“I found myself spending time learning about their business and learning their stories,” Baker recalled. “What I learned real quick was that I was more interested in the business and how it worked than in reporting on its financial results. I knew I wanted to be a business owner some day.”
At the time Baker was reaching that conclusion, his firm, Arthur Andersen LLP, was establishing a West Michigan consulting practice and he got in on the ground floor.
Initially, the practice focused on companies with annual revenues in the $30 million to $50 million range. As the practice grew, the focus shifted to very large companies, and Baker began working with companies such as Ford, Chrysler, Kellogg and Herman Miller, both domestically and abroad.
He already had the financial background, and along the way he gained experience in every aspect of running a business, from planning to product development to marketing.
“A lot of the consulting I would do helped shape my understanding of what I would need to run a company.”
At Andersen his career path began to steer him toward Detroit as he was being groomed to take over the automotive segment for a soon-to-retire partner. He didn’t want to move his family from the Grand Rapids area, so he started looking around for another job.
Baker had founded a group called the Distribution Executive Council, which brought together executives from West Michigan distributor companies for meetings on “big picture” issues and strategic benchmarking. That’s where he originally met the two owners of National Nail Corp.
In 1996 National Nail was more or less at a crossroads, he recalled.
“The company had consistently been at $36 to $37 million, and there were a lot of changes going on in the industry. The two of them looked at it and saw they didn’t have the talent internally to take the company where it needed to go. They didn’t want to sell the business but still wanted to liquidate some holdings. I was helping them find a CFO.”
After interviewing candidates for the job, the owners decided they wanted Baker to step in to run the company, not as CFO but as executive vice president.
“I was 35 years old and decided to give it a whirl. It was a good company with a good reputation and good people. My friends thought I was nuts for going to work for a nail company.”
In 1999, two years after joining the company, Baker took over as president.
National Nail was founded in 1962 as West Michigan Nail & Wire. Today the company is about more than just nails; it manufactures and distributes a dozen categories of building material products, including adhesives, pneumatic tools, decking, roofing, aluminum doors and windows, and metal and poly products.
Some 80 percent of its market is residential construction and the remaining is light commercial. Its primary customers are independent lumber dealers and roofing wholesalers. Baker said National Nail is trying to expand more into the light commercial market.
Today the company has 205 employees nationwide and four branch locations in Cincinnati, Syracuse, Atlanta and Houston. Houston is the second largest market in the country, with 63,000 home starts within a hundred-mile radius of the city, Baker pointed out. National Nail opened its Houston office Feb. 7.
National Nail sales have more than doubled over the last six years, which Baker attributes to geographic expansion into other markets and the addition of products that were “natural extensions” of the ones the company already carried.
Sales increased 35 percent in 2004, and Baker anticipates growth of more than 20 percent this year. Over the next three years he expects the business will grow another 50 percent.
Baker serves more or less as a think tank for the firm.
“Scott spends a lot of his time just thinking about where we need to be. He is truly the visionary for the company,” said Kevin Gilfillan, director of marketing.
“I’m always looking forward at what we can do differently and how we can have fun,” Baker acknowledged. “Painting pictures and driving a vision is where I spend a lot of my time. I see my role as that of a salesman. Most of the time I’m selling what’s different about our company.”
Baker explained that National Nail’s business strategies are grounded on four cornerstones: customers/suppliers, employees, financial stewardship and conduct.
He said National Nail’s job is to help its customers succeed with quality products and services, help its suppliers build equity in their businesses, provide opportunities and a rewarding work environment for employees, give back to the community, and conduct business in a manner that “reflects trust and dependence on God.”
As he puts it: “There will be a bottom line benefit for us if I take care of our employees first, if we serve our customers first and if we serve our suppliers first.”
When Baker came aboard in 1997, about 17 employees owned the company. Today it’s 100 percent employee owned. His feeling is that if employees are more financially tied to the business, then they’ll invest more of themselves in the business; they’ll be more involved in their job and more committed to it.
“A person will invest more in the company if he feels his efforts are going to yield some benefits to him personally. I think it helps us attract better people.”
Gilfillan said one of the reasons people like to work at National Nail is because it’s a different type of company.
“The biggest thing for me is to be able to make a difference and have an immediate impact on what happens,” Gilfillan said. “You can see ideas that you’ve got take shape and be implemented.”
Since 1999 National Nail has spent a “tremendous” amount of time working with its manufacturers and dealers on how to get the products out of their stores and into the hands of end users. Besides providing advertising and marketing material support, the company offers half-day classes for dealers’ customers on such topics as installing decking.
Around that same time the company put together a marketing team and started calling on builders, architects and contractors to teach them about National Nail products.
“Even though we’re selling a nail, we get more for it than the competition does because of all the other things we do,” Baker remarked. “How we help you sell our product is different. How we train you on our products is different. And then there’s just that thing called trust.”