In 1985, Michael Houlihan co-founded Barefoot Cellars, where he served as president and chief executive for 19 years. Despite launching the company with no money and no knowledge of the wine industry, Houlihan and his partner, Bonnie Harvey, built a global brand in 28 countries with sales of almost 600,000 cases a year.
They sold Barefoot to E&J Gallo in 2005. Houlihan, 67, is co-author of The Barefoot Spirit.
EL: Barefoot Cellars grew rapidly in your 19 years as CEO. How do you explain such explosive growth?
Houlihan: We had a set of guiding principles. One of them was pay-for-performance. Another was really listening to our salespeople. And telling our people everything they needed to know. We let information flow freely to engage people and get great ideas from them.
EL: Early on, how did you hire top employees when you couldn’t pay top dollar?
Houlihan: In interviews, we’d ask, “Where do you want to be in five years?” and “Why did you leave your last job?” We also asked, “Will you work on a big bonus?”
EL: In your book, you write about how every employee supported the sales team. How did you motivate them to do that?
Houlihan: You bring in every person as “sales support.” We wanted everyone to pull together to help us reach out to customers and educate people so they got to know what we were all about. We made sure everyone’s compensation was based on how the salespeople performed.
EL: But how can entry-level employees affect sales?
Houlihan: We gave all employees an info-graphic, a money map, to show how their role affected sales. So our receptionist might greet a visitor and ask, “Are you on vacation?” and “Are you a buyer?” If he says yes, she gets our sales manager on the phone right away.
EL: Some CEOs prefer to limit information flow among the rank-and-file. Why did you let it flow freely?
Houlihan: We adopted a “need to know” approach. We’d tell people what they needed to know about the organization. We’d hold brainstorming meetings where we’d say, “Here’s our challenge. Can you help us?” It created a team spirit. It’s harder to knock salespeople or have groups working against each other when everyone’s working together to share ideas.
EL: How did you reward the most valuable contributors?
Houlihan: We rewarded them with public praise. Our attorneys would say, “Don’t acknowledge your staff, especially in writing. They’ll demand a raise. And if you fire them later, you’ll leave a paper trail.” We didn’t listen to the attorneys. We expressed praise in writing and in person all the time.
EL: How did you motivate your salespeople?
Houlihan: We’d send them a letter at home, congratulating them on their production and laying out the new bonus plan. Their spouses would read the letter and become another source of motivation.