’This should be a course in how business can really, really work,’ says longtime employee
By Jenny Gaines, Manager, Public Relations & Media
NEWBURYPORT, MA – Mike Strem is the epitome of a successful entrepreneur. Seizing an opportunity from his college research, Strem started a small chemical business in 1964 with two employees – himself and one other person – and has quietly grown the business into what longtime employees consider a model for success.
What’s his secret? Strem found his niche in the industry, surrounds himself with quality employees and, most importantly, gives back to the community. Strem and members of his staff recently shared insight about the company’s recipe for success.
As an undergraduate seeking a degree in history from Brown University, Strem began to think about life after college. The Pittsburgh native wasn’t sure what he could do with a history degree, so he started taking science courses at the University of Pittsburgh when he was home for summer break. Once Strem completed his undergraduate degree at Brown, Dr. E.M. Arnett, one of his chemistry professors at Pitt, encouraged him to go to graduate school and pursue a degree in chemistry. It was through research projects for Dr. Arnett that Strem was introduced to organometallics, which proved to be the roots of Strem Chemicals.
After completing his Ph.D, Strem decided to start his own business. His father, who was an entrepreneur himself, was a little skeptical about his son’s new business idea and asked him to gather evidence that this field of chemistry had potential. “In the process of trying to show my father, I prepared a list of organometallics and metal carbonyls that I wanted to be ready to sell by the end of 1964,” Strem said. After research proved there was indeed a market for his product, Strem forged a deal with Metal Hydrides, Inc., which had the equipment and facilities he needed, sitting unused in Danvers, MA., and Strem Chemicals was officially launched.
After sharing ownership of the company with Ventron, Inc. (formerly Metal Hydrides, Inc.) for the first 13 years, Strem became sole owner in 1977 and moved the business to its new location in Newburyport, MA, opening for business January 1, 1978. In the mid-1980s, Strem expanded further and opened a facility in Europe, developing a global network of distributors in Europe, Asia and the Middle East.
Finding a Niche
Strem Chemicals is a niche manufacturer. “We are not everything for everyone,” said Ephraim “Efi” Honig, Strem’s Chief Operating Officer. Strem is like a specialty store, providing specialty chemicals of high purity in a timely fashion.
The company’s initial goal was to manufacture research chemicals for industry and academics, and Strem has stayed true to that goal, said Frank Wagner, the first Ph.D chemist hired by Strem almost 40 years ago.
The company’s first product was cobalt carbonyl, which continues to be an important product for Strem today. Over the course of 50 years, the number of products has grown from about 30 in the early days to more than 4,000 today.
While his company may have found its niche in organometallics and metal carbonyls, Strem believes changing and growing the product line is a key to success. “If you only stay with one product line, you risk it drying up,” he said.
“We look at products that fit into our core competence and into our product line,” Honig said. “If you look at nanomaterials (a recently added product line), there are many metal-based nano products, and our catalogue is primarily metal-based products. We saw nano as a new technology for making metal products very small,” he said.
While it may sound cliché, Honig said, safety is Strem’s number one priority. The small things Strem does to improve safety add up to huge benefits for the company. “When you don’t have accidents or problems, that’s payback, and it’s just good business.”
Strem’s safety and security efforts haven’t gone unnoticed. The company was recognized by SOCMA in 2012 and 2013 with the association’s Gold Performance Improvement Award, which recognizes member facilities demonstrating outstanding commitment to continuous improvement in environmental, health, safety and security.
Giving Back to the Community
“When I came to Newburyport, I wanted to be part of the community,” Strem said. “In Danvers, I was a young kid starting a business.” Now was the time for the company and its employees to be involved in the community.
One of the first things Strem did was join the Newburyport Area Industrial Development Board. He immediately connected with the Superintendent of Education, and they worked to find ways to bring industry and education together.
“When (Ronald) Reagan was President, the head of W.R. Grace had a group that was supposed to discuss relationships between business and education,” Strem said. “I knew the superintendent, and said, ‘Francis, why don’t we do something about this here.’ We formed the Newburyport Education and Business Coalition (NEBC), which is now a part of the Newburyport Education Foundation.”
The coalition has worked on numerous projects through the years, and Strem and his employees have worked directly with the schools to promote science education, including collaborating with MIT to start a robotics program at the local middle school.
“The employees are involved in a very important role about getting kids involved in science,” Honig said. “Science and technology are what’s going to keep this country as a leader in the world.”
Two years ago, SOCMA and the Chemical Educational Foundation recognized Strem’s efforts with the Educational Outreach Award.
Strem is also a proud member of the Newburyport community, where he has served as President of the Chamber of Commerce and as a member of numerous civic organizations. His community efforts were recognized earlier this year, when he received the Newburyport Chamber of Commerce’s Ed Molin Community Leadership Award. The company was also named the Greater Newburyport Chamber of Commerce 2008 Business of the Year.
On a national level, Strem has served on the SOCMA Board of Governors and the American Chemical Society’s Board of Directors. In 2011, Strem received the American Chemical Society’s prestigious Parson Award, also recognizing his community outreach efforts.
In September, Strem Chemicals will celebrate its 50th anniversary, but Strem doesn’t want to make a big deal about this milestone. He believes his company is doing what it’s supposed to do as a corporate citizen, and he doesn’t want a lot of fanfare. Strem plans to celebrate the occasion in September with a small party for his employees (both current and former) and their families, and possibly a few dignitaries, at the Customs House Museum in Newburyport.
Sharing achievements with his staff is not surprising for Strem, who has always realized the importance of his employees. As the company continued to grow and prosper, Strem shared his success with those who worked to make it possible. “The more he does the harder we work because we’re a part of it,” Wagner said. “It changes your whole perspective.”
Because of the employee-focused culture, Strem has always maintained a low turnover rate, with high employee engagement and commitment. But in 2006, he added an extra incentive for his workers – an employee stock owned program (ESOP). “Now employees own 25 percent of the company,” Strem said.
“This should be a course in how business can really, really work,” Wagner said. “It’s that synergy of give and take. He gives, and the employees give.”
Tips on How to Build a Successful Business
Based on his 50 years in the specialty chemical industry, Strem Chemicals President Mike Strem offers the following advice on how to build a business:
- Pick products people want and establish a leadership position.
- Focus on growth and tackle international markets (learn to cope with cultural differences).
- Hire and retain good people.
- Establish an open, candid atmosphere in which employees function well.
- Watch the financials, especially cash flow. Establish profitability as soon as possible.
- Stress safety, quality and customer service.
- Emulate role models, learn to network and sharpen your communication skills.