Sam I Am

Just as one president from Arkansas is gearing up to leave the Oval Office, another Arkansas native is preparing to assume a presidential post of a different kind.
   We’re talking, of course, about Sam Hummelstein, president of Hummelstein Iron & Metal Inc. (Jonesboro, Ark.), who will become ReMA president at the association’s annual convention in March.
   As Hummelstein notes, he “didn’t go looking for this job.” Instead, it found him.
   The story goes like this: In the early 1990s, Hummelstein’s father, Lee, advised him to get out of the scrap business to spare himself the grief that Superfund could inflict on their company. Instead of getting out, Sam got mad. “I decided that I wanted to be part of the solution, so I got involved to help beat Superfund,” he says. And get involved he did. He has chaired various ReMA committees and subcommittees and served as a chapter officer as well as national second and first vice president. Plus, he and Marilyn, his wife and constant companion, were key players in ISRI’s push for Superfund reform. Most notably, they gained the support of Arkansas congresswoman and, later, senator Blanche Lincoln for the Superfund Recycling Equity Act. Her endorsement of the act in several congresses was invaluable to ISRI’s efforts—and a testimony to the Hummelsteins’ commitment to the future of their company and the scrap industry.
   Hummelstein plans to bring that same commitment to his role as ReMA president. That commitment was evident in February when he flew to Washington, D.C., to brainstorm with ReMA staff about the priorities for his administration.
   The ideas that came out of that meeting included implementing ISRI’s new governance structure, remaining vigilant in the legislative and regulatory arenas, emphasizing leadership development and professionalism among scrap processors, forging a greater partnership between processors and consumers, and helping the scrap industry thrive in this technological age.
   The technology issue is particularly near and dear to Hummelstein, a self-proclaimed “techno-geek.” Not only was his company into computers long before they were cool, but he is personally “overly connected” through computer, voicemail, e-mail, Web, beeper, cell phone—you name it. But it’s just this technological bent that makes Sam the ideal candidate to guide the scrap industry into the brave new e-world. As he asserts, “For ISRI, the Internet will either be our key to long-term viability, or it will render us obsolete.”
   His role as ReMA president, he says, will be to provide direction to the association in this difficult era of dwindling membership, tight finances, competition from the Internet, and growing service expectations from members. “We need to balance our resources and our priorities,” he asserts.
   In his own words, here’s how he plans to do just that.

Q: What are your earliest memories of your family’s scrap business?
Hummelstein: I became aware of what my dad did when I was in grade school. In the summers, I’d go down to the plant, answer the phone, and be a pest, primarily. Then in junior high I worked summers.

Q: How and when did you begin working full-time at the company?
Hummelstein: My grandfather, Abe Hummelstein, became ill in 1970 and required some time away from work for treatment. He was running our little steel warehouse at the time. My dad said, “Your grandfather’s going to be off a little while. Why don’t you come down and help us this summer?” So I joined the company to help out for a few months and forgot to leave.

Q: What had been your career plans before then?
Hummelstein: I was going to be a band director. I was pursuing a general music degree at Arkansas State University, and I was going to minor in business. My grandfather didn’t recover as quickly as expected, which put my dad in a bind, so I kept working after the summer. I said, “I’ll catch the next semester”—then the next semester. And the next semester never came.

Q: What happened to your music?
Hummelstein: I stayed in the music business for a couple of years. I was in a band—the 1932 Ballroom Blues Band—so I did both for several years, worked and played gigs. I primarily played keyboards.

Q: When did the music finally take a backseat to the scrap business?
Hummelstein: Actually, the music business took a backseat to Marilyn. I was gone every weekend playing gigs, I was working all through the week, and it basically came down to: “Let’s make a decision which way we’re going with our lives.” And I made the right decision. In truth, I’d gotten pretty bored with the music business. So I quit the band, asked Marilyn to marry me, and the rest is history.

Q: What was your first introduction to scrap industry trade associations?
Hummelstein: Our family vacations were ISIS Gulf Coast Chapter meetings. I have this wonderful memory of going to Galveston for one of those meetings. While my dad was in the meetings, my mother, sister, and I went to the beach. Somehow we came up with a fishing pole, and my mother caught a turtle! That’s the only memory I have of that entire trip.

