Four decades ago, Peter and Olaf Harken ran a 10-year-old Wisconsin company that sold low-friction ball-bearing blocks for sailboats. Galati Yacht Sales was a Florida boat dealership, also nearly 10 years old, run by Mike and Anna Maria Galati, with their five children, ages 10 to 19, working after school.
Today, Galati Yacht Sales is one of the industry’s biggest dealerships, with 12 offices in three countries. The Galatis’ oldest son, Joe, is president. Harken has 400 employees, manufacturing operations in the United States and Italy, and distribution in 50 countries. The CEO is Bill Goggins, who was in elementary school when the Harkens were building the business.
Leadership styles and management practices have changed during the past 40 years, and both men can offer valuable leadership perspectives for any size company today.
From Start-up to Global
When Bill started with Harken 20 years ago, the original leadership team of Peter, Olaf and Art Mitchel (who kept the brothers on track) had expanded to a leadership team of a half-dozen. While the number is the same today, the six are more global and diverse in their roles.
“Peter and Olaf would hire the best utility infielders,” Bill says. “They’d been given a lot of rope and felt empowered, engaged and able to use their judgment. This was our recipe for success for a long time. Now we’ve gone from an entrepreneur’s classic start-up to being a pretty well-structured, midsize international business with accountability, clear communications and an executive committee. I hope we never lose the recipe to empower people, but based on our size today, we hire more people with specialized skills — the business equivalent of baseball starting pitchers, middle-inning relievers and closers.”
The transition has been similar at Galati Yacht Sales. “We wore multiple hats and physically did all the work,” Joe says. “At the same time, my dad gave us a lot of responsibility.”
Joe says he and his siblings were prepared to manage different aspects of the business, and as it grew, they specialized more, either with specific boat brands, service, human resources, or marina and customer relations. The only non-sibling to join the family board of directors, Darren Plymale, was recruited to develop centralized consumer financing and is now the company CFO and COO. In a 2009 profile I wrote about the company for Boats.com, I included this description:
What were once board meetings around the dining room table with their father doing most of the talking … moved to an office and became progressively more structured. … According to Joe, decision-making is by consensus, and meetings can be long. You also have to be “thick-skinned and not expect much patting on the back. We focus on what to do next to improve, always with a sense of urgency.”
One result of the change in management structure was a process change in overall management, Joe and Bill say about both companies. “We had much shorter game plans then,” Joe says of Galati Yacht Sales. “We didn’t spend one second on a five-year business plan. Now we have an incredible amount of business information in minutes, and we’re always watching the trends. We see accurate financial statements by the 10th of each month. In the past, it was at the end of the year that we figured it out.”
Bill says Harken is also now process- oriented, but in a simplified way. “We have a one-page plan, broken into quarterly areas of focus, and we meet every week for 90 minutes. If anything is off track, we work toward a seven-day resolution.”
That includes working with a leadership team of three Italians and three Americans on the global-level executive committee, and another five-person leadership team at the Harken USA level. “We’re a ‘we’ company,” Bill says. “If we fail to do something, we support each other toward resolution.”
The New Look of Work
One thing that hasn’t changed at Harken is the effort “to hire people better than you,” Bill says. “But today, recruiting for specialist roles requires hiring people with particular skills to fit in a larger mosaic of talent, engaging people to work together in a structured process without a lot of confusion or overlap.
“Our next generation wants to know they have a sense of purpose,” he adds. “This workforce is most motivated and self- accountable when they know exactly how their day-to-day activity contributes to the company achieving its vision, and rewards them individually.”
Joe says the younger workers he sees at Galati Yacht Sales also have a solid work ethic. He describes Galati’s apprenticeship and mentoring programs as “incredibly successful,” adding that younger employees “require more understanding and explanation of ‘what am I going to get?’ You have to show them the path and what they can achieve.” Eleven of 12 third-generation Galatis work for the company, and the 12th is about to graduate from college.
Joe says the Galatis often ask themselves if they are operating like Sears or Amazon. “The Internet has changed the knowledge base of customers dramatically,” he says. “As a retailer, we constantly ask what we can bring to the table that adds value.”
Compared to 40 years ago, Galati Yacht Sales does much more than sell boats. It provides staff training, customer support, captain support, charters, rendezvous events, float-plan tracking and whatever else is needed. The goal, Joe says, “is to provide the end user a tremendous amount of benefit from purchasing from us.”
Even on the service side, which Joe calls “customer support,” team members are compensated by the hour, not the job, and are encouraged to take the time to stop and explain their work to the customer. “Sales sells the first boat,” he says. “Service sells the rest.”
Humility, Right and Wrong
Over the years, both Joe and Bill have internalized the lessons they’ve learned. Bill still quotes advice he got from Peter Harkin: “Remain humble, even if you think you know the answer. Ask questions and harness other people’s strengths.” He says he believes in protecting the well-being of workers, offering top products at a fair price, beating consumer expectations for service and maintaining a sense of morality.
Joe adds leadership flexibility and humility to that list. When downturns come in the economy, he says, “your leadership role and responsibilities to the company will need to change.”
The Galati Yacht Sales tagline is “Always Exceed Customer Expectations.” “We never make business decisions on cost,” Joe says. “We make it on right and wrong. We learned the hard way to align ourselves with products and manufacturers who have the same philosophy.”
This article originally appeared in the June 2019 issue.