The origins of the Simpson Strong-Tie [SST] trace back to a simple request in 1956 when the late Barclay “Barc” Simpson’s neighbour asked for help bending metal strips used to secure roofing joists. At the time, Barclay’s business focused on screen doors, but he had the right equipment for the job. As he continued assisting with these metal connectors, he saw a larger opportunity in manufacturing structural components for the building industry. In a strategic pivot that would have impressed Charlie Munger, Barclay sold his screen door business and committed himself full-time to producing metal supports for builders.
This shift marked the beginning of what would become a progressive, community-centred business model that went beyond profits. In the enlightening book Strong Ties: Barclay Simpson and the Pursuit of the Common Good in Business and Philanthropy, the profound impact of Barclay’s leadership and vision is carefully examined. His commitment to profit-sharing, stakeholder engagement, and expanding the definition of "value" in business challenges conventional wisdom. Barclay believed that true business success couldn’t be measured by shareholders alone, but should encompass employees, families, and the broader community. This philosophy of shared success would ultimately shape Simpson Manufacturing’s remarkable growth and reputation.
Barclay’s decision to enter the building components industry came at a crucial time: building standards were minimal, the West Coast faced a post-war housing boom, and California’s seismic activity underscored the need for safer structures.
Barclay recognized that by having Simpson products specified on architects’ plans, what were once commodity-like metal components could become essential, branded products. This insight was pivotal. By creating and rigorously testing an integrated system of metal supports, Simpson Manufacturing ensured that architects, engineers, and builders could trust their products for structural safety and durability. This strategic move helped elevate Simpson Manufacturing from a manufacturer of basic construction components to a leading brand in the industry, synonymous with reliability and quality.
Warren Buffett is known for acquiring great businesses, and while many owners have embraced his offers, some, like Barclay Simpson, have turned him down. Given Buffett’s interest in building materials, evident in Berkshire Hathaway's ownership of competitor Mitek, Simpson Manufacturing was a natural target. But Barclay, who valued his employees' welfare and believed that long-term stability was vital for their future, refused. As he explained, “I’m still the biggest shareholder—this company is not for sale. I don’t care what the price is or who wants us. Because a few years back, why, Warren Buffett really wanted us.”
Barclay’s approach wove together the principles of profit-making and the common good: a profit-sharing system gave employees a direct stake in the company’s success, while a nonhierarchical, decentralised management style empowered people to make decisions at every level. The company also promoted diversity early on, from the desegregation of plants in the 1960s to inclusive hiring practices, reinforcing Barclay’s conviction that the true capital of any business is its people.
I recently enjoyed Strong Ties: Barclay Simpson and the Pursuit of the Common Good in Business and Philanthropy by Katherine Ogden Michaels. The quotes below are drawn from this book, supplemented by excerpts from An Oral History with Barclay Simpson, housed at the Bancroft Library. This case study offers a compelling look at the elements of enduring business success and the principles that make it possible.
Philosophy
“Take your responsibilities, but not yourself, seriously. After all, has been on this earth for over two-million years, and earth is but a grain of sand in the universe.”
Obliquity
“Making a ‘profit’ is a manifestation of irrefutable value and seriousness, not simply an interest in making money per se.”
Customer Focus
“Right from the start, we have worked on building a culture where each one of us realised that his boss was not the person above him at the company, it was the customer.”
“The focus, the obsession, is on customers and users. We need to be constantly reminded that none of us has a job without customers. You want to build trust with your customers. You want to get to know them, show interest in their lives, make them feel important, and then you may find out that they get interested in you and your products much more than they would if you just fill an order. No matter what your position in the company, it's vital that you keep the customers and users in mind, whether you have direct contact or not. What do they need from you? How can you help make their jobs easier? How can you improve their lives?”
“We have to deserve the business, and we have to make money for our customers as well as for ourselves.”
Quality
“A company can only be temporarily successful without a quality product. The people in our company can feel proud of what our products can do, and each and every person in the company plays a role in ensuring that our products meet high standards.”
