Goetz Custom Boats - Surviving to Thriving

A Thriving Team Story – Goetz Custom Boats

Happy Holidays!

The previous two blogs highlighted personal (Bernie’s) resiliency factors and positive interpersonal (Coach Monica’s) influencing skills. Discussing organizational success factors seems to follow naturally, so this month’s article is about team Goetz.

Eric Goetz and I met while he attended the Brown University Practice of Management Certificate Program I helped develop and teach. It ran between 1994 and 2006. After he completed the fifty hour long program, Eric became a guest speaker and now visits and presents his company’s case to universities where I guest lecture. I also sit on Eric’s advisory board.

So, please enjoy the following. You are encouraged to share your thoughts and recommendations. They will be forwarded to Eric. Following the case are tools and theories we used, in part, to help Eric. These are included to benefit you. If I can help you apply them to your organization, please let me know.

Also, if you have the opportunity, please visit Goetz’s award winning website at:


The Given: In 1975, fresh out of Brown with a degree in Anthropology and a strong passion for sailing, Eric Goetz was commissioned to build his first boat. He did so with his own two hands. Word soon spread amongst wealthy boaters about the boat's sleekness and Eric’s desire and ability to apply the most advanced boat building technologies, with ultra light carbon fiber and resins, to customized designs.

During the 1980’s business ballooned, thanks in large part to The America’s Cup being held in Newport, RI. Ted Turner won the race commandeering Captain Courageous. Mr. Turner practiced on a Goetz built yacht. He marveled about the boat’s speed and maneuverability.

By 2000, Goetz's Bristol, RI facility was considered the world’s premier custom boat shop. Eric Goetz employed thirty-five full time crafts people, each with boat building component specialty skills. They produced four yachts per year. Average sticker price was $1 - $2 million.

The Doubt: Business was strong until terrorist activities on September 11, 2001 sent shock waves through world financial markets. Eric’s high net worth clientele, like Roy Disney, cancelled over $6 million in scheduled yacht orders. Clients had the capital to purchase new boats, but wanted to avoid being perceived as insensitive and extravagant during world crises.

The Trials:
Domestic business dropped off completely and remained idle through the fall of 2003. To remain solvent, Goetz was forced to lay off employees. He pursued international business with the likes of the Pirelli family, Italian manufacturers of high performance automobile tires.

International clients sustained business, but the market fluctuations and associated stress caused internal organizational strife. Several key employees either left or were reassigned. Roles and responsibilities were blurred as employees did what was needed to stay afloat.

In his twenty-five years of business, Goetz never experienced such a sustained lull for his boat building services. His primary clients, wealthy Americans, were considered recession proof. To avoid future dry spells, Goetz wanted to use his high technology brand to expand into diverse, and dependable, markets.

Transcendence: Eric considers Ferrari a good model. The Italian racing giant established its brand making exceptional racing cars. Car owners wanted the opportunity to experience Ferrari technology every day. Road cars were built to meet this demand. Ferrari apparel was created and appealed to people wanting to identify with the sleek racing brand.

Eric refocused, adjusted and clarified office roles to free his time to engage clients, to focus on the future, and to build strategic alliances.

He considered aligning his brand name and technology applications with diverse marine manufacturers. He explored commercial and industrial land design and construction markets where his custom composite technology can meet creative design and structural needs. He submitted a bid to build a custom designed roofing system in upstate New York where carbon composites meet unique design and structural specifications due to snow loads.

By September of 2007, thanks to his new strategic focus, realigned structure allowing him more client time, employee involvement and empowered leadership, Goetz Boats opened a new, state of the art boat building facility offering the world’s premier technology. The old shop, located less than a mile from the new facility, is used, primarily, for service and custom repairs.

During the year, to meet demand, the workforce grew from thirty-five to eighty-two employees. Also between 2006 and 2007, sales more than doubled, from $3 million to $7.5 million. 2008 sales are expected to exceed $10 million.

