Our guest today is COO Alliance member and COO of Germfree Laboratories, Jeff Serle.
During his 30+ year career at Germfree he has led the design of Biological Safety Cabinets, Laminar Flow Equipment, Pharmacy Isolators, Class III Gloveboxes, as well as Modular and Mobile BSL 3 Laboratories and Cleanrooms. Jeff holds a Bachelor of Science in Mechanical Engineering from Florida International University. He has been a long-standing Member of the Controlled Environment Testing Association (CETA) and has twice been selected to serve on the Board of Directors in 1997, then again in 2009. Jeff served CETA as the Chair of the CETA National Board of Testing (CNBT), which developed the Registered Cleanroom Certification Professional for Sterile Compounding (RCCP-SC) Exam, from 2009 – 2012 and is formerly the President of CETA. He is also a member of the American Biological Safety Association and the American Society of Heating, refrigeration, and Air-conditioning Engineers.
In This Episode You’ll Learn:
- The transition from a family business to a traditionally-run business, and the challenges faced during that transition.
- Jeff’s process for socializing the current team when bringing in people from the outside.
- The importance of training interviewers in the actual process of interviewing candidates.
- Some of the elements Jeff has worked on in the last few years to make him a better leader.
Resources:
Connect with Jeff: Website | LinkedIn
Connect with Cameron: Website | LinkedIn
Get Cameron’s latest book “Second in Command: Unleash the Power of your COO”
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In this episode, we’ve got a great guest, Jeff Serle. Jeff is the COO of Germfree Labs. He’s also a COO Alliance member. He’s also been working with the company for many years, which is unusual. He started as a twenty-year-old and still has been with the company. The founding CEO was originally the father of the company. His son then became CEO and the son passed away.
There are some interesting discussions around the transition from being a family-run business to having the CEO die while he was there, and then also the transition from that selling to a PE firm. There are some interesting insights about that. Also, bringing in senior leadership and lots of great lessons from Jeff Serle. Enjoy the episode and we’ll see you on the inside. Take a look at our second episode. We’re releasing two episodes every week. Start enjoying those as well.
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Jeff, welcome to the show.
Thanks, Cameron. It’s good to talk to you.
Nice to see you. What a lot of people don’t realize is you’re also a COO Alliance member. I’ve gotten to know you a little bit and get to meet you in a couple of the breakouts. Hopefully, we’re going to be able to see you in person at the April 2023 in-person event. You’ll be able to make it to that, hopefully. What was it that got you to join the COO Alliance initially? I’m curious what that mindset was and then I’m going to come back into lots about your company.
I feel like I’ve been the COO for the company for 100 years but I got the title in 2022. I said about figuring out what exactly that meant and how I can best execute that. I stumbled across COO Alliance and it hit me. I started getting into some of your books and how practical it was. It helped me define the role for what I need to be and hopefully, where I’ll go over the next years.
You’ve been with the company for many years, which is amazing. When did you join? When you were twenty?
Twenty-one.
Joining the company when you were 21 years old and then still being able to be there at this stage, that’s a pretty extraordinary growth stage to be able to have gone through. You informally were the second in command or the COO for all that tenure and then you became formally the COO. What was it that tweaked that they finally gave you the title? What do you think has changed with the title versus when you were more informally COO?
I’ve done a lot. My background is Mechanical Engineering and I’ve done a lot of design. I’ve been involved with all the products we’ve developed over the years. I always had that role to the former CEO who was the founder’s son and he had the ideas. The two of us ran the company as we transitioned. Unfortunately, he got sick and passed away. He had brought on Kevin, who’s our current CEO. He had a vision for the business. He broke us down a little bit, got things in good order formally, and then we built back up.
Through that process, I held a couple of formal roles like Director of Engineering and Director of Sales, as we pieced together the rest of a solid leadership team. Once we had that together, that’s when he made the move to make me officially COO and bring that in. We’ve talked about the types of COOs that are out there and which ones I fill. I fit in the middle of some of those even. It’s interesting.
