#1 — Bob McKnight

#1 Bob McKnight
The king of surf leads through passion and example.

The fact that Quiksilver’s Bob McKnight is such an obvious candidate for the top spot on this list only underscores his influence. As the founder and CEO of the largest surf company ever—the first to top a billion dollars in annual sales—McKnight is the undisputed king of surf.

But there are other reasons that made McKnight the most-mentioned choice among industry leaders and retailers. The opening of the Quiksilver Boardriders Club in Times Square, its launch of Quiksilver Entertainment and The Crossing, its exposure on MTV through Surf Girls, its philanthropy, and its leadership in the women’s market with Roxy—all these place Quiksilver ahead of other surf brands by just about any yardstick you can think of.

And no small part of McKnight’s influence comes from the team he’s assembled, many who could comfortably sit anywhere on this list except the top spot. Danny Kwock, President Bernard Mariette, National Sales Manager Tom Holbrook, Men’s President Marty Samuels, Women’s President Steve Tully, Retail VP Gregg Salomon, Marketing Executive Vice President Randy Hild, and others all cast huge shadows on the U.S. surf market.

But make no mistake that above them all on the SS Quiksilver—perched in the crow’s nest with the best view of all—sits McKnight. It’s his vision and passion that sets the tone for the entire company. And he clearly remains a surfer at heart. Thirty-five years ago he got the brand off the ground by driving to surf shops and selling the line out of a box. Those roots are still central to him. He uses words like culture, passion, and responsibility with the zeal of a missionary, and is there any among us who isn’t grateful—or at least respectful—of the way he’s led Quiksilver?

TransWorld SURF Business spoke to the most influential person in the surf industry to get his view on management, the responsibility of influence, and the road ahead for the surf industry. Here’s some of what he told us.

Companies are usually run from the top down. What’s your management philosophy?

Bob McKnight: The aura, vibe—whatever word you want to use—of a company should exude from the boss. People look at me as sort of the embodiment of Quiksilver. So my standards, ethics, style, schedule, passion, and energy level are precedents for the whole company. That’s a part of the {management guru} Jack Welch system that I really appreciate.

I don’t have an MBA or come from a family with a 100-year-old apparel background. I more or less built this thing up on instincts. I think my instincts and morals are good. I try to run the company fairly and honestly and from the gut. I probably break all the rules about being a good CEO, but I don’t really give a shit.

I’ve built friendships with my managers. I travel a lot with them and I play sports with them. I drink with them and I hang out with them and their families. I really believe that whole thing about building a culture within a company. If you have healthy, enthusiastic people down in the bunker with you every day who will jump out of the bunker in front of a bullet for you, it makes the entire company strong. Those are the people you want to go into battle with.

We’re growing and diversifying and going global and hitting a billion dollars in sales, but that’s all bullshit compared to really looking after the business that we originally founded—selling boardshorts to surf shops. That’s the essence of our business. We can never forget about that. Brick-by-brick, everything grows from that platform. If our foundation is weak—the very essence of how started the business—we’re fucked.

As the company has grown, has it become easier or harder to maintain that vision?

It’s no harder or easier because it’s just me. It’s instinctual for me and to most of the people here who drip saltwater. Those people, like myself, really don’t have to think about it much. They just it. It’s not harder now that we’re bigger. It’s like, “Is breathing any harder now that you’re older? Maybe it is, but I don’t notice it.

There’re only so many 100-million dollar boardsport companies available to be acquired. At a certain point will you look at non-endemic acquisitions to feed the growth machine—or would that be completely counter to everything you’ve just said?

Our mission is to be the very best company at serving the youthful mindset demographic with product and accessories. It’s not about age; it’s about the mindset. So, it doesn’t all have to be endemic. There’s certainly a very narrow surf-skate-snow field that we specialize in right now. But if you look at these surfers and skaters and snowboarders, they’re wearing Diesel and Levi’s and Gap. They’re wearing Dolce & Gabbana when they go out at night. So when I’m talking about serving that demographic, we need to look at what they’re wearing and how they respond to things.

