Tom Brady is founder of Plastic Technologies Inc (or PTI), and has probably touched more people’s lives than any guest on this show having developed the plastic technology behind the plastic bottles now used widely in the beverage industry. Since starting over 30 years ago, his company has also branched into other areas like plastics recycling, food packaging, and healthcare packaging. It’s easy to take this stuff for granted, but there’s really a lot of technology and innovation behind the packaging we use every day. It’s that innovation that Tom and his company are responsible for. So all of that is cool, but what this interview is really about is how he created a company where so many of his employees embody the entrepreneurial spirit in growing the business. The engagement he’s had is kind of unheard of: he’s had almost no turnover since starting the company, roughly half of all the employees all throughout the company have some kind of equity ownership, and over half of the technical employees are women! So it’s a unique place, and I think you’ll enjoy hearing him share how he created it.
“We think of packaging as a pretty mundane field, but you know what? If you think about all the value of packaging to our food supply, to our medical field, to the way we live our lives…if we didn’t continue to try to figure out how to make things safe, how to aseptically fill things, and how to sterilize things, and create materials that are multiple in layers…we couldn’t have all that!”
- His employer at the time, Owens-Illinois wasn’t interested in pursuing plastics technology for bottling beverages because they were worried that it would cannibalize their glass bottle business.
- So when Coca-Cola was interested in developing the technology to use plastic bottles, he took the opportunity to start his own company focused on doing exactly that.
- He started as a one-man shop, no employees, using office space he got for free from a friend.
- He contracted out all the technical work
- At Dartmouth, his first engineering course was essentially an entrepreneurship course, with students organized into teams of “companies” assigned to solving a problem as a business. Many of his fellow classmates later had created their own businesses at one point or another.
- “Part of the secret of life is not planning everything, but keeping your eyes open for when opportunities come along.”
- You have to be ready to act when opportunities come along. They’ll disappear if you wait too long.
- At the time, he was one of maybe 10 people worldwide with the skillset to take advantage of that opportunity.
- Hiring his first employee, a friend from Owens-Illinois who was also feeling stuck at their old company. After that, he hired 2 more friends the same way.
- They were really uniquely well-positioned in the industry, and started out at a time when the industry was switching over to plastics.
- In the early days, the company was essentially a few desks and some computers. Lab equipment came later as they had more resources.
- When a couple customers wanted to back out of their contracts, rather than buy out the contracts, Tom and his team extended the contracts to 5 years to support their platform for future growth.
- They’ve expanded from their technology and development business into the Plastics PET recycling business (manufacturing), the specialty packaging business (manufacturing),
- A lot of their growth occurred because he hired people who had a similar entrepreneurial spirit, who were looking for opportunities to grow PTI.
- Their recycling business was created because rather than contract out the consulting work to show Colgate how to do it themselves, one of PTI’s employees suggested that PTI could handle all that work for them as a separate manufacturing company. This led to Phoenix.
- Another employee saw opportunity in Europe, so they created PTI Europe.
- Now, they are starting Guardian Medical.
- The companies are interrelated in terms of the underlying plastics technology, but were separate opportunities from the original business. What I think Tom did so well was set those up as successful, separate enterprises where the “intrapreneur” driving that project had significant ownership, and PTI had some ownership.
- “Each of those things got started because we treated them all as separate opportunities with an incentive for people to do more than come to work everyday.”
- Having all these businesses connected with one another offers a lot of advantages because each individual segment gets some benefit from being able to cooperate with the other segments. The engineering teams can see how products are actually put together in manufacturing, for instance.
- For medical devices, it’s a 50:50 joint venture between PTI and the entrepreneur heading that company.
- Where their opportunities come from
- “We’ve tried a lot of things, by the way, that have failed!” Some of which have cost a lot of money and failed financially, but some have really worked well. And more importantly, that creates a culture where it’s okay to fail and where people are willing to try things!
- “The primary attribute that our company has is that we’ve created an ownership model that encourages everybody to believe that it is as much theirs as it is mine.” The senior management staff (not just Tom, or the board) has a say in who else gets stock. Anyone can propose and make a case for an employee to get stock.
- “Offering stock options to people that had not just done a good job, that could help grow the company” against the advice of his advisory board. Stock awards are forward-looking, not based on tenure, or seniority, and are given to people who have demonstrated their ability to contribute. People all throughout the management structure have ownership stakes. Everyone is important in their own way.
- About half the employees have ownership, his own ownership is down to about 25%. Most of the employees have taken on the objective of making PTI successful.
