69. How Small Businesses Can Stay Ahead in Today’s Market with Technology | Tighe Greenhalgh, President of Central Components

Karthik Chidambaram: Hello, everyone. Welcome to a new episode of Driven by
DCKAP podcast. We are here in Chicago, Illinois. I'm your host, Karthik
Chidambaram, CEO of DCKAP. We make systems talk to each other for
manufacturers and distributors.

In this podcast, we are going to talk about how small businesses can compete
with big box retailers by leveraging technology. And to discuss this, we
have with us Tighe Greenhalgh, the President of Central Components. Tighe, I
hope I pronounced your name correctly, and welcome to Driven.

Tighe Greenhalgh: Thanks, Karthik. Thanks for having me.

Karthik Chidambaram: So, Tighe, I was reading about Central Components and
you are a fifth generation business. Your great-great grandfather started
the business and you guys have been doing this for a long time. Can you tell
us about the history of the company?

Tighe Greenhalgh: Sure. Yeah. Well, so my great-great grandfather started us
in the industry. The business itself was started in 1989 by my uncle. The
family has been in the industry through five generations. Central Components
started off as a plumbing specialty repair part supplier to wholesalers. And
about 15 years ago, we started to see that market drop. So, three years ago,
I bought half of the company and we decided to expand our product offering
into industrial fittings and valves.

Karthik Chidambaram: Let's go a little deeper into that. It's very
fascinating. Prior to Central Components, you were with Midland Metals, and
that's also a family business, right?

Tighe Greenhalgh: Yeah.

Karthik Chidambaram: And you guys got sold to Private Equity, and that
happens a lot in family businesses. Can you tell us about that? What
happened there?

Tighe Greenhalgh: Yeah. So, Midland Metal, also a family company. To give
some context around that, my grandfather, whose grandfather had gotten the
family, the fittings industry, by buying into a brass foundry.

So my grandfather, he had eleven kids, seven of them sons, and he wanted to
set each of those sons up with their own business. And so he would look for
opportunities within his own business, whether on the supply side or, or the
you know, if it was a new product line that he would want to go into
something along those lines, right. A new market he wanted to pursue.

He would then set up a company with one of his sons in charge of it to do
it. And so that's how Midland metal got set up. My uncle Nick had come out
of, out of college and my grandfather had before he had bought his, his
dad's company. He had bought another company around the same time that Nick
was finishing college.

So he sent Nick into the warehouse that he had just bought and told him to
clean it up. Nick found some old marketing material for Midland metal, which
had been a metal manufacturer during world war two. And then when the war
ended, they had gone out of business because they had shifted all their
contracts to the government for the military.

So Nick liked the name, resurrected the name. And then my grandfather had
gotten into a dispute with one of his vendors. And so worked with Nick to
set up that product line that he was buying from that vendor. And now that
was Nick's company. And. And my grandfather's company was his first customer
and then he grew it beyond there.

So Midland Metal had started that way. Central Components started in a very
similar way. And Midland Metal, Nick then sold it to his brother. He split
it into two, sold it to his brothers, Vince and Billy. And Vince and Billy
operated as separate companies till 2015. And at that point I'd started
working at Midland Metal for Vince in 2013. And so, brought the companies
together. We merged there and then in 2018 we- after three really good years
of growth, we sold it to a private equity group in 2018.

Karthik Chidambaram: And after 2018, you were the Chief Operating Officer of
the business and then you were let go.

Tighe Greenhalgh: That was, yeah, so once we sold it to a private equity
group, Vince had stayed on as CEO. I was COO, Billy was on as marketing. We
had a great team, a good dynamic. In 2019, we had bought four companies that
we had transitioned onto our platform. 2019 was a busy year full of growth.
And then 2020 is when COVID hit. And so, second quarter of 2020 was
miserable. It's probably the hardest time professionally I've ever had,
right?

