An entrepreneur with a visionPosted on Written by Ben Sherwood
In my 50-plus years in the boating industry I don’t think I have known anyone who has more of an entrepreneurial, risk-taking spirit than the legendary Eddie Smith, owner and chairman of Grady-White Boats. I have known Eddie for many years, and it was a real pleasure to have a chance to have a lengthy conversation with him about his long and successful career in the boating industry.
Entrepreneurs willing to take business risks founded and built the recreational boating industry, going back as far as when Ole Evinrude built his first outboard in 1909. During the last 100-plus years there have been a lot of successful entrepreneurs in this industry — dealers, boatbuilders and distributors. I have known many people who gave up good jobs to take a risk and start a boat dealership from scratch because they had a passion for boating and to have their own business. And the same goes for many boatbuilders.
Learning from his dad
Eddie says he inherited his entrepreneurial and independent spirit from his father, Eddie Smith Sr. Known to friends as “George,” his dad was very much the definition of an entrepreneur. “George” was raised in an orphanage in the Lexington, N.C., area with his siblings, because both of their parents had died when they were very young.
At 18, youngsters in the orphanage were required to leave. So when he turned 18, Eddie Sr. immediately got his first job working at a movie theater in Lexington. Then he drove a taxi, which is what he was doing when Eddie was born. After that, “George” started working for a mail order women’s hosiery company. Later, in 1952, he took a big chance and founded his own mail order company.
“Every day of dad’s life was a great day for him,” recalls Eddie. “And he was great fun to be around. I learned all my business principles from him — how to treat customers, how to treat employees, the importance of product quality and much more. We built Grady-White on all of these principles.
“I started working for my dad summers when I was 8 or 9 years old and worked there every summer through college,” Eddie says. “He worked me hard. For example, he made me unload tractor-trailers full of hundreds of cases of hosiery when it could be as hot as 120 degrees sometimes in those trailers. He expected a lot more from me than from the other employees. But even back then I was learning about business from him.
“Dad understood the value, the absolute necessity, of customer service and satisfaction. He was just as fanatical about product quality. Growing up and working for him, I was learning these things from him when I didn’t know I was learning them,” Eddie recalls. “As I look back now, I think about the fact that I was a fresh college graduate from the University of North Carolina and dad had only gone through the 11th grade at the orphanage, which was all he had the opportunity to do.”
Eddie laughs and says, “So as a young college grad, I think I felt that I was a lot smarter than he was. I soon learned differently.”
In 1968, Eddie Smith was a 26-year-old with a wife and a young son, doing what he had long assumed was his life’s destiny: working in the family business in Lexington. The firm, National Wholesale, founded and built by his father, was a thriving mail order enterprise selling pantyhose and stockings.
“I went all through college knowing that after graduation I would just always be selling ladies’ pantyhose mail-order with dad’s company,” Eddie says, but after working for his father full time for three years after graduating from college, unexpected events abruptly changed his career direction.
Seeing an opportunity
When I asked Eddie how he got from the ladies’ mail-order hosiery business to the boat business, he said, “If I hadn’t learned to fly while in college I probably wouldn’t be in the boat business. A friend of ours in Lexington, who was in the car business, plus a local lawyer, shared ownership of a Bonanza aircraft with my family. My friend couldn’t fly, so he called me one day and asked if I could fly him to Greenville, N.C. He said he needed to go there for an emergency meeting with a partner in another business he had invested in. I had never been to Greenville before. It is about 200 miles east of Lexington. I agreed to fly him there, and when we landed, a man named Don White, co-founder of Grady-White, met us at the airport. We went over to the old Grady-White boat factory, which was originally an old tobacco warehouse. It was so horribly bad that when it rained, the roof leaked and water poured down on the folks working in the factory. I heard Don White say during his meeting with my friend that the company was broke and they would have to close it down or sell it. My wheels started turning right then and I started thinking about buying the almost bankrupt boat company.