- Rather than rely on corporate rules and policies, they work things out according to what makes sense in each situation. This is particularly powerful in developing and keeping women in the company. Half their technical employees are women, and most of them have families. None of them have left. So being able to work with people and their personal situations makes a big difference.
- His 3 year stint as Dean of Education at University of Toledo, going from being roundly rejected by the faculty for his nonacademic background, to creating a system where people care more about the success of the organization rather than about their own individual status. And eventually getting embraced for that.
- “We have been diligent in trying to break our enterprise into smaller, separate companies. The nature of that is that not only people who are leading those enterprises, but are working in those enterprises feel closer to the action. They’re closer to the business. They’re closer to the customers. And by the way, they can more directly share in the success, whether that be monetary or otherwise, and the challenges.”
- It’s harder to create that level of connection and loyalty at larger organizations than at smaller organizations where people are closer to the action
- Focusing on surviving innovation by “finding the gaps.” I interpreted this as “playing offense” and looking for new opportunities constantly, much the same way you would if you were creating a new company. You need that flow of new projects, technologies, and ways of adding value, and you get that by staying active and entrepreneurial.
- How a technology development company gets paid: initially as an hourly or project consulting fee. The real leverage though, is in owning and licensing the technology to many different people. Includes his example of how this played out with Coke with food-grade plastic recycling. “A big part of that comes down to the will to sell value to customers, as opposed to just hours.” It’s hard to sell that to a purchasing agent (who is usually responsible for finding just the lowest cost option), but someone at a higher level (like a VP) has a bigger picture view and appreciation of that higher value, even with the higher price point.
- How technology has multiplied their productivity and capacity. What used to take days or weeks of work and prototyping can now be done in minutes or hours on a computer.
- Given that, you can’t just bill by the hour because you don’t have nearly as many hours of that repetitive work. You need to find some way to tie your prices to the amount of value produced.
- What drives him (and the company) is finding how you can add value for a consumer. Their recycling business was born out of a restlessness about the waste created by a throw-away economy.
- Plastics isn’t necessarily sexy, and most people wouldn’t describe it as an industry that is particularly good for the environment. But the developments made by his company really make a big impact. Lower shipping costs enabled by new packaging. Safer packaging. Improved recycling technology so you can use this cheap, durable, light-weight material without it ending up in a dump.
- Entrepreneurs need a tolerance for risk, and an unusual level of energy. “By definition when you start a company, you’re doing something that hasn’t been done the same way before.”
- You really are alone. You can take all the advice you want, read all you want. But ultimately you’ll be writing your own book.
- “Find something that you really are passionate about….If it’s just something you’re doing, that’s not something you get up every day and you’re really excited about figuring out how to make it successful and make your customers successful…I think a lot of that stuff doesn’t work and wears out. I think you need energy, and you need passion.”
- “People that aren’t one dimensional are more likely to have the energy and passion because they see the opportunities”
- Try new things, you’ll find things you like. And then you’ll do them more, and get more energy and excitement about them.
- Extra hour a day? Play the piano. Another hour? Spend it in the shop. A third hour? With the grandkids.
- “You’ve got to have a variety in your life that allows you to re-energize yourself”
Book recommendations: He reads a recommended book intensively until he gets it done.
Clayton Christensen (disrupting big systems is how systems change). Innovator’s Dilemma, the Innovator’s Solution. Disrupting Class (the educational approach, you need to come in from the outside).
So as you have probably figured out by now, this is a different Tom Brady from the one who is quarterback for the Patriots. I’d argue that this Tom Brady has actually had a much bigger impact on the world than the quarterback, although if anyone has a way of connecting with the other guy, I’d love to have him on this podcast as well.
If you liked this episode and want to hear more like it, make sure you are have clicked subscribe in your podcast app. Also, if you could share this podcast with at least one friend, that would really help me out, and I would appreciate it a lot.
You can also hear more episodes like this one at nicholaspihl.com, and podcasts aren’t the only thing you’ll find there. You’ll also get recipes for delicious and mostly nutritious food, book recommendations of guests, and writing about mindset and entrepreneurship.
Music for this podcast is by Cambrian Explosion, who have signed up for the mission to settle Mars. Someday, maybe within your lifetime, probably within my lifetime, people throughout the solar system will be listening to their music. You can listen to Cambrian Explosion today on iTunes, Spotify, and CEPDX.Bandcamp.com.
Thanks for listening.