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Saturday, March 6, 2021

Top 100: Public CEO: Dennis Knautz, Acme Brick

Name: Dennis Knautz

Position: President-CEO

How long at this position: 10 years

Previous jobs: controller, Acme Brick; chief financial officer, Acme Brick.

First job: caddy at Thorngate Country Club, Deerfield, Ill.; also bagged groceries at the local Jewel Food Store.

Best business advice: “In the B2B [business to business] world, focus on making your customers successful. The easier you make their path to success, the more likely they will want (and depend on) you, your products and/or service, thereby increasing your probability for success.”

Best business book: leadership books by John C. Maxwell; Strategy: Create and Implement the Best Business Strategy for Your Business from Harvard Business School Press. “For my “at-home” reading, I get to read One Fish, Two Fish, Red Fish, Blue Fish quite often.”

Favorite book, movie, play, etc.: “My favorite movies include whatever movies my wife chooses!”

Best decision: “Other than choosing to marry Connie, choosing to move to Fort Worth and attend TCU before joining a great company like Acme Brick Company.”

Advice for people getting started in business: “Recognize that inventing a product, delivering a service or producing, selling a product is just one part of operating a successful business. Include someone on your team who understands the business side of the operation to help you chart a successful (and profitable) course through the legal, financial and regulatory requirements that each business must address.”

A chart behind Dennis Knautz’ desk says it all.

Despite an otherwise successful production run that’s made Acme Brick Company Inc. an industry leader, some years can fall short. Way short.

That was the case in 2006 when the Fort Worth firm shipped fewer bricks than its standard annual output. But Knautz has taken more than a few punches and knows what’s needed when business contracts.

“We’ve learned how to get big and how to get small,” said Knautz, 61, who joined the firm in 1982 as controller and became its president and CEO in 2005.

As an executive who considers himself a hands-on leader determined to remain connected to his 2,200 employees, Knautz has done just that. He attends annual lunches at each of the company’s 70 sales offices while keeping tabs on its 26 brick plants. Yet he keeps a loose leash, allowing plant managers to run their own affairs. He does likewise from his Fort Worth office overlooking the Trinity River at Bryant Irvin and Edwards Ranch roads.

“I try to encourage managers to give folks the tools to be successful,” said Knautz, who follows a similar philosophy of his own supervisor, Warren Buffett.

When the billionaire investor’s Berkshire Hathaway Inc. acquired Acme Brick, Justin Brands, TTI and BNSF beginning in 2000, he left its top brass alone. He trusted the executives to make decisions appropriate for each of their Fort Worth companies.

“He needs to worry about the billion-dollar deals, and I need to worry about the million-dollar deals,” said Knautz.

“I have to report to Warren. He expects us to manage this business. He leaves that up to me.”

As a brick supplier to countless construction firms, Acme knows housing. Knautz monitors new housing starts and construction trends, which historically follow seven-year cycles. The pattern changed after the nation celebrated 2 million housing starts in 2005, compared with the average 1.5 million in a typical year.

“In summer 2006, everything dropped,” said Knautz. He watched brick orders fall by 20 percent in a single month. The company declined to specify numbers, citing proprietary reasons

Instead of slashing the payroll and closing offices, Knautz took a more measured approach, viewing the downturn as an opportunity to prepare for the following spring. Surely, orders would pick up by then, he thought.

“Spring came and it just got worse,” said Knautz, who shut down 16 plants, including six in Texas. The company’s workforce was cut as a result.

“We had to get small. It was tough,” Knautz said.

Despite idling operations at several plants, no sales offices were shut down.

“If you close a sales office, you’re leaving that market. It’s like pulling your hand out of a bucket of sand. It’s harder to get back in,” said Knautz. He credited Berkshire Hathaway’s backing for his ability to downsize less than he otherwise might have.

“I was able to keep more people on the payroll,” Knautz said.

While serving as chief financial officer, Knautz gained a firsthand look at the company’s financial matters before succeeding Harrold Melton as president and CEO in 2005. But even then, Knauz was no backroom numbers-cruncher.

“I got out into the field and visited plants, sales office, people. I understood what made each of those locations successful.”

A resurging housing industry is making business better for Knautz these days.

“We’re starting 2016 budget [planning] now and are looking at next year’s demand,” he said. He foresees greater demand for Acme products as builders construct new homes.

“We may put another plant [back] online. It’s ready to go.”

Although it is not fully recovered, Texas’ housing industry continues to rebound, Knautz said. But that doesn’t mean more brick plants will open next week.

“It takes two or three years to build a brick plant. I can’t respond that quickly,” Knautz said.

What Acme Brick can do – and does do – is keep tabs on the state economy, the nation’s gross domestic product and housing trends.

“It’s a gut check. You listen to all of those, as I do in strategic planning.”

When not reading the economic tea leaves, Knautz enjoys the occasional golf game at Shady Oaks Country Club and spending time with his wife, Connie, and 7-year-old grandnephew who lives with the couple.

Finding such time is difficult for an executive who is in the air as much as on the ground.

“I travel a lot,” said Knautz, who is scheduled to spend half his working days out of town for the rest of August and all of September and October.

“If I go to a market, it gives me a chance to understand what business conditions those markets are in. Keeping up is very important.”

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