“During the three years that I worked for dad after college I was restless and not a little bored in my job,” Eddie continues. “So as I was flying my friend back to Lexington after his meeting at Grady-White, all I could think about was buying this struggling boat company. I was trying to figure out how to tell dad that after three years I wanted to leave his company that I was supposed to eventually take over and instead buy a bankrupt boat company … and oh, by the way, would he loan me the money to do it. When I did tell him about my plan, he totally surprised me by being very supportive, even after his financial people studied the Grady-White books and said it was too far gone to save. Dad said, ‘Well, son, you will learn a lot. And if we lose some money, we are doing well here and we can just take the tax loss and then you can come back here to work.’ That was 45 years ago, and I am still here.”
So in 1968, at the age of 26 and with his father’s support, Eddie Smith left a comfortable and secure job and — taking a big risk — became an entrepreneur and bought the ailing Grady-White Boat Co. Now entrepreneur Eddie Smith was captain of his own corporate ship, master of his fate. Right away he realized the importance of surrounding himself with very competent people.
“I am not the smartest guy in the world,” he says. “I was not the best student. I have to have people around me who are extremely good in their areas and who believe in the same principles that I do.”
And he has done just that amazingly well.
Hiring the right people
Shortly after buying Grady-White, Eddie learned of an engineer and manufacturing expert in Greenville named Wiley Corbett. A 1950 graduate of North Carolina State University, Wiley had already built a successful resume in manufacturing. He also was restless and sensed an opportunity at the troubled boatbuilder. Eddie called Wiley and, after they talked, offered him a job. It was a good decision.
So Wiley came to work for Grady-White on a stiflingly hot day in July 1968. He spent the first morning walking around the plant, observing the workers and the work flow closely. He was not impressed. In the afternoon he gathered the entire work force and announced that they would have to improve their professionalism. The “or else” was unstated, but understood.
“The company had been selling boats based on what other people were charging, not on what it cost to build them. They had no concept,” Wiley told Eddie after his first day at Grady-White.
Wiley quickly hired a firm to set up a standard cost system. It was an enormous investment for the nearly bankrupt company, but was one of the best investments it could have made. The system included time and motion standards to measure the efficiency of individuals and the boatbuilding processes. In 1968, in an era when computers and company record-keeping were virtually unheard of, Wiley hired a computer expert to design a material requirements plan to measure and keep track of materials. Things started improving thereafter.
Another of Eddie Smith’s wise personnel decisions was hiring Kris Carroll as a production control clerk in 1975. “I have been proud ever since to have her on the Grady-White team,” Eddie says. “Kris Carroll, who is the best natural leader I have known, has now been with us over 35 years. She worked herself up from production control clerk to the position of president.”
As Eddie expected, Kris excelled at each challenge she was handed. In 1993, when Wiley retired, Eddie did not hesitate to promote her to company president.
“Kris is the definition of a great leader,” Eddie says. “She is the best leader of people I’ve ever been around, and I’ve been among a lot of the Fortune 500.”
Eddie laughs and says, “My role now is just trying to stay out of their way.”
Speaking of her boss, Kris says, “I believe there is no doubt that Eddie Smith has made one of the most significant impacts on our boating industry’s history. His passionate work impacted many facets, from manufacturing great boats … to … dealer/customer relationships, leadership in most of our industry associations, regulatory and legislative issues and fishery conservation.”
“The quality of the original Grady-White boats when I bought the company was great. That is primarily why I kept the name Grady-White,” Eddie says. “They had started out building wooden lapstrake boats. They were very seaworthy, high-quality boats with mahogany decks and transoms and white oak steamed and bent ribs on 4-inch centers with bronze bolts and nuts. They had a great reputation for quality and seaworthiness, but they just stayed with wood too long, which is the main reason they went broke. When they finally transitioned to fiberglass it was just too late.
“That first year I owned the company was tough,” Eddie says. “We did about a third of the business we thought we’d do and lost about three times as much money as we projected. The second year, we lost about half as much as we projected, and the third year we broke even for the first time. And we’ve been doing very well ever since.” During those first two years I think it had to have been Eddie’s entrepreneurial spirit and determination that kept him going with the struggling Grady-White. It would have been easier to just bail out and go back to work for his dad, but Eddie obviously would not and did not give up. In those early years, though, it was tough on everybody, and nobody drove themselves harder than Eddie and Wiley. For Eddie, in particular, it was a classic 24/7 push. Eddie barely had time for sleep, much less to spend with his wife and young son.
