Cargas names new CEO
Chip Cargas has stepped down as CEO of the business software company he founded in 1988, handing off responsibility for the firm's operations as well as the workplace culture he has crafted over the years.
The new CEO at Lancaster-based Cargas Systems Inc. is Nate Scott, who joined the company in 2005 as a sales consultant. A Lancaster native, he was drawn then by the company's technology, its culture of employee ownership and its reputation for being a great place to work.
"We have such high expectations to live up to based on Chip's experiences here," Scott said in an interview Monday. "I just want to do everything I can to continue that success."
The leadership change was approved in November by the company's board and announced Dec. 15 at an all-employee meeting in the lobby of the company’s headquarters building. It represents the culmination of a long internal succession process.
Scott, 43, was named president in 2016, but had been taking on greater responsibility before then. He had worked previously, for example, as vice president of the Cargas Energy business unit, which develops and sells proprietary software to energy companies.
The company, which employs about 100 people, had 2017 revenue of about $17.06 million, up from $15.02 million in 2016. It has two other units, business solutions and Sage Intacct, both of which resell and support software from other companies. Its staff has been growing at a rate of about 14 percent a year, Scott said.
Cargas will remain company chairman and continue working, albeit in a less-intense role. In addition to offering advice to his successor, he plans to focus on Cargas’ community initiatives, including a recently created company fund at the Lancaster County Community Foundation. He also will spend more time with family, including his seven grandchildren.
"I probably haven’t been this relaxed in 30 years," Cargas said. While decisions at Cargas Systems are typically collaborative, rather than top-down, being CEO still takes a toll, he said.
Cargas said he began thinking about leadership succession when he turned 50. Soon after, he started an employee ownership program that affords Cargas employees two opportunities a year to buy stock in the firm.
Today Cargas holds a 40 percent stake in the company, and is selling it off at a rate of about 4 percent per year. About 70 employees own the rest of the company. Scott said he owns a little less than 6 percent.
The incremental approach to changing ownership and leadership has worked well, Cargas said. "You don't always have that luxury. Fortunately we've had the luxury to do it."
Scott had already taken on numerous CEO responsibilities before the official transition, Cargas added, and has found new ways to encourage collaboration, a hallmark of the company’s culture.
During that time, Cargas wasn’t focused on when he would step down. "I was really more focused on making sure that my successor as CEO was thoroughly ready, our company was thoroughly ready and, yeah, it’s nice that I’m thoroughly ready, too."
Still, it has been an adjustment, Cargas said. He had to stop and think the first few times he heard of company decisions or issues he normally would have been in the middle of. "But within a matter of seconds I was like, this is great. It’s the way it is supposed to work," he said.
Among the most pressing decisions for Scott is configuration of the company’s new headquarters in downtown Lancaster, which Cargas plans to occupy in spring 2019. The company has invited employees to make recommendations on what the space, in the former Bulova building, will look like.
"This move is really big and important for us and we want to make sure we get it right," Scott said. The company has outgrown its existing space.
Also on Scott’s to-do list is developing a new software product similar to its product for the energy industry but for another sector. Cargas has already begun researching potential industries, Scott said.
Another of Scott’s goals is to encourage professional development at all levels of the company. "You don’t have to be a manager or a vice president or president or CEO to advance your career here," he said. "There’s lots of different ways."
It’s also not too early for Scott to be thinking about the next leadership succession. The company’s eight-member board discusses succession annually, at its July meeting. The board, in fact, identified Scott as a potential CEO candidate about four years ago.
"This is going to happen again," Scott said. "Will it be 29 years like Chip had at the helm? Who knows … I really feel it’s a great opportunity and I just want to keep things rolling."
Editor's note: This story has been modified from its original version to include 2017 revenue for Cargas Systems. The number was not available as of the original time of publication.