You mentioned as well that the father was the founder of the company. When you joined the company, he was there and then the son became the CEO. What was that like working inside of a family business? You mentioned to me that the founder, CEO, the father wanted this to be more of a lifestyle business, $2 million, $3 million a year, and then you guys pushed past that. Did you have to get his buy-in around that or did you focus and grow, and all of a sudden, it became bigger and he woke up one morning and said, “Oh, well?”
A little more planned than that. If you knew Keith, you’d realize that there was always this looseness to things. At the time I joined, the father was already about 80 so he had clear plans to retire. Keith and I talked together. We started when Keith had left the company, believe it or not, long story there. He and I worked together doing some product development. I’m nineteen years old. We’re working in the back of a karate studio behind a screen, developing these products that became one of our current product lines.
Once his father officially decided to retire, he moved back. I got hired by Germfree formally so we decided we wanted to grow. We started having wives, kids, and families inside. We didn’t want to be in Miami, move the company up here, and that allowed us that freedom to settle in and grow the company.
Can you speak to that? You mentioned the ah-gee-shucks through it about having wives and family. How did that change the dynamic of the company? Did you cognizantly have to address that with any of the employees when that change started to happen?
I don’t think so. We were twenty or so employees when we were in Miami. When we came here, seven of us moved up here with the company. There are 2 of us left still, 1 of our salespeople and myself. We grew up. I was 21 when I started with the company. He was probably 25. I grew up before he did. I got married about two years before he did and started having kids a couple of years after that. We found ourselves spending half our days in traffic in Miami and decided we needed a quieter place. That seemed like a good way to get a fresh start. We guise our informal attempt of having the company be more formal and a real company. We stopped wearing shorts and flip-flops to work, that kind of stuff.
What you’re talking about as well is so critical for a company to go through that natural transition. What can happen is that when they are Gen Y, young, beer after work, play together, have fun together, and work all the time, and then when one of the leaders has a child, it does change the dynamic. I was the first of the leadership team at 1-800-GOT-JUNK? to have a child. I remember saying, “No, I can’t meet every morning for breakfast. I can’t go out for drinks every night anymore.” We had to become this more of a real business. It was good for us to go through that transition too.
We were more of a fish on the weekend. We lived on a boat together for a number of years. We had that kind of working-we-had-to-and-play lifestyle. It evolved pretty quickly. He was married a couple of years after I was. When I got married, he was dating pretty seriously. It was a natural progression for the two of us. For the rest of the team, we had a bunch of young guys on the team and gals. They grew up with us. It all became a natural progression for us.
For the first 25-ish years that you were there or maybe even longer, you had a family CEO. Sadly, the son passed away from cancer after a few years. That’s a big transition for a company to lose its founding CEO or that CEO for a long period. It’s also a bit of a transition to go from a real family company to just being a company. Were there any lessons, learnings, or stumbling blocks that happened through that period for you?
The first day we discussed bringing in my new boss was not easy. The first year was probably pretty rough but we realized at some point along the way, it clicked. We both realized where our strengths and weaknesses were. This is the new CEO. If you talk to both of us, we’ll tell you the same story. We’ll both say, “For this relationship to happen, I had to change.” We realized that about the same time. We found that yin and yang, as you call it, how we can work together and complement each other.
Was there a transition period in terms of the company having to let go or go through a grieving process as well? How did you walk them through that?
It was a couple of years. It happened pretty slowly. I worked with Keith for many years. I’ve known him longer than my wife. It was a difficult transition personally and professionally. At the same time, we’re on this huge growth curve. It was at a point where 20 people, maybe 30 people, knew Keith even, and the other 50 didn’t. Now, it’s 20 or 30 people knew Keith and the other 160 don’t. While there was a struggle for a lot of us, the company thrived. Keith and Kevin, our current CEO, bonded very well. At that leadership level, we all knew him and struggled.
Let’s talk a little bit about what Germfree Labs does and then I want to go back into some of your growth as a leader through there. Tell us a little bit about what Germfree Labs does overall as a company and then we’ll go with some questions there too.
