Xiaorong (Hazel) Hu knew even during her pre-college years in Lishui, in China’s Zhejiang Province, that success for her likely meant pursuing a career outside her home country.
“The reason I came to the U.S. is because I felt America provides greater opportunity for women,” says the entrepreneur who in 2004 founded Permasteel, a manufacturer of barbecue grills and other seasonal outdoor products such as patio heaters and coolers. “In China, breaking the glass ceiling is much harder to achieve, regardless of how hard you work.”
That awareness convinced her to take her bachelor’s degree in international business from an industrial university in China to Azusa Pacific University near Los Angeles, where she enrolled in a master’s program in human and organizational development. She founded Pomona-based Permasteel the year after graduating and has remained the company’s president ever since. The company now has about 600 manufacturing, engineering, and logistics employees in China, and about 15 U.S. staffers handling sales, marketing, and customer service.
Permasteel recently began making grills under its own brand, and also signed an exclusive licensing agreement to produce and sell Kenmore-brand grills and accessories to large retailers, including Sears, Kmart, True Value, Home Depot, Sam’s Club, and Lowe’s.
But a desire for additional education in management and leadership brought her to Stanford, first in 2018 to attend the Women Entrepreneur Program, and again in 2019 for the Stanford Executive Program. She says she hopes her work ethic and success will inspire her two high school-age daughters.
Your SEP application said: “I realize there is a lot more that I need to learn about management and leadership.” What are the most valuable things you’ve learned during your weeks in SEP?
It really opened my eyes. For the past 15 years, I focused so much on the sales and marketing side of the business, without a lot of strategic thinking. But at SEP we talked a lot about design thinking, strategic leadership — especially strategic leadership. I learned to think more about how I lead the company. Mostly I learned that strategic leadership is a process, not a final result. Also I learned that as a leader you need to create a system to help to discover what’s next.
And you are expanding the company, cutting licensing deals and hoping to lead multiple teams worldwide. What do you feel are the most common leadership mistakes that entrepreneurs such as yourself make?
In my company I was the only decision-maker. And basically, I thought my decisions were always right, because I was the one who brought the business to where it is today. But at Stanford, I talked to a lot of classmates, and we studied the 360-degree evaluation system. This was a new concept for me. After SEP, I was able to implement this system in our company and found the common responses from most of my employees were that I should listen more, instead of making decisions on my own all the time. So, I think for any entrepreneur, there’s a risk in being overconfident in your own decisions. That’s something I want to improve.
Did your company face any challenges as a result of the financial struggles of Sears and uncertainty about the Kenmore brand?
Sears closed a lot of stores and reduced the size of their retail business. That was a great opportunity for me to earn the Kenmore license. This meant I was able to bring the brand outside of Sears and sell to other retailers in the U.S. and all of the world. Currently the Kenmore grill is at Lowe’s stores, Costco, Amazon, Wayfair, True Value, and Menards. So, for me, it was an opportunity and not a struggle. If Sears’ sales were as strong as they were 10 years ago, they would not have given the licensing opportunities to an outside company like ours. They would have kept the Kenmore brand at Sears as their home brand. But because their business was struggling, we were given the opportunity to bring the brand outside of Sears.
How did that opportunity come about?
You know, surprisingly, out of the five companies that bid for the Kenmore license, we were the smallest. We were their original equipment manufacturer for Kenmore grills, for almost 10 years. We were their number one supplier. So through that partnership where we proved we were a capable manufacturer — providing good quality, good performance, good followups—we won the bid to be their licensing partner. We became Kenmore’s first licensing partner out of many categories.
So you didn’t just see an opportunity, you went after it. Did anything about that intimidate you?
Yes. Before we were mainly a manufacturer. After we were rewarded with the license for an iconic American brand, I knew as a leader that I really needed to improve myself. I needed to bring that brand to the world, not just be limited to Sears and Kmart. I really wanted to bring it everywhere, to other major retailers, and to sell this brand in other countries. I really think that’s an opportunity.