“Wiley and I really operated for many years as a team,” Eddie says. “ I did the sales and marketing and left the manufacturing to him. From the training I had with my father, we were perfectionists and we didn’t send the customer anything unless we thought it was perfect.”
By 1971, Eddie felt it was time for a new plant, so land was purchased in a new industrial area on the outskirts of Greenville and a 120,000-square-foot manufacturing facility was built. The company moved into the new plant in December of 1972.
A new design concept
In late January 1974, Eddie and Wiley went to the 41st annual Chicago Boat and Sports Show at McCormick Place. As they cruised up and down the aisles, sizing up the competition and looking for innovation, they spied something that piqued their curiosity.
On display was a triple-sponson cabin boat with something they had not seen before. Instead of narrow side decks, the boat had a molded-in walkaround circling the cabin. On the flight home, Wiley and Eddie compared notes on all they had seen.
“Wiley finally turned to me and said, ‘That walkaround is what we need to make,’ ” Eddie says.
Eddie says they began designing a 20-foot walkaround after returning to Greenville.
“We redesigned one of our 19-foot hulls to create an all-new 20-foot walkaround on a vee hull: the 204-C. We introduced it in the 1975 model year and it became our bread and butter for years and years,” Eddie says. “We thought it would sell, and man, did it ever. It was a top-selling boat. We saw a walkaround on a multihull, but we were seen as the pioneers, the pushers of the walkaround concept. And the reason was simple. We put it on a vee hull instead of a multihull.
“We showed our first walkaround Grady-White boat at the IMTEC trade show in Chicago,” Eddie adds. “There were like 13 boat companies with walkaround boats the following year at IMTEC. I don’t claim to have invented anything, but in recreational boats we have popularized some concepts like walkaround and walkthrough-style boats and boats with an outboard bracket.
“We continue to come out with exciting and successful new products. We don’t necessarily look to pioneer, but we look for concepts that we think will work well for our customers. We just introduced [last year] a new 37-footer at the Miami show that is doing well.”
Taking customer service seriously
Certainly, good dealer and consumer relations and satisfaction have been top priorities for Eddie Smith and Grady-White. Eddie has spent many years working boat shows and visiting his dealers and even consumers to keep in touch with customers. Proofs of this emphasis on customer satisfaction are the many J.D. Power awards Grady-White received each year from 2001 through 2009.
Regarding Eddie’s focus on customer satisfaction, in late 1998 Grady-White began something that remains unprecedented in the industry. To take the concept of customer feedback to a new level, Grady-White established the Owners’ Forum system.
Kris Carroll explains, “Several times each year our executives travel to our Owners’ Forums, held in many places around the country. Our main agenda is simply to listen to our customers. We ask our customers to tell us how they are really using their boats and we ask how we should evolve our boats to meet their future needs, but the exercise always energizes us and increases our resolve to do great things for our customers.”
Eddie has received numerous awards over the years. He tells me, “I have been blessed with recognition and awards that I never felt like I deserved, but every time I received one I gave my dad credit for the business principles and values he taught me. I was further blessed that my dad lived long enough to be in the audience several times to hear me credit him when I was getting some recognition or awards. And every time I received some recognition or award I always shared the credit with all the incredible people at GW.”
In a 2001 ceremony in Washington, D.C., Eddie was recognized on a national level when the American Sportfishing Association named him its first Lifetime Achievement Award recipient, citing outstanding long-term service to conservation and the fishing and boating industries.
He was also inducted into the National Marine Manufacturers Association Hall of Fame in a ceremony at the Miami International Boat Show on Feb. 12, 2003. In 2008 the North Carolina Citizens for Business and Industry named Eddie to the North Carolina Business Hall of Fame for his continuing success and his longstanding support of the organization.
Eddie also has been very involved in the industry. He says, “My dad also taught me to give back when I could. So I did get involved. But I used to get angry when I would fly to Chicago for an NMMA board meeting and I would look around the table and realize that there were several direct competitors of mine who were doing quite well, but who were never involved in the industry other than in their own business.”
Eddie adds, “I was one of about five so-called rebels who pushed [the National Association of Engine and Boat Manufacturers] and [the Boating Industry Association] to merge into NMMA.” That merger was a very good move for the industry.
