In 1936, sixteen-year-old Bill Thomas was eking out a living by cleaning ditch and hauling beet pulp. Fifty years later, in 1986, he retired from his position as President of the national Big O Tire Company and as President and CEO of William B. Thomas Enterprises, the multi-million-dollar company he had founded.
How did a young man from Burley, Idaho, with a tenth grade education and a bad back, go from hauling beet pulp to owner and operator of a multi-million dollar company? What was his business philosophy and values that helped him become successful?
Bill did not start by sitting down and writing a business philosophy and plan. Not until much later, when he reflected on his life and his business success, was he able to identify some of the values and practices that had guided him.
One of those values was helping other people–helping other people help themselves. Bill did not adopt this value because he thought it would bring him business success. Rather, it was something he had always wanted to do–even when he was a teen-ager getting into trouble or dishwasher in a restaurant. “I learned a long time ago that I was the happiest when I was helping someone else,” he said.*
He also knew how much a little help and encouragement could mean to someone who was struggling. He remembered a man he knew only as Sam, who, when Bill was young, away from home and in trouble, had given Bill money to buy a bus ticket home. Years later Bill tried unsuccessfully to find Sam. He always regretted that he could not find him, as he wanted to help him in return.
But if Bill could not find Sam, he found others to help. After the failure of his first franchisee, he stopped looking for people with money and started looking for people with no money but with ambition and ability. He developed the Incentive Management Purchase Program to help them get started–even though “everybody said it would never work.” But, as Bill reflected much later, “You can’t be selfish. You have to think of the other guy.”
Under the Incentive Management program, the person wanting to operate and eventually own a new tire store was given an Incentive Management Purchase Contract or IMPC. The IMPC provided that the operator would receive a living wage plus 40% of the net profits of the store. The operator was to accumulate the profits as a down payment. When the down payment reached 25% of the pre-set value of the store, a buyout contract went into effect. The operator would buy the store equipment and inventory at a set price over a period of five years. The franchise was on a separate note and the payment term was for the life of the franchise, which was ten years.
The first person to enter this program was Bob Jones who began operating a store in Martinez, California. Bob reached his buy-out goal in just two years and soon became a successful tire store owner. Later he and his brother, Ron Jones, started over twenty new tire stores using Bill’s Incentive Management Purchase Program.
Ron Asher was another person who became successful through Bill’s program.
Ron was managing a liquor store near Bill’s OK Rubber Welders store in Oakland. At that time Bill smoked a brand of cigars which Ron stocked. “I’d go in and buy a cigar and chat with him,” Bill said. “Of course, I could have bought a whole box of cigars, but I would buy one at a time so I would have a reason to visit with him.” Bill liked the way Ron was managing the store and thought he had a lot of potential.
Bill had earlier become acquainted with Gordon Walker, whom he admired because of his skill at merchandising and display. Bill gave Gordon an IMPC contract, but he soon found that Gordon did not have the management skills that a store operator needed. So Bill gave Gordon the opportunity to get to know Ron Asher, and then suggested they go into partnership. The partnership was successful, and Ron later used Bill’s IMPC program to help other young people become established.
“I don’t think Bill understands his impact,” Ron later said. “If it weren’t for him I would not be successful. He came into my life at the right time. I had a couple of paths I could have followed and not all of them were good. He made me what I am today.”
Bill established William B. Thomas Enterprises in order to have a central supply organization.. As an incentive for the franchisees to purchase from this supply organization, he made 25% of the stock available to them. “It was set up at a fair price and financed at a fair rate of interest,” Bill wrote. At the same time he established a volume purchase bonus based on the increase of purchases over the prior year. “The bonus more than paid for their stock,” Bill wrote. This program was not only beneficial to everyone, it brought us all together. We were all working toward the same end. It improved business for everyone.”
Bill was always willing to learn from others. “Many of the people in my organization didn’t realize that they were filling in where I was weak,” Bill later wrote. “Pete Marrero is a good example. Pete is an outstanding salesman–a natural. I also used Pete as a sounding board. He doesn’t agree with all of my ideas and he never hesitates to let me know.”
Because Bill believed that the people who were actually doing the work often had the best ideas, he set up a meeting and committee system. Store owners were required to attend an all-day meeting every month. “It was an ideal situation for exchanging ideas,” Bill later wrote
Bill took charge of the first meeting, setting up the ground rules and providing for the election of a chairman and secretary. But then, because he wanted the dealers to be in charge, he moved to the back of the room. Bill attended all the subsequent meetings, but “it was very seldom that I interrupted or participated,” he later wrote. The only time he spoke up was when he felt that someone was not being treated with respect. He wanted all ideas to be expressed, even the most outlandish..
But Bill also did not want the meetings to degenerate into gripe sessions. To avoid that he set up a committee system. Problems were not to be discussed at the meetings but instead were handled by small committees that were concerned with specific areas, such as sales, service, advertising, accounting. Anyone with a problem submitted it to the proper committee in writing. This system worked so well that it was later adopted by other Big O Tire groups and is still a part of the operation of Big O Tires today.
