Imagine the pressure of pitching that big idea, but instead of standing in a typical boardroom, lights and cameras are pointed at you as you face a row of investment sharks – among them, Daymond John, founder and CEO of clothing brand FUBU. You’re probably nervous, but be careful – you’re being branded.
This is the scene on Shark Tank, ABC’s reality series – which starts its second season on March 25 – where entrepreneurs pitch ideas to investors like John and Mark Cuban. Before the entrepreneurs open their mouths, John is already looking for branding cues.
“The entrepreneurs are being branded themselves when they’re doing a pitch,” says John, who also formed a branding consultation called Shark Branding and wrote a book called The Brand Within. “We’re all branding each other every time we see each other.”
John shared some Shark Tank takeaways with Smart Business and discussed how social media is changing the branding landscape.
What tips can leaders take from Shark Tank?
When you’re negotiating, the person is always just as important as the number. We want to know the owner we’re dealing with because you’re going to have to be dealing with them way more than anything else. We never jump into anything. If you want to just coldly buy businesses, then go to the stock market.
[Getting to know people] comes in the due diligence process. When you set a conference call up for 1:30 and the person’s always late, the person has excuses – you start to see in your daily dealings with people how they really are.
What makes an investment opportunity appealing?
First of all, that there’s no surprises. You see that it’s scalable; it’s a business with all the right ingredients just needing funding and/or strategic partners.
More importantly, is the person a good person, where you’re like, ‘If this business does not necessarily create a huge revenue stream, I could see myself see doing other businesses with this person’? Someone with a patent always may have potential, given time, to take off because it’s proprietary.
This is not charity. This is my money, and it’s easy to say no when you either feel like the person is irresponsible, or you went down that lane with similar products or businesses in your past and it just didn’t work for you. It may not be that the product is a bad idea, but if I invested in Laundromats and I lost money, I’m just not going to be excited about it.
When does branding begin for entrepreneurs?
They say that a jury either convicts or exonerates somebody within the first 30 seconds of seeing them. After that, all they want to do is listen to what is going to prove them right in their assessment.
When the entrepreneurs have to stand there for that minute with those lights on them and none of us have to say anything as the cameras are getting set, if they’re fidgety and they don’t want to give eye contact, there’s this funny feeling people get. And we understand you can be nervous, you know, if you’re fidgeting and you’re smiling and you’re looking at people like, ‘Oh wow, this is scary,’ (but) you’ve got that little smile, that’s natural.
So branding starts there. Then talking about the product, do you have a clear, concise message? I always say the best brands, whether you personally or a business, can be summed up in three words. Whether it’s BMW: Fine German Engineering, TBS: Very Funny, TNT: We Know Drama, White Castle’s What You Crave, if it’s the Terminator, ‘I’ll be back.’ If you can summarize your whole business or personality in three words, then you live off that motto. If you and your staff don’t understand your message, why will anyone else understand it?
What else goes into personal branding?
You’re sitting across the table from a banker. The guy has on a pinstriped suit but it’s really loose, and he has a lot of jewelry on. Generally people don’t invest in bankers and accountants that look like that. Now, you could take the jewelry off and make the pinstriped suit really close-fitting to the body. That is how you’re assessing where you’re putting your financial nest egg: how they look, how they act, how they speak.
Somebody’s telling you they have all these great business ideas, and you look and they’ve got dirty fingernails and dusty shoes. I hate to sound so frivolous about things, but this is really what we do every day.
Speaking of branding, you’ve rebranded FUBU as FB Legacy, correct?
Because FUBU had slowed down in the United States, as did other brands here, and started globally becoming really big, we decided to bring it back into the market. A lot of the kids may have not wanted the old FUBU name, so just like Armani Exchange has AX and Dolce has D&G, we decided to do FB Legacy.
Because we have a following, they know what it is and this is just an abbreviation. We always went under FB as well [as FUBU and 05]. There is a different audience. A fashion line in 15, 20 years, it’s a new generation discovering it.
How is branding different today?
With the Twitters and the Facebooks of the world, branding has become personal. No longer can you just plaster something all over and make it and they will come. Because of the way information is moving very fast, if it’s not a true message, it will be discovered that it’s not a true message. People will basically punch holes in it – if your model is holding Coke and drinking Pepsi, there will be a picture of them drinking Pepsi somewhere immediately.
The consumer, they need to feel special. They need to feel like you’re talking to them. That means you need to have a lot of interaction with them, like giving them discounts on Foursquare. It’s just not as simple as, ‘Alright, come to the store and maybe we’ll hook you up.’ You’ve got to reach out to them.