“As far as defining moments in the company in its direction,” Eddie says, “I think clearly one of them was when we decided to specialize in coastal fishing boats. Up to that point we were making ski boats and bowriders and weekender cabin boats and fishing boats, and we were neither fish nor fowl. We decided to cast our lot with the offshore fisherman and start building just coastal fishing boats, self-bailing and unsinkable, and that really was a defining moment. We never veered from that coastal, high-quality, high-seakeeping ability that is really a very small market, and we carved out a niche and stayed with it. We carved out an initial niche at the top of that market, sort of the Mercedes, if you will, of that particular limited market. There are only a small number of people who are going to go out of sight of land in small outboard boat.”
The 1989 catalog celebrated the company’s 30th year in business. The cover that year featured Eddie Smith aboard a 1960 model year Pamlico waving at his son Chris aboard a 1989 model year Marlin 28. The heritage of solidly built craftsmanship is clear.
Grady-White is recognized as the walkaround pioneer the world over, yet the advancement and completeness of its center console line is certainly of note. It has been hailed for the breakthrough express models, but of all the designs — dual console, walkaround, center console and express — dual consoles have been around the longest.
Asked about his many years in the boating industry, Eddie, now 71, says, “Ben, I think about how blessed I have been all of my adult working life that I could get up every morning and go to a job that I just love. I love making boats that make people happy and bring families together. It is a tremendous industry, but it has changed a lot to where it is so much more corporate. Back when you and I were working together in the industry, I think every boat company in the country was owned by a guy like me.”
Of his current involvement with Grady-White, Eddie says, “I go into the office when I am not travelling, hunting or fishing and attend monthly financial meetings that my son is also involved in.”
Those trips to the office haven’t always been easy. For many years, Eddie has had to deal with significant health issues. However, those issues don’t keep him from being highly tuned in to his business and the industry. His health issues have affected his ability to continue to fully engage in doing all the things he loves about life and work, and he wisely turned over day-to-day operations to Carroll and Grady’s experienced management team.
“I am so proud of the Grady-White management team,” he says. “Despite all of the recognition and awards that I have received that I never felt I deserved, I accepted them on behalf of all the folks at Grady-White. Over the years I have surrounded myself with people that are terrific.”
“It’s not just about creating great products,” Carroll says. “Eddie Smith just as much also wants a well-run company. We are focused on the details of satisfying our customers and we’re just as focused on the details of running our company. It’s a passion. It’s the art of doing business. It’s the art of satisfying our customers.”
Through the years
1959 Glenn Grady and Don White found Grady-White Boats in Greenville, N.C., turning out a line of high-quality wooden lapstrake boats.
1968 Still building in wood in the new world of fiberglass, Grady-White Boats is broke and about to shut down. Eddie Smith buys the company and quickly brings aboard Wiley Corbett, a fellow North Carolinian with an engineering background.
1972 With Corbett overseeing manufacturing and Smith sales, the now-prospering Grady-White builds a 120,000-square-foot plant in Greenville.
1974 Smith and Corbett are intrigued by the sight of a molded-in walkaround on a multihull cabin boat at the Chicago Boat Show. They immediately set about adapting the concept to a vee hull.
1975 Grady-White introduces a 20-foot walkaround, the 204-C, and it’s an instant success. “It became our bread and butter for years and years,” says Smith. It is also the year Kris Carroll is hired as a production control clerk.
1977 The company introduces the Kingfish 254, ushering in the era of small fishing boats capable of venturing far offshore.
1979 Smith is “one of about five so-called rebels” (his words) who orchestrate the merger of the National Association of Engine and Boat Manufacturers and the Boating Industry Association into what is now the National Marine Manufacturers Association.
1993 Corbett retires and Carroll succeeds him as president.
2001 The American Sportfishing Association honors Smith with its first Lifetime Achievement Award.
2003 Smith is inducted into the NMMA Hall of Fame.
2004 Grady-White opens a $6 million, 50,000-square-foot plant addition.
Ben Sherwood, a 50-year veteran of the marine industry, was head of sales and marketing at Evinrude & Johnson for the now-defunct Outboard Marine Corp. After retiring from OMC he was a marine trade magazine columnist for 18 years and authored the book “How to Succeed in Marine Retailing.” He can be reached at email@example.com.
This article originally appeared in the February 2014 issue.