011, and like this one, you had to make a lot of very hard decisions very quickly. Not all the decisions, if you look back on them, might have been the right ones, but you had to get down to a core business that was running as profitable as possible.
–Jane M. Von Bergen
(Interview questions and answers have been edited for space.)