Branding in those aspects has really changed, but I always say that there’s nothing new created in this world; it’s only a new form or delivery. Branding has stayed the same in the one simple matter: a clear, concise message and the truth.
How should brands leverage this new environment?
I do a lot of consulting with other brands and I try to advise them and say, ‘Why don’t you punch your name or your product’s name into Twitter [or other social media platform] and just look at all the feeds that are coming through. You can’t have thin skin. That’s your report card.’ Once I advise them of that, they sit there for months looking to understand the real problems with their product.
Kentucky Fried Chicken was basically saying, ‘I don’t know why Chick-fil-A is beating us. Maybe we need to come out with this double-breasted sandwich.’ I said, ‘Look, that’s not your problem. Your problem is: There is an urban myth that your chicken is steroid chicken. You’ve never fought that issue. If you go on Twitter, most people are saying, “Look at the big breasts on that chicken, that’s steroid chicken. Isn’t that stuff grown in a vacuum where the chicken has nine wings?”’
I said, ‘Until you attack that, you cannot advance yourself because you’re not even taking care of the issue at hand.’
There was a misunderstanding that FUBU was just for African Americans, and it wasn’t. It was about making it for the consumer that we are. After you hear a certain message, a certain line that everybody’s saying, you have to pay attention to it and you have to address it.
What are the strongest brands in the marketplace today, and why?
They’re going to be Apple, Coke, Nike.
Interesting enough, I had a conversation with Phil Knight (chairman of Nike Inc.) yesterday on the phone, and I’m not throwing that out casually because I was very excited to have a conversation with him. He’s still so laser-focused on sports that I was amazed and impressed at the same time. He never veered off of his brand, and his brand is one of the biggest in the world.
Coke is purely marketing and they change with their consumers over the years.
Nike is clearly marketing, but they stayed very close to ‘Just Do It,’ [asking,] ‘How can my product enrich an athlete’s life?’
And Apple came out and said, ‘Computers are cool and everybody’s going to have computers but we’re going to make it fun and we’re going to make it sexy and we’re going to make it quirky.’
Maybe a smaller company doesn’t have that marketing reach or those product ideas. What can they learn from these brands?
They can concentrate on their market and stay true to their brand. That’s going to be first and foremost.
Deliver an exceptionally great product and look like you’re having fun. All three of those brands are doing what they love and they’re doing it with people they love. Phil Knight probably can’t get enough of seeing athletes and talking to them about how to advance their training.
What are the keys to branding?
First of all, before your brand even gets out there, what are we going to provide? People are buying into it for either one of two things: for a need or for a want. So are we providing a need or a want?
The next thing is: What is the impression you’re going to give the brand when it comes to advertising and marketing?
Now, it’s: Where will they find this product, at what price?
Creativity in production is first, second of all is marketing it, and third is where will they touch it – will they get it online, will they get it at Target or will they get it in Louie Vuitton, will they get it from a street vendor, or will they get it in their five and dime store?
If we went to Target and we saw something with LV or Jimmy Choo on it, we would think either, ‘This is counterfeit and we don’t trust Target,’ or we would say, ‘I’m never touching Louis Vuitton or Jimmy Choo because this is garbage.’ It would be such a brand confusion that your head would pop.
How to reach: FB Legacy, www.fblegacy.com
Daymond John, @thesharkDaymond
For more about Shark Tank, visit ABC.
Joel Portice sees one problem with meetings: You have to be there. The president and CEO of Intelimedix LLC, a company that provides predictive health care analytics, thinks that’s too restrictive.
So when Portice created advisory groups of Intelimedix customers — who are health plan providers — as sounding boards for needs and opportunities, he leveraged their collective knowledge by blowing the doors off the boardroom.
“Rather than just relying on set meetings where everybody has to be there and if you’re not there, you’re not participating, it’s open 24/7,” says Portice, who has 50 employees. “What we’re saying is: Take away the physicality of this and make it digital. Our view was [that] to digitize the meetings would help promote participation and sharing and use.”
That was the inspiration behind Tru:Connect, an online platform for communities of customers to share experiences and best practices.
The first key to building customer communities is staying on the sidelines.
“If a vendor comes in and dominates the discussion, then it becomes just a big sale session,” Portice says. “If we are encouraging the conversation and helping to create discussion topics and engaging the participants, then that’s going to keep them further involved.”
Facilitate conversations by asking for problems and issues, then let your customers take it from there.
