Todd Watson is one of the moving industry’s young, high performers. But what makes his business successful and what does he think are the biggest challenges for the industry? Steve Jordan interviewed him to find out.
He’s 42 and the third generation in a 60-year-old, family-owned business that’s really going places. He’s Todd Watson, CEO of Armstrong Relocation in the USA - and he might be looking for you.
The current business was founded by Todd’s grandfather, Jim Watson and his great uncle Clyde Springer in the 1950s. They bought an existing enterprise and kept the name because it began with ‘A’ and was at the front of the phone book: a big consideration in pre-Internet promotion. Todd’s father, Tom Watson, joined the business in 1970 and his cousin, Karen Fields [Clyde’s daughter], joined the business full time in 2001. Both are still co-chairmen of the company.
In the 1970s Tom was one of the first in the U.S. to operate a ‘pack and load’ model, against the trend at the time. This required the company to pack and load its own jobs rather than use an origin agent and allowed Armstrong to benefit from the most profitable part of the transaction while controlling the consignment door to door.
The 1980s saw the company move into the international side of the business with a very boutique offering. And in 2013, the purchase of Crown Worldwide Moving & Storage in California totally changed the scale of the company’s international capability through freight forwarding. Today, Armstrong turns over around US$200m annually through 25 U.S. locations. All its international work is performed on an agent-to-agent basis, providing its clients access to the highest quality services at the best price.
“I have been in my father’s shadow ever since I was a kid,” said Todd. “I’d come into the office when I was four or five years old. The greatest advantage I have had is my relationship with my father because of his ability as a leader, teacher, mentor and businessman. No matter what he was doing I have wanted to do the same.”
Todd started working at the business in 1991 as a high school student sweeping the warehouse and helping with the packing and loading. He joined the company full time after graduation in 1996, spending five years in operations followed by another 11 years in sales and business development. He became the company’s CEO over three years ago.
The company has grown through acquisition right from the early days. But, it is the somewhat unusual business model that has proven to be the key to its success. “Our first expansion was in 1969 in Louisville, Kentucky,” explained Todd, “and we have stuck to that original model for acquisition ever since.” Armstrong insists that the person operating the business after acquisition holds 25 percent of the equity in the company. “So now, all of the different businesses that we own are operated by an equity partner who owns 25 percent of the stock.” He believes that this is the element that has provided the company with its advantage.
Demographics have also been helpful to Armstrong. In the 1970s, many of the baby boomers started businesses. Now 40 years later, they are selling. But, Todd is particular about which companies he buys. “I want to buy successful businesses and put capable leaders in place to run them. It’s so much easier to make a good company great than to try to build a company that is distressed.”
So his job is to find suitable companies for purchase and then choose the right equity partners to lead them—that’s the challenge. When a company comes along that fits the profile, Todd does not want to be limited by lack of human capital. He says that it’s hard to attract top, quality people into the moving industry. In the face of competition from the giant pharmaceutical and finance sectors, for example, the moving industry is not seen as being sexy. “We try to make it as exciting as we can to attract top talent.” That said, Armstrong’s business model helps to attract talent because the compensation can be three to five times what a general manager could usually make. “We are bringing great people onto our team,” said Todd, “and our need to do so continues to increase.”
Todd said that he is not just looking for academic achievement when searching for recent graduates with leadership potential. While collegiate academic success is important, even more important is having the right attitude. He said that he prefers coachable candidates who have integrity and common sense and can be trained in the Armstrong way. “It’s not a hard business to learn, but you need to understand the people and the history,” he explained. “It’s still very much a relationship business; it takes time, exposure and experience.”
The company identifies potential, young professional leaders and places them into summer internships. “It’s not an internship where they are making copies; we put them in operational seats where they have to interact with crews, drivers, leaders, teams, and presidents,” said Todd. “As we work with these people we can see if they have an aptitude, and if they do, we work to perpetuate our relationship with them.”
The people problem is not the only uncertainty within the moving industry. Todd is very much aware that the industry, in common with all others, is changing faster than it has ever done in the past. He says that he is always on the lookout for technology that will help streamline the business but the physical act of moving will always be a manual process that requires top quality service. “Technology can’t make that go away,” he said. “What we need to watch for is disruptive technology; to see if someone such as FedEx with deep resources comes into our space. I am very interested in technology that can drop costs out of the business, but I don’t see any significant change in business risk out there today. I don’t want to be naive and say something couldn’t happen, but I don’t perceive that now.”
At this time Armstrong has no plans to expand its brick and mortar internationally, and it prefers to continue to trade with its trusted overseas agents. But as it continues on the acquisition trail, it is likely that a strategic opportunity will come along with a company that has already branched outside the U.S. Until then, its search for home-grown talent will continue.
Learn more about Armstrong at www.armstrongrelocation.com, and contact Todd Watson at firstname.lastname@example.org for further information on agent trade opportunities.
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