Q: When did you start participating in the association?
Hummelstein: In the mid-1970s. ISIS put on a workshop—an introduction to computers—as part of a top management seminar in St. Louis. I sat next to a fellow who looked at my name tag and said, “Sam Hummelstein, Jonesboro, Arkansas. My name’s Ken. My dad was Gordon Matthews, who owned Matthews Men’s Store in Jonesboro.” I said, “I know the store because that’s where we bought clothes when I was a kid.”
   t turned out that Ken was the controller at Chatham Steel in Savannah, Ga. We started talking about computerizing scrap operations and, before long, I was helping him teach computer seminars for ISIS. This was before anyone considered writing commercial software packages for recyclers. We also served on a computer task force for ISIS.

Q: When did you begin serving on association committees or get involved in governance?
Hummelstein: It was in the Gulf Coast Chapter in 1991. I was chairman of the chapter’s bylaws committee. Then I was appointed to serve as state legislative liaison. In 1993, I was elected secretary/treasurer of the Gulf Coast Chapter for a two-year term, then climbed the ladder to second vice president. It was in the second year of that term that I was asked to run for national office. Serving as a chapter officer was a lot of fun and did a great deal toward preparing me for my next assignment.
   On the national level, I chaired the fair trade practices committee during Arnie Gachman’s administration and the history and archives committee under Cap Grossman’s term as president.
   In 1996, during my term as ISRI’s national second vice president, Jim Fisher asked me to chair the subcommittee on industry restructuring. This subcommittee’s work laid the groundwork for a new dues structure reflective of our changing industry and identified the need to reevaluate our governance structure.

Q: How did you feel when you got the call to be a national ReMA officer?
Hummelstein: When the nominating committee called, I was pretty shocked because I knew many people who, in my opinion, were more experienced and deserved the honor more than me. I was very flattered and honored that they felt I could do the job.

Q: How long did you have to think about your answer?
Hummelstein: I gave it a few days. The time commitment was something Marilyn and I discussed a great deal. We knew she’d have to become even more involved in the management of the company if I became a national officer.
   Once we made the decision to allow the nominating committee to put my name in the hat, we started moving people and responsibilities around so Marilyn could become more involved in all areas of our company. It meant more responsibility for Marilyn—and the rest of our company’s management team as well. There were several people we needed to develop and give more responsibility. We moved some of our people into greater leadership roles, which has been good for our company.

Q: How else has being a national officer benefited you and your firm?
Hummelstein: Just to get to work with the people at the national level—both volunteer leaders and ReMA staff—is a real treat. You’re dealing with some very dedicated and bright people. We’ve had some wonderful experiences and made some great contacts, both personally and professionally. We’ve got a lot of new friends within the industry—people whom we wouldn’t have had the opportunity to know otherwise.

Q: You’re soon to become the next ReMA president. Is that a daunting thought?
Hummelstein: Are you asking if I lay awake at night in a cold sweat? No, I don’t. But yes, I’m a little nervous. Anytime you venture onto a new stage, it can be a little intimidating. There are people out there who have a lot more experience in the industry than I have. And there are certainly people who have a lot more experience in the trade association. But I’ve been fortunate to serve in leadership roles in other organizations, and I think those experiences will help. The nice thing about being in your 40s—albeit barely—is you know that you’re pretty much the person you’re going to be and you get comfortable with that. You know your weaknesses and strengths better than anyone else, and you know some people will like you and some won’t, but you’ve got to live your life the way you see fit.

Q: Speaking of strengths, what will you bring to the job as ReMA president?
Hummelstein: For one, I’m a consensus-builder. I like working in groups. That’s my most rewarding time, working with other people, solving problems as a group, hearing other people’s points of view, learning from other people. Some call it synergy.