“At a certain point, Simpson Manufacturing pulled ahead [of the seven or eight competitors]. What ultimately gave them the edge was the quality of the Simpson product: We won't make a substandard part, and we won't sell a substandard part. We won't sell a part were not a hundred percent behind....Barc doesn't want his name on it.” KM
Creating a Brand / A Verb
“Barclay had long felt that the failure to create a brand name for his product was at the heart of his father's inability to build a truly profitable business… The concept of branding— the transformation of a generic tissue into a "Kleenex," or the "Xerox" copier machine into an internationally used verb - is an ancient precept of American business, perhaps all business.. Barclay's early focus on the importance of creating a named product was transformative, ultimately changing him from a small local businessman to the chief executive of a global company, whose brand name-Simpson Strong-Tie [SST] became interchangeable with a set of core products that have become essential to modern construction.” KM
Competitive Advantages
“What is it that is crucial to building a successful organisation? It’s the culture!”
“Barclay recognised an important gap in the rival business plan, gleaning the chance to create a brand based on the integration of manufacturing, marketing, and customer service that would directly target engineers, architects, construction firms, and other end users. In 1956, strict building codes were neither widely diffused nor systematically enforced. In this, Barclay saw a chance to link product development to engineering, and from that baseline to the establishment of precise building specifications.
This realisation turned out to be prescient, especially in California, where the threat and reality of earthquakes created strong impetus for the drafting, diffusion, and enforcement of ever more exacting building codes in the coming decades. Simpson fortunes were to ride side by side with this new art and science of specification, which in large part the company also helped to shape first at the local and, eventually, at the global level.” KM
“There was a moment of transition - early on - when Barclay said, ‘We’re not a job shop making pieces of metal on demand. Were making a technical piece that carries loads throughout a structure.’ That was the beginning.” KM
“The thing you need to understand, it’s not just connectors. It’s not just screws. It's not just epoxy or tools. It's a whole systems approach to building. It's not like we sell carpet or linoleum or tile or cabinets or roofing material. All our stuff, once it's in and covered up, you don't even know it's there. You only know it's there if your house doesn't fall down. This is what we sell.” KM
“Engineers loved the products produced out of the continuous load path system, especially when Simpson Manufacturing started to systematically test and design connectors that both met and helped modify key specifications for residential building. These products offered engineers a new level of security in an era when seismic- and wind-related codes were becoming ever more stringent.” KM
“Architects loved them, too, because they offered much greater design flexibility in dealing with the load-bearing elements of a structure.” KM
“Clearly Barc's initial decision to make the leap into connectors was motivated by his instinct that there was the potential for significant growth in the industry. But what he managed to build was a business that moved way beyond the marketing of widgets-creating instead an animated world of people solving big problems using basic materials.”
“The connectors offered guarantees backed by the faith and insurance of Simpson Manufacturing and made up a relatively small portion of the overall cost of construction.” KM
“The initial insight and lasting conviction that effective testing of products was the most direct way to build trust among their target audiences of engineers, architects, and general contractors. The first test press was superseded by increasingly sophisticated devices, and, in time, Simpson products were to help shape the building codes and specifications they were designed to meet. In this marketing and manufacturing model, product development drove the drafting and enforcement of standards across the industry. Barc's early understanding of this direct linkage was indispensable in building a brand that would make the Simpson Strong-Tie appellation synonymous with a set of engineering standards based on high-quality steel, design, testing, and replicability.” KM
“The goal was to have the SST product directly specified in the drafting of blueprints, to provide engineers and builders with a load-bearing element that they could be sure wouldn't fail. Barclay believed that the key to creating this trust was the use of high-grade raw materials as well as constant testing of the product to make sure it could bear the loads being advertised - a product backed up by empirical proof, not just formulae on paper. Frugal as he was by nature, he realised that to build the Simpson brand, he would need to invest heavily in R&D so as to have a product that engineers and construction people throughout the industry would call by name. Over the years, this double-barreled business model resulted in the development of a product that was not the least expensive in the industry, but which engineers trusted over the cheaper commodity spin-offs produced by SST competitors.” KM
“Another early and key salesman brought on at Simpson Manufacturing was Hugh Oliphant... Oliphant believed that if they could get Simpson products specified on an increasing number of architects' and engineers plans, then Simpson would control the market. This turned out to be a shrewd strategy that ultimately set the product apart from its competitors.”
