Taking Risks to Meet Challenges

How Howard Brodsky learned the value of working, and succeeding, collectively

BY LIISA RAJALA

HOWARD BRODSKY wouldn’t be a business owner and co-founder of the largest global co-operative in the world if he hadn’t taken risks. After all, being an entrepreneur is in his blood.

He was about 5 years old when his father, a Russian immigrant who formerly worked in the flooring department at the Sears in Lawrence, Mass., opened his own flooring store in Manchester, Dean’s Carpets.

Sadly, his father passed away from cancer when Brodsky was 13, leaving his mother, a trained pharmacist, unexpectedly in charge of the store and navigating the challenges of being a business owner.

“He opened up the store, and it was his pride. It was his dream,” Brodsky reflects. “I saw how much passion he had and love for the business. At the age of 13, I told my mother that was what I wanted to do.”

Brodsky ended up running his father’s business, but his pathway to ownership and experience as an entrepreneur was one of a series of trials and persistence.

LEARNING FROM MISTAKES

Brodsky’s plan was to take over the business right out of high school. His academically minded older sister did not endorse his plan. She told his mother, “If Howard doesn’t go to college – sell the business.” So I ended up applying to college and went to Wesleyan University,” Brodsky says. “But my focus was 100%, I wanted to run the family business.”

His persistence paid off. As a college graduate, Brodsky returned to the store and grew it to a chain of four stores in the Manchester area. He became a part of the close-knit Manchester business community. At 27, after talking to another person in the home furnishing industry, he became fascinated with the idea of meeting with an organizational psychologist, someone who could help him find the best people and form a valuable team-approach with employees.

“I proceeded to meet with the psychologist once a week, every week for 15 months. He told me, ‘If you learn how to find great people, it’s a skill set you’ll never lose,’” said Brodsky.

“We had a whole plan, I was going to go from four stores to 20 stores. We had a team we were going to do it with, the banks were willing to back us. All during this time, my mother said, ‘I don’t know what they’re doing.’ I kept saying, ‘They’re very smart.’” But amid all the hope and optimism, things took a turn for the worse. “I started getting calls,” said Brodsky. “‘You’re not paying your bills.’ And I said to my controller, ‘What’s the story?’ and he showed me the cash flow reports.” Everything looked fine, but Brodsky continued to get “more and more calls.” One day, Brodsky, now 28, went into the office, and opened a drawer to find millions of dollars of unpaid bills.

His controller fessed up. “‘I didn’t know how to tell you – we’re broke. I just couldn’t tell you. I thought our growth would be enough.’”

Howard Brodsky with his mother, Selma, a trained pharmacist who managed the family’s flooring business when her husband passed away. Despite her suspicion of Brodsky’s business partners in the early days, when her notions were confirmed, she reacted with comfort and support. He attributes that moment to his continued resilience as an entrepreneur. (Courtesy photo)

Brodsky proceeded to call his accountant and lawyer and look through the books. They all confirmed his business had to file for Chapter 11 reorganization.

The timing could not have been worse. “I was shocked. I was married, had a 2-year-old and my wife was pregnant,” Brodsky says. “My next toughest thing was one of the toughest in my life – I had to go tell my mother we were going to file Chapter 11 bankruptcy. For a year she had been telling me, ‘They don’t know what they’re doing,’” says Brodsky.

“It was one of the most important points of my life, and when I went to tell her, she never once said, ‘I told you so,’” Brodsky recalls. “She gave me a hug. She said, ‘That’s the way we learn. We move on.’”

“If she had said, ‘What did you do? I told you so,’ I would have become risk-adverse,” Brodsky says. “My greatest lesson is, in these times, when you make the greatest mistakes and the greatest trouble, you need the greatest love.”

Brodsky ended up paying off all of his bills and coming out of bankruptcy in a very short time.

“It was obviously enormous pressure – enormous pressure – but I learned (from it),” says Brodsky. “I think you learn only during your difficult, dark days. Everyone wants wonderful times every day, but I think you learn the most only in our darkest days.”

He took lessons from the experience as well as inspiration. One of the lessons was learning how to hire and keep good people. He also learned the power of a family business. “I understood it one way, when I almost lost it: The family business is the fabric of the community. And I think that’s why I built CCA Global, to save family businesses in America,” says Brodsky.