We saw sales drop again, April that year. I mean, they dropped by over 50%.
I mean, it was rough. And we had a private equity partner and so we had
certain leverage ratios and we had to cut back on costs and it was just a
really tough time. 2020 was, was really hard for everybody and it was really
the first time that we, you know, realized we're not a family business
anymore, right?

And so that was, that was tough for everyone. Vince ended up stepping down
as CEO in September. And then in November, the new CEO fired me.

Karthik Chidambaram: But the plan was to stay on with Midland, was that the
original plan?

Tighe Greenhalgh: The plan? Yeah. The plan when we first sold to private
equity. So yeah, I- our goal was, we Midland Metal, we were very much driven
by technology. Right. And they still are. They're a great company still. And
so we had seen the opportunity to maybe bring on an investment partner, or
use that investment to continue to grow the technology, to expand into new
product lines and to serve more people better. Right. And so that was the
plan. And, yeah, 2020 kind of put a wrench in that plan.

Karthik Chidambaram: That's very interesting. And then, from there you go on
to buy 50 percent of your uncle's company and Central Components. So that's
how Central Components started, yeah?

Tighe Greenhalgh: Yeah. So yeah, the timing was fortunate, right.

Because Central Components is in Austin, Texas. I live in Kansas City. My
uncle who owns Central Components, he came up for Thanksgiving right around
the time that I had been let go and was still kind of negotiating you know,
how we would leave things, Midland and I would leave things and so, the
opportunity was there.

He mentioned that he had been seeing a strong change for the worse in that
plumbing specialty repair part market. So he was looking for what to do with
it, with his business. And I knew the industrial fittings and valves market
well and thought there was a great opportunity actually at Midland, we had
built a whole suite of tools for our customers.

And so the idea originally was just to start off as a customer of Midland
and take advantage of all those tools that we had built and just kind of
prove out. I was excited about them and wanted to show that they were a good
set and that you could do a lot with them.

Karthik Chidambaram: Yeah, it's like starting from ground zero again, you
know, so you reached out.

So how can you leverage technology? I mean, because there are a lot of big
box retailers out there, you know, Amazon, you know, Home Depot and
everybody, how do you compete with them and how can you leverage technology?
What do you guys do? And what do you do at Central Components?

Tighe Greenhalgh: Yeah. At Central Components, you know, to be able to
compete with those bigger boys, what technology does is it allows us to
reach like that, that playing field where the convenience factor for the
customers is almost negated, right?

So you have these, these big box companies that want to compete in the
wholesale market. And what they have is a suite of tools that makes things
very easy and convenient for our customers. And what we can do is leverage
technology to do the same and at least eliminate that advantage of the
bigger boys.

Karthik Chidambaram: And what kind of tools do you leverage in terms of
technology?

Tighe Greenhalgh: Yeah. So, CRMs. Our ERP is Prophet21. On that, we use
HubSpot as our CRM. So, we're launching a new website. Very excited about
that. And that will provide more transparency to our customers.

They'll be able to see what we have in stock. They'll be able to see when
items are expected and that are maybe out of stock or back orders when
they're expected to ship. They can check all that. It's typical things that
we would normally get phone calls for, right? We want them to be able to
find those answers themselves so that when we do talk to them, we can work
more on building relationships with them.

Another feature in it that we're excited about, it will just be a simple
drag and drop to submit POS. So a lot of the adoption around e-commerce
within the wholesale industry is, the complaint we hear often is, you have
to enter in a purchase order twice, right? You have to enter it into your
own ERP. Then you have to go to your vendor's website and enter it there.

So now what we're allowing is you enter it into your own ERP and print it
however you would. You know, you can export to Excel. Or you can do it PDF
or however it is, and just drag and drop it onto our site, and it'll
automatically populate that PO for you. You could even do it handwriting.
We're excited for it.

Karthik Chidambaram: So, with a small or mid sized business, I mean, like
you talked about, you know, it's usually a challenge, right? So it's
important for the systems to talk to each other, and oftentimes they don't
have the systems integrated, so customers are not able to see the inventory
or the pricing and all that, you know.