There’s a certain amount of them who are into this whole urban movement—Sean John, Phat Farm, Fubu, Shady. That’s not a comfortable environment for us, because we’re not about guns and gangsters and people with gold teeth. It’s a scary route, but it’s happening. So we probably wouldn’t go down that road.

But there are tons of other opportunities. Our market definitely wears denim, and it’s not just Levi’s. These guys are wearing fashion denim like Ben Sherman, Diesel, and Stüssy. Maybe there are companies like that you could acquire or partner with where you can activate the parts of their business they don’t do so well. If they do men’s really well, maybe you could do the women’s side. If they do America really well, take it global. If they’re in Europe, bring them to America.

Is the story the same with DC?

That made perfect sense. We don’t necessarily want to do Quiksilver skate shoes—that would just be another “me-too, dumb-ass move. When we launched Quiksilver shoes, it was more of lifestyle shoe play, and it’s worked quite well, but we don’t know enough about shoes—the sourcing, the backend operation, the styling, and the technology.

But aside from that, and aside from the fact that culturally DC fits like a glove, we knew we could help DC with apparel. They did twenty percent of their 130-million dollars this year in what’s like badge-warfare clothing—sweatshirts with huge logos, DC shirts, and DC hats. That’s business that just falls off the table. Imagine if they got serious about it. We have bigger plans on how DC can compete with brands like Diesel without going completely urban.

Quiksilver will still do Quiksilver shoes, but we might have people from DC up here helping us in this building. When they’re going to do their clothing down in their fortress, we might have some people down there. Both companies can share backroom, sourcing, logistical, lawyering, and accounting services, but DC is going to stay DC and we’re going to stay Quiksilver.

There’s not a lot of employee turnover at Quiksilver. When there’s a change with a longtime rep or an athlete, you really make a point to take care of those people. Why?

We don’t bring in employees or reps or riders as meat. We don’t hire someone because we can grind them and spit them out the back door when we’re done. We look at them like family members and partners for life.

We have great examples like Bruce Raymond, Tom Carroll, Willy Morris, Jeff Booth, and Danny Kwock. All these people started as little kids on the beach and now they’re managers or presidents of the company for heaven’s sake. If they have good instincts and they’re passionate—and don’t screw around or abuse us—then as far as I’m concerned I’d like to have them one day run the company. What makes me most proud is seeing these people rejuvenating the company, people who are actually running the company now.

It drives me crazy when I hear, “Ah, Quiksilver is a big fucking sellout public company. Okay, fine. Go ask the people who work here what it’s like. They’ll tell you it’s the most family-oriented, non-public company atmosphere and, by the way, they have these stock options that grow and grow, and next thing you know, you can buy a new house with them. Could you buy your employee a house with options?

The tools that come from being public are wonderful. It’s a reward. Do you want to sit there and make the same amount of money every year, year in year out? Everybody wants to grow in their career, and the only way you can do that is by growing as a company. You can’t just sit there and be cool and groovy.

I mean that’s why I can’t wait to watch Volcom. Richard {Woolcott, Volcom founder} and I talk about it all the time. It’s like, “Hey Richard, you know you’re going to get to that point where you’re going to have breach through that canopy of like going places that are going to be a little more uncomfortable, and bringing some like non-salt people to help you grow, and what’s your posse going to say then? He’s like, “Oh fuck, I knew it was coming.

How would you characterize Quiksilver’s relationship with specialty surf shops?

Fantastic. We have good competition now. In some cases, competition that’s kicking our ass in particular stores. Volcom’s on fire, no question about it. I admire them for that. In some stores, Billabong is better than us. Those are the only two that really ever equal or beat us. It might be that that guy in the store likes the brand himself, or they have a hot item that blows out. In Volcom’s case, the entire brand is just on fire. They could almost bring in trash and it will sell out. But we’re still far and away the number-one vender for most surf shops, and that just doesn’t happen because our product is good and they have a history with us. It’s something we have to maintain every single minute of every day.

