I recently went one-on-one with Bill Canady. Bill is the Chairman and Chief Executive Officer of Arrowhead Engineered Products and Chairman of OTC Industrial Technologies. Bill is also the founder and CEO of The 80/20 Institute.
Adam: Thanks again for taking the time to share your advice. First things first, though, I am sure readers would love to learn more about you. How did you get here? What experiences, failures, setbacks, or challenges have been most instrumental to your growth?
Bill: I came up the hard way, and I think that was the only way I was going to learn any of it. I enlisted in the Navy before I had much of a plan, and the Navy gave me one. It taught me that a watch either gets stood or it doesn’t, and nobody is particularly interested in how you felt about it. School came later, at night and then at Booth, but the classroom was always my second teacher. The P&L was the first.
The experience that shaped me most was taking over a company in 2021 that had been assembled out of roughly thirty acquisitions and was still operating as roughly thirty separate companies. Each one had its own systems, its own customers, and its own way of doing things, and nobody could see the whole. Revenue was growing while earnings were not, which is the most dangerous combination there is, because it looks like success right up until it isn’t. And when I asked the simplest question available, which customers and which products actually make us money, nobody could answer it. Not because anyone was hiding anything, but because the reporting had never been built to answer that question.
My own mistake was not in the analysis. It was in the people. I gave leaders more time than the situation could afford, and I told myself I was being fair. Being fair to one individual is not the same thing as being fair to the several hundred people who depend on that seat being filled correctly. Every one of those changes I eventually made, I made later than I should have. Not one of them did I ever look back on and think I had moved too soon. That is the most expensive pattern of my career, and I still have to guard against it.
Once we could see where the money actually was, and once the right people were in the right seats, the business turned quickly. Not because I had gotten smarter. Because it had gotten narrower and the team had gotten better. I am in the middle of a version of the same work now at a larger company, which is a useful reminder that none of it gets easier with scale. Setbacks have been more useful to me than wins. A win tells you that you were right about something. A loss tells you where you were wrong, and that is the only information that reliably changes behavior.
Adam: In your experience, what are the key steps to growing and scaling your business?
Bill: Start by knowing what you actually own. Most leadership teams cannot tell you which customers and which products make money and which ones destroy it, because the reporting was built around departments instead of around where value is created. Until you can rank every customer and every product by what it contributes, you are guessing. Then sort it. When you do that ranking honestly, you usually find that a narrow slice of the business carries nearly all of the profit, and a long tail underneath it absorbs engineering hours, inventory, working capital, and management attention while returning very little. That tail is not neutral. It is expensive. Then choose, which is the step people skip.
Growth is a resource allocation decision before it is a market decision. You have to move your best people, your capital, and your own calendar toward the top of that list, and be willing to reprice, starve, or exit the bottom of it. Almost nobody wants to fire revenue. You have to be willing to. Fix the core before you add to it. Acquisitions and new markets layered onto a business that has never been sorted just make the problem larger and more expensive to unwind. And watch cash the entire time. Growth consumes cash long before it produces any. I have seen more good companies get into trouble growing than shrinking. Finally, sequence the work. You cannot do all of this in one quarter. Pick the two things that move the number this year and let the rest wait.
Adam: What is your best advice on building, leading, and managing teams?
Bill: Most growth problems that present as strategy problems are actually leadership composition problems. Companies stall because they are missing a type of leader, or because one person is attempting to be all of them. There are three kinds you need. Visionaries set direction and hold the organization to where it is going. Operators convert that direction into execution: people, priorities, process, and performance, on a calendar. And there is a third that most companies overlook, the leader whose actual job is other leaders. Coaching, developing, naming drift, telling the truth about culture. Plenty of companies have a visionary and an operator and nothing in that third seat, so the bench never gets built and every decision routes back through the CEO.
If you are the CEO, be honest about which one you are. I am not naturally all three. Very few people are. Your job is to know your own type and then hire the other two and genuinely give them authority, which is harder than hiring them. Beyond that, be specific about ownership. Most of the dysfunction I encounter is not conflict; it is ambiguity. Two people believe they own the same decision, or nobody does. Write it down.
And understand that you set the standard by what you tolerate, not by what you say. A team calibrates to the worst behavior a leader allows to pass. If you let a missed commitment go without a conversation, you have just published a new standard, whatever the values poster in the lobby says. And when you have concluded that someone is in the wrong seat, move. Almost every leader I know is slower at this than they should be, and the cost of the delay is always paid by the people around that seat.
Adam: What are the most important trends in technology that leaders should be aware of and understand? What should they understand about them?
Bill: The trend that matters is not any particular technology. It is that the cost of knowing your own business has fallen through the floor. For most of my career, the analysis I described earlier, sorting every customer and every product by what it truly contributes, took a team of people several weeks, and by the time it was finished it was already stale. That work can now be done continuously. That changes what a leader can be held accountable for. If you can see where your margin is coming from in something close to real time, “we didn’t have the data” stops being an answer.
