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|How Howard Brodsky Almost Lost the Family Business|
|Published Thursday, June 29, 2017|
Howard Brodsky, third from right, with members of the staff at CCA Global Partners in Manchester. Courtesy photo.
Few in NH have attained the success earned by Howard Brodsky. He leads CCA Global Partners in Manchester, a multi-billion dollar cooperative with 13 independent business brands and more than 3,600 locations worldwide. CCA Global is second only to C&S Wholesale Grocers on the NH’s Top 100 Private Companies based on revenue.
CCA Global consistently ranks among NH’s Best Companies to Work For and Brodsky was named the Business Leader of the Year in this magazine in 2012. His list of accolades also includes being inducted into the Cooperative Hall of Fame in 2009 and the World Floor Covering Industry Hall of Fame in 1992.
Brodsky is no stranger to success. But, as with any leader attaining success, it has meant taking risks and experiencing failure. Brodsky’s story starts with a humble beginning. His father, Harry, was a Russian immigrant who worked in the flooring department at Sears in Lawrence, Mass. when he decided to move his family to Manchester. Howard was five when his father opened Dean’s Carpets on North Elm Street. “He thought Brodsky was a bad name for a flooring store, and he wanted to be the dean of the flooring business,” Howard says.
Harry built the business up to three employees and annual revenue of $150,000 when he died of cancer. Howard, one of three children, was only 13. Howard’s mother, Selma, worked as a pharmacist and was suddenly confronting what to do with her husband’s business. “I told my mom at 13 that’s what I wanted to do. She believed me and kept the business,” Brodsky says.
Selma Brodsky, Howard's mother, working as a pharmacist in downtown Manchester. Courtesy photo.
So she did, at first entrusting the operations to a manager there. However, when she later discovered he was stealing from the company, which almost went out of business, she stepped in to run the business herself until Howard graduated high school.
Howard Brodsky's senior portrait from Central High School in Manchester.
Young Howard was eager to take over the family business and planned to skip college. His older sister, who went on to become a college professor, persuaded her mother to make graduating college a condition of keeping the business for Howard. As soon as the brash 21-year-old Brodsky had his degree in economics from Wesleyan University in hand, he rushed back to Manchester to take over. And his mother stayed on to help.
Howard dived in. Within four years, he moved Dean’s to a larger location in Hooksett. And, by 1975, Dean’s had expanded beyond Hooksett to locations in Laconia, Nashua and Fitchburg, Mass.
That’s also when a conversation with a business colleague ended with the colleague having to leave to visit his industrial psychologist. Brodsky was intrigued. “He explained an industrial psychologist helped him to understand the best way to work with his people and to hire people,” Brodsky says, adding he called the psychologist the next day to arrange a meeting.
“He said, ‘You have the capability to have a higher level of employees.’ I was fascinated by the whole thing,” Brodsky says. He hired the industrial psychologist, who met with him weekly for 18 months to conduct psychological tests of staff, develop an eight-page job application and teach Brodsky what to look for in potential hires.
“I proceeded to have incredible people who I hired over the next six to nine months,” he says, including an experienced controller from New York City and a vice president of United Technology to lead operations.
“I developed this unbelievable management organization. We had a business plan to go up to 20 stores in three years and have $24 million in sales volume,” Brodsky says. “I may not have known what I was doing, but I was ambitious.”
His new management team had impressive resumes but no actual experience in flooring, and Brodsky’s mother would occasionally express her concerns. “She said, ‘They might be smart, but they don’t know what they are doing,’” he recalls.
By 1976, long-time suppliers started complaining Dean’s Carpet was past due on bills. His industrial psychologist assured him he had developed a great leadership team and kept pressing forward with plans for new stores, securing bank loans and insisting everything was fine. “[The psychologist] told me your team has it under control,” Brodsky says.
But the calls from unpaid suppliers were increasing. Unsettled, Brodsky finally decided to visit his controller’s office. “I opened a drawer and there was millions of dollars worth of unpaid bills,” Brodsky says. “My heart sank. It was like a nightmare.”