You wrote in your SEP application that you “need to have a bigger vision” for your company. How does that abstract idea translate into the decisions you’ve made to move Permasteel forward?
Before the licensing, I was just a manufacturer. I didn’t try to develop my own brand. My main focus was on private labels. After I received the license, it made me realize the importance of brand recognition. While developing markets for the Kenmore products, I’ve also invested a lot of time and effort into developing Permasteel as a reputable and trustworthy brand. That’s the kind of vision and strategic planning I’ve implemented right now, not just building grills.
Have the recent tariffs complicated your life at Permasteel?
Oh, big time. After we received the Kenmore license, I put in a lot of effort to grow the e-commerce business. I had most of my products set up on all major e-commerce sites, including our Permasteel coolers and Kenmore grills at Home Depot, Wayfair, and Amazon. And then the 25% tariffs hit. This became a huge problem for us to overcome.
How did you deal with that?
We reached out to every buyer to find common ground we both can accept. It was an issue all the vendors were struggling with. So we worked very closely with the customer during this very difficult time. A lot of the customers were very understanding. We supported each other and compromised. It has affected many categories and industries, including our competitors. It’ll take time to recover, but we are hoping it will eventually work out.
And the coronavirus?
We have very few employees working in the office, and very limited operations going on. We’re just processing orders and shipping goods and trying to quarantine as much as we can.
It sounds like you’ve limited your product line to keep it coherent and coordinated.
Grills, patio heaters, and patio coolers are very similar products in a sense that they are all outdoor products. We only sell grills and patio coolers during the summer season, approximately six or seven months, so in the winter season we’re selling the patio heaters to compensate for the down time.
Have you seen any notable progress or setbacks in recent years for female entrepreneurs?
That Women Entrepreneur Program was a really eye-opening experience for me. I was selected to participate in 2018, and without it I probably wouldn’t have applied to SEP. The reason I came to the U.S. is because I feel America provides greater opportunity for women. In China breaking the glass ceiling is much harder to achieve, regardless of how hard you work. Women just have less opportunity to be successful. When I was in high school and college, I always thought about how I needed to go overseas. In the U.S., you also have a glass ceiling, but American women have more freedom and more equal opportunity compared to China. In the Women Entrepreneur Program, I learned a lot from all those women leaders and entrepreneurs. I learned women can be successful in their own businesses, but also can have a big impact on society and their community.
How do your challenges as CEO of Permasteel compare to your challenges as a single mom?
I know I only have so much energy while I’m the CEO of the company, so when I’m with the kids they’re my only focus. I try to spend quality time with them. And I explain my responsibilities to the company and to society, so that they understand my roles. I try to lead by example because I know I don’t have a lot of time to spend with them. When they see me at home, I’m reading, or making tea, or doing exercise, or doing yard work. Twice a year I take them on vacations all over the world, because I think travel and reading are the best ways to educate kids. And I have a full-time live-in nanny, because if I try to do everything I won’t do it very well. I think there’s a lot of single moms out there, but you just need to plan for it and know that you can’t do everything. So I try to focus on what’s most important to the kids.
Any people, books, or experiences you had during the Stanford executive program that have been particularly useful in your daily business life?
In one class at Stanford, we talked a lot about purpose. I was very impressed by that class. As a result of this class when making daily decisions, I’m really trying to see the big picture to find out what kind of impact it can have on my business. In addition, I’m asking myself, what is the purpose of this business? What was the purpose of me coming to the U.S.? It got me thinking about how it should be more than just selling grills. It led me to think about where I’m leading my company in 5, 10, 20 years down the road. I’m also thinking about how I can give back to community, society, and the country. I didn’t have that vision before the program.
What was your most valuable takeaway?
The biggest thing is the connection with my classmates I met at SEP. If I have any questions, I can call them and ask. They’re all experienced entrepreneurs, CEOs, people with finance backgrounds, from other countries, and in diverse industries. They’re open and try to help each other. That’s one of the big assets of the program. Because we had six weeks together, the relationships we built are very solid.