“The biggest way to get the feedback and to get the participation is having them lead it,” Portice says. “We think about it from the perspective of: You’re going to lead discussions. You’re going to lead the identification of things you want to address. They’re your ideas. We’re going to help you monetize those ideas.”
You step into an active role later by identifying and validating ideas that bubble up through the community.
“We’re involved to help synthesize the issue,” Portice says. “If the issue’s coming in different words or it’s being articulated different ways from five different perspectives, it’s our job to really understand what the issue is and synthesize that for everybody so there’s a single view of what we’re trying to achieve.”
Once you’re clear on the key issues, confirm they are issues you and your customers can solve.
“It really is about understanding our circle of influence,” Portice says. “As we’re looking at things, we have to be very honest with ourselves and with our customers as to not only what we can do but what we should do. If it’s going to be shared across a lot of our customers, then it’s going to be worth our effort.”
To turn feedback into strategic business moves, position yourself behind the problems with the broadest influence. Examine the scope of the problem and of the potential solution by questioning other customers.
“We’ll look and say, ‘Is this a persistent issue? And if that issue were resolved, what does that mean to the users? How does that benefit them?’” he says. “It’s really understanding: Is it really an issue, what kind of a lift does it provide the customers if the issue is resolved [and then] what does it take to do that? Is it repeatable and ongoing or is it just a one-time deal?”
Online communities not only identify needs and opportunities for your business, but they also create loyal customers — after all, they’re benefiting, as well, by learning and leveraging best practices from others on issues that matter to them.
“The core issue here that’s underlying all of this is listening to the customers and listening to the market,” Portice says. “You see a lot of companies that try to pursue and develop things that are interesting and cool to them rather than saying, ‘What is it that the market is really feeling the pain with, and how can we help that?’”
How to reach: Intelimedix LLC, www.intelimedix.com
Joel Portice wants feedback from his customers, but he knows better than to throw open the floodgates. When the president and CEO of Intelimedix launched Tru:Connect, an online community for customers, he did so with limits.
“The information is compartmentalized based on the specific areas that we’re covering,” he says. “Somebody who connects to Tru:Connect — no pun intended — for analytic reporting, they’re not seeing what’s going on in the Tru:Connect that’s dealing with cost containment or the Tru:Connect that’s dealing with fraud detection. You’re part of a community on a specific issue.”
Of course, one customer may participate in several groups but only after agreeing to some terms to ensure that nobody is hijacking the output for their own purpose.
Portice monitors each customer’s engagement, contacting idle participants as a warning and a way to keep the group rich.
“If somebody’s not engaging, then we will reach out to them and say, ‘We need to make room for somebody else because this time is too valuable for everybody,’” he says.
That keeps participation high, and the selectivity even entices customers who aren’t involved.
“We want to make it useful,” Portice says. “But we also want to make it a little selective because it keeps the folks involved engaged. It also sparks opportunities for people that may not be involved to say, ‘I want to create my own subgroup.’”
David Hankin could pass for an entertainment executive as he sits in the courtyard of The Peninsula Beverly Hills hotel. Donning a sleek suit and squinting into the sun, he cracks jokes about which doctor he might portray on TV.
And when you hear his mantra, you’ll really think Hollywood.
“You have to take care of your talent,” he says.
Hankin does come from the entertainment industry, where he gleaned that piece of advice, but today, he serves as CEO of The Alfred E. Mann Foundation for Scientific Research. In fact, that mantra still guides him as he leads research and development of medical devices at the organization, which has produced cochlear implants for the deaf, retinal prostheses for the blind, and the pen-cap-sized device Hankin holds now — an implantable microstimulator that’s battery-powered to stimulate impaired neural and muscular functions.
Some would argue that those plots of intellectual property are a business’s most important assets. But when a moderator of a panel discussion on the topic once made that claim, Hankin was quick to refute it.
“I said, ‘With all due respect, in our business, intellectual property is not the most important asset that we have,’” he says. “‘The most important asset we have is people because that’s where it starts.’ You don’t have intellectual property if you don’t have great people.”
For Hankin, who also serves as president of The Alfred E. Mann Foundation for Biomedical Engineering, it really boils down to that mantra he borrowed from the entertainment world. It’s all about taking care of his 105 employees, who tend to be top decile graduates from prestigious technical schools with years of specialized experience. That caliber of talent presents a double-edged sword.
“The challenges, of course, are that you have to figure out how to channel that creativity and that brilliance so that it’s productive,” he says. “The rewards are spectacular, and you end up with devices like a microstimulator that holds the promise of reanimating paralyzed limbs. From a leadership point of view, it’s really channeling that brilliance and energy that (employees) have.”