We’re an equipment manufacturing company. Originally, it was equipment for hospital pharmacies where you mix IV drugs and sterile products inside of our equipment. There’s HEPA-filtered air blowing. It protects the product. In some versions, it protects the people as well if it’s a hazardous drug or something.
That moved into work with the US Army, where the US Army approached us and said, “This is cool. We need this product. We want to drop it out of an airplane in a parachute. Can you make that mobile for us?” “That’s cool. We can do that.” We did that. They dropped it out of an airplane and set it up in the tent lab in the desert. They wanted to put it in a truck or trailer. We said, “We can do that.” The truck fell apart around our equipment. They said, “Why don’t you guys build us the truck too?” We started making mobile laboratories.
We buy a truck, build this big box, and put our equipment inside. That grew into clean rooms for hospital pharmacies, pharmaceutical manufacturing, and high containment labs where they’re handling Ebola. Even in the COVID-19 crisis, the lab that we built in our factory and delivered to Singapore is the lab where they isolated the virus from the bat for researchers to start working with.
You guys are running some pretty complicated and high-tech stuff. How do you decide what to say yes to and what to say no to? I would imagine that you get asked to do some pretty cool stuff and you’ve got the engineering bend to you so you always like creating cool stuff. How do you know what the right stuff is to say yes to?
We’ve been focused on that. That’s some parts that Kevin brought to the table because Keith never said no. We focus on the markets we want to do. We realized that pharmaceuticals, personalized medicine, and distributed manufacturing of medicine are the future in the market we want to be in. We focus our effort there as far as attacking sales and marketing. We build a Cadillac. We don’t build a Chevrolet. If it’s a Chevrolet, that’s not the path we go down. We have our little niche.
What about your growth as a leader? You started in the engineering background. Do you still use your engineering skills? Do you take any of your engineering skills into the operations or the business side at all?
Yes. I’m a mechanical engineer by training. It took me thirteen years to get there. All of those years I worked here so I did it at night. I became an SME in the industry. I’m a lifelong learner, partially by necessity and that’s my personality. As far as leadership skills, that’s something I have some natural ability for. I’ve also been focused in the last few years on digging in, learning, and applying that to the business.
From the engineering side to the company, I still get involved in business development, early projects with clients, flying over the world, and meeting with clients. As a COO, it’s important that I’ve got a world-class team, which has built-in our building. We divide the work as a company into get work, do work, and measure it. Do work falls under the COO so engineering, production, project management, quality, and procurement.
Business Transition: COOs must strive to put together a world-class team. This way, they can equally divide the work and measure their results accordingly.
Does the measure it falls under the CFO? Who does that fall under? The get work falls under where, CEO?
CEO, yes.
How did you decide how to divide and conquer that?
Kevin is a gifted salesperson and has had a lot of formal training in that as well as a business operation. He’s got skillsets on both sides but that’s the line where we’ve worked together and decided that that’s where his strengths are. Mine lean more towards the operation even though we have some overlap but we’re both open for the overlap. How do we make this work? We both realize we have to make it work. If I step on his toes, he lets me know to move on. If he steps up my toes, we do the same. More often, we’re collaborating around that middle ground.
When you’re dividing up that work between the CEO, COO, and CFO in that case, you were the one who had to cash the checks the CEO wrote. I heard that the COO is often the leash to the dragon or the brakes to the gas. How did you talk to the CEO when you were having to write checks that you couldn’t afford to write? When the promises or projects were too big or the timing of it was wrong, how did you have those discussions with him?
This goes back to the former founder’s son CEO. Those were the days when I was cashing the checks. We would write another check was the answer. We always sold our way out of problems. That works until you’re a certain size company. We would share the responsibilities when we had bad news to share with a client. We would work 24-hour days or 48-hour days to meet our commitment.
We’ve defined our core values, our mission, and all these things. We’ve always had them and the people bought into it. If we needed to work 48 hours straight to get a project out the door to meet a commitment, we did it and the whole team would pitch in. We were a smaller team but it’s not the way you want to do it.
When you’re scaling to the size, you’ve got about 200 employees. How many employees did you have years ago? Were you at the 40 or 50-mark?