I know all those guys, and they know me. I still go to the tradeshows and hangout. They can see that I’m still involved after all this time. I’m an American. I surf. I participate. I’m true to my word. And then we have right below me: Tom Holbrook, John Mills, and Jeff Booth—people who really look after them. Then there are our reps. You know there are real people there who have been at it for a long time. And, by the way, the product line has never looked better. They know it fits and that we’re going to ship it on time. If something doesn’t work or if they can’t pay on time, we’ll work with them. We’re the best kind of a partner to have in their business. The combination of all this stuff is the reason why our relationship has never been better.

And you’re satisfied with what they’re giving you?

I would encourage them to do more, but they can only do what they can do. I would certainly rather them be on the move than Pac Sunwear or whoever. We relate to them in a real emotional, guttural way.

I don’t know if you remember this, but the SIMA Surf Summit a few years ago was all about Internet and Internet sales, and I just went, “Fuck that! We need to look after the shops. I hope people remember that.

If we don’t have the shops down there on the beach showing off surfboards and snowboards and selling wax and wetsuits, with guys with green hair and tattoos talking the talk and walking the walk, if we don’t have that, we’re fucked. Then we allow Tommy Hilfiger and Ralph Lauren and Hollister and all these wanna-be assholes to come in and walk all over us. Those stores are the most important partners we have. Protect them at all costs!

Now, what I don’t like is when they start griping when other stores come into their territory. That just means that maybe there’s some demand left on the table that I wish they would take care of. But if they can’t and the new store comes in, what are we supposed to do? Not sell them?

So I love them. Are they doing a good job? A great job. Are they redecorating and putting money back into their store? I hope so. And as long as they’rhe people who work here what it’s like. They’ll tell you it’s the most family-oriented, non-public company atmosphere and, by the way, they have these stock options that grow and grow, and next thing you know, you can buy a new house with them. Could you buy your employee a house with options?

The tools that come from being public are wonderful. It’s a reward. Do you want to sit there and make the same amount of money every year, year in year out? Everybody wants to grow in their career, and the only way you can do that is by growing as a company. You can’t just sit there and be cool and groovy.

I mean that’s why I can’t wait to watch Volcom. Richard {Woolcott, Volcom founder} and I talk about it all the time. It’s like, “Hey Richard, you know you’re going to get to that point where you’re going to have breach through that canopy of like going places that are going to be a little more uncomfortable, and bringing some like non-salt people to help you grow, and what’s your posse going to say then? He’s like, “Oh fuck, I knew it was coming.

How would you characterize Quiksilver’s relationship with specialty surf shops?

Fantastic. We have good competition now. In some cases, competition that’s kicking our ass in particular stores. Volcom’s on fire, no question about it. I admire them for that. In some stores, Billabong is better than us. Those are the only two that really ever equal or beat us. It might be that that guy in the store likes the brand himself, or they have a hot item that blows out. In Volcom’s case, the entire brand is just on fire. They could almost bring in trash and it will sell out. But we’re still far and away the number-one vender for most surf shops, and that just doesn’t happen because our product is good and they have a history with us. It’s something we have to maintain every single minute of every day.

I know all those guys, and they know me. I still go to the tradeshows and hangout. They can see that I’m still involved after all this time. I’m an American. I surf. I participate. I’m true to my word. And then we have right below me: Tom Holbrook, John Mills, and Jeff Booth—people who really look after them. Then there are our reps. You know there are real people there who have been at it for a long time. And, by the way, the product line has never looked better. They know it fits and that we’re going to ship it on time. If something doesn’t work or if they can’t pay on time, we’ll work with them. We’re the best kind of a partner to have in their business. The combination of all this stuff is the reason why our relationship has never been better.

And you’re satisfied with what they’re giving you?

I would encourage them to do more, but they can only do what they can do. I would certainly rather them be on the move than Pac Sunwear or whoever. We relate to them in a real emotional, guttural way.

I don’t know if you remember this, but the SIMA Surf Summit a few years ago was all about Internet and Internet sales, and I just went, “Fuck that! We need to look after the shops. I hope people remember that.