Q: Recruiting new volunteer leaders has been a challenge for ReMA in recent years. What are your thoughts on that issue?
Hummelstein: As we’ve learned through analyzing our leadership ladder and governance structure, times are different. The new people coming into our organization as volunteer leaders have different expectations from the organization. They have a different level of time to commit as a volunteer because they’re balancing many priorities in their lives—family, professional, personal interests. We’re not going to be able to lean on volunteers to the extent we have in the past. This is true for all volunteer organizations. This doesn’t mean we’ll be short volunteers, it just means we’ll have to use volunteers in roles that have shorter time-spans, with clearly defined responsibilities and objectives.
   Once a job is completed, we’ll say thanks and let them get back to their already very full lives. Very few will sign up for an eight-, 10-, or 12-year climb up a leadership ladder.
   We have to restructure our governance to utilize our volunteers’ strengths without overtaxing the time and energy they have to give to the job. So we need to create a more efficient governance structure and rely on the volunteers for what they do best, which is providing the leadership, the vision, the direction, and the fiduciary responsibility. Then leave the detailed day-to-day implementation of the board’s goals and plans to the professional ReMA staff.

Q: What are some key areas you’d like to focus on in your administration?
Hummelstein: Superfund is going to stay a high priority for us. We won a great victory when Congress passed the Superfund Recycling Equity Act, and the entire membership owes a debt of gratitude to all the ReMA leaders before me who devoted themselves to Superfund reform over the years. Shelley Padnos, in particular, deserves much credit for steering our Superfund effort forward, even during some of the worst scrap markets in history.
   However, even with our legislative victory, we’re finding that we may not automatically get to benefit from that legislation. We may need to fight in the courts. We may even need to fight in the halls of Congress again. Either way, we must remain vigilant on this issue.
   Beyond Superfund, I’m also very excited about the efforts being made by the ReMA staff to expand the association’s efforts to a greater range of issues affecting members, including general business issues such as taxes and health care.
   Beyond that, the biggest challenge facing ReMA is revenue. We’ve lost hundreds of members in the past several years. We must increase our membership rolls. The future of the trade association and its value to its members depends on that.
   I’m also committed to further strengthening ISRI’s efforts with our paper members by increasing the number of paper processors, brokers, and mills who are ReMA members, working with the Paper Stock Industries Chapter to further integrate our paper members into the general membership, and expanding awareness of the broad services available to all members, regardless of their commodity.
   I’m also committed to engaging the volunteer leaders in meaningful work in the association. What does that mean? As members, we’re the recipients of ISRI’s benefits. But, as volunteer leaders, we’re also responsible for looking five or 10 years down the road to envision what our industry is going to look like and what members’ needs are going to be. And we must begin today to reshape the organization around that future.
   Hockey great Wayne Gretzky’s success was in skating to where the puck was going to be. That’s the whole point in any organization—to be ahead of the issues, not lagging behind. That’s the greatest value the board can bring to the association—to come to consensus on where the puck’s going to be and then move the organization toward that point.
   Our chapter leaders sent a clear message at the January board of directors meeting that they want and need to be actively involved in the governance of ISRI. I found this to be one of the most encouraging things to come from that meeting. Our challenge will be to engage the chapter leadership in a meaningful discussion about the duties and fiduciary responsibilities each chapter shoulders. One of the greatest challenges to ISRI’s continued growth and strength is action at the chapter level that, if not addressed in conjunction with chapter leaders, could inadvertently undermine the association. ReMA is only as strong as its chapters. I intend to initiate a dialog with the chapters to address their current and future needs and how they can best serve and be served by ISRI.

Q: What about technology and how it could affect the scrap industry?
Hummelstein: Obviously, the Internet is changing our society. It’s changing our expectations from our sources of information. I constantly turn to my computer and call up one of 18,000 search engines, and within minutes I’ll normally find what I need.
   That’s truly just the tip of the iceberg. Our members will expect information at their fingertips, 24 hours a day, seven days a week, and ReMA is going to have to live up to that expectation. The bar has been raised for all of us.

Q: Will scrap processors have a harder time competing in this e-commerce world?
Hummelstein: I really don’t know. E-commerce is definitely going to impact the scrap business. Typically, what computers have done is replace the middleman. Computers certainly displaced a large number of middle managers over the past two decades. It’ll be interesting to see if that happens in our industry, which depends on brokers for a large share of transactions.
   At the same time, the scrap industry is still a relationship business. What it may do is force us to find more cost-effective ways of dealing with the transactions themselves. So you might deal with your broker via a Web site. What that does is eliminate more back-office staff, which drives down transaction costs. So it could make the industry more efficient.

