For 15 years, Allen Carlson directed Sun Hydraulics’ world operations from a cubicle, working next to rank-and-file employees in an open office adjoining a small lake near the Sarasota Bradenton International Airport. From his casual dress and his titleless business card, you wouldn’t have known that Carlson oversaw a power fluid company with operations in seven countries, including Germany and China.
Sun transitioned from a privately held concern that makes cartridges, manifolds and electronics to an international publicly traded company with more than $200 million in sales last year. The company has become a case study in M.B.A. programs for its flat corporate structure that avoids organization charts and titles and treats people the same whether they are in charge of marketing in Korea or grinding the coffee beans in the company’s cafeteria.
Before Carlson retired this spring, he told us about handling the demands of investors, operating companies in foreign countries and how to get the best out of employees.
“When you have foreign operations, let the local management run the company. We hire the right people, expose them to the corporate culture here in Sarasota and they take what they’ve learned back with them. Our foreign operations have the same layout, the same lighting and the same kind of environment. There are things that are adjustable based on the culture and some things that are not. We have a list of commandments of the things we won’t do; we have no titles, no organization charts and no sales forecasts.”
“You can’t predict the unpredictable. Our approach is to do the best we can. Money has not been a driving issue, and we don’t feel like our backs are against the wall. We don’t predict quarterly earnings or sales.”
“Many people don’t know that I grew up on a 3,000-acre dairy farm in northern Wisconsin. I cut hay in the summer. We heated our home with firewood and we ate what we killed, venison and beef. We never had a lot of money, but we never went without. It’s a pretty good way to go through life."
“Sometimes the best way to know what you want to do is to know what you don’t want to do. When it came to a career, I eliminated all the other possibilities and the only thing left was to be a complete dropout or an engineer. I had a four-year scholarship to study engineering and quit after two years. That was an interesting time with my parents. I wasn’t having fun in school and I had found a job as a technician for a hydraulics company. My boss said, ‘You need to go back to school.’ It took me 11 years to finish a four-year degree.”
“Keep it simple. If you look at our financials, we use lots of laymen terms; we do not use industry jargon. You should explain something as if you were talking to a fifth grader.”
“Don’t worry about investors; you’ll get the investors you deserve. That’s the best advice I received, from an early investor in the company. If you start responding to next quarter, if you start projecting sales will go up 20 percent when you don’t know, you’ll get speculators, not investors. We are building a long-term investor base.”
“Successful people are people who never give up. Their perseverance is very strong. In the long run don’t think of life as a sprint, think of it as a marathon; just because you won one leg doesn’t mean you’ve won.”
“Always ask, ‘What does success look like?’ What’s your objective? And how do you know when you’ve reached it? So many companies don’t set goals and then they get scope creep. State the objective early on, not halfway through a project.”
“You have to let people fail. Our product development team introduced a lower cost value line a few years ago. And it’s been disappointing. But you have to give people a leash to succeed or fail. Sometimes they succeed when you thought they had no chance at all. Our team created an innovative smartphone application that can control hard-to-reach hydraulic valves.”
“The idea that I am retiring from life is not true. I’m retiring as CEO of a company. I’m transitioning to something else. I’m going to join some other boards. I’d like to be on the board of an Asian company and one in Europe.”
“Ask if you need something. That’s my advice to my successor [Wolfgang H. Dangel]. I’m not going to offer unsolicited advice. The last thing the new guy wants is to have the old CEO tell him what he would do.”
“Don’t worry about investors. That’s the best advice I received.”