New Trials: The challenge is to maintain open communication channels and superior client service with the same effort and quality responsible for Goetz Boats’ current vaunted status. How can Eric maintain close to his clients and workforce despite tremendous growth and a strong desire to keep growing into all boating markets and affiliated industries?

Can you please help Eric maintain and grow the business without sacrificing relationships and quality?

Below please find Goetz summaries culled from business classes and board meetings.

Goetz UMD Case Summaries
November 29,2007

Customers choose Goetz for its value. The relationships, production quality, and expertise distinguish Eric and his shop. His workforce training is superior. They are ahead of the learning curve regarding carbon and resin applications. They have a trusted “Alumni” club comprised of former employees who supply and create component pieces for Goetz Boats. Goetz is one of four major customer yacht builders in the world.
Weaknesses: The rapid expansion may undermine quality and the unique, empowered, culture Goetz cultivated over the years. The Focus, Structure, Customer Orientation, and Leadership may suffer while Goetz experiences growing pains.
Target high net worth clients. Align with designers and builders of all crafts. Get an international shop presence with a foreign site / location. Create incentive systems for referrals. Purchase or merge with respected firms in markets you want to enter.
Threats: Captains / owners become more challenging, and less knowledgeable – they purchase based solely on cost. Access to raw materials (keel steel) is delayed because of the building explosion in China.


Goetz Brand Image / Value and Votes
Quality - 6
Innovative - 5
Pedigree - 4
Performance - 3
Service - 1
Tradition - 1
Speed - 1

Goetz BLC Case Summaries
April 12, 2005
Technology and specialization, niche, innovation, work environment, lack of sales tax, experienced workforce, multitasking workforce, industry / client network, strong reputation and brand
Weaknesses: Product diversity, sales and marketing, advertising, strategic management, project management, delegation, licensed technology / patented tech., nautical parts, female workers
Sports marketing, sponsorship, merging with existing players, ski equipment, skateboards, bobsleds, stock boats, Ferrari’s model, high image, profile, education / internships, alliances, schools, supplies
Threats: Global economy, tornadoes, sailors / cliques / flippant, popularity

Critical Marketing / Strategy Success Factors with Current Level of Satisfaction:
(1 = Needs Improvement, 10 = Great)
Stable Workforce - 9
Develop Quality Employees - 9
Cutting Edge Technology / Brand - 9
Maintained and Cultivated Client Base - 8
Upgraded Facilities - 5
Streamlined Processes (Where possible) - 5
Eric Sets Strategies and Delegates - 4
Product Diversity - 2

GOAL: Expand into 2 –3 new product areas
Barriers: Time
Controllable recommendations to overcome barriers: Cultivate strong management team to free up Eric
Possible Steps Today: Set up 2 tier management teams to work on existing products and to test prototypes
By when is this possible: Within 12 months – April 2006

Goetz BLC Case Summaries
April 13, 2004

Strengths: Quality reputation, culture, spirit, body of knowledge, loyal, faithful, use of materials, technically savvy, customization, specialization, accommodating, history, credibility, nimble
Weakness: Visibility, exposure, big chunks of cash in cycles, small product lines (narrow), connected to elite market (wants vs. needs) hobbies – control

Reach broader markets (Smaller Boats), build here, advertising – Robb report, scale models / sporting goods, skis, composite products, windmills, towers, Sharper Image
Threats: International Competition, Terrorism, And Economic Fluctuations

Critical Marketing / Strategy Success Factors with Current Level of Satisfaction:
(1 = Needs Improvement, 10 = Great)
Close to Customers - 10
Product Innovation - 10
Elite Brand Name - 9.5
Retain High Quality Employees - 8.5
Efficient Process Applications - 7
Alliances / Partnerships / Strategy - 6.5
Controllable Costs (Lean) - 5
Steady Cash Flow (Obtainable) - 2.5

GOAL: Steady cash flow via alliances and smaller, steady lines

Barriers: Economy, Competition, Eric’s time to pursue these strategies, Limited Market Focus

Controllable recommendations to overcome barriers: Hire plant manager, Convince wealthy to sail via articles, more referrals per designers, free up Eric’s time – get him away from administrative duties

Steps today: Free up Eric to focus on below External Opportunities

Below please find tools and theories used in part to help Goetz thrive. They can be applied to your organization. If you need help, please give me a call.