Start with skill
Though the Mann Foundation is relatively small, with recent income around $24 million, it competes with giants like Boston Scientific and St. Jude’s.
To stay competitive when it comes to hiring, the foundation recruits heavily across several fields, from electrical and mechanical engineering to biosciences. Hankin keeps tabs on employment news so if a large defense contractor is shedding people because of a canceled program, for example, he reaches out to their human resources manager to connect the dots.
“Anytime a company with sufficient technical prowess is shedding people, we look at who they shed,” he says. “Just because somebody gets axed in this environment doesn’t mean they’re not a great person.”
Because about 80 percent of the positions at the Mann Foundation are technical in nature, Hankin considers technical skill the primary hiring factor.
“It’s a litmus test because, frankly, if you don’t have the right technical acumen, you’re not going to be able to hang in our group,” Hankin says. “If they don’t have the skill level and they can’t sit in meetings and contribute in our organization, then they’re not going to make it.”
Hankin often has prior working relationships with executives he brings in, partly thanks to his recruiting network. Beyond that, he assesses how candidates have proven themselves in the field.
“Some of it is based on past performance: What have they done in their career? What kinds of challenges have they undertaken?” he asks. “I’m not afraid of people who switch careers. Frequently when we see that, we see people who are able to make adjustments and also have to learn about new industries.”
Industry-hopping could also suggest a candidate is a natural learner who would fare well in ever-changing fields like health care and technology.
Use the interview to drill into candidates’ skills, even if that means turning it over to the experts. Hankin gets uncomfortable in interviews with his scientists, because they ask candidates such tough questions.
“It’s not, ‘What do you think your strengths and weaknesses are?’” he says. “They’re asking them how they would solve certain scientific and engineering problems. They want to know more about their approach than whether or not they come to the right answer.”
Give employees leeway
When you’re bringing in such technical people who have spent years specializing in their area, the key is really harvesting their abilities. If you’re like Hankin, you may feel clueless next to your people’s expertise. In that case, get out of their way.
“My management style tends to be more about hiring great people and letting them run, giving them the field,” Hankin says. “I’m not smart enough to micromanage these people, honestly. The technical breadth and diversity among the different technology areas that we have to cover … is staggering. I have to hire great people and really trust them.”
Their skills need the opportunity to shine. Give employees freedom to do what they do best.
“One, you have to have creative, challenging projects for them to work on,” Hankin says. “Two, you have to give people room to make mistakes and fail. We want people to take risks; that’s how we solve problems.”
Creating that safe environment starts with flexibility on your end. When you’re discussing the company’s approach to solving a problem, keep the table open to all ideas. If your employees are technical experts, this isn’t too hard to do because they’re the ones with the knowledge necessary to formulate answers.
“It’s not my role to talk,” says Hankin, who stays quiet during meetings. “If something comes up where there’s a partnership issue, those are things I’ll (talk) about. If there’s a debate on how to design a circuit sufficiently to perform a certain function, I’m probably not going to enter that debate.”
The good thing about this kind of environment is that even if Hankin did enter that debate, his perspective would merit consideration, too. He’s comfortable throwing out a “what if” in a meeting because an initial “Yeah, right” response may give way to, “Let’s try it.”
“We discuss different directions that we might take in addressing a problem,” he says. “We may pursue one or two or three or four avenues of addressing a particular technical problem, any of which may succeed or not. We’re willing to consider multiple paths.
“Maybe 90 percent of the conversation is about different technical approaches: ‘Well, have you tried this? Have you thought about that? I know someone who’s done this.’ This free flow of scientific ideas is something that we promote, and that’s how these kinds of problems get solved. They don’t get solved because some guy is holed up in a cube someplace running experiments.”
Rigorous testing — in many cases, required by national and international guidelines — later reveals the best solution. But to get there, Hankin has to remind people that speaking up is the only way for solutions to surface.
“From a management point of view, we tend to want to understand what the problems are so that we can help try to direct resources to hot problems,” he says. “Because we have a culture where you’re not going to get crushed if you fail, people tend to be more open about things that they’re seeking to solve. One of the things that I always tell people (is), ‘If there’s a problem that exists and I don’t know about it, there’s nothing I can do to help direct resources.’ I look at myself as the remover of roadblocks and also traffic cop of resources. If I can direct resources in the right way in the right place, we can solve almost anything.”