Why do you think integration is critical and how do you think that can help
compete better?

Tighe Greenhalgh: Yeah. I think it's very rare that you'll have a company
build a tech stack from zero, right? Most of these companies have legacy
technologies over the years that they've built their systems around and
grown used to using.

And so as technology progresses with AI, or I even think in our own
industry, mobile technology is still an untapped resource, right? People are
still learning how to best use that and adopt that into their procedures.
But I think as technology expands, you need to be able to integrate your new
tools with your old ones, right?

Otherwise the efficiencies gained in those new tools, you're going to be
lost and going back and forth between several tools. Or lost in missing data
because you didn't check one or the other, right? Missed opportunities,
stuff like that. So, you need to have that integration of the tools as you
continue to add on to your own abilities.

Karthik Chidambaram: Yeah, this is where an ERP integration platform can
also come in handy. And, how are you finding your customers at Central
Components?

Tighe Greenhalgh: Yeah, trade shows, trade associations, walking, I mean,
phone books, right? They don't even exist anymore, but more or less that
virtual phone book of just looking in an area and finding who's there and
reaching out to them.

I mean, it's very, that part is very old fashioned. It's very much still,
pick up the phone, call them, introduce yourself, right? Go visit them. Sit
down eyeball to eyeball with them and just start building that relationship.
It's- we see it's really hard for customers to add new vendors.

There's a lot of setup and everything necessary. So we look to do everything
we can to simplify that process. Make it more convenient for them. But
ultimately the only way you're gonna grow is by building that relationship
with them and being patient with it.

Karthik Chidambaram: Yeah, it's a relationship game, but who's your target
customer? Right? So who are you going after?

Tighe Greenhalgh: Yeah. Mostly industrial distributors, hose houses. Those,
that's our main, like- NAHAD is our top opportunity. There are top trade
associations that we work with.

Karthik Chidambaram: And what marketing that I mean in addition to trade
shows and Events, is there anything else you guys do on the digital side?

Tighe Greenhalgh: Not as much as we should be yet. Once we launch this new
website, then my next project is to dive in and build out our full marketing
plan and execute it, using as many tools out there as available that I can
to automate it. And again, try to keep our costs low and our presence big.

Karthik Chidambaram: So it's always something new to do every day.

Tighe Greenhalgh: Oh yeah.

Karthik Chidambaram: And you have a big family, you know, you have a lot of
cousins, a lot of uncles and you guys get along with each other, or how does
the family dynamics look like?

Tighe Greenhalgh: Yeah, no, I think, I mean we love each other. Like, we
have, my grandfather passed away almost two years ago. Now my grandmother is
still alive, but they really instilled into us a sense of love and support
of each other. There's, you know, there's always been some disputes or
disagreements. Right. But when all is said and done, you know, we love each
other and we realize we can do a lot more together than we could apart,
right? It's the- big family is much more of an advantage and an asset than
it is a liability.

Karthik Chidambaram: And when you have disputes, what advice -because there
are a lot of other family businesses out there watching this- what advice
would you give them on how do they handle conflicts?

Tighe Greenhalgh: Yeah. I have an aunt that probably said it best. And it's-
she just said, is this worth losing a relationship over. Right. And when
you're working together, it can get stressful. Like, I mean, my uncle Ted,
who's my partner now, early on, I remember very vividly when we were first
launching on P21 and getting that going, late nights, and we're tired and
exhausted, and things aren't working the way you want them to at first.

And, you know, it's 2:00 AM and we're in the parking lot yelling at each
other. But I think it's just keeping that bigger picture, right? Like
knowing that this is a group of people that love you, that have your best
interests in mind, as well as you do theirs and you can trust them and it's,
you know, our time working, like our time spent on our career. Relative to
our life is a huge chunk of our life, right?

And I always say you might as well do it with someone you love. Like, work
with people that you love. I think that you're not always going to love your
job, right? But if you love the people you're doing it with, and you're able
to be the best in the world at it, you're gonna really enjoy it.

