'Hire smart people, get out of their hair'

Immediately after World War II, there was little work for teenagers. No one knew it better than Howard Roach, a high-school sophomore in San Gabriel who had gotten so good at his hobby of tinkering with radios that he was spending most of his time fixing his friends’ and neighbors’ sets for free.

Roach figured that if he could fix radios for fun, he could do it for profit. So at age 16, in 1946, he opened a radio-repair shop in the back of a San Gabriel sporting-goods store. 

During the war, production of TV sets was banned. When the war ended in 1945, so did the ban, and demand for televisions boomed. TVs fascinated Roach as much as radios. Back then, television sets were individually assembled by hand. At a time when there were only about 500 televisions in Los Angeles (and no commercial stations), about seven or eight of those sets had been built by Roach.

Once manufacturers started making televisions, Roach expanded into TV sales and repair with a full crew of salespeople and technicians. That was when he learned something he has applied to business ever since.

“TV manufacturers had new models with all-new circuitry every year, so they’d send trainers to teach us how to repair them. When my technicians didn’t pick up on things as fast as I thought they should, I’d step in and show them what they were doing wrong. The trainer took me aside and said, ‘You’re not helping them, you’re doing their work for them,’” Roach said with a chuckle. “That’s when I got it through my thick head. I thought: ‘The man’s right. If you hire somebody good, let him do his job.’”

As customers came to know and trust Roach, they asked if he would sell and service appliances, too. By 1980, he had a huge warehouse and an even larger store — he called it his “superstore” — taking up an entire block in San Gabriel. In 1981, he opened another superstore in La Habra. Between 1988 and 2011, he added eight more locations. Howard’s Appliance & Flat Screen Superstores are now in San Gabriel, La Habra, Upland, Long Beach, Laguna Hills, Westminster, Irvine, Corona, Riverside, Torrance and, very soon, Alhambra.

In 1976, government regulations began allowing businesses to convert to employee stock-ownership plans, where employees buy ownership in the
company and their profit shares go into their retirement plans. When Roach heard of it, he made a bold decision.

“I felt that the people who make the company successful should have a share in it,” Roach said. He gave 43% to the employees. In 2000, they purchased the remaining 57%. Howard’s was one of the first ESOP companies in the nation.

As a result, employees who otherwise might have moved on to other jobs stayed and worked their way up. At Howard’s, it is not unusual for employees to work there for 15, 20, even 30-plus years.

“We grow our people. It’s like planting seeds in a cornfield,” said CEO and President Judy Lawrence, a former Maytag representative who joined Howard’s 20 years ago as a sales trainer. “When customers and vendors deal with a manager, that manager has probably worked many positions at Howard’s and understands the company from the ground up. That’s a big part of our success. ESOP companies are 10% to 15% more productive than competitor stores in the same industry, and Howard’s is no exception.”

Roach, who remains on the company’s board of directors, said that in the hands of people who care about it, the company could go on for another 65 or 100 years. “There’s nothing stopping it,” he said. 

As for gems of wisdom from a seasoned businessman, he offered two: The first is to “hire smart people and then get out of their hair.” The second? “Love what you’re doing, or move on,” he said.