Probably 80.
In that scale, there often comes some waste where you don’t have a strong leadership team. You have a management team and they’re all figuring it out as they go. Often, their solution to every problem is to hire more people. You can get wasteful as an organization at that stage. How did you unwind some of that waste? How do you prevent that waste? Is that the measure it side of the business that does that?
We certainly got better at measuring it but we’re still figuring that out, Cameron. That’s a big part of what we’re doing and it’s a big part of me adding folks to the operations team that bring in skillsets that I don’t have. We hired a new director of operations that has a strong lead manufacturing background. We brought on some solid-quality people.
We’ve also brought some people up with us in procurement. Our engineering director is amazing. We lost an amazing director of project management. We’re filling that role but the key is we’re still solving the problem and it’s getting the right people in place to do that. That’s part of that learning curve over 2022. I’ve been focused on how I build that team.
When you’re bringing in those people from the outside into the organization, that can often cause some ripple effects. It always causes both good ripple effects and bad ripple effects. What’s your process for socializing with the team that you’re bringing people in above them? How do you bring in those people so that they do the least amount of damage and the most amount of good?
We had the opposite problem. Prior to our being acquired, we had some people at that level that wasn’t contributing and were causing a lot of frustration in the organization. We talked a lot about being driven by our culture and living by our core values but due to circumstances, we had to delay the enactment of that. Going backward a couple of steps brought the team together. I’ve learned processes from you on how to find the right people the first time. Thank you very much. That has made that possible.
We’ve also done a lot of hiring from within. When the position’s right, we bring the people up internally to refill those positions. When we don’t, we’ll bring them in from the outside but we always make it available to the internal teams. That also helps. Everyone knows what’s going on. If we had a candidate that wanted to be the director of operations, they could have applied for the job and would’ve been taken as seriously and gone through the same process.
When you have somebody internally, let’s say that they’re going for the director of operations role and you recognize they’re not the right person for it, how do you tell them that they’re not the right one? Do you rip off the Band-Aid and say, “You’re not the right person?” Is there a system that you use to do that? How do you let them down so that you don’t lose them? That can often be discouraging for them as well.
It’s honesty. I’m honest from the very beginning that we’re going to open this position internally and externally. I explain the process we’re going to go through and then I explain the scoring steps we’re going to go through. It’s multiple people interviewing the candidates, not just myself. I’ll do the first round and then I put it to their peers, their subordinates, and then their superiors through an interview process. There’s a score done. We talent the score and pick the best candidate based on a score.
I try to take the emotions out of it and make it a process-driven thing. If not, you can hurt feelings. If you start from the beginning honestly and tell them, “This is how we’re going to do it. This is how we’re going to score people,” it’s pretty clear. We’ve been good at retaining people and bringing up the right people internally.
Do you ever tell people right at the very beginning that they’re not the right fit?
I don’t think you have to. We’ve been through a lot of change. We’ve brought in new management over the last few years. We’ve been purchased by private equity. We’ve had some big changes in the leadership team. The one thing I tell people is, “If you embody our core values, and we have grit, we own it, we drive innovation, and we embody integrity, if you have those qualities, we’re going to find the right position for you in the organization. We’ll work together to do it.” Everyone believes that and is doing that.
Business Transition: If somebody embodies your core values, has grit, and drives innovation, do your best to find the right position in your organization.
When someone reads a job description, it’s not them. I’ve had conversations like, “I’m not sure I want to do this.” I said, “I agree. What about this? Let’s fill this position.” I’m trying to also build out our structure so it’s agnostic to who fills the roles. I’m the COO but in the next years, I may not be. That role will be well-defined for the next person. We make it clear, upfront, and honest. Sometimes, you have to have hard conversations when you’re in a leadership position. If you’re honest with people, they appreciate it usually.
How about the core values? You rattle them off, which is great that you know them. Often, people say they have core values and then you ask any of the employees or leaders and they have no idea what the core values are, or they can name 2 of them, not 5. How do you interview against those core values when you’re looking for candidates and you know you want to interview for them? Do you have a process for that at all?