Karthik Chidambaram: Yeah. Enjoy what you do. Yeah. The theme of this
podcast is Driven. How are you driven as a fifth generation entrepreneur?

Tighe Greenhalgh: Yeah, that's a great question. I'm driven generationally.
Does that make sense? So I'm a fifth generation. I- there's been a lot of
advantages that I've enjoyed because of the work that has gone before me.
Right. And back to my great-great grandfather, but even to my uncle Vince,
who was able to work with me and be a mentor to me and provide me an
opportunity. And my partner and uncle Ted, who I work with now, right? Like
the work that he had put in to get central components to where it was.

And I want to do that moving forward, right? The first two hires I made when
I bought Central Components were two of my cousins. And I've got three of
them working for it. At one point my sister had been a teacher and was
pregnant, and just didn't want to teach anymore, but needed something for
her transition and to figure out her new career.

She didn't want to start a career while she was pregnant. So we were able to
hire her and put her on sales. So it's really that. It's looking
generationally down the line. And I've benefited greatly from the
opportunities provided. And now I want to provide similar opportunities.

Karthik Chidambaram: And pay it forward.

Tighe Greenhalgh: Yeah.

Karthik Chidambaram: What are you most excited about for Central Components?
You know, what's ahead?

Tighe Greenhalgh: Yeah. There's a lot to be excited about. I think that
we've put in a lot of work over the last few years. Getting our technology
where we needed to be with the ERP and the CRM. And there's still a lot more
to come there I think.

Adding the whole new product line and making people aware that we're out
there and who we are and what we can do. It's been a lot of work now, the
new website launching. So I'm excited to start seeing the fruits of all
that. I'm really excited to launch this website. I'm excited at other
opportunities that may come up.

To expand into new product lines or new geographies, or really just to
strengthen our relationships with our current customers, right? Make their
lives easier, make them look good. I think when I first hired my two
cousins, I remember sitting with them and just kind of setting a vision.

And, you know, I think it's tough when a company goes to set a mission
statement, the likelihood that everyone in that company will feel as
passionate about that mission statement as the person that came up with it
is very slim. It's almost zero, right? Because how are they going to feel as
passionate as the person that came up with it? But I think what I told them
is we all have different goals. We all have different missions. And the
people we work with, both our suppliers and our customers, reps, anyone that
we're working with, they're all going to have their own set of goals.
They're all going to have their own mission.

And I think it's important to realize that the work that you do is necessary
to them being able to fulfill that mission and achieve those goals. Just
like the work that they do is necessary for you to fulfill your mission and
achieve your goals. And so recognizing that and building relationships with
that as the foundation, right?

I mean, I think that that really lays a foundation for love and working
relationships that everyone then is going to benefit from and enjoy.

Karthik Chidambaram: Because of how long you've been running this business,
you have a lot of domain expertise, and that's actually a big way you
differentiate from others. Some of the big box retailers. So, but there's a
lot changing in your industry as well, you know, there's a lot of new
technology coming in and there's a lot changing in plumbing as well. New
products coming in. So how do you keep yourself updated within the industry?

Tighe Greenhalgh: Yeah. Read, webinars. I mean, there's great email
newsletters that I'll get every day. There's great webinars. I mean this P21
user group, I'm on those webinars, you know, two, three times a week. MDM,
they've got great webinars. I'm on and really I'll just, I'll consume as
much of that as I can. I'm always looking for new opportunities. I think
with AI is like the new big thing.

There's a lot of shiny objects out there that look cool, but if you don't
know how you're going to implement those you can kind of get distracted and
get lost. So I spent about four months earlier this year, just researching
all the different AI tools out there, right? Got really deep into it. And
ultimately I came away with, I thought two of them would be really good for
us.

Karthik Chidambaram: Yeah, rightly said. I mean, there are definitely a lot
of shiny objects. You have to pick what's right for your business and then
disregard, right? Or subtract the rest from the core thing. So, Tighe,
what's the differentiator for a company like Central Components, right? So
why should I come to a Central Components rather than going to an Amazon,
and how do you compete with Amazon business?

