1 September 2021 • Entrepreneurship Fred Matt '81 on Leadership: Provide clarity, lead by example, celebrate success

Fred Matt on leadership: Provide clarity, lead by example, celebrate success
By Stan Linhorst | StanLinhorst@gmail.com

Reproduced by permission of The Post-Standard.

Fred Matt '81 is president of F.X. Matt Brewing Co., the brewing company started by his great-grandfather in 1888. In the decades since then through Prohibition, economic hard times, destructive fire, intense competition, and changing consumer tastes F.X. Matt has a remained a family company in Utica.

"If you look at the statistics of companies lasting 133 years, its pretty rare, and a family company is even more rare," Matt said.

Matt joined the family business in 1989, during one of the hard times, after establishing a career in New York. His advice on leadership? Lead by example, provide clarity, celebrate success.

Your company is well known, but give me the elevator speech.

There are couple of things that I think are kind of interesting.

One, the family has always put the priority of the brewery first. We all get along.

The other thing thats really cool is that surviving as a company for 133 years does bring its challenges. The thing that we have done well is we focused on the customer. Our objective as a company is to delight our customers with products that they like and want to buy. There have been times when we've tripped, but to keep your customer coming back for over 133 years says you're doing something right.

We have a great history. Utica Club was a beer that did exceedingly well coming out of Prohibition. It was the first beer brewed after Prohibition. We have the No. 1 license, which is kinda cool.

Matts Premium did exceedingly well in the 1970s and 80s. And we had the Matts Beer Ball that everybody loves. That was my Uncle Kemper Matt's idea.

We created the first mix packs in craft beers. Saranac Trail Mix was the first seasonal mixed pack, 12 beers. In the 80s, my dad (F.X. Matt II) got us into contract production and Saranac beer. And then we started seltzers. We've done innovative things that sometimes have been before their time, but, generally, the timing has been pretty good.

I'd say we have two parts of our company.

We have our own brands which comprise Saranac beer, Saranac soft drinks, obviously Utica Club, and then we make Saranac green tea seltzers. Seltzers were started here by Nick Shields. I like to call him the Father of Seltzer.

Then we have the contract side of our business, which is heavily craft. Almost anybody on the East Coast that's been successful in the craft category has worked with us. Arguably, the first craft beer on the East Coast was New Amsterdam, and it started here in 1981.

We've evolved our contract production business. Now we're into distilled spirits, wine in cans. We do non-alcoholic, organic seltzers, obviously soft drinks, and beer. We've diversified nicely. As a result, we've done investment to make more diverse products and have more flexibility. We're just coming off a $34.7 million expansion. Now, we're on another investment project, which is about $11 million.

We've put more legs on our stool so that its sturdier and supports where we want to go as a company. We want to grow and grow aggressively and be the best place to work for our employees and anybody who works with us, whether it be contract partners, suppliers, et cetera.

We have about 130 employees. We are adding between 25 and 30. We also own the Flying Bison Brewery in Buffalo and that has another seven employees. Another cool thing is that we do all our mix packs, over 2 million cases, with Oneida County Arc. We employ about 25 to 35 people at Arc. That relationship is growing.

Thank you that's quite the elevator speech.

I made it so we did 50 floors. (Laughter)

Let's talk about early influences and your path to company president. I'll start with my usual question: Were you in leadership roles growing up?

I was captain of baseball teams and things like that. I'd say that I always took kind of the lead role. Maybe its my personality, but I like to succeed.

I grew up in New Hartford, New York. I went off to Hobart College and then to New York City. I graduated from Hobart in 1981. I was an economics major with an English and history minor.

When I got out of college, it was not exactly the best time to be looking for a job. CDs were at 13 percent. Chrysler had filed for bankruptcy. I don't know if they tracked it at the time, but unemployment for that 21- to 25-year-old group was bad.

In those days, you wrote letters to companies. I wallpapered my dorm room with rejection letters. The crushing blow of getting rejected, rejected, rejected, rejected got me focused on the idea you gotta make your own breaks. That's been my approach to life and business.

I ultimately got a job in a training program in international shipping with Barber Blue Sea. In an entry job, you might think your boss is thinking about how to groom you and promote you, but I didn't see much of that.

If you cull it down, early influences weren't a boss or a person. It was a fair amount of rejection.

I worked in shipping for three years, and then I went to grad school at the Simon Business School at the University of Rochester. That helped me in my next job where I went to Grey Advertising in New York City. I worked at Grey for four years.

In 1989, the brewery was not doing well. My uncle Nick, who was president of Richardson Vicks Oil of Olay, NyQuil, et cetera was coming back to the brewery and he asked me to come back with him.