Managing Culture: What will it take for Goetz to thrive?
• Thriving organizations do well in terms of Outcome Vitality.
Cultural vitality impacts outcome vitality.
How does it fit together?
Values influence basic concepts and assumptions about the way things work. (Teamwork, customer / employee philosophy, involvement, decision making, conflict)
Beliefs reflect an understanding of what gets prioritized. (results, processes, relationships, etc.)
Behaviors demonstrate actions taken by people. They reflect ways of behaving within an organization. (Meeting behaviors, follow through on commitment, observable actions)
Culture is a specific set of values, beliefs, norms, and behaviors, learned over time, and assumed to be the correct way of being.

Organizational Learning Continuum

Culture = Value + Beliefs + Behavior = Results

Thriving Traits:

•Vision and goals
•Collaborative, two-way
•Shared accountability
•Relationship focused
Customer Orientation
•Important partner
•We adapt to them
•Many to single
•Many leaders
•Accountable risks

Just Surviving Traits:

•Here and now
•Top-down, one-way
•Silo-turf mentality
Customer Orientation
•Necessary evil
•They adapt to us
•Single to many
•Hero-leader myth
Keys to motivating environments (Team):

Successful Team Building Factors

Constantly reinforce your organization's goal. Let everyone know his or her talents and skills can help the organization succeed.

Cultivate unique individual talent with modeling, development, training and security instead of rejecting those who do not fit a popular role.

Build a commitment to your people, a sense of belonging, with respect, appreciation and by applying their unique skills to organizational needs.

Egos must be dropped so your associates can communicate without fear of rejection. This communication leads to sharing more information, which facilitates trust, change and development.

Develop the positive aspects of ego-confidence, assurance, and assertiveness and eliminate the negative-selfishness, insecurity, the need to draw attention to oneself and being threatened over territory.

Team Solutions

Does everyone want to be on the team?

Is there a common vision / mission / goals - for results?

Are there mutually agreed roles and responsibilities to support the mission?

Are there well-developed team processes, procedures and norms to support the roles?

Are there functional and satisfactory relationships based in trust, respect, communication and cooperation?

Is there support and development of individuals? Do people sense a strong and
sincere commitment from leaders to apply and actualize potential?

Team Function Gauge:

____ My role is clear.

____ Communication is open and candid.

____ I believe I am heard.

____ We are maximizing the team’s talents.

____ My talents are fully utilized.

____ We are using effective problem solving skills.

____ We are making timely progress toward our goal.

____ We are effectively coaching one another.

____ Conflict is managed effectively.

____ We are maximizing resources.

I am most pleased about______________________________________________________

I am most frustrated with____________________________________________________

Successful Organizational Change Traits

Establish a sense of Urgency

Form a Powerful Guiding Coalition

Create a Vision

Communicate the Vision

Empower Others to Act on the Vision

Plan and Create Short Term Wins

Consolidate Improvements and Produce More Change

Institutionalize New Approaches

Action Plan

1. What is your goal? On a scale of 1 -10, what does 10 look like?

2. Where are you now?

3. What do you need to bridge the gap between your current status and your goal?

4. What is holding you back? What barriers get in the way?

5. What’s causing this barrier or obstacle?

6. What's within your influence to recommend and change to overcome the barrier / obstacle?

7. What steps can you start today to accomplish these recommendations?

8. Within 30 days, how will you know you are making progress?

9. What will progress look like?

10. What will ultimate success look like?

11. By when will you accomplish ultimate success?


Anonymous said…
The discussion at UMD with Mr. Goetz was very informing and I hope that we as students were helpful in giving him some ideas to use in continuing his successful business.
Matt Paknis said…
Thanks Mark:

Eric found your comments and recommendations very thoughtful and helpful. Your summaries follow the case. Great job!

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