Q: What are some other big concerns for the industry?
Hummelstein: One is retaining what we’ve won with Superfund, making sure that we don’t slide back through detrimental legislation, regulations, or court decisions. Eventually, comprehensive Superfund reform will begin to move, and we must be a player in that work. Otherwise, we could easily lose what we’ve gained.
   Also, aside from the Internet, technology is changing the material that’s coming into our plants. Not only are there new alloys, but there are new products like powder metal parts and composite materials, which have a direct impact on our inflow and, thus, on the quality of our processed scrap product. At the same time, our consumers are driving up their demand for higher-quality raw materials. High-strength steels are creating lighter-weight components, while technology and improved management on the shop floor are reducing the amount of prompt industrial scrap being generated.
   And obviously, the globalization of our economy is fresh on everyone’s mind. As we recently witnessed, record growth and strength in the U.S. economy isn’t enough to sustain a global industry like ours.

Q: Where do you think the scrap industry consolidation trend will go?
Hummelstein: I don’t think that trend is over. When the economics for consolidation are right, it’ll return. The challenge for us is to position ReMA to serve all types and sizes of members.

Q: You’ve expressed interest in continuing ReMA President Shelley Padnos’s emphasis on improving professionalism in the industry.
Hummelstein: I think that ReMA can benefit in two ways by continuing to develop leadership skills in its members. Certainly, if a member has better leadership skills, then that member’s company will be healthier, which has a direct benefit to the association. If you’re a more effective leader at work, you’ll also be a more effective volunteer leader. So it’s a benefit to both the association and the member to develop leadership skills, which cover everything from how to lead a meeting, how to bring a group of people to consensus, how to deal with conflict, how to problem-solve as a group. We use those skills at work every day. But those same skills can be brought to the volunteer role within the trade association.
   Among the leadership skills we must foster is setting a high ethical standard for our industry. We can accomplish this through our policies and by each member incorporating those standards into their organizations. Failure to do so undermines all the good we can do to improve the industry and our members’ best interests.
   The astute CEO will encourage up-and-coming leaders in their organization to participate in the leadership of ISRI. What better place to learn and hone the skills needed to be successful at work?

Q:  If a genie granted you three wishes for the scrap industry, what would you ask for?
Hummelstein: First, resolve all the unanswered questions about Superfund relief for recyclers. Second, I’d like to reach out to every member and involve him or her in a serious discussion about who we are and where we should be going as an association. The results would be nothing less than amazing for ReMA and its members.
   And third, I’d wish for a relationship between our consumers and processors that was a true win-win partnership, where we looked at each other’s issues and worked together on common problems.
   In many industries, the supplier/customer relationship has become a partnership. Part of our country’s industrial rebirth has grown from the awareness that the relationship between supplier and customer is a codependent relationship. And if you create that partnership in a win-win environment, everybody benefits.

Q: What do you want your legacy to be as ReMA president?
Hummelstein: It won’t be my legacy, it will be our legacy. At the end of my two-year term, I want us—officers, volunteer leaders, and staff—to be able to say, “ISRI is better today than it was two years ago because of what we did.” I’m talking specifically about ISRI’s position for the future. We’ll make incremental steps in two years, but if we build a foundation that can support the organization into the future, that’s how we’ll measure our success.
  It’s important to understand that this isn’t starting today. We stand on others’ shoulders, and we drink from wells dug by people who came before us. We’re building on the work of all previous leaders, who molded a strong organization and struggled with some tough issues. We have the good fortune to build on what they’ve done.
  Nelson Henderson wrote: “The true meaning of life is to plant trees under whose shade you do not expect to sit.” ReMA is an entire forest of shade trees planted by those who came before us. Our industry benefits from the shade of those trees. If ReMA is to continue, we must plant trees for those who will follow us.

Q:  So you’re planting a tree?
Hummelstein: Hopefully. Or at least we’re preparing the soil.

—Kent Kiser