Harley Franco, Founder, Chairman & CEO, Harley Marine
(Article originally published in Nov/Dec 2016 edition.)
The founder of Harley Marine is equal parts entrepreneur, philanthropist and visionary – and all business.
By Paul Benecki
Harley Marine has grown dramatically over the past thirty years. How have you structured the company to sustain that growth?
Harley Marine serves as a parent company with headquarters-based support divisions for our operations in the field. Instead of having seven regional heads of engineering, safety and regulatory compliance, all of those functions are centralized here in Seattle. We went to this format about 25 years ago when we grew from a local company into a regional Northwest company. It has served us well, and we've expanded all over the West Coast, out to the East Coast and down to the Gulf Coast. Whether you're on a Harley tug in New York or Seattle, you’ll find a consistency in how we maintain, operate and manage it.
But it's not just about structure. The real difference is in our people – in their passion, their persistence and their professionalism. You could have a $10 million, state-of-the-art tractor tug, but if you put someone inexperienced behind the wheel it's going to be useless. You need a professional mariner who looks at his charts and gives clear commands to his crew, and then the tug does what it's supposed to do. That's what we've tried hard to do here – to put the right people in the right places and to support them well. Our people are our secret weapon, in good times and bad.
How did you go about building your team and creating Harley's safety culture?
It was a process – one employee at a time, one vessel at a time, one customer at a time, one mistake and one success at a time. We kept our ears cleaned out and listened to our customers, learned from others' mistakes and our own, and we went back out to our people in the field to share those lessons. It was clear from the beginning that if you invest in safety and quality, in the long run it will make you more money. You're not paying for additional mistakes, downtime or casualties. The worst thing for the bottom line is to have one of your vessels end up on the evening news.
We've also worked hard to promote more diversity than what you might have seen thirty years ago in this industry. We actively support women and minorities entering the business, and we've opened the door to take advantage of everybody's input, style, experience and perceptions. I think this has made us a stronger company.
You've won dozens of awards for safety and environmental quality over the years. How has this track record helped you?
We're heavy in the petroleum sector, and the oil majors have high standards. They have plenty of choices and there are many people who would love to have their business, so we need to work hard at exceeding their expectations. Every day when we go out there we have to prove ourselves. We'll never be perfect, but it's our intention to be better every day at what we do.
What are the challenges in the current market?
The energy sector and the liner and bulk operators are all going through challenging times, and of course that trickles down to us. Our challenge now is to become more efficient without sacrificing quality or safety. What I worry about the most is that customers will want to go with the cheapest operator they can find. We can't go below our cost structure. We pay our people sustainable wages with meaningful benefits, and we can't deviate from that. We have to give our investors a return on investment. We have to repay our loans and maintain our equipment, and to do that we need a sustainable margin.
We've always been a customer service-oriented company, but if a client says, "Your competitor will do the job for less and we'll give you a chance to match their price," we may have to say no. We're not used to saying no – we've always tried hard to work with our customers. But if someone wants you to take a job for less than your breakeven rate, you'd better take a hard look at it before you agree. You're only going to lose money faster, and then you'll be under pressure to cut corners.
Tell us about some of the maritime leaders you look to for inspiration.
Recently I've joined the board of the U.K. P&I Club, and that has given me an opportunity to learn from bright shipowners from around the world. There were also some brilliant people who were kind to me in the early days – Emery Zidell of Zidell Marine, Ray Hickey of Tidewater Barge Lines and many others. They were no-nonsense, smart businessmen. They were very giving; they ran quality companies, and they were a pleasure to do business with. I've tried to emulate them, and I like to think that in this business you can be a good guy and not finish last.
Your firm is widely recognized for its involvement in charitable causes. How did that come about?
It's part of our company culture to give back. Even in the early days when we had fewer resources, we'd auction off cruises on our tugs to raise money for charity. Today, the ratio of our giving to our revenue is completely out of whack compared to what most other companies do. I'm very proud of that. But I couldn't do it without the support of our customers, our employees and our board of directors.
What kinds of causes do you support?
When the company was founded I worked with a group of friends to start a state chapter of the Cystic Fibrosis Foundation, and more recently we've been donating to breast and lung cancer research. Beyond financial contributions, we also name vessels after some of the good people we've met who have been affected by disease.
The name of a vessel tells a story: When a tug comes into port and someone asks, "Who is Allysa Ann," that gives you a chance to tell them about a young girl, about how cystic fibrosis shortened her life and how we can help find a cure. The names are also part of our safety culture because they mean something to our crews. The last thing you want is to see the Allysa Ann on the beach. That tug represents someone's legacy.
What do you like to do in your spare time?
We are in a challenging market, and this year I haven't had a lot of spare time. Between getting out in the field, drumming up business and listening to our customers, I haven't been able to take as much time for myself as I would like. But I have a passion for what we do here, and I don't want to assume we're doing a good job – I want to get out there myself and hear it from our customers.
When I do have some time I serve on a number of charitable boards. I am privileged to have a wonderful family, and I try to spend as much time with them as I can. I think I have a good balance in my life. Hopefully, as the challenges ease up and I am able to hand off more responsibility, I can become a goodwill ambassador for this company. Then I can just show up at the golf course and hit three into the woods. But I still want to be a trustee of this industry. I want to help shape it to do a better, more responsible job for employees, customers and society at large.
What does the industry need in order to grow and evolve?
Well, we're getting a lot of government pushback rather than government support, and that needs to change. This is a great industry with great-paying jobs, but those jobs don't just create themselves. We need to have a good partnership with government, and our political leadership should understand that the maritime industry deserves more cooperation. We all need to be committed to making it work.
We also need high-quality technical education in public schools. Thirty years ago our schools had wood shop, metal shop and mechanical drawing. Even I learned a little in those classes, at least enough to be dangerous. Today, the schools are so focused on getting kids into college that we're ignoring their other skills. There are plenty of other kinds of good-paying jobs out there. If you like to weld, why can't you become a welder? Why do you have to work at a desk if you like to play with electrical systems or plumbing? We need a secondary education system that respects people's desire to work and recognizes the needs of industry. I'm concerned that, without that early training, the hands-on, practical knowledge will slowly disappear from the workforce.
What’s the most important thing our readers should know about Harley Marine?
At the end of the day I want us to be known for doing the things we say we're going to do. We don't just talk about our values, we walk the walk. Our people put their ethics and their character into it. If there ever comes a day that we can't do that, it will be time for me to hang up my shoes and retire. – MarEx
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.