by Mike Vogel
Updated 2 yearss ago
Clad all in black, tall, Bill Yeargin nonetheless strikes a self-effacing figure as he quietly returns greetings of “Hi, Bill” from the workers on the Correct Craft boat factory floor. His shirt has the company name and a slogan introduced under his management: “Making Life Better” — better for customers, but also workers and, he says, anyone else the company touches.
Right now, the better life is in high demand. “We have dealers and customers screaming, wanting boats,” he says. He aims to please, but meeting demand isn’t what worries him. What concerns him is a future in which the factory east of Orlando could fall silent.
Boating is big business in Florida. The state annually leads the nation in marine spending on new powerboats, engines, trailers and after-market accessories, according to the National Marine Manufacturers Association. Retail sales of new powerboats in Florida set a 13-year record in 2020, up 22%, the 10th consecutive annual increase.
The industry’s reach goes far beyond the state borders. Correct Craft alone exports to about 70 countries. The company dates to 1925, when Walter C. Meloon, a New Hampshire mechanic who built a boat powered by a Model T engine, went into business near Orlando. A Christian, Meloon established the corporate mission as “building boats to the glory of God.” That goal remains, supplemented with the addition of “Making Life Better” in 2012 just under it in the corporate “identity pyramid.” (Yeargin is the type to have a company identity pyramid.)
Through the decades, the company cherished an identity of integrity, wholesome advertising and quality boats as it manufactured a variety of craft, including plywood boats that carried rifle squads across the Rhine in World War II. It made its Nautique brand the premium towboat for waterskiing, where the goal is generating as little wake as possible. The company evolved through the years as wakeboarding, where the object is a big wake, became a popular towboat sport and again when wakesurfing became a popular trend.
Nautique senior electrical systems engineer Andrew Cochrum, in his electronics-filled Correct Craft office, shows how a boat owner can tweak a digital display of a wake crosssection to configure a gentle wave for children or one that is significantly bigger for experienced riders. His personal board sits in a corner, a sign of how designers, engineers and Nautique team pros make use of a lake adjoining the factory to test innovation. “It’s hard to find someone who’s not excited to be behind the boat,” Cochrum says.
Correct Craft’s transition in the early 2000s from the third and fourth generations of Meloons to professional management proved as turbulent as its boats’ wakes. After burning through three CEOs, Correct Craft talked to Yeargin about joining.
He seemed a perfect fit. The West Palm Beach native was a committed Christian. Yeargin graduated from a church-affiliated West Palm high school, Berean Christian, and later authored a book with the church’s pastor. Additionally, the Florida Atlantic University accounting grad and Nova Southeastern MBA headed yacht builder and servicer Rybovich Spencer in West Palm Beach. He wrote a regular column for trade publication Boating Industry and was in demand as a speaker.
Yeargin dives deep in management practice. Black-belt certified in Lean Six Sigma performance improvement methods and a CPA, he also got certified in personality preferences measurements — Myers-Briggs Type Indicator and DISC — that give him insight into people.
He wanted to be a consultant and rejected Correct Craft’s initial overtures. “I never aspired to be a CEO,” he says. But after Correct Craft parted with a fourth CEO a year later, Yeargin listened. “My wife and I decided this is what we’re supposed to do,” he says. Only when pressed does he add, “Clearly, there was a faith element in that, absolutely.”
Belief in culture
Upon arrival in 2006, the fifth CEO in five years found a company operating from a new factory but in far worse shape than he’d thought. The board was disunited; overall, “it was just a big mess,” he says.
Yeargin turned to his belief in culture, building on the Meloons’ values and investing in new ones. Culture, says Phil Purcell, CEO of the Marine Industries Association of South Florida, separates the top boat builders from the rest. “He has a culture that’s positive,” Purcell says.
Along with incentive pay and continuous improvement, he asks employees to be “learners” rather than “knowers.” He always has a couple of audio books going himself and suggests books to workers. As Yeargin walks the factory, an employee stops him for a quick chat about a book he recommended. “Thank you for being a learner,” Yeargin tells him.
Yeargin started and taught a voluntary, lunch break, workplace Bible study. Another Yeargin introduction: Service trips. In 2007, the company sent 21 employees to Mexico to build a home for a family of seven. It went on to sponsor employee service trips to Asia, Africa, the Caribbean and Central America as well as locally through Habitat for Humanity, among others. “It’s just had such an impact on our team,” he says.
Yeargin’s such a culture proponent that for the past two years he’s had Correct Craft host a “culture summit” for the marine industry, even inviting competitors, to show how culture improves not only morale and customer satisfaction — Correct Craft scores high in J.D. Power surveys — but also financial performance. He highlighted a turnaround at a Correct Craft subsidiary led by executive Paul Singer that proved so successful the subsidiary pays more in bonuses than it earned five years ago.
“It all comes back to culture,” Yeargin says. He tries to avoid boasting. “I’m sure there are people who do it better than us,” he said in his summit speech. “In fact, I’m sure we don’t do it the best.”
The logjam over control of Correct Craft broke in 2008 when Indiana investor and Ambassador Steel founder Daryle Doden, a minority owner of Correct Craft, bought out the Meloon heirs. That transaction occurred just as the Great Recession swamped the industry. Correct Craft cut production 90% as sales fell. Revenue bottomed at $40 million. With production down, the company sent workers on service projects and trained them in skills as varied as welding and English as a second language. Today, there’s a Correct Craft University, a mix of onsite skill training, web offerings, formal courses and book readings for employees. Yeargin has had Correct Craft pay for about 30 employees to earn their MBAs.