“Over the years, I thought a lot about how bad business was organized in the United States,” Bill wrote. “Management was at one level and labor at another. Unions were usually involved and they just aggravated the situation.” Bill enjoyed his work, and he wanted his employees to enjoy their work too. He disliked what he called the TGIF mentality. He did not want any of his workers thinking “thank goodness it’s Friday”. For someone to be working at a job that they disliked so much “is a terrible way to live,” he said.
Then Bill heard about a plan that Louis Kelso, a San Francisco attorney, was trying to promote with the US Congress. It was called the Employee Stock Option Plan. This plan gave employees the opportunity to accumulate stock in the company they worked for. Each employee could accumulate 15% above their wages. They could not cash in their stock until they retired from the company. Bill met with Louis Kelso, who explained to Bill how the plan worked and helped him set it up for Bill’s company. “While all this was going on, I called Louis and asked him to send me a bill,” he wrote. “I knew his fees were high and I didn’t want to get a bill I couldn’t pay.” Louis told him to be patient. “He never charged us anything,” Bill said.
The stock option plan gave employees an incentive to do their work well so that the company would be successful. It changed their thinking about their job from “What will it do for me?” to “What will it do for everybody employed by the company?” Bill later said.
The stock option plan, along with Bill’s genuine respect for all his employees, helped to contribute to a good working atmosphere that brought people together and aided the company’s success. “We thought of ourselves as one big family,” said Pete Marrero.
When Bill first started his first OK Rubber Welders store, retreaders and used-tire dealers were not highly respected. “We were looked down upon by other tire operators,” said Pete Marrero. It was easy for unethical dealers to sell customers an inferior tire for a good price because the customer would not know the difference. But from the day that he opened his first OK store, Bill operated his business with integrity. He later insisted that everyone he worked with do the same. “Bill would not even take a discount on a set of tires for his own use,” said Pete Marrero. “He wouldn’t buy a rake or shovel for himself and write it off as a business expense. He gave you a good reason for operating that way, and the best reason was the success of the dealers operating under him.”
Bill also believed in keeping a clean, neat workplace. When he first went into business, he never went home at night until the store was clean and presentable for the next day. He insisted that his store operators do the same. “They accused me of being a granny about neatness,” Bill later said. “But it’s important. A clean workplace attracts customers.”
Like many others who grew up in the Great Depression, Bill was suspicious of credit. He liked to pay his bills on invoice. His excellent credit rating made it possible for him to purchase the tires he needed even when supplies were tight and other dealers could not get them. When he wanted to build a 116,000 square-foot facility in Vacaville, California, he worried because he had to finance it through “Certificates of Participation” that were similar to a bond issue. The certificates were sold on the East coast to people who had never heard of William B. Thomas Enterprises, and Bill was concerned that they would not sell. But “they sold in just a few minutes,” wrote Bill. “The reason was that we had a perfect financial record.”
Bill required similar financial accountability from his store dealers. They were to pay for their supplies in fifteen days. “He could be strict,” said Ron Asher. “ If you were late in paying, you’d get a phone call from Bill that would make you cry.” But it helped to make his dealers successful. “There is a tendency in the retail business, especially among young operators, to think that everything that goes into the cash register belongs to them,” said Ron. “But it doesn’t. That money that goes into the register has to pay rent, pay all the other expenses. The only money that is yours is the money left over.”
Bill tried to instill that idea into all his associates. When he heard that a young dealer had purchased a yacht, he wrote a paper that he sent to all dealers. Entitled “Too Much, Too Soon” it discussed business and personal money management. After receiving this paper, the young dealer sold his yacht. “He carried that paper around with him for a long time,” said Bill.
Bill never looked on the difficulties that came his way as problems. To him they were opportunities to change. His bad back forced him to stop manually retreading tires and move into management. When radial tires could not be profitably retreaded, he quit the passenger retreading business and focused on retail and customer service operations. Whenever he realized that his earlier plans would not work out, he made the needed changes and never looked back. Later he expressed gratitude for the problems that forced him to change.
“Honesty is the best policy,” wrote Benjamin Franklin. But honesty for Bill Thomas was more than a policy. It and the other values that he practiced were part of what he was. Because they were a part of him, and not just a tactic that he thought would lead to success, he never deviated from them, even when it would appear that following them was not the smart thing to do. Paradoxically, the fact that he cared more about helping other people than his own personal success led to his personal success. Today he can look back on the businesses he started, the awards and prestige he received as a leader in the tire industry, and his financial success. But more important for him is the love and esteem that those he worked with have for him. Personally and through his example and his passing his values and practices to others, he has helped hundreds of people become successful. He has fulfilled what for him was his most important value–to help other people help themselves. The love and esteem of his business associates and colleagues is his greatest reward.
*Quotes come from William B. Thomas’s autobiography, My First 90 Years, privately published in 2010, and from interviews with Bill Thomas, Ron Asher, and Pete Marrero.