The 1980s were tough sledding for regional breweries. The majority went out of business. We hung on by our fingertips. The brewery, I believe, lost somewhere around $10 million from 1984 to 1989. The plight of a regional brewery was difficult. The national breweries were spending lots of money on advertising and on keeping prices down.

We focused on quality, and the national breweries came in and lowered prices. Our way of dealing with it was to hold pricing down. The hold pricing was two curses. One, you didn't have money to build your business, and, two, holding your price gave the perception your quality wasn't as good.

The company was in a death spiral. What ultimately saved it was getting more volume. The real saving grace was Nick. We had just won the Great American Beer Fest and one night, very late, Nick said to me: I think we ought to put everything on Saranac because, one, the margins are good and, two, its a category that's growing, and we have something to say about it now.

That was a wonderful decision, because it gave us focus as craft was starting to explode. Dad had created Saranac in 1986, but it was really before its time. In 1991, when we won the Great American Beer Fest, Saranac was like 20,000 cases. And that's when Nick said, lets lean into Saranac and drive it forward. That was a great decision.

Central New York can be proud that you survived and have stayed around.

We have employees that hung in and didn't get raises for several years before 1989 and probably didn't get a raise until '91 or '92 when we started to make some money.

It's very cliche to say that people drive businesses, but the asset that we have always had, that you could take to the bank, and know that you could rely on was our people. The fire we had in 2008 shut us down for 45 days. COVID hit, et cetera. This company pulls together like no company I've seen. We have this ability to do things we probably shouldn't be able to do. It's because we have a group of people that work together, are passionate about what they do, and have pride in the product. It results in a resilient company that has survived and thrived for 133 years.

If you ask me what one single thing made it happen, I'd say, one, weve always delighted our customers, and, two, people that have worked here made it happen.

Whats your advice for effective leadership?

It's a few things. I think its lead by example. I think its providing clarity of expectations and direction. People come to work wanting to do a good job. If they're clear on what they're doing and what's expected of them, they succeed.

I think its having empathy and understanding of your employees. I'm open with our employees about things in my life that are sometimes personal. But that sharing of almost a rawness allows them to be more trusting of you. They're more willing to come and talk to you about situations in their lives, because you make yourself real.

I got to get better at this, but I think celebrating wins is huge. Everybody wants to be part of a winner. Show appreciation for what people do.

You mentioned being open with employees. Tell me a little more.

I read that Google did a study on successful work groups. They put high performers together. They put high performers, low performers together. They put low performers together. What they found was that the most successful groups were when people shared something personal about themselves. That's when the groups worked best, were most collaborative, and came together as a trusting group. They felt more secure in the group in saying what they thought.

I've always embraced being open and honest. My life is very good, but like anybody else there are challenges. To share the fact that you are human and you have the same issues allows people to say: I'm going to go talk to him about it.

Trust is important. Build trust within your team. Have people know that you feel for them and that you care for them. We truly do. When I stand at the gas pump thinking its expensive to fill the car, my next thought is: Well, if its expensive for me, it's worse for our employees.

So we've got to make sure that we're paying them well, which we do, and that they have good retirement and their healthcare is taken care of, et cetera. I think its important to care for your employees as if they are family.

What qualities do you see in good leadership or in leaders you admire?

I see empathy. I love leaders that listen. I love leaders that are collaborative and make people feel good about themselves. I love leaders and this is an area I gotta be better at that celebrate the good.

What attributes do you see in poor leaders?

Not caring about your team and being self-centered. I had a boss one time that always used to tell people: Well, I'll just fire you.

If you're on the receiving end of that comment and he can fire you, that comment, as glib as it is, is very uncomfortable. He never said it to me, but I told him several times: It's not funny.

And he said: Oh, they know I'm joking.

Well, they don't know you're joking.

People are becoming less and less tolerant of that kind of poor leader, because it just isn't right.

Poor leaders are harassing and don't make you feel good. They give poor direction.

They're very self-centered.

What's your advice for business leaders to spark innovation?

The thing that we preach around here is that ideas come from any place. My dad used to say: Never dump on an idea because a thread of an idea may come to another idea.

I have to say that's very true. When someone says something, it may not work, but it spawns a thought in somebody elses mind or somebody elses mind or somebody elses mind. It becomes a chain reaction.

In our innovation meetings and idea sessions, there are no bad ideas. We keep open minds and keep the conversation positive. Someone says something which be a good idea or it might not be a good idea. But saying something might mean something to somebody else that ultimately becomes a great idea.

Idea generation and innovation are very collaborative. Even when an individual had the idea, there are a lot of assists on that idea. Its really a collaborative process.

The weekly Conversation on Leadership features Q&A interviews about leadership, success, and innovation. The conversations are condensed and edited.

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