SUCCEEDING COLLECTIVELY

In the mid-1980s, Brodsky and Alan Greenberg, a fellow business owner with flooring stores in the St. Louis, Mo., area, noticed encroaching competition from big chains and resulting consolidation not only in their industry but also in others.

“My mother was a pharmacist. Slowly all of her friends went out of business because of CVS, Walgreens and Rite-Aid – they couldn’t compete,” Brodsky says. “I said, we’re going to be in the same boat as all of these other industries,” as the Home Depots and Lowe’s gained a growing foothold.

He and Greenberg realized they needed find way to get to the same scale of buying and marketing sophistication a company like Home Depot or Lowe’s has.

Brodsky and Greenberg were introduced to the CEO of True Value Hardware, at the time a national cooperative of independent hardware stores.

“Our mission as a company was to give the scale to family businesses to make them succeed,” says Brodsky. “The more consolidation happens, the more cooperatives have to be part of the fundamental structure of how family businesses respond to it.”

Thus, in 1984, Carpet One, later renamed CCA Global Partners, was born with 13 members.

“It was the first cooperative in the floor covering industry. Our original plan was to have 300 stores, and we ended up having 1,000 stores.”

But they soon realized that the concept wouldn’t just work for floor covering stores but any kind.

Since then, the cooperative has expanded to include home furnishing stores, business services, sports retailers and child care centers, serving 2,800 retail locations, 20,000 child care centers and 1 million small businesses in the U.S., Canada, Australia and New Zealand.

“We do all of the buying for them at massive scale so they get the same prices as a national company. Digital marketing is very complex – we have teams of marketing people that are superb. We have our insurance company that provides them insurance. We have our own training company that provides a lot of the training for them. We have a HR group that helps them hire people. These are very complex things to do on your own,” says Brodsky.

He adds that “the marvelous part” about a cooperative is that the members “own their company,” says Brodsky, and most of the shares are owned by the partner businesses, so the profits get redistributed back to them. Brodsky doesn’t own any shares.

“Some people say to me, ‘Why would you do that?’ and I would say, there’s a lot more to life than having the biggest checkbook when you can create value for other people and have people rise up and create a better life for 100,000 people. How do you measure the impact on 650,000 children of what you do? I help change the lives of other people.”

Howard Brodsky and his wife, Joan, are pictured here with their “little brother,” Luis, in 2018. Giving back is an organization-wide affair, as all CCA Global employees are allotted time to mentor a young person during the work day. (Photo by Cheryl Senter)

‘A TURNING POINT’

When the Covid-19 pandemic struck, CCA Global’s team reached out to every one of the businesses to help them with the process of applying for Paycheck Protection Program funds.

The CCA team also helped members negotiate with landlords, submit business interruption insurance claims, and assisted with marketing and distributed shared profits ahead of time to push cash into members’ hands.

“They need us more than they’ve ever had needed us in their entire life and our life as a cooperative,” says Brodsky. “They’re facing a time you never could imagine. Who would imagine the government would shut down your business? We had the resources to be their partner in making it happen.”

In fact, he thinks this economic moment will be “a turning point for cooperatives.”

“In many parts of the world, cooperatives are much stronger than ours,” says Brodsky. “People don’t realize the scale. There are a billion members of cooperatives around the world. There’s the farmers’ cooperatives, credit unions. It’s across all sectors.”

Brodsky’s faith in cooperatives led to another inspiration. He started Cooperatives for a Better World, a campaign that spreads the message of the value of cooperatives to assist communities with economic development and equal opportunity.

“The cooperative structure by nature puts people first not profit. But second, it’s your values,” says Brodsky. “You can lose money. You should never lose your values.”

In 2019, he became the first American to receive the International Rochdale Pioneers Award – essentially the Nobel prize of cooperative business – at the International Cooperative Alliance Global Cooperative Conference in Rwanda. The award is given to one person in the world every two years.

Brodsky has also inspired his son to enter the family business – cooperatives, that is. Greg Brodsky is founder of Start.coop, the first incubator that helps entrepreneurs start cooperatives in new sectors.

“Cooperatives are the best in both worlds—you own part of the company and you still make your own decisions, except you have scale,” says Brodsky. “You’re not giving up any authority. You have all the tools to level the playing field to make you succeed.”