“They had the foresight to see that specifications were important… It didn’t mean that you got the job all of the time, but what it meant was that your product was on the plans.” KM
“We don't make commodity products, per se. We take a commodity product and make it highly specialised and better. We’re making a precisely engineered product that can support US technological input and US labor costs.. Our product has such a small cost - it's like a three- or four-dollar product - even if you make it cheaper in China, you couldn't ship it cheaply. Our product's one where you try to manufacture it near where you can use it.” KM
“Even if it was cheaper to make our product somewhere else, the logistics are a very important component of our brand. We don't want our customers to have to inventory. We'll make it. We'll store it. We'll get it to you. Again, this is part of the secret sauce. Why can we charge 20 percent more than anybody else? It's because we make a better product and we'll provide you all the information you need to use it, we'll hold the inventory, and we'll get it to you the day after you order it.” KM
“Simpson has a higher proportion of non-commodity products than most basic manufacturing companies.” KM
Small Cost versus Value Add / Pricing Power
“If you were a contractor building a $400,000 house, the Simpson portion of your house is probably— I'm winging it - 400 bucks. So why would you care? The reason you care is that with that $400 worth of Simpson stuff, you can build your house incredibly faster and stronger.” KM
“From day one, Barclay’s aim was to create the most trusted rather than the least expensive product in the industry. He and his growing sales force did this through linking sales directly to end-users, product development, and adaptation.” KM
Share the Profits / Promote Ownership
“Barclay's early design of a multilevel compensation strategy was unusual for its time -and, as it has turned out, for current times as well. The impulses behind this strategy demonstrate a rare set of convictions regarding how to build a successful business.”
“Barclay focused his strategy on providing employees with low-deductible health-care plans (way before this became a central American political issue), pension benefits, and, more radically, a quarterly profit-sharing system that has few analogues in the way American business was conducted at mid-twentieth century.” KM
“There was something radical in Barclay's early concept of compensation. This was the conviction that building employee commitment and productivity might best be accomplished through a very direct sharing of the wealth of the entire company on a quarterly basis - and that this short-term compensation vehicle should include people at all levels of the organization.
The most famous element of the compensation package is known as cash profit sharing (CPS). As Barclay originally conceived it, CPS involved the sharing of the net operating income of the business on a quarterly basis by salaried as well as hourly employees. In his own words: ‘The point was to make the company the employees' company as well as mine... that was crucial to their performance and to attracting good people and keeping them. I wanted to make it their company. If their division makes a lot of money, so do they. And again, ... the people...get a percentage. If they have a really good quarter, they can earn a ton of money. A ton. And their salaries are just average... It's worked extremely well over the years.’ His concept was simple: that everybody be all-in-together, all employees sharing both in the company's upside and downside.
In brief, that means that when the business does well, all employees split the profits, and when the company doesn't do well, there is no pool of cash from which to pay CPS, and this part of the compensation package goes away for a quarter or two until the business returns to profitability.” KM
“There is a 20 percent return to shareholders... so no employee benefits until we've made enough money that we show the shareholders that we earned a return on the investment and we've, there-by, earned the right to share.” KM
“What is indisputable is that more than any other single element in the Simpson compensation formula, the concept of sharing profits across the board on a quarterly basis has created a deep sense of vested interest among the company's employees in both the near- and long-term fate of the business. Certainly, CPS is at the root of SST's motivational system, yet it is not simply an incentivising tool but seems more in the nature of an ethical precept. At the core of the company's profit-sharing formula is a basic conviction regarding ‘fairness’, a belief that the distribution of the fruits of enterprise should be broad and wide rather than pyramidal.” KM
“Barlclay’s belief is that business growth and profits are directly linked to giving key players an ownership stake.”
“Under the ‘all for one and one for all’ principle, we make sure that everybody gets something... Few companies provide the benefits that we offer. We profit share down. We even give out stock shares. You get Simpson shares after you've been with the company ten years. You don't have to buy them.” KM
Separate Profit & Loss
“The only way that the people at a branch make a lot of money is if the branch makes a lot of money. And the granting of stock options depends on the branch making its profit goal, which is true of the people at the home office, also.”
Hire Smarter
“Great companies are built with great people. When I got into this business, I decided that I'm no genius, so I need to hire the very best people. They make the company the kind of place where they don't want to go anywhere else. They want to stay here and help build it.”
