Nate Scott Named CEO of Cargas Systems

Lancaster, Pennsylvania – January 17, 2018 – When Chip Cargas set out to start his own company in 1988, he took a different approach than many other business owners. Instead of focusing solely on what the company would do, he spent just as much time thinking about what the company would be—a business founded on values that inspired and motivated employees.

During the past 30 years, Cargas Systems has grown into a thriving business software and consulting company, specializing in accounting, sales and marketing, and operational software, as well as custom solutions. Today, Cargas has more than 100 employees, three business units, and an impressive reputation with its customers and the community.

The company has also undergone its first CEO leadership transition, with Nate Scott taking on the role of President & CEO in December 2017. For Cargas, it was the final step in a 20-year succession process.

Ownership Succession

When Cargas turned 50 years old, he realized he and the team had built a successful company that customers and employees were counting on.

“I realized we had to start thinking about how to keep this thing going,” said Cargas.

To prepare for the future, Cargas began an ownership transition, opening stock ownership to all employees while incrementally reducing his share. Cargas has gradually decreased his ownership to 40%, and today, 70% of Cargas employees are owners.

In addition to the ownership transition, Cargas also began to develop a sustainable growth strategy and a leadership succession plan to keep the company viable for generations to come.

Leadership Succession

Leadership succession became a primary focus of the Cargas Board of Directors. They devoted one meeting a year to the subject and documented a leadership succession plan defining the role and desired qualities of a CEO. With culture as the foundation, the plan highlights people, strategy, execution, and capital as primary focus areas for the CEO.

“The CEO has to really understand our culture and values and think and live that way,” Cargas explained. “They have to attract and engage talented employees. They have to see the big picture and collaboratively develop a sensible business strategy. They have to execute that strategy, organizing efforts and addressing challenges. And they have to maintain the necessary capital to support sustainable growth and ongoing employee ownership succession.”

The Right Candidate

With the qualifications of a CEO defined, it was now a matter of finding the right candidate.

Nate Scott arrived at Cargas in 2005 with a degree in Government & Law from Lafayette College and a background in operations, sales, project management, and consulting. He was drawn to the culture and the company’s position in the software market.

“I had been following Cargas for quite some time,” Scott recalled. “I was really struck by the culture and the offerings. I was looking to get into a company that had that kind of vision for the future.”

Scott joined the company as a Sales Consultant, but it was clear he had more to offer.

“I saw a lot of potential there,” Cargas said. “My main concern was finding bigger jobs for him quickly enough so that he wouldn’t want to move elsewhere.”

Scott eventually became manager of the Sales and Marketing team. When the company launched a new business unit centered around its proprietary Cargas Energy software, Scott became VP. During his tenure, the business unit doubled in staff and doubled in revenue. Scott also took advantage of annual career advancement meetings and asked to lead cross-company initiatives.

An Incremental Approach

Four years ago, the Cargas board named Scott as a potential CEO candidate and outlined a plan to move him into the role of President and eventually President & CEO if all went well.

The company frequently uses incremental transitions to give employees the opportunity to grow into new roles gradually and to make changes feel more natural and less jarring company wide.

“We think of succession as an incremental process that happens over time,” Cargas explained.

This approach gave Scott a feel for his new role and helped him hone the necessary skills.

“There were a lot of things I was able to take on over time to prove out whether or not I had the abilities to take on the CEO role,” Scott said. “It’s an opportunity to get some great feedback on your skills and approach, where you need to continue to improve, and the initiatives you should be leading to prove yourself.”

As Scott took on more responsibilities, becoming President in September 2015, Cargas gradually reduced his hours and phased out his level of involvement in tasks like company planning, employee meetings, and speaking at company events.

At the board level, the succession plan became more and more focused, first identifying Scott as a potential CEO candidate, then the intended candidate, and then finalizing the timeline for his transition. By the time Scott was approved as President & CEO at the November 2017 board meeting, his appointment was a foregone conclusion.

The change was announced to the Cargas team at an employee meeting in December 2017, but because of the incremental transition, Cargas and Scott believe everyone was prepared.

“At Cargas, if you’re organizationally aware, you see these changes coming,” Scott said. “When you see people engaging in new ways or taking on new responsibilities, you know they’re doing that for a reason.”

Founder & Chairman

Cargas explained that he devoted much of his time as a CEO to his employees, maintaining and evolving the company culture as the business grew.

“I’ve spent a whole lot of my energies over the years just trying to get all of that right,” Cargas said. “Get the right people into our company, into the right positions, and let them run with the minimum amount of framework necessary.”

Cargas will continue as Chairman of the Board, act as an advisor, help sustain the company culture, and lead community engagement initiatives. While he will remain involved, Cargas made it clear that he wants everyone to recognize the change in leadership.

“I can’t help but think of our company as my baby,” Cargas said. “I want it to continue forward and be beneficial to a lot of people in this world, and whatever I can do to help, I’m willing to do, but I don’t want to be in the way or cause confusion in anybody’s mind. We all have to remember, Nate is our CEO and we listen to him.”

Cargas believes he’s found the right successor in Scott, and that will allow him to focus on his new role.

“I have such great confidence in Nate that it allows me to actually relax more than I have in the past 30 years,” Cargas said.

Cargas is looking forward to doing all of the things he really wants to do and leaving the company operations in Scott’s hands.

“I still get to be engaged with our company and I love that part,” Cargas said. “I get more time with my wife, children, and grandchildren and more time with our community and I love those parts, too.”

President & CEO

For Scott, company culture will remain a primary area of focus. With the company at more than 100 employees and growing, maintaining the culture Cargas established is an ongoing process.

“Our culture isn’t just about having fun,” Scott said. “It’s all the tenants of our belief system, from the way we work with customers to the way we treat each other to our transparency. We need to be focused on scaling our culture and engaging everybody in the experience.”

On the strategic side, the company will continue to invest in its existing business units and products and research and explore new opportunities for the future. The Cargas team has developed numerous custom integrations, configurations, and applications for its clients, including Cargas Energy, and will continue to expand the capabilities of these proprietary products.

“More than 70% of our clients today have something from Cargas that we built ourselves,” Scott said. “We need to continue to accelerate this business, focusing on offering our customers flexible, adaptable solutions.”

As the company continues to grow, Scott also plans to scale the necessary supporting infrastructure by expanding the HR, Finance, and IT departments.

Scott is looking forward to supporting the Cargas team in sustaining a built-to-last company.

“Facilitating more innovation, helping our team achieve success, and reducing roadblocks—that’s really what I’m thinking about,” Scott said.

Scott is grateful to have an ongoing advisor and sounding board in Cargas.

“I’m glad Chip’s not going anywhere anytime soon,” Scott said. “I’ve been really lucky to be able to tap into Chip’s experiences, wisdom, and talents over the years. I feel very fortunate coming into a role where such an awesome foundation has been laid.”