You generate an open discussion by focusing on the collective goal of solving problems. A new employee at The Alfred E. Mann Foundation, who came from a company where people were protective of information, was surprised by his first meeting. Afterward, he asked Hankin if people were usually that open.
“Here, people want to share information because they want to solve their problems,” Hankin told him. “They know there’s other people who have different experiences who come from different industries who have a potential contribution to solve their problem.”
Make your mission relevant
The microstimulator Hankin is pinching between his thumb and forefinger was a much bigger undertaking than its size suggests. It took 10 years to develop — two for the proprietary ceramic case alone. To get there, the foundation debuted at least half a dozen fresh innovations.
How does he keep employees motivated for projects that take that long to complete? Hankin says it’s not a huge hurdle, considering that “psychic value” is inherent with Mann’s mission of, basically, saving lives. When Hankin surveyed employees about their motivation a couple of years ago, they said they were there to help improve human health.
Your company’s mission may not be that mobilizing. But whether you’re saving lives or shipping parts, the key to motivating employees is showing them the relevance of what they do. Making your product or service real to them will keep them engaged for the life of the project — however long that may be.
“Because we take things to human trials, people get to see the effect on people,” Hankin says. “We also bring patients in who’ve experienced the benefit of a device, and we have them talk to our people. So we try to bring our people as close to the patient experience as they can get without having to go to the clinic themselves. This is the whole motivating factor— you get to see the benefit of the device you create.”
To get his employees close to the customer, Hankin will even send employees to watch the company’s devices being implanted through surgery.
The key is keeping that big picture in focus as employees tackle individual tasks. Frequent design reviews give Hankin’s team an opportunity to recap every aspect of a project’s progress and remind everyone about all the parts that must come together.
Getting big-picture buy-in goes back to giving employees challenging projects to work on. If you can pare down your teams to the point where each member carries a significant portion of a project’s weight, you automatically make each piece important. When Hankin came on board in 2007, he trimmed overlaps and “deadwood fat” to make the organization lean and each role relevant.
“Each person’s working on something that’s really meaty,” he says. “It’s not somebody who’s working on a piece of something that they can’t see any relevance to. Everybody in our place understands the relevance of exactly what they’re doing.”
A good leader educates employees about why their jobs matter, but a great leader actively matches up employees with jobs that matter to them personally.
By helping employees see all the necessary parts that make a whole, you’re inevitably unveiling other opportunities where their skills could make a difference. Have the flexibility to let them jump on different projects.
With five or six projects running at once, Hankin can reassign employees who have completed one task or just need a change.
“I try not to pigeonhole people,” he says. “If people want to try different things — subject, of course, to meeting our schedules and our budgets — we try to enable people to work on different projects. … We make adjustments from a career development focus. I may say, ‘Look, next available opportunity to do that, we’ll do that,’ but I keep my promises.”
That effort keeps employees engaged so they’ll make your company successful. By taking care of his talent, Hankin keeps his most valuable resources engaged through high-risk, high-reward projects with long, challenging life cycles.
“If somebody is working with you and they are unhappy and disgruntled, you’re not going to get their best work,” he says. “Part of the challenge is to get people to align with what their desires are.”
How to reach: The Alfred E. Mann Foundation for Scientific Research, (661) 702-6700 or www.aemf.org
Brandon Edwards is proud to be a geek about a boring industry. In fact, being passionate about tax credits has helped him build a team of likeminded stars.
“We’re tax credit geeks. It’s all we think about,” says the president and CEO of the appropriately named The Tax Credit Co. “One of the reasons we’ve been so successful is that we’ve been able to attract people into the company that think like that.”
Edwards’ previous experience in a recruitment outsourcing business also helped hone his hiring process to bring in the right 47 employees.
“We’re only as good as our people,” he says. “The difference between one really good person and one person that’s not necessarily a fit is tremendous in a company.”
Recruit with purpose. It’s not just about the interviewing. The recruitment process is critical to finding (the right) people.
First of all, when we write an ad for a job, it’s got a lot of personality in it. We are passionate about it, so that almost irreverent, fun-loving personality comes out. Not only is that helpful to attract good people, but it attracts the right people. They’ll say, ‘Wow, I was looking at all these ads, and these people look like my kind of people.’
From the very beginning, we try to find out about the person — who they are, not just what’s on their resume — so we ask for a cover letter. We put specific traits in the ad. For a documentation specialist, we’ll say, ‘Are you the type of person that every single drawer in your house is completely organized? Are you the type of person that gets bent out of shape if something on the wall is tilted?’ We’ll put fun things in there, but we’re looking for certain traits about people that are going to make them good fits for the job. That’s No. 1.