This might sound familiar to you but I’m collecting five traits for that candidate and defining those traits so everyone in the interview process has a clear picture of what that means, listing the core values on an actual piece of paper that I hand them, and say, “These are the core values.” Also, the top three things they need to get done in the next year. “Have you done it?”
I walk through a questionnaire sheet. If it says someone that’s not familiar with the interviewing process, I’ll have our team write questions for them that they can choose from as they’re talking to the candidate, all designed to hit those topics, the traits, the core values, and then what needs to get done. It makes it even. We’re answering questions. “Do they check that box or do they not check that box? Can they show they have integrity? Have they demonstrated that?”
I like that you’re giving the process and the actual questions to the interviewers as well. Often, interviewers go in with the best intention but they’re either rushed or don’t have the skills. They’ve never been trained in interviewing. One of the core modules in my Invest In Your Leaders course is this whole section around interviewing. It’s a real skill that we often miss the boat on. We’ve got all of our people doing interviews but they’ve never been trained or you got a leader who says, “I’ve done hundreds of interviews,” but you might have done 100 of them wrong too. It’s good that you’re putting those systems in place.
I’ve written a lot of accreditation programs for people in the industry that test our equipment. The process of question writing and having a rubric against which you score the questions and answer them to is so critical. That’s why I felt we had to do the same thing for this type of questioning to make it clear we’re all shooting for the same goal. Whoever asks the question and gets the answer, we can see it’s a good answer, not a bad answer.
Something I’m building out is the certification models for all of the twelve skills of the Invest In Your Leaders course. I can have that as an offering as well so that leaders can certify people in their company on demonstrating the skill and using the skill. It’s one thing to learn it and be able to regurgitate it. It’s another thing to be able to practice it, demonstrate it, and then later be certified at a level that you could even train other people in it too. It’s good that you build that out. You went through a transaction selling. Did you sell the whole company or part of the company to private equity?
Whole company.
How did that transaction go? What was the process like? What have the lessons been through that?
I came into the process about ten months prior to the sale. It’s already been going on for about six months with the CEO, laying some of the groundwork with the owners. The process I got involved, involved us building out a complex slide deck about who we are, how we plan to grow, where we’ve been, and where we’re going. That was then shopped through a process that I wasn’t a part of, thankfully. They brought us twelve candidates. We did phone interviews with them. That got narrowed down to five finalists.
We then went through live interviews one-on-one with all five of these groups, dinners, all-day offsite meetings, tours, and that kind of stuff. They went away. The highest bidder won in the end. It was an interesting process because as the process went along, we didn’t know where we’d end up. The night before it got finalized, I thought things were going in a different direction. I woke up to where we are, which has been amazing. We have a wonderful group. EW Healthcare Partners is our new owner. They’re supporting us 100% and giving us what we need to get to the next level.
What did you have to do differently as an organization to start working through that transaction and post-transaction? Have you had to change the way you’ve operated? Have you had to raise your bar in any areas? I’m curious about that.
The biggest thing we had to do is think bigger. We’ve always thought about it within the constraints of a decent-sized family-owned business, a $20 million business with over 100 employees at one point but we were still constrained by our circumstances and how sales went. We’ve got a little bit more freedom to think bigger and achieve goals that we’ve highlighted and that we know the market will support. That has been our biggest challenge.
There have been definite operational changes that are taking place. We were in a 170,000-square-foot facility, which we think is going to be too small pretty soon. Our products could be 15,000 square feet made out of 700 or 800-square-foot boxes that are bolted together with 15 feet of mechanical ducting and air handlers on top. We’re in a huge building. We’re reconfiguring the building to fix the layout.
We also do equipment that’s the size of a refrigerator so much smaller. One has an 18-hour contact time and one has a 24,000-hour contact time for us but they’re very complimentary because our smaller products fit inside our laboratories and clean rooms. It gives us a very turnkey offering. Service is a huge part of what we do. We’ve got a service team in-house of ten people. We’ve got one employee in Singapore that lives there full-time supporting the lab and the region. We’re thinking bigger, reorganizing, and defining what we can do here and when we need to move into a bigger facility.
