When Ryan Pape took the XPEL CEO job, he thought his wife would be excited. He was wrong.
"She cried," said Pape. "She thought it was a terrible idea."
Back then in 2009, XPEL, a maker of protective film that protects paint on cars from chips and scratches, was on the verge of going out of business. The nation was muddling through the Great Recession. And the auto business had stalled out.
XPEL was losing money. Debts were piling up. It was down to 15 employees. Raising cash was all but impossible. Its stock, which then traded in Canada, was worth pennies. And its business model, which initially focused on software used to precision cut the paint protective film to fit different auto body types, was flawed.
Run To A Challenge Like Ryan Pape
But Pape, 40, saw a challenge. He knew the company well, having worked there since 2004 as an tech specialist before leaving in 2008. He knew he was taking a big risk. But, unlike his wife, he didn't think taking the job was crazy. The opportunity to turn the company around excited him. "I thought to myself, I can do this," Pape said.
Today, XPEL is the premium producer of paint protective film. And the business, which still generates most of its revenue from automotive paint protection film, is growing. XPEL now also sells protective films for boats, car interiors, and home surfaces. It also makes anti-microbial film for tablets and touchscreens, as well as glass window tints on commercial building, residential homes, and auto sunroofs.
The turnaround under Pape, helped by acquisitions and raising awareness of the company via auto racing sponsorships, has been impressive. From the stock market low in 2009 to the high this January, XPEL was the No. 1 performing stock in the S&P 1500, rising 51,000%, vs. 533% for the broad stock index. Today the shares trade on the Nasdaq and the company's market value is $1.9 billion. In 2021, XPEL sales topped $259 million, up 63% from 2020. (Sales were just $3.8 million in 2009 when Pape took over.) In the past five years, earnings have risen from 5 cents per share to an estimated $1.61 this year.
So, how did Pape transform a business on life support into a thriving growth business?
Gain An Edge By Going 'All In'
If you want to make waves in your career, you have to dive in headfirst, Pape says. Dipping a toe in just won't get it done.
"You have to be willing to go all in," Pape said. That means being totally committed and taking an entrepreneurial view of your role. "You have to be willing to do anything. Any job. Any amount of hours."
Being a quick-study and figuring stuff out on the fly is another must-have trait if you want to succeed at work, he adds. Just because you're not an expert in something doesn't mean you're off the hook when a challenge comes along. Your job is to figure it out. "Most people, say, 'I don't understand that' or "I'm not an expert on that,'" Pape said. "My approach is there are a lot of things I don't know, but I'm willing to learn anything."
In his early days as CEO, Pape got a call one Friday from a shareholder with questions about XPEL's cash flow statement. Pape spent the entire weekend becoming fluent in the topic. By the time he returned the investor's call on Monday he had mastered the subject matter. "I wouldn't accept that I didn't know, and I didn't want to fake it, so I decided to figure it out," Pape said.
Use Constraints As A Motivator
Everyone has constraints at work. Typically, it's financial. But Pape uses constraints as a motivational and problem-solving tool that boosts self-reliance.
"Having constraints really focuses your time and attention," Pape said. "It shifts the burden back to you to say, Okay, what are you going to do about it? You can't hire a new employee or a consultant ... you have to ask yourself, 'Is this worth doing? And if it is, how do we do it?'"
When Pape took the CEO job 13 year ago, XPEL's biggest constraint was a potentially company-killing cash crunch. The company couldn't pay its bills and it owed large sums of money for past deals gone bad. "So that was a way of focusing me for sure," Pape said. Getting additional outside financing was a nonstarter as credit had dried up.
So, Pape got creative. The company watched every penny. He also showed his commitment to the company by using his own personal credit card to settle the company's debts. "You had to figure it out or die," Pape said.
In the early days of his tenure, the company faced extinction when it owed $250,000 for an unpaid sponsorship. So, he picked up the phone to try to settle at a lower price. "I said, 'Look, I'm the CEO. I'm new to this job. I don't own any of the company and there is very little I can do for you. But I have a credit card and if you will take a $25,000 settlement (which was the limit for that card), we'll call it a day.'" The deal got done.
It was a big personal bet for him, too, as he didn't have the cash to pay off his credit card immediately.
Show Your Dedication
Pape also showed commitment to XPEL when he invested in shares when nobody else wanted them.
"I think having skin in the game is incredibly important," Pape said. "There were dozens of times in this process where I said, forget it, I'm done. You have to be committed, because if you're not it's just too easy to walk away."
Pape also is a big believer in quickly fixing what's broken. In analyzing XPEL's business when he took over, Pape noticed a glaring omission on the organizational chart: There was no sales team. "It was such an obvious misstep," Pape said.
The company could not turn around its fortunes without a sales team spreading the message about the paint film protection product that XPEL is now famous for. So, Pape quickly set up a sales team with a pay structure that aligned incentives for the sales team to the company's success. "That was the most consequential pivot," Pape said. "I said we need to be a sales-driven company. We need to grow."
Help The Team Succeed With Facts
When communicating with workers, Pape focuses on facts and avoids corporate jargon. "The most important thing is to tell it straight to your team," Pape said. "Here's the situation. This is what we need to do. It might be awkward, but they need the facts."
As CEO, Pape thinks it's also his job to remove impediments that get in the way of employees doing their best. On a typical workday that means Pape asks: How can I help you do your job better? What do you need to get the job done? How can I help? What's holding you up?
Pape also thinks it's his duty to make decisions quickly so the company can gain and maintain momentum on new initiatives. "In my experience, moving forward is so important," Pape said. "It is better to move forward quickly and make a few mistakes than stand still and overanalyze."
Doing tasks today rather than putting them off until tomorrow is the best way to keep the momentum rolling, Pape says. Pape has learned that nothing good comes from procrastination or lack of decisive action. "One of our core philosophies at XPEL is 'no tomorrow,' meaning there is no tomorrow, there might not be a tomorrow," Pape said. "So, it needs to happen today. It needs to happen now. There needs to be a sense of urgency in everything you do."
Peddle Your Way To Peak Performance
Stress can hold people back at times. But to be your best on the job — even for the most-committed employees — you must disconnect from time to time to recharge, he says. "When you are running a business, a team or a project it can be in your head 24/7," Pape said. To get away from things, Pape hops on his Trek bicycle and pedals his way to a clear mind. "The only way you can really achieve that disconnect is vigorous exercise," he said.
Taking care of your body and staying fit can also pay huge dividends. In a diet-related move that has resulted in weight loss, more discipline and better health, Pape fasts 18 hours a day. He restricts his food consumption to the late afternoon and early evening. "It's helped with my focus and sense of urgency," he said. Not having to stop for lunch breaks during the day allows him to say OK to appointment during typical lunch hours, he adds.
Pape says you must put yourself in a position where you must succeed on your own. "Where no one is going to save you," he said. "It will bring out the best in you because you have no choice."
Ryan Pape's Keys
- Turned XPEL into a top-performing company, from a money-losing one, after taking over as its CEO in 2009.
- Overcame: Serious debt and cash flow issues that threatened the company's survival.
- Lesson: "There might not be a tomorrow. So, it needs to happen today. It needs to happen now. There needs to be a sense of urgency in everything you do."