“I busted my butt to hire first-class people and make the success of the business their success, through various ways.”
“You hire smart people, then get out of their way. For Barc, this was the true religion.” KM
“Barclay observed that it is not good management practice to have geniuses at the helm of a company. Rather it is the job of a CEO to find brilliance and let it wander where it will. In his mind, the fate of the organization depended on giving people the freedom to do what they are best at rather than trying to fit them into the confines of a strict job description.” KM
Reading and Learning
“Barclay learned to love reading, a devotion that persisted throughout his life.” KM
“All his life, Barc was a voracious reader and auto-didact. His eclectic interests ranged from Epictetus, a Greek Stoic; to Mary Baker Eddy (founder of the Church of Christian Science, and author of Science and Health); to Viktor Frankl (survivor of a Nazi prison camp and promulgator of a therapeutic methodology called "logotherapy," which focuses on the importance of "attitude" in human actions); from the Bible to the Communist Manifesto; from Shakespeare to Michael Connelly; from seventeenth century Dutch painters to contemporary artists; and from theories of business management to early childhood education. His immersion in these subjects and authors shaped his view of the world - but none as intensely and abidingly as Abraham Lincoln.” KM
“Among Lincoln's fabled virtues, the ones that Barclay incorporated most effectively into his business (and his personal life) were the ability to listen and to change his mind (as Lincoln did on slavery); an innate commitment to fairness; a search for-rather than fear of-intelligence and excellence in others; a capacity for collaboration even with potential rivals; and a powerful ego, toughness, tenacity, and strong sense of irony about power and presumption. These beliefs-chopped, diced, and spiced in various ways by the people with whom Barc surrounded himself-became key ingredients in the ‘secret sauce’ of the Simpson Company.” KM
“Barclay's capacity for self-schooling was to last a lifetime. It was, in fact, a continuing way of life for him.” KM
“Critical to Barclay’s intellectual makeup was a deep curiosity about human motivations… He was committed to finding patterns in human behavior. This took the form of a lasting interest in psychology, which may have been based on an acknowledgment of the mystery of human personality as well as the nearly opposite desire to understand and categorise human behaviour in the service of the kind of predictability that might lead to productivity.”
Autonomy and Decisions at the Edge
“SST prized autonomy over standardization.”
“In building a business, when I took this eight-week class at the Stanford Business School - one of the professors said one sentence, which made the whole thing worthwhile. This was at the time when businesses were top-down. He said, ‘Get the decision down to the lowest level possible.’ I listened to that and I thought, ye gods, what a fantastic idea. We ran the business that way ever since.”
“Don’t tell your people how to accomplish the goal. If they ask you questions, you try and answer them. But you build strong people by letting them figure out how to do it. You tell them what the goal is; you let them figure out how to do it. If they want to talk to about it, fine. If they don’t, that’s all right, too. And they’re going to make some mistakes. But in making those mistakes, you build much stronger people.”
“Local control was for Barclay a fundamental business principle, a direct outgrowth of his insistence that decision-making should take place at the lowest possible level. At its core, Barc's belief in autonomy was ontological rather than simply operational - a principle grounded first and foremost in his personal psychology, which combined a profound distrust of complex, impersonal reporting structures with a conviction that taking personal responsibility is the engine of a productive life.”
“A coherent philosophy at the company encouraged personal initiative and pervaded all aspects of the business: There was never any fear of stepping outside the boundaries.. the best idea always won, whether it originated with a plant worker or at the highest levels.”
Tone at The Top
“Tone at the top - we do well with that, and it is Barc that has really set that tone. The dominant characteristic of his leadership is his very strong sense of propriety... and that sense of propriety is also egalitarian.”
Value All Employees
“Everybody in a company is important. Everybody. That's absolutely crucial. You must do everything you can to make people feel that they're valued. Our company culture says that everyone gets recognised for their contribution, no matter the role. There are no big shots, no parking places. It's always been first names—nobodies Mr. or Ms. You're Joe or Carol or Peter or Barclay. We're all working together toward the same goal. We rely on each other to be successful. We show each other respect.”
“We’ve never had anything but first names. Never anything else. Parking places? Nobody’s ever had one.”
“Taking care of employees is central to the mandate of any business and the key to its enduring success.”
