Over the course of his five decades of leadership, Tom established certain practices within RPM that continue to drive our growth and progress. These include:
Attract and retain entrepreneurs – RPM founder Frank C. Sullivan’s business philosophy was “Hire the best people you can find. Create an atmosphere to keep them. Then, let them do their jobs.” Tom applied this thinking to an acquisition program that began in 1966 as the coatings industry entered a period of consolidation that continues to this day. He sought well-run, profitable businesses in related industries and then urged the business owners to continue operating them as part of RPM. Tom understood the value of patience when attempting to interest an entrepreneurial business owner in selling “his baby” to RPM, as many of these transactions occurred years after the owner was first approached. He also brought the concept of a fair price, not the lowest price, to the process. Tom always offered the top dollar he felt RPM could afford and would walk away from a deal if that amount was not acceptable to the owners. His approach of maintaining an acquired company’s employee base, honoring its heritage – often built over multiple generations – and supporting its continued growth addressed the key concerns of most selling owners. As a result, RPM is now widely recognized as the best home for entrepreneurial companies in its primary industries.
A sense of urgency – Related to the entrepreneurial operating philosophy, the need to quickly seize opportunities and then move on is a hallmark of the Tom Sullivan era. Nowhere is this more evident than the RPM acquisition program, where deals are often completed in a few months versus other businesses that take significantly longer.
Adherence to the highest standards in corporate governance and business ethics – Tom set a high bar in both business ethics and corporate governance well before government- and stock exchange-mandated changes in these areas were enacted. For example, by the late 1970s, RPM’s board of directors was made up of a majority of outside directors, decades before this practice was required by the New York Stock Exchange.
Commitment to a growing cash dividend – It was important to Tom that RPM’s shareholders be consistently rewarded for their investment in the company. RPM has increased its cash dividend for 47 consecutive years, placing it in an elite category of less than one half of one percent of all publicly traded companies, a vital element of RPM’s ability to deliver superior returns.
A disciplined planning process – Under Tom’s direction, RPM instituted a disciplined annual planning process starting in 1977. While it has evolved over time, many of the original practices remain, including arriving at mutually agreeable targets between operating units and the corporate office by establishing certain revenue and EBIT targets.
Connections creating value – Tom long believed that the company could realize potential synergies inherent within a large group of businesses serving similar markets and utilizing similar manufacturing assets with the goal of creating an “entrepreneurs club,” where technology and best practices could be shared to everyone’s benefit. He established a purchasing action group in 1996 to combine RPM’s buying power in the purchasing of key raw materials and services. Based on its success, other groups followed in the areas of finance, IT, human resources and marketing. Tom’s actions laid the groundwork for today’s highly successful MAP to Growth program.
Underlying these components of RPM’s operating philosophy is an environment of trust, respect and open communication established by Tom, which has been instrumental in our long-term success.