If we don’t have the shops down there on the beach showing off surfboards and snowboards and selling wax and wetsuits, with guys with green hair and tattoos talking the talk and walking the walk, if we don’t have that, we’re fucked. Then we allow Tommy Hilfiger and Ralph Lauren and Hollister and all these wanna-be assholes to come in and walk all over us. Those stores are the most important partners we have. Protect them at all costs!

Now, what I don’t like is when they start griping when other stores come into their territory. That just means that maybe there’s some demand left on the table that I wish they would take care of. But if they can’t and the new store comes in, what are we supposed to do? Not sell them?

So I love them. Are they doing a good job? A great job. Are they redecorating and putting money back into their store? I hope so. And as long as they’re doing their job, I’m entirely happy. Where I want to focus now is China. That shouldn’t affect them. I want to focus on Chicago, which shouldn’t affect them. I want to focus on the DC shoe acquisition and taking that to Australia. That doesn’t affect them. They shouldn’t be afraid of the stuff I’m doing. It’s not stuff that will impale them in any particular way.

Yeah, there could be a random Boardriders Club like in downtown San Diego — which doesn’t affect any coastal shop, and I’ll argue to the death that it doesn’t. But I’m not going to stick one right on top of them. Why would I do that? That’s stupid. I love our partnerships and relationship and I’m passionate about taking care of them.

Don’t ever forget that I’m the guy back in 1991, when we had the first collapse, when neon died and all the surf shops were going down the plug hole, we were the ones giving them up to two years in extra term to pay, putting product in stores, trying to keep them afloat. That was the first time around. The second time around, when this Internet thing came around, I was the one who said, ‘No! Out! Don’t do it! You don’t have to right now. Look after the surf shops.’

What responsibilities come with being a billion-dollar company, and what is your growth game plan now?

I see three phases of Quiksilver. Phase one was zero to 100 million. It was core people like me, Tom Holbrook, and Jeff Hakman building boardshorts, walkshorts, and T-shirts and selling them to Laguna Surf & Sport, Val Surf, and Jurgen {at K-Five}.

The next phase—100-million to a billion dollars in sales—was about adding not just core people. We brought in some professional managers who aren’t dripping salt. We also added more brands—Roxy, SilverEdition—and offered broader product lines—denim, outerwear, shirts, sweaters. We expanded distribution. We were not going to be just in Laguna Surf & Sport and all that. Now it’s like PacSun, Zumiez, Tillys, as well as Nordstrom, Macy’s, Boardriders Club, and off-price stores.

We’re now at a billion dollars and entering into phase three. Now our number-one priority—you can read it right there—’Keep existing business.’ Phase three is first and foremost about protecting what we have. Meaning surf shops, and core product for core people at the core shops. We must have the mindset of always keeping and supporting that.

Part of our goal is to see growth through existing channels—even at Laguna Surf & Sport, PacSun, Nordstrom, and Tilly’s. PacSun is definitely on the move, Zumiez is on the move, some of our surf accounts are on the move. We want to add more product: more shoes, more accessories, more denim. We want to sell more of the technical products we’re getting into now, like fabrics that respond to body temperature and interface with Sony electronics.

We’ll also have new initiatives: shoes, sunglasses, watches, technical products, and more you’ll hear about later. We’ll also be going global, which doesn’t just mean taking our products to China, Russia, and the Midwest—which is really like taking it global—but also South America and the Middle East. There are countries like those where they have youth mindset cultures and they need this stuff. All they’ve been introduced to so far is Nike and Starbucks. So why not surf, skate, and snow? Why not us? We’re the biggest brand. It’s our responsibility to take it there. Before they get hooked on Fubu, I want them hooked on Quiksilver.

We want to become global, but not just geographically, but through synergies with sourcing and driving our merchandisers together and our marketing people to be more global in their mindset. When you see Nike and Starbucks, you think the same thing regardless of what country you’re in. I want to make sure the same thing happens with Quiksilver.

Acquisition is also part of the strategy. Two years ago it was Quiksilver Australia and Japan. Now it’s DC. I told you there will probably be more.

That’s probably the easiest way