Interview people, not positions. We’re talking about a combination of what they’ve done in the past but also who they are. One of the keys to bringing in great people is to find out what that person is about. Finding out who that person is, I think, is more important than who they worked for and what they did. What’s the track record that they demonstrated that we could apply to what they’d be doing in the position: what they like, what they don’t like, what they get excited about, what drives them, what they get annoyed at, their attitudes on work in general?
The way you ask questions is very important. I’ll ask questions like, ‘What would your supervisor say about you?’ They would (answer) from that perspective, and you find out what would they say the good things are, what would they say the things that you could improve on would be. You’ll see an indication of a potential issue that you can explore from there.
You’re not looking for 100 percent adherence to all the job duties. You want to find out the core points of success or failure in that job. You say, ‘If a person had these traits, these skills, then they would be very successful. If they didn’t have these, then they would have problems.’ You want to specifically go after those in an interview.
We’re always looking for the person, not the position, and we’re always keeping in mind that this person may not stay in that position that long. So while we’re looking at the critical factors for that position, we’re also trying to test: ‘Is this a high-quality person in general? What are the make it or break it characteristics of the people that are successful in your company — the personality, the attitude, the work ethic?’
Remain objective. If you like somebody straight off, try to find something wrong. And if you don’t like somebody straight off, try to find something right. You don’t want your emotions to guide you in that process, because this is a snippet of your potential relationship with the person. Even if you go through extensive interviews, the entire process could represent less than a whole day of interaction with that person.
You need to make sure that you’re as objective as possible and not skimming over areas just because you really like the person. If you just focus on the areas that you like about them and you’re judging them based on that gut feel, then you can potentially miss some big issues.
David Taiclet wasn’t ready for the scene at the Fannie May store in Oak Lawn, Ill., when he showed up around 7 a.m. that day in November 2004. He was there to prepare for the chocolate maker’s first soft launch, scheduled two hours from then, that would set off a chain of reopenings and reignite the brand.
“When a retailer does a soft launch, it means we don’t do a lot of publicity about it, because we’re just trying to get organized to open the store, and then we’ll do a grand opening maybe a couple of days later,” Taiclet says. “We picked that store, because we didn’t think it would attract a lot of attention.”
He wasn’t expecting to find a line of people flooding out the door flocked by TV news crews — not much different from the scene 30 days and 45 stores later when he reopened the flagship store downtown at Michigan Avenue and Wacker Drive, where 800 customers stood in a line three blocks long.
“Picture this: You’re at this store, and you have these TV cameras there,” Taiclet says. “And the TV camera starts talking to a customer who just came out of the store, ‘Hey, I have so-and-so customer right here. What do you think of the product?’ And she’s like, ‘Well, I haven’t tasted it yet.’ So she opens her product up, grabs one and puts it in her mouth and starts chewing on it.’”
Now, keep in mind, this wasn’t quite the same Fannie May that many Midwesterners had fallen in love with when the brand’s mouth-watering sweets became tradition. When the chocolate maker’s parent company, Archibald Candy Corp., sank into its second bankruptcy in 2004, it closed the plant and 250 retail stores and started looking for a buyer. It found one in Taiclet’s company, Alpine Confections Inc., which had recently purchased Harry London, another chocolate company, out of bankruptcy.
So what would the response be now, with new ownership and a few other changes in store?
“She’s like, ‘This is the best Pixie I’ve ever tasted,’” Taiclet says, continuing his story with a reference to the chocolate-covered caramel candy. “You couldn’t pay for that kind of public relations and marketing to say, ‘Hey look, Fannie May is back and our product is outstanding.’”
It was proof that during the tough times that shuttered Fannie May, customer affection didn’t falter.
During the relaunch and beyond — like when 1-800-Flowers.com Inc. acquired Fannie May in 2006 and, after a couple years, asked Taiclet to stay on board as president of the gourmet food and gift basket group — customer service has been Taiclet’s focus. He leads 1,100 full-time and 1,500 seasonal employees under brands like Fannie May, Harry London, Cheryl&Co., The Popcorn Factory and 1-800-Baskets.com with the goal of maintaining the customer experience while staying relevant.
“If you look at any brand, they’re going to have ups and downs through their life,” Taiclet says. “But what makes it an enduring brand is the experience that customers have with it. You can talk about a brand being a logo. You can talk about a brand being a recipe. But a brand is really the experience a customer has with it. As long as you stay focused on that customer experience and maintaining the integrity of that experience, the company may go through ups and downs financially, but in general, you’re going to have a long, successful run.”
