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Zac Ziegler: I'm Zac Ziegler, and you're listening to Oregon Rainmakers from KLCC. On this edition, I head to Softstar Shoes in Philomath.
A big question for many small business owners is: What am I going to do when I'm ready to retire? It takes a lot of trust to hand off something that years, or even decades, have been poured into. When that decision came for the previous owner of Softstar Shoes, she simply looked around the office and factory floor. Earlier this year, Softstar became employee-owned, with every employee getting a say in big decisions. That style of corporate structure is about as unique in the U.S. as the minimalist shoes the company makes. To learn more about how things are going, I headed to Philomath, where I talked with Sarah Mason, the company's chief people officer and a current member of the committee that now makes executive decisions. She starts by taking me on a tour to learn about those shoes, and leads with an interesting quirk about the company.
Sarah Mason: All of us here are known as elves because we make shoes, or we sell shoes, or we hire people to do those things. If you're familiar with the fairy tale "The Elves and the Shoemaker," the shoemaker had way too many shoes to make. He goes to bed, the elves come out and make the shoes, and in the morning he wakes up and they're all done. So we sign our emails: Elf Sarah, Elf Kenna.
Ziegler: I guess with that, you're kind of limited to shoes, toys or cookies, right?
(A quick disclosure: Yes, I realize I stole that joke from the movie "Elf.")
Mason: We have a few accessories, but we've been in business a little over 40 years. Softstar was started by one man, Tim Oliver, who just recently retired. He started making soft shoes when he couldn't find them for his young daughter. All the shoes were really stiff, and he wanted something that was healthier and more comfortable, so he started making shoes out of a school bus. His shoes were sold at art festivals and craft fairs in California, and then in Texas, where he and his wife lived in that converted school bus. Eventually they came to Oregon because they thought it'd be a great place to raise a family. They were in downtown Corvallis for quite a while. In 2005, two friends, Tricia Salcedo and Larkin Holavarri, talked to Tim about buying the business. They had young kids, they were both engineers, and they wanted something where they could be with their kids, have their kids at work and have a little more flexibility. Long story short, Tim agreed to sell the business to them and stay on as our founder. In 2017, we outgrew our Corvallis workshop and moved to this building in Philomath. This building was originally a roller-skating rink built in the '50s. It was a mess. Most people would have knocked it down. The owner, Alan Ayres, is amazing. He had a vision, and over two to three years he really repaired the building. At the time, Trish and Larkin knew they needed a bigger space, but they really wanted something that was fun to work in, that was healthy, that wasn't full of paint and chemicals, and this really fit with that.
Ziegler: How about we walk around a little?
Mason: 95 percent of our shoes are sold online. So although we do have this local space and we love it, it's really a small amount of our sales. One of our core values is connecting with the community and having fun at work, so we love having people come into the shop. We have a huge slide.
Ziegler: I was wondering if that was functional or just fun.
Mason: Most people's first guess is that it's functional. I suppose it could be, but it's really about fun. One of our core values is having fun at work and connecting with the community, and the slide really embodies that. When our orders come in, our customer service team prints every single order and looks at every one, because we'll get comments like, "Hey, what do you think of this color combination?" or "I think I ordered a size 9 last time. Can you double-check for me?" Along here, you'll see what we call the wall. These are collection shoes we make in advance during slower times, so if you order one of those, it ships that day or the next, and we can charge less. That's about half our shoes. The other half are what we call custom shoes, where the style and patterns are set, but you might pick a shiny purple front and a black back and we will make that for you. Our goal is to have it made and sent out within four to five business days. People are used to ordering off Amazon and getting something the next day. That's not going to happen for us, but if we can get it to you within a week, that makes us really happy, and it makes the customer happy.
Ziegler: That is a pretty impressive turnaround time for a custom order these days.
Mason: So we've got our orders sorted, and now we need to cut our leather. We have two ways of doing that. For about 35 years, we would use what's called a clicker. It's like a hydraulic press. Let's walk back there.
Ziegler: Yeah.
Mason: This is Mark. Mark, this is Zac. He's doing a radio interview.
Ziegler: How's it going?
Mark Martin: Doing great.
Mason: Mark is on our TSC, our Trust Stewardship Committee. Let's get out of the way for safety.
Martin: Yeah, it's pretty cool. I like this machine. Essentially, we've got these giant cookie cutters here, and they're basically just shapes for all our different shoes. I grab whatever color that customer has ordered, lay it out, find a good piece of leather, take the shape I need, pull it over and stamp it down. Now I've got the shape I need. We've got hundreds of parts to work with, and it's a little confusing at first, but now I know where everything is without looking.
Ziegler: It's just like making holiday cookies at Grandma's house when you were a kid, except on a much, much bigger level.
Mason: We really try to minimize hand cutting, but it is necessary. It's really hard on the hands, especially with leather, and that's why we have dies. I'm going to show you a different tool we have to help with that as well.
Ziegler: Thanks, Mark. Thanks for explaining how it works.