“A key element of what made SST different is how Barc treated his people, allowing them to develop, encouraging their education, realizing the value of the employee or the person. It's just that appreciation of how valuable your people are.” KM
Family Culture
“For Barc, the key to success remained what it had always been: taking care of his employees and running his very particular kind of ‘family’ business even from within the jaws of the global marketplace.” KM
“I know it sounds funny to say, but Simpson has been a big parent to all of us who joined this company. That's why you very seldom hear about someone leaving. The turnover rate is very, very low here.” KM
Reciprocation
“For Barclay, the most important part of the leadership equation - and the source of the creativity from which greatness comes - were the people themselves. From the early days, his method was based on a commitment to reciprocity, a belief that power shared begets success much more effectively than power hoarded.” KM
Empowerment
“One of the core principles that Barclay had pursued in building Simpson Manufacturing, a capacity to respect and support his employees and colleagues as a way of encouraging personal success as well as that of the company at large. This instinctive, yet intentional giving of power to others is a rare quality of the very best leaders. When combined with a certain kind of moral authority and charisma, this brand of leadership moves and compels rather than coerces.” KM
Promote from Within
“When people join our company, they don't come for a bus stop; this is a career. When we hire someone, they find out when the job above them becomes available, they've got a shot at it.”
“We promote from within; very seldom do we go outside to fill a key job.”
“This idea that employees could build a career at the company, in turn, affected the way Barclay first constructed Simpson's rather unusual compensation system, as well as shaped his commitment to hiring and promoting from within the company wherever possible. In both instances, his methods were aimed at giving his employees a tangible stake in the business and in rewarding loyalty in direct and transparent ways.” KM
“I have never seen a senior leader cling to the philosophy of promoting from within more than Barclay.” KM
Business is People
“We are a successful company, and attracting and keeping the best people has made it all possible. Great people. That's the whole secret.”
“Barclay was an early prophet of a business creed that put people at its centre.” KM
Frugality
“As was true of most of the generation that came of age during the Depression, Barclay internalised a stern frugality, which in his case he attributed also to his Scottish heritage by way of hardscrabble Vermont.” KM
“The shabbiness of the plant and office facilities in San Leandro reflected Barclay’s committed frugality, dramatising his deep and continuing preference for substance over show.” KM
“Barclay’s insistence on saving a dime and not allowing himself special luxuries - along with his famously battered, dusty cars - were sources of amusement and wry respect among SST employees, becoming a key element in the emerging culture of the company.” KM
“Barclay hates to waste a nickel of shareholder money... He was the only person I knew who took the bus in from JFK to downtown rather than a cab. And that applies to all aspects of his leadership style.” KM
Resilience and Attitude
“Attitude conquers all. You just think about that. You’ve got some project that, God, you worked hard, you’re trying to get it done and you can’t get it done. You have to accept it and get on. Don’t stew about it. So I think that sentence, I’ve tried to follow it. Well, I did follow it. Maybe sometimes my attitude was lousy, but I followed it. Then there are a couple of books that I have found important… This one is more important — Man’s Search for Meaning, by Viktor Frankl. I saw this book probably sixty years ago. He wrote it in 1947, when he was out for a couple of years, out of a Nazi concentration camp. That book, I’ve found extremely important.”
Respect and Trust
“Long-term relationships are built on trust and respect, and this applies to your everyday job. Show respect and build trust in everything you do with your customers, users, and with your fellow employees. Always be straightforward. Don't just tell people what they want to hear; tell it like it is.”
Long Term View
“Good business leaders focus on the long-term outcomes, not short-term gains.”
“The business’s view is long-range. It’s people never sacrifice tomorrow for the sake of today. So no matter how much you want the sale, you never exaggerate what our connectors can do, in order to get the business. It’ll catch up with you. You may lose the sale right now because the competitor has done that, but long run, you’ll be okay.”
“We invest in markets, products, and projects that may not pay immediate or even short range returns, but should lead to future sales and profits.”
“In Barclay's mind, the most difficult part of the job came with the realisation that a very significant segment of investors is entranced with short- rather than long-term bets. It was a challenge, swimming upstream against a countervailing interest in quick gain.” KM
Earnings Guidance
“It is earnings, not investor relations departments, which drive the long-range price of a stock.”
