Scott Cawelti and Tom Penaluna

Scott Cawelti, left, with Tom Penaluna during their lunch conversation.

COURTESY PHOTO

Freelance writer Scott Cawelti is having lunch and a conversation with area leaders. This is the eighth installment from his lunch with community leader Tom Penaluna.

When I lunched with Tom Penaluna recently, he had just returned from a Chicago weekend retreat with his management team. He cited that meeting as one of the best experiences of his long career as his company’s leader.

Why the enthusiasm? Because he could see the fruits of his long-sought goal of developing leaders who were now running his company effectively. “They were brilliant. I mostly watched and help them deliberate, making decisions that made sense to all of us.”

They ran the show, and Penaluna knows they were doing fine without him. “Really, a good leader’s goal is put himself out of a job.”

I found that bizarre — many powerful leaders want to be flattered, consulted and told how wonderful they are. Not Tom Penaluna.

His greatest accomplishment, he told me, has been finding and nurturing young leaders to manage effectively — with or without him.

To call him successful at reaching that goal would be an understatement. His involvement in the “Leader in Me” program helped move it into 20 of the 34 schools in the Cedar Valley, from grade school through high school. Essentially, thanks to Penaluna and his company’s efforts, teachers and administrators have implemented a school program where they teach the seven habits of highly effective students.

All three school superintendents support the program, and when schools successfully implement the program, they become “Lighthouse Schools,” meaning they become exceptional at helping students become leaders who understand and use effective skills and attitudes.

“It changes their lives,” Penaluna insists, citing how “Leader in Me” students, in case after case, do better in work and life than those without the benefit of such tools.

“We can see the results, year after year, so we know that this approach works.”

Years ago, Penaluna heard Stephen Covey talk about his book, “Seven Habits of Highly Successful People.” He realized Covey was describing the actions and attitudes of people who do well at everything. He also saw teaching and learning such habits could transform students and their schools.

Those habits includes “sharpening the saw,” meaning always improving, and that is Penaluna’s strong suit. The history of his company reads like a Horatio Alger story.

A Waterloo native and a 1967 graduate of West High, Penaluna purchased the “Credit Bureau of Waterloo-Cedar Falls” in 1986, and soon incorporated and renamed it “CBE Companies.” Essentially, his companies collect payments on bills, which to Penaluna means helping people manage their finances better, not just browbeating them.

As CEO at that formative stage, he believed in “culture over planning” as he put it, meaning hiring employees who shared his values, treating them well, rewarding them with opportunities for advancement and making sure they felt at home with his company. Then get out of their way. Then the planning falls into place.

Now Penaluna is chairman (no longer CEO) of CBE Companies, with 1,600 employees in Cedar Falls, Waterloo, Kansas, Texas and the Philippines, with headquarters (and 800 employees) in Cedar Falls. “I do travel to all CBE headquarters and see how they’re doing. But I’m not a traditional boss who comes in and imposes rules and regulations on them. I try to listen and help.”

Through all of CBE’s growth, his approach remains the same: Treat everyone as you would want to be treated, hire smart people who work hard and share the company’s values of fairness and compassion. That’s his leadership approach, and it explains the success of his company.

What challenges and disappointments has he faced, running such a large operation? “Government regulations, which we need and can be helpful, sometimes become government overreach. We’re asked to manage for exceptions.” Compliance with those regulations can be overwhelming.

Besides, “every work day is completely different, so it can be stressful, and hiring and firing is always a challenge. I hate having to tell someone they’re not suited for the job.”

After a heart attack some months ago he was told to “avoid acute stress,” so he concentrates on fine-tuning the company’s governance and strategic planning rather than day-to-day operations.

He and his wife, Ginger, also undertake serious worldwide travel, which he enjoys immensely as radical breaks from work.

Surprisingly, he’s a serious long-distance motorcyclist, having taken a trip with two buddies from Alaska down to the furthermost tip of South America. “That was life-changing,” he says with a grin, and shares a few hair-raising stories.

All in all, Tom Penaluna not only teaches and supports the habits of highly effective and successful people — he embodies them.

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