Although the soft launch turnout was surprising, Taiclet already knew about the bond between customers and Fannie May. It’s crucial you understand your brand through consumers’ eyes, too.
Taiclet learned about the customer experience during due diligence, when he had a three-month window to accumulate information before the acquisition. He spent that time with customers and previous retail store managers alike, even hiring back many employees to tap into their understanding of the brand. Then he compiled the feedback.
“The most important thing is we focused on, what is the great part of the customer experience?” he says. “What is the relationship this customer has with the brand? What’s the most important thing? We realized there’s this love affair between the customer and the brand. That love affair is the product quality, one; two, the tradition that people had with this product.
“When people described our brand, it was like, ‘Hey, it’s tradition. It’s a trusted friend. It never fails. I know it’s going to be good. You can’t go wrong with this.’”
From those consumer descriptions of the brand, Taiclet knew that going forward, product quality would have to stand up to the legacy of recipes that hadn’t even changed when ingredients ran low during World War II. Of course, hiring back the same employees and using the same recipes helped ensure that the product would stay the same. But he was so concerned about quality that he sent old and new samples to a university food research group for scientific analysis.
Understanding the customer experience takes more than upfront research — it’s an ongoing endeavor. When 1-800-Flowers.com acquired Taiclet’s brands, he was able to leverage its e-commerce platform and social media presence — in other words, become more accessible to consumers and get more personal with customers.
“Feedback has become a lot easier these days, both good and bad,” he says. “You’re deepening your relationship with your customers by offering them these [interactive] opportunities. You get instant feedback. It doesn’t get any better than that.”
Direct contact can even be a business in itself. The company acquired DesignPac Gifts, which created wholesale gift baskets for third-party retailers. Tapping into the capability and name recognition of 1-800-Flowers.com, DesignPac sprouted a direct-to-consumer brand called 1-800-Baskets.com, which has become the fastest-growing brand in the company.
But customer interaction can get even more personal than e-commerce or Twitter can allow. You need to get out and interact with customers, too. Taiclet regularly visits stores, plants and distribution centers, both to work alongside employees and to chat with customers. Whether he’s stocking shelves or attempting to giftwrap boxes — which, he’ll admit, is not one of his strongest skills — he’s facing customers and getting a glimpse into their experience.
“Our management team is active and involved, and I think we know what our customers are saying,” he says. “We live in a world where it’s not hard to get customer feedback, and if you just go stand in a retail store, you know. If you’re standing in your distribution center and you’re seeing the product go out the door, you know the kind of experience that your customers are probably getting.”
Keep things fresh
While it’s crucial to understand what has kept your customers coming back, you shouldn’t limit your brand to what has been successful in the past. After all, you want customers to keep coming back in the future, too.
“What’s important to be relevant to your customer is the tried and true but also that you’re out there being interesting and new, as well,” Taiclet says. “It’s a fine line. But it’s important that you’re giving people a reason to come in: ‘Oh, what’s new?’”
You need to marry the tradition of your brand with a few fresh touches. The challenge is determining whether any changes or additions will influence the overall brand perception.
“Look, not everything you do is going to work,” Taiclet says. “We’re not afraid to try some things. But I can tell you we’re not going to change the things that we know work.”
So don’t mess with the staples of your brand — like the customer experience — that you identify as important through feedback. You can take small steps to improve those things, but you shouldn’t change the game completely.
Many of the new Fannie May products, for example, partner the famous chocolates with other well-loved snacks, like ice cream and Eli’s Cheesecake — and these don’t replace traditional favorites like Pixies, Trinidads and Mint Meltaways.
But most of the changes came simply as an effort to “freshen up” the stores through signage, displays and uniforms.
“Clearly, when we came back, people were quickly pointing out differences,” Taiclet says. “But any differences, we tried to make sure they had nothing to do with customer satisfaction. I mean, the uniforms were a brighter color because we wanted to freshen the look. So the changes that we did make were with the understanding that this would be seen as a positive.”
To help lessen any shock when customers walked in and saw the differences, Taiclet communicated changes they could expect and what those meant.
“At the end, I think they came to appreciate why it was different — it just presented the product better,” he says. “[We] told the customer what it was: ‘Here’s a small little change to tell you that, hey, we’re a new Fannie May, but at the same time, we didn’t mess with the quality of the product.’”
Maintaining your brand’s legacy while keeping it relevant really translates into sustainable growth. It’s a balance that Taiclet thinks will differentiate his brands.