So the practical understanding I would want leaders to carry is that the value sits in the decisions, not in the tools. I watch companies buy capability with no clear idea which decision it is meant to improve. Start instead with the decision you make badly or slowly today, whether that is pricing, quoting, where to place a salesperson, or which products to discontinue, and work backwards from there.
Second, these systems are only as honest as the data underneath them. If your item master is a mess and your customer records are duplicated, you are going to automate confusion and receive it faster. Third, none of it will rescue a business that has not been sorted. Technology applied to an unfocused company simply makes it efficiently unfocused.
Adam: What do you believe are the defining qualities of an effective leader?
Bill: A willingness to face the actual number. Most people in leadership positions carry a version of reality they have quietly negotiated with themselves. Effective leaders don’t. They look at the result, say it out loud, and start from there.
Comfort with subtraction. Anyone can add, and adding is popular. Deciding what the company will stop doing, which customers it will let go, which projects die this month, is the rarer skill, and it is where most of the value gets created.
Clarity. If your people cannot repeat the priority back to you in a single sentence, you do not have a strategy. You have a document.
Consistency. People will follow a leader they disagree with far longer than they will follow one they cannot predict.
And a real interest in developing other people. The leaders I respect most measure themselves by who they produced, not by what they personally closed.
Adam: How can leaders and aspiring leaders take their leadership skills to the next level?
Bill: Get closer to the P&L. This is the largest gap I see in high-potential people. They are excellent at their function and cannot explain how the company actually makes money. Ask for a number to own, even a small one. There is no substitute for the education that comes from being responsible for a result you cannot deliver by yourself. Then go find a hard situation. Careers are made in troubled businesses, not healthy ones. A turnaround will teach you more in eighteen months than a decade of carefully managing something that already works.
Get feedback from someone with no incentive to be kind to you. Your team will not tell you. Your boss will give you a filtered version once a year. Find a peer, a mentor, or a board member who will say the thing you do not want to hear, and then resist the urge to argue when they say it. Read outside your industry. Most of the ideas that helped me did not come from industrial businesses. And practice deciding. Decision-making improves with repetition and honest review, but almost nobody revisits their decisions after the outcome is known. That is how leaders accumulate experience without actually getting better.
Adam: What are your three best tips applicable to entrepreneurs, executives, and civic leaders?
Bill: First, know precisely where your value comes from. Whether you are running a company, a division, or a nonprofit, a small portion of what you do produces most of the result. Find it with data rather than intuition, then act on what you find even when it is uncomfortable.
Second, decide what you are not going to do, and put it in writing. Strategy is a list of no’s. A plan without exclusions is a wish list, and it will quietly commit your organization to everything.
Third, build the team you will need in two years rather than the one that fits today. Most leaders under-hire because they are solving for the current workload. The organization you have is a ceiling on the organization you can become.
Adam: What are your best tips on the topics of sales, marketing, and branding?
Bill: On sales, the fastest improvement available to most companies is not more activity; it is better aim. Sales organizations tend to spread coverage evenly across accounts out of a sense of fairness. Look at where your gross margin actually originates and move your strongest people there. And look hard at pricing while you are at it. Most companies leave real money on the table and never test whether it is there.
On marketing, spend where you can demonstrate a return and be willing to kill what you cannot measure. I have sat through a lot of presentations about impressions. Impressions do not fund payroll.
On branding, a brand is not what you say about yourself. It is the accumulated memory of whether you did what you said you would do. In industrial businesses, that means delivery and service far more than it means advertising. If you ship on time and solve problems when they occur, you will build a brand whether you intended to or not. If you don’t, no campaign is going to rescue you.
The thread running through all three is focus. It is very difficult to have a sharp brand or an efficient sales force while you are trying to be everything to everyone.
Adam: What is the single best piece of advice you have ever received?
Bill: Early on, a senior officer told me not to confuse activity with progress. I have thought about that sentence more than any other. It is the difference between being busy and being effective, and nearly every organizational failure I have witnessed traces back to it somewhere. Teams that are exhausted and going nowhere. Leaders who mistake a full calendar for a contribution. Companies that launch something every quarter and finish nothing.
It cuts personally, too. It is comfortable to work hard on things that do not matter, because effort feels like virtue. The harder question is whether any of it moved the number. When I have been honest with myself, the answer is usually that a small fraction of it did.
Adam: Is there anything else you would like to share?
Bill: Only that I believe leadership is far more learnable than people are told. There is a durable idea that leaders are born with something the rest of us lack, and in thirty years I have not seen much evidence for it. The people who improve are the ones who look honestly at their results, seek out situations that stretch them, and take feedback without immediately defending themselves. The rest of it is repetition.