To cut costs, Correct Craft eliminated warehouses the Meloons still owned in favor of direct sales to dealers. It brought international distribution in-house, starting Yeargin on visits to 50 countries in three years. Even so, Yeargin had to cut headcount from 400 to 125 when he started.
Sales eventually picked up. Correct Craft’s Nautique won Florida Manufacturer of the Year and Sterling Manufacturing Business Excellence honors. With Doden’s blessing, Yeargin reinvested profits. The company became an industry-leading acquirer. Under Yeargin, it has grown to nearly 1,700 employees at 13 locations that include eight boat brands, three engine brands, three watersports parks and an innovation company. Yeargin targets a 20% minimum investment return on deals. The company acquired cable watersports parks in Orlando and Miami and created one in Auburndale. Yeargin, 60, hits the Orlando park himself Saturdays for an hour of what he says is a mind-clearing, total body workout. Pre-pandemic, he went to the gym every weekday.
As the company grew, Yeargin upped his involvements. Among others, he has served on boards for the National Marine Manufacturers Association and UCF, where he recently finished a term. “He really has no ego, doesn’t need to be recognized and is happy to serve,” says UCF trustee and Foley & Lardner partner Michael Okaty.
Yeargin’s made seven trips to the White House and served on advisory committees — one on trade, the other on outdoor recreation access — for Presidents Obama and Trump. He was the final chair of the outdoor committee, a group that included Bass Pro Shops founder John Morris. Says another committee member, Derrick Crandall, at the time president of the American Recreation Coalition, “They could just tell Yeargin had a passion, was committed and had some ideas” for improving access.
‘July 4th every day’
Within boating, especially in Florida, times looked good. The state usually leads the nation in boat registrations and in 2019 hit a 10-year high at 935,742. As 2020 began, the fret in the industry was over inventories getting too big. Yeargin predicted a “reset” year.
Instead, the pandemic lockdown closed Correct Craft’s California plant for 11 weeks. In Florida, the shutdown lasted four. Like other manufacturers, the company temporarily switched to making personal protective equipment for health care workers. Yeargin used his forced hiatus from business travel to pen books — a company history, a book on leadership called Education of a CEO and a third, Education of a Traveler. (He’s been to 110 countries. He once wake-boarded on the Sea of Galilee.)
He spent family time on the lake behind his Seminole County home on his personal boat, a Super Air Nautique G23. The busy lake gave him a glimpse of what was coming. “It was like July 4th every day,” he says.
For 2020, ski and wake boat registrations, which reflect sales, posted at least four consecutive months of double-digit gains and eight months of year-over-year gains nationally. “It was really a rocket ship,” says Michael Swartz, a marine industry analyst for Truist. “We just saw historic demand.” Correct Craft went from having an average backlog of seven weeks in February 2020 on the eve of the pandemic to 29 weeks a year later.
Nautique boats begin in a design studio meant to evoke a boat’s sitting area but that seems more like a grayscale version of the Star Trek Enterprise bridge — with the addition of a Rockstar Energy fridge, Lego tables for mocking up design ideas and a 3-D printer. “We can have an idea in the morning and have it printed out by the afternoon,” says design supervisor Matt Moore.
Yeargin tours the engineering section and photography studio, past the black-curtained spot where the latest thing is kept under wraps and onto the molds being filled with the mixings for brightly hued hulls. He volunteers insights on boat building as he goes. Boosting production by one boat a day would take 40 to 50 more workers. He traverses the assembly line that snakes through the plant for sandwiching hull and deck together, onto parts and electronics installation to the spot leading to the onsite lake where every boat gets a test run — to catch the “little things that should have been checked”— before being shrink-wrapped for shipping by truck to customers.
With demand so high, the risks ahead are that the industry adds too much capacity and that those new boat buyers, once their recreation routines return to normal, flood the market with late-model used boats, undercutting new sales. Correct Craft recently purchased a former window factory next to its Orlando area plant, but Yeargin says he will be disciplined in increasing production.
Correct Craft hit $550 million in sales in the pandemic year. Yeargin forecasts $750 million this year. Through acquisitions, he sees a “path to a billion.” Acquisitions will be competitive. The marine association’s Purcell says the first few months of 2021 saw $1 billion in industry acquisitions from Fort Pierce to Miami.
Benefiting from changes
Yeargin has a different concern about the future. In 2017, he headed to the Singularity University education program founded by authors Peter Diamandis and Ray Kurzweil. “I’ve always been a bit of an amateur futurist,” Yeargin says. For a week, he heard from experts on the technology advances and disruption coming in their fields. It convinced him some boat builders would join Kodak among top companies sunk by new business models and technology. In 2018, he started Watershed Innovation to avoid being one of them. Watershed is the designated outsider — under the Correct Craft umbrella — focused on change. “We want to give people what they don’t even know they want,” he says. “If we fail, I want us to fail looking out and trying to adjust and benefit from the changes, not be afraid of them.”
The biggest opportunity, Yeargin says, is electrification. Car dealers report that electric vehicles, despite all the buzz, are a tough sell to consumers, accounting for less than 2% of sales. Boating faces the same issues as autos— battery cost, capacity and charging time — without the consumer subsidies. Correct Craft has sold just a couple electric boats, but Yeargin says technology will overcome the issues and “in 10 years all our boats are going to be electric.” Meanwhile, electric propulsion and other advances led Correct Craft to industry honors as the most innovative marine company for two consecutive years.
Says Yeargin, “I’m not thinking about retirement, but I want to finish strong. What can I do today to make sure they’re successful long after I’m gone?”
Read more in Florida Trend's May issue.
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