Mason: Over here is what we call the Zoom. This is a huge investment for Softstar. It's a digital cutter. We can make patterns and project them onto the materials, and it helps us cut multiple pieces very quickly. Used to be that when we were experimenting with a new pattern, we would literally make patterns out of cardboard and hand cut them all, and then once we knew exactly what we needed, we'd send them off to a place in Texas to make these metal dies. It's great, it works great, but if you want to change it, you have to make a new pattern and a new die. We have one elf who's our designer. She gets input from a lot of people, but she'll use programs where we can just adjust things on the computer, project them, and then our pattern's changed.
Mason: So this is one shoe.
Ziegler: I'm seeing some soles, a spot that is obviously straps, holes for a buckle.
Mason: We've got the heel here, the piece that's going to go over the toe, some straps, the inside of the shoe, the midsole, and then at the very end a rubber sole will be added. All the parts and pieces have been cut and are in the tote, and then we start the sewing and gluing process. This is one of our lines. The first step is what we call white glue. When you're sewing clothes at home, you can pin fabric together. You cannot pin leather together. One, it's too thick, and two, it would leave holes. So we use white glue, just like you would at school, to temporarily hold the parts and pieces together until we sew them. You can see we've got a lot of size tags here. We have smaller pieces we cut in advance that we'd glue in. The next step is we start sewing. This tote has a lot of pieces. There's probably about 20 pieces in here for one pair of shoes. This is our Switchback boot, which is a hiking boot. These machines are industrial. They are very powerful. If your home machine is a Toyota, this is like a Ferrari. It has to be able to sew through multiple layers of leather and rubber.
Mason: Hi, Amar, how are you? This is Zac. He's recording us for radio. You can go ahead and sew. He's doing the first step of the sewing process, sewing the pieces of leather together. Amar and Mustafa came to us through an amazing agency called Salem for Refugees, or Corvallis for Refugees, which helps refugees come to the United States and get jobs. Neither of these guys speak English as their first language, although they're learning day by day. They have amazing sewing experience and skills, and they have been some of our most dedicated, loyal employees. They've learned so quickly, even without English as their first language. You can see here where Amar has finished the first step of the sewing. You can see it's coming together.
Ziegler: Oh, yeah. That's when you look at it and go: Oh yeah, that's a shoe.
Mason: You can see the upper of it. It's turning into a boot, but it doesn't have the sole on it yet. The next step will be sewing the midsole onto the shoe, and another person will do that. Let's sneak through here. This area is called our bond area. Not all shoes come here, but the ones that have a sole that's adhered on will. Hopefully you didn't notice any stinky smells when you came in here.
Ziegler: No, it smelled kind of nice. Like wood and leather, two pleasant scents.
Mason: There are a lot of glues out there that really stink and aren't great for you. We don't use those. We do use some adhesives for our very durable soles, and we put them on over here in the corner in these hoods. The last thing to do on these shoes is to trim any last threads, lace them up and triple-check everything. We do that at what we call our finishing station. Once the shoe is finished, it's ready to go to the customer. We ship all over the world every day, and then the other 5 percent are local. We'll call you and say, "Hey, come pick it up," or we can send it to you as well.
Ziegler: We're going to take a break before we talk about Softstar's move to employee-owned. I'm Zac Ziegler, and you're listening to Oregon Rainmakers from KLCC.
Ziegler: We're back. I'm Zac Ziegler, and you're listening to Oregon Rainmakers. My conversation with Softstar Shoes continues.
Ziegler: How did this process start? How did it get to: "Instead of finding a new owner, we've got plenty of them in the building if everyone just gets a little bit?"
Mason: The former owner, Tricia Salcedo, who is our chief financial officer and still works at Softstar, had for a few years been thinking about her exit strategy. She'd been here about 20 years, and both her father and grandfather had been small business owners, so she'd seen those transitions firsthand. What her father in particular really struggled with was seeing the business change a lot, seeing the values he'd built maybe not stay with the new owners, and seeing the employees not as happy as when he was there. Trish wanted to avoid that, so she looked into several options. We have about 30 employees, so we're a small business, but not a tiny one. At some point, she heard about something called an employee-owned trust, which is pretty new to Oregon. There are a lot of them in Europe. It's similar to a co-op, but with some differences. The first difference is that every employee is an owner. We don't have to buy into it. That structure, I think, matches well with the existing culture of Softstar. Tricia and Tim before her had always valued employees. We want to be a place that people like coming to. We work hard, but we might as well have fun while we do it. Hence the slide. There's nothing worse than Sunday night dreading coming to work.
Ziegler: My brother used to work for a company that was a co-op. After a certain amount of time, he was given a certain percentage of the company, which increased over time. When he left, they basically had to buy out that portion he owned. It sounds like that differs here, where you all collectively own, for lack of a better term, the stock, and everyone splits things evenly.
Mason: Everybody is an owner and we all share in it. When we have employee payouts, it's based on how long you've worked here and how many hours you work. When you leave, you leave. You don't own the business anymore, you don't own part of the business, and you don't have to be bought out. It's slightly different from some of the bigger co-ops, but it allows for a lot of flexibility, which can be nice.