“Barclay has no BS in him, his investor relations were open. Because of his large share of the ownership of the company, he could get away with some things that other people couldn't, but he was just remarkable, always stressing the long term and never speculating about how were going to do next quarter.” KM
“Barclay never would make a prediction. No guidance on stock price, no predictions.” KM
“Though the analysts would try to pry predictions from him, he refused to embellish or forecast the economy or markets.” KM
Business Fanatic
“[Barclay] lead Simpson-named businesses for nearly sixty-seven years, increasing annual revenues over the years from $100,000 in 1946 to net sales of $706.3 million in 2013, the year he retired from the board of directors of Simpson Manufacturing, to $1.27 billion in 2020.”
Tenure
“I’ll bet you that you’d have a lot of trouble finding a company that has not lost almost any employees. Once in a while one leaves, yes. Usually an engineer or somebody who’s big in accounting. But very seldom. I think you’ll have trouble finding a company that has the percentage who stay there. It is because of the benefits that make them feel that it’s their company. Not just the big shareholder, but their company.”
Financial Discipline
“[From Shakespeare’s Hamlet] ‘Loan oft loses both itself and friend, and borrowing dulls the edge of husbandry’. This above all.”
Mistakes and Innovation
“It encourages innovation and creativity, by recognizing that success seldom is achieved without taking risks and making mistakes along the way. If you don’t foul up occasionally, you won’t make real progress; but try not to mess up too much.”
“There was a lot of experimentation and failure - and learning from failure.” KM
“Because of its enduring openness to innovation and expansion, Simpson Manufacturing engaged in more than a few ventures and products that did not succeed, but the company had the continuing momentum of the core connector business to fall back on. Barclay observed that the most important thing about making a mistake is admitting it, cutting your losses, and moving forward without regrets.” KM
“A tenet that mirrors Barclay's own life practice exhorts employees to take risks, to embrace innovation and creativity, and to recognise that progress can only be achieved by experimentation and failure along the way (though one should try to foul up as little as possible).” KM
Asking Questions
“If you’re striving to understand something, never be afraid to ask the ‘dumb’ question. Pursue it in detail until the answer is clear. So often in a class, something comes up, and you think, wait a minute—what’s the answer to that? But you hold back because you don’t want to seem like a ‘dumb-head.’ Well, don’t. Ask it. If you think you’re the only one wondering, you’ve undoubtedly got company.”
Summary
Barclay Simpson recognized early on that the key to lasting business success was not only offering a product that added real value to customers but also building a team of exceptional people. Just as the metal connectors Simpson Manufacturing produces form the foundation for stronger, more reliable buildings, Barclay understood that a strong business required more than just good products—it needed a strong, interconnected culture. Riding the tailwind of post-war construction and growing regulatory building codes, Barclay’s go-to-market strategy was to position Simpson Strong-Tie as the industry standard—synonymous with quality—creating a brand that customers sought by name, not just a commodity.
Barclay’s insights into human psychology helped him build a culture of empowerment and trust within his company, giving employees the freedom to experiment, learn from mistakes, and grow. By sharing the profits of the business with all employees and promoting a decentralised structure with delegated authority, he created a robust organisational framework where each part worked together to create greater strength and resilience. This interconnectedness allowed Simpson Manufacturing to withstand the challenges of economic cycles, consistently deliver outstanding customer service, and achieve long-term success.
The company’s unique business model even caught the attention of Warren Buffett, who tried to buy the business, recognising its rare ability to create sustainable success. As Charlie Munger might say, businesses like Simpson’s are exceptional; when you find one, hold on. They provide a blueprint for long-term, enduring success that lifts not just the company, but its employees, customers, and communities.
Sources:
‘Strong Ties: Barclay Simpson and the Pursuit of the Common Good in Business and Philanthropy,’ Katherine Ogden Michaels with Judith K. Adamson, Rare Birds Books, 2022.
‘Barclay Simpson: An Oral History- Interviews conducted by Neil Henry in 2012 and 2013,’ The Bancroft Library Berkeley, California. 2013.
‘Simpson Manufacturing Annual Reports,’ 2001-2023.
‘Barclay Simpson's Nine Principles of Doing Business,’ Interview, 2013.
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