How about the communications with the employees and the current team? Was there any nervousness that you had to quell with them or anything you had to walk them through? How did you handle that part of the transaction?
There’s a lot of nervousness. People have worked for a family company for a lot of years starting with the CEO and myself. We had to get this figured out. We have open and honest communication, being as forthcoming as we could. We had limitations based on the process throughout each step of the process with whom we could share information.
Months into it, people are getting comfortable that we are going to keep this team together and grow based on our leadership team. They’re not coming in, replacing, and dropping their CEOs in a place. They’re going to grow on our leadership team. There have been some changes, mind you, but it’s been for a couple of different reasons, not our owners forcing us to do something, which also adds to the nervousness. We’re in a good head space company-wide and moving forward.
With the sale to PE because the family needed to have the exit after the son passed away, was that the exit from a family business to a business now?
Yes. The wife, who’s an amazing lady, has amazing kids. She owned the majority of it. His brother owned some, who wasn’t involved in the business until the last few years but they weren’t able to bootstrap it the way that the previous CEO did. They didn’t want to have that kind of investment so they needed to do something different. It’s sad on one hand but it’s also given the business the ability to go to the next level.
It’s nice that they recognized it and they didn’t kill the goose that laid the golden egg. They didn’t do anything at that stage. Did they keep any position in that transaction or are they out?
They’re out. Keith Landy was the gentleman that passed away. His family and the leadership team always respected his vision. They wouldn’t have done that. He made his wishes clear that he wants the company to go on. Our products are used to develop therapies that cure cancer and will be a great way to distribute medicine throughout the country so the time and the risk of shipping these expensive therapies go down.
There’s a real purpose to what we do and he wanted that purpose to go on. Everybody respected that in the process. The ownership was amazing. We did the work, getting the company sold but they also included us in the decision process and made sure that we were going to be in a good home. It couldn’t have worked out better at this point.
You’ve always been a lifelong learner. What is it that you’ve been focusing on in your growth? You talked about joining the COO Alliance and working on leadership stuff. Are there any specific things that you’ve worked on in the last couple of years or that you’re even working on to be a better leader or COO?
The lab is working on myself, the thinking-bigger thing. I talked about the relationship between Kevin and me and how that was rough at first. One of the first things he did was throw a book on my desk called Extreme Ownership. I looked at that book and said, “I’m not reading that. You read that thing.” Now, it’s one of my favorite books. I tell everybody about it. I don’t know if you’ve read it but if you haven’t, listen to it on tape because these guys are awesome. There are big tough Marines and they tell these stories of war and how that relates to business.
Extreme Ownership: How U.S. Navy SEALs Lead and Win
It’s been that formalized leadership training is the answer to your question. I’m making sure I’m following a process in my learning and getting something that I can pass down. I do have a passion for learning and teaching leadership. I’ve been involved in Boy Scouts over the years as a scoutmaster and bringing my guns up through Eagle Scout. I always like helping internally as well as in the community so people could learn.
I want to go back to the twenty-year-old Jeff Serle. You were behind the curtain doing the coding and working on some cool stuff but you’re just getting started in your business career. What advice would you give yourself back then that you know to be true now?
Start getting serious sooner. I tell people about my career, “I’ve had 27 years working with no boss. I work with my best friend. For the last few years, I had a boss. We have expectations. I wish I would’ve started working on this part of myself sooner.” The first ten years I worked here, I was going through college and getting an Engineering degree, which was somewhat important but I haven’t been the engineer of the company. I’ve led the engineering department. Get serious younger and take this more seriously. It’s taken for granted. It was comfortable. I let myself be comfortable for too long.
It seems like that’s probably the case for so many companies out there too. They just exist. They go day to day but it’s when somebody gets serious and grabs the reins or decides to start to lead. Sometimes it’s the speed of the leader or the group but you’re certainly a leader. Jeff Serle, the COO of Germfree Labs, thanks very much for sharing with us on the show.
Thanks for having me.
I appreciate it.