He called his controller, who was at home, for an explanation. “He said to me, ‘I didn’t know how to tell you; we’re broke. I didn’t have the courage to tell you. I thought we would come out of it,’” Brodsky recalls.
He called his accountant and lawyers. “They told me I had to file Chapter 11. I didn’t even know what it was,” he says. At 29, married with a child and a baby on the way, Brodsky was faced with losing the family business. “In days I went from opening 15 more stores to bankruptcy,” he says. “The most emotional time was when I had to tell my mother we had to file Chapter 11. This was the family business that she kept for me.”
But that painful conversation remains one of his most memorable life lessons. “My mother didn’t say, ‘I told you so.’ She didn’t say, ‘You shouldn’t have done this.’ She gave me a hug and said, ‘I love you. That’s the way you learn,’” he says, still feeling the emotion of that moment. “If my mother had not shown me that love at that point, I would not have taken another risk.
People need the most love when they are going through the most difficult time. That’s when you have to show people the most love and not the most criticism.”
It would be the first of many lessons Brodsky would learn from the experience. He says the process of going through bankruptcy was terrible and humbling. He also remembers the electricity being shut off in the store. “I had no credit with suppliers. It was cash before delivery. We had to send certified checks. I didn’t know from week to week if I would have enough for payroll.”
Brodsky says he was transparent with everyone from employees to suppliers. “It was important for me to be honest with them about what happened and what I was going to do,” he says.
For starters, he needed to get expenses under control. With more staff than he could support, Brodsky fired half of the staff in one day and closed all but the Hooksett store.
He ditched the industrial psychologist and turned to a trusted mentor with 25 years of experience in the industry, Rick Meyer of Carpetland USA in the Midwest. Meyer told Brodsky to move his desk out of his office and onto the showroom floor so he knew firsthand what was going on. Brodsky negotiated with creditors and suppliers and did a lot of hand holding with those anxious employees still left.
And the dark days kept coming. A lack of credit meant some goods didn’t arrive on time and some checks didn’t clear. “I was under so much stress I developed a serious back issue,” Brodsky says. “I had a hospital bed at work because I couldn’t stand. It was a daily crisis.”
But Brodsky was determined to come back from the brink. “I had so much desire to keep the family legacy,” Brodsky says. Slowly, he got expenses under control until they returned to profitability in 1977 and emerged from Chapter 11. “I paid all my obligations to everyone I owed money too [under the Chapter 11 plan],” Brodsky says. “I was proud of that.”
Within two years Brodsky built a larger store on South Willow Street that grew to become the largest floor covering store in New England, with 110 employees and generating $14 million in annual revenue. By 1984, he was named National Retailer of the Year by the National Congress of Floor Covering Associations. Three years later he was named Retailer of the Year in the nation by the industry association. “My mother gave me the faith in myself,” he says. In 1985 he started CCA Global with his then partner, Alan Greenberg. And Brodsky credits his low points with helping him finally achieve his career highs.
From left: Howard Brodsky, Manchester Mayor Charles Stanton, and Selma Brodsky at the opening of Dean's Carpets on South Willow Street in Manchester in the late 1970s. Courtesy photo.
“I learned from the industrial psychologist how to find the very best people. It’s been part of our success. But I also learned you can hire the best people, but if you don’t manage properly, you will get into trouble,” Brodsky says. “I learned the difference between delegating authority and relinquishing authority.” He says he also learned that the road to success is neither straight nor easy. “It’s part of life,” he says. Brodsky also learned not to let mistakes prevent you from taking risks. “You have to take intelligent risks. You’ll never succeed by playing it safe,” he says.
The results speak for themselves. Brodsky now oversees a cooperative generating billions in sales, 370 employees (with more than 100 in NH) and member businesses that employ 27,000. His greatest source of pride is that CCA allows small businesses to pool resources and access services that help them compete. “What we do everyday is give [them] the ability to maintain and grow these family business legacies,” Brodsky says.
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