Tighe Greenhalgh: Yeah. I mean, personal relationships is the biggest thing
around that. We try to keep our technology to a level where the convenience
factor is on par with what they're seeing. I think the fact that we carry a
lower overhead, we can be a little more competitive on pricing.

For them, but ultimately it's the personal relationships, right? You like to
work with people that you like and so I think as long as we can make our
customers look good by working with us, right? We can be cost effective and
we can be simple and easy. Ultimately, it's the biggest differentiator,
those personal relationships with our customers

Karthik Chidambaram: And in addition to those relationships, I also think
it's the know-how, right?

Let's say if I have questions on the product, then you would definitely know
better compared to an Amazon.

Tighe Greenhalgh: Yeah, absolutely. We would definitely know better than an
Amazon on it. But most of the time, it's our customers who know more than we
do about the products that they're buying from us. It's really getting it
for them.

They can trust us that we'll have it when they need it. Having it available
to them. Availability is the best ability, and then making it easy for them
to come to us and us just checking in on them, continuing to see what is,
what more can we do? Right. I think that those bigger boxes, they've got
lots of people talking to each other about what more they can do.

Whereas for us, it's very simple. We'll go right to you and see what else do
you need? What would make things easier for you? And it's tailored to you
specifically and not a nameless mass.

Karthik Chidambaram: More focused on you, the customer.

Tighe Greenhalgh: Yeah, right.

Karthik Chidambaram: So, Tighe, how can small businesses choose the right
technology? Because there's a lot of technologies out there. How can they
know what's right for their business?

Tighe Greenhalgh: Yeah, I think you have to think functionally, right. In
terms of what's going to make a better experience for your customer. You
know, I mentioned earlier, we haven't fully embraced the potential of mobile
yet. And so I think it's coming up with how do you fit mobile technology
within the current procedure or process of your customer? And then obviously
the tools out there for AI, I think AI is going to superpower the mobile,
and that will then be easier to adopt. What, I mean, one thing would be like
conceptual searches, right?

I've never been satisfied with our search bar capability within our website,
at any place that I've been, and even any other websites I go to. But now
the large language learning models, yeah, what they allow for is conceptual
searching. And so, the way that you and I would type in what we're looking
for on the website is the way that they're searching.

Whereas in the past, for every SKU that you carry, if you carry 40,000 SKUs,
you're going to need about 200 tags or terms that you're going to tie to it.
And so that's one thing that we're looking at. Again, I, you know, I'm
talking about the PO submission online, having to do, having to enter that
PO twice on your own system and on your vendor's website.

AI is making that easier for our customers now to just drag and drop that. I
think, recommendations. Right. A lot of what powered Amazon is the ability
to recommend products. AI now allows us to do that as well, to easily
analyze our sales activity across customers and across products and be able
to recommend items to customers that maybe they didn't even know that we
carry.

Karthik Chidambaram: Totally. And I think you also have to learn by doing,
and you are bound to make mistakes, right? You don't really have to wait for
the technology to be right there because AI is still not there. You know,
it's evolving and there's a lot changing. Yeah. And a lot's going to change
over the next few years, and you can't wait for the next few years for
technology to be really there.

So you start doing it, you know, run experiments, like you said, you know,
search is a problem everybody has. And you know, it also depends on the kind
of prompt you're going to give, and it's never going to be perfect, but you
just can't wait for it to be perfect. Just have to get there, deep dive, get
your feet wet, make mistakes, learn and improve.

Tighe Greenhalgh: That's so true. Most of the time, if it doesn't work, it's
because you're too early. Right. But now you have that experience and that
knowledge that came from that swing and a miss and when the, when everyone
else catches up, you'll be ready.

Karthik Chidambaram: Yeah. Tighe, you talked about relationships and
customer relationships being very critical or the key in building the
business.

How do you build great customer relationships? So how do you build great
relationships?

