Watco still works with the very first customer it ever landed, a paper mill in Louisiana, on a contract it signed in 1983. The strange part is that the mill could have walked away at any point in the 43 years since. The contract lets the customer cancel any day, for any reason, with 30 days’ notice. They never have.
Ask Rick Webb what that says about what he built, and he will correct you before you finish the question. He did not build anything, he will tell you. The team did.
Rick would know what he is talking about. His father started Watco in 1983 with one locomotive and eight people, and Rick spent the next four decades helping it grow, 20 of those years as CEO. Today the company runs 47 short line railroads and serves more than 3,500 customers across North America and Australia. By any measure it is his life’s work. He still will not take the credit for it.
That is not false modesty. It is the whole philosophy. Watco does not have a better balance sheet than its competitors, Rick says, or better equipment, or deeper pockets. What it has is a team that earns the customer over again every day. Those first eight people kept the company alive by doing exactly that. So do the nearly 5,000 who work there now. The value, he says, is not made in a boardroom. It is made at the rail dock and the truck dock, where the actual work happens.
That is why the paper mill is still a customer 43 years later. Watco barely looks at the contract. Only two copies of it still exist, both framed, one outside the CEO’s office and one at the company that owns the mill today. Nobody pulls it out to settle an argument. They keep the customer the same way they earned it on the first day, by doing the work right and showing up the next morning to do it again.
Rick has a plain way of putting it. If you want to grow the top of your business, listen to your customers and act on what they tell you. If you want to grow the bottom, listen to your team and then get out of their way. He says Watco never really had a plan. The plan was to go wherever the customer took them.
There is a lot more to the story than we can fit here. Rick talks about the bet his parents made to start the company, and whose signature actually got it off the ground. He talks about the bar he opened six months before Watco, and what selling beer taught him about standing out when anyone can sell what you sell. He tells about a deal he made in 2008, at the worst possible moment, and the hard, honest thing his father said to him about it not long before he passed. And he explains the one rule Watco hires by, and why he gives full credit for it to a former Major League pitcher.
He spends the whole hour giving the credit away. For a guy who ran the place for 20 years, that tells you something.