Ziegler: How has it changed the culture? You said it just started in January. How's it been the last couple of months?
Mason: I think the biggest thing is relief that we're not getting bought out by a big company overseas, and that things, at least for now, are going to stay kind of the same day to day. Our culture has always been about listening to employees and working together, but there is now a sense that: This suggestion I'm giving to improve things is going to make a better shoe, make customers happy, and could help the employees and their payout.
Ziegler: Chances are you're not going to run into another well-known instance of a business being sold in the Pacific Northwest, like the Seattle SuperSonics, where they said, "Oh yeah, they're staying. Don't worry, we're not moving the team." And then they moved the team.
Mason: Right. Employees now have more control over the decisions that are made. In a business where there's one owner, ultimately it comes down to that person. They might be a great listener, they might take input, but they get to make the final decision. That's a little bit different now. Will that involve more conversations? Yes. Is that a good thing? Yes. People make suggestions here, and we encourage that. We think we have the right structure for it.
Ziegler: When it does come time for a big decision or a small decision, is it the board? Is it going to the body as a whole? Do we have an employee referendum, to borrow a term from the elections world, or is this representative democracy?
Mason: My biggest fear when Trish first talked to me about it was picturing all 30 of us sitting around a room spending hours trying to decide if we should have pink or purple shoelaces. I said, "We can't do that. We will never be able to make a shoe." She said, "No, no, it doesn't quite work like that." We still have an executive management team that makes day-to-day decisions, but the Trust Stewardship Committee's job is to make sure those decisions are in line with the goals and values of the trust. We're just starting to set up that structure and some of those decision-making matrices. We actually hired a group called Project Equity. They're consultants who help businesses transition from a traditional structure to employee ownership. We've worked with them for almost two years and will continue to for up to three years. They're helping us figure out: When somebody has a suggestion, like switching to four 10-hour days instead of five 8-hour days, who makes that decision? How do we make it? Who gets input?
Ziegler: After chatting with Sarah, she leaves me in the hands of Mark Martin. He's the elf who showed us how the hydraulic press works. He's also a member of the Trust Stewardship Committee.
Martin: It's been kind of crazy for me. I owned my own business and sold it about six years ago. I stumbled into this line of work and fell in love with it day one. I knew Tim, the founder of the company, and then when Trish bought it 20 years ago, she obviously expanded the business, went into adult shoes and moved us to this beautiful building out here in Philomath.
Ziegler: Yeah, this cool old roller rink.
Martin: It's incredible. It's a fun place to come to work every day, with all the beautiful exposed wood. I got lucky just stumbling into this. I knew a few people who worked here, and now I've been here five years. It was quite the surprise when Trish began thinking about stepping down and sprung on us: "Hey, I'm going to sell it to you guys." It was a big wow moment. We were all pretty excited, but also none of us knew how it worked. We're still learning.
Ziegler: It's probably a bit relieving, too. There's always that fear when the owner changes: Are they going to shut this down and move it all overseas? Are they moving it to some other town? It's probably a bit of a relief to know that you work with the owners.
Martin: Yes, absolutely. Keeping it local is important to everyone here. We take pride in being locally owned and being a part of our community. It would have been a much scarier prospect had she just sold it to someone else. You wouldn't know what your future entails at all. But it's pretty exciting. We're all really ecstatic and happy that she chose to go the way she did.
Ziegler: It's been a little over two months now as a member of the committee. Any big decisions that have had to come up yet? Have you really gotten to test the system, or has it been more: we're sticking our toes in the water?
Martin: Exactly the latter. We've had just a few meetings, but no big decisions. It's business as usual. On the surface, nothing has really changed. But the first committee I'm on now, we have the job of laying the foundation for future committees on how to conduct business and how to make those decisions. Is the subject big enough to get employee input or not? We're all just dipping our toes in. None of us have done this before, so that's exciting.
Ziegler: Well, I'll let you get back to it. You've got bigger fish to fry than chatting.
Martin: I'm ahead of the game. Part of what I love about working here is that we all learn to do different things in the shop, whether it's sewing or soling or, right now, helping with materials support: unboxing things, putting them out in the shop. I always have time for anybody who's interested in learning about what we do here. It's fun.
Ziegler: After talking with Mark, Sarah met back up with me for the moment I'd been waiting for.
Mason: Want to try the slide?
Ziegler: That sounds like fun.
Mason: Make sure everything's cleared out. The slide rules: You have to go on your bottom, feet forward, not on your stomach, not lying down. Don't swing from the top. No flips.
Ziegler: OK. I'm not going to be a risky one. I'll follow all the things I always told my daughter at the playground. If you're curious, you can see a picture of the slide and other parts of Softstar on our website, klcc.org.
Weeeeee!
Spectators: It happens to everyone! Well done, well done.
Ziegler: That's the most fun way I've gotten to end an interview.
Ziegler: Thanks to Sarah, Mark and the other elves at Softstar Shoes for the hospitality. This has been Oregon Rainmakers from KLCC. I'm Zac Ziegler. Thanks for listening.