Tighe Greenhalgh: Yeah. I think it's frequent contact. It's really just
approaching them. I think one great thing about a family business is the
family isn't constrained to the business, right? That business extends into
customers and vendors and, and reps and service providers and all of that.

And that they're a part of that family, right? And so you, you approach
those relationships with your customers from that, that point of, of
familial love. Same with your vendors, right? We look out for our vendors.
We try to understand where they're coming from and we work closely with them
and they take good care of us in return and there's definitely a familial
love there, right?

And it's, so that family business extends beyond just the warehouse walls
or, or the, the company itself. But everyone that, that, that this company
is doing business with is part of that family.

Karthik Chidambaram: Yeah, I really love how you reference love, you know,
so the more you give, the more you get. And it's not just about the family.
It's about your employees, your customers, your vendors, and you just take
care of everyone and you know, always make it a win-win relationship. Yeah.

Tighe Greenhalgh: Yeah. Like I said, I think everyone's got their own, own
goals, their own mission. And I think it's really taking the time to
understand that with each person.

What is that for you? That sets that foundation of love, and it's a great
foundation on which to build a business.

Karthik Chidambaram: So, Tighe, you mentioned about Dale Carnegie's ‘How to
InWin Friends and Influence People’. I mean, I read the book as well, and I
enjoyed reading it. But sometimes I think that that book is overrated in a
way, right?

Because hey, you know, what he talks about, you know, Dale talks about is,
hey, if somebody says something or does something, just don't react, you
know, just be quiet, right?

What are your thoughts on that? Do you agree with that?

Tighe Greenhalgh: No, I think that's a great question. Again, as I've
alluded to many times in this conversation, love is a driving factor in a
lot of my actions, and even working in a family business, right, you're not
shying away from conflict.

That's not always the loving action. Sometimes it is. Sometimes it's, let's
cool off and move on and try and better understand each other. But
oftentimes if someone is not up to the part that they should be at, if
they're not, if they're not near reaching their potential, right, the loving
action is to say something and to encourage them or redirect them.

Karthik Chidambaram: Yeah, gotta give them feedback.

Tighe Greenhalgh: Exactly. Yeah.

Karthik Chidambaram: What do you do outside of work?

Tighe Greenhalgh: Right now I'm coaching football. And I love it. This is my
fourth season. It's my third season with this team. It's- my oldest son is
12 years old, in seventh grade. And so this group of boys that I've known,
you know, a lot of them since they were two or three years old.

And so, you know, at least for the last three years, and so that takes up a
lot of time. I get really, really into it. I get really competitive with it.
I love it. It's- they're a great group of boys and good families. It's a lot
of fun.

Karthik Chidambaram: That’s fun, yeah.

I would like to end with this question, Tighe. What book are you reading
right now?

Tighe Greenhalgh: Yeah. I'm actually reading three books right now. I'm
reading ‘A Man in Full’ by Tom Wolfe. I remember in college, my college
roommate was an English major and always had books laying around. And so
that one was laying around and I was always interested in it, but never
picked it up. Netflix recently came out with a mini series on it. So before
I watch it, I wanted to finally read the book.

So I'm reading that. I'm reading ‘How to Win Friends and Influence People’
by Dale Carnegie. This is probably the fourth or fifth time I've read it.
It's great to go back and it's just, you know, a good reminder always of
your behavior and daily interactions.

And then the third one I'm reading is called ‘Season of Life’ by Jeffrey
Marks. And it's about Joe Ehrmann who used to play for the Baltimore Colts,
was a defensive tackle. And then he became a football, high school football
coach in Baltimore. So the Season is upon me and so I've been reading that.
And basically about Joe's philosophy of coaching and, and building, building
boys into men, to serve others.

Karthik Chidambaram: All right. It's been fun chatting with you. Thank you
so much for your time. And thanks for joining the Driven podcast.

Tighe Greenhalgh: Yeah. Karthik, thank you very much. I appreciate you.