“Companies get themselves in trouble trying to grow at all costs and to grow anywhere and everywhere,” he says. “What we’re trying to do is grow in a smart, sustainable way.”
Along with keeping an ear to customers to confirm that his blend of tradition and freshness is keeping them satisfied, Taiclet also uses financial analysis to temper growth. Before opening a store, for example, he evaluates economics to predict returns. Even though he could have opened eight stores last year, he only opened the five where analysis signaled the best chance for success. At the end of the year, there were a total of 85 company-owned stores, and he also recently launched a franchising program.
“We could grow aggressively on the wholesale side through some of our third-party retailers,” he says. “But it is incredibly competitive in certain areas and we’re going to make darn sure that we don’t get too aggressive. We could go out in that wholesale market and sell a lot of product and grow the top line, but it might not necessarily grow the bottom line. When we talk about ‘grow smartly,’ that’s what I’m talking about is that you’re constantly finessing between top-line growth and bottom-line growth.”
Taiclet has found that balance by focusing on the customer experience.
“We’re fortunate that we have growth opportunities, [and it’s] because we have focused on those things,” Taiclet says. “We just need to be thoughtful and prudent about the different directions we could grow and make sure it’s profitable, sustainable growth and not just one-off. There’s a lot of one-off places to grow for a lot of companies.”
The long-term test for Taiclet is that any changes or growth ventures won’t lead the company astray from the customer experience that has made Fannie May the No. 1 chocolate brand in the Midwest. That focus has helped him grow the entire gourmet food and gift basket business to about a third of the revenue generated by 1-800-Flowers.com — about $250 million.
“(It’s about) the relationship of your product with the customer and the customer experience,” Taiclet says. “Across all of our food brands, what we’re trying to focus on is the positive relationship that a consumer has with you and your product. It is that experience that embodies your brand — and that is your brand, really.”
How to reach: 1-800-Flowers.com Inc., (800) 356-9377 or www.1800flowers.com
The Taiclet file
President, Gourmet Food and Gift Baskets Group
Born: Monterey, Ind., a town of 200
Education: Graduated from Notre Dame in 1985 on Army ROTC scholarship, then served four years active duty. Earned MBA from Harvard Business School in 1991.
What was your first job, and what did you learn from it?
I grew up in a family business; my father owned the local grain elevator. So I grew up working in that business, doing everything. That was probably my first experience with customers and doing anything you could to keep customers happy — and farmers are a tough group of customers.
I’m a Fannie May Pixie fan.
If you could have any superpower, what would it be and why?
I’m married with four kids, and I love my family. If I could just have the power to have those moments with my family that are very special to last a little longer, maybe go back in time and relive a couple of them, that would be pretty cool.
What’s your favorite way to relieve stress?
One, I like spending time with my family. Two, I don’t read a lot of books, but I’m a voracious newspaper/magazine reader. Wall Street Journal, New York Times, Fortune and The Economist are my four things I like to carry around. And if I have a lot of time, I love to fly fish.
What’s the best business advice you’ve ever received?
The best advice I ever got was probably from my father, who said, ‘Surround yourself with good people — both your friends and your businesspeople — because it will make not only you better but your organization better. Throughout my life, whether it was in college or the army or when I owned my own business or worked for others, I’ve always focused on: Am I surrounded by good people, and have I hired good people? I would say that’s been one of the elements of Fannie May’s success is that we’ve attracted, hired and retained really good people to the organization.
Favorite local spot for a business lunch?
Maybe it’s because of my roots growing up in a small town, but I love the local diners and I love the local flavor. We have a plant in Lake Forest and there’s a Liberty Restaurant in Libertyville, Ill. In Glen Ellen, Ill., there’s a small restaurant called Baroney’s there that we’ll go to. In Cleveland, there’s Gasoline Alley down in Bath, but for formal dinners in Cleveland, Ken Stewart’s Lodge is my favorite. And then in Chicago it’s typically, for a formal dinner, Gibson’s. I typically stay at a place called The Talbot Hotel downtown Chicago on Delaware street and there’s a casual dinner right across the street called The Feast Restaurant that I think has really interesting food and wine.
When Marty Field purchased a money-leaking Chicago packaging company about a decade ago, he didn’t want excuses. In early production meetings, he learned the company, which was operating at 42 percent efficiency, was late delivering to more than half of its customers — because that’s the way it’d always been.
That wasn’t going to cut it.
“If we could create a manufacturing facility that would always be on time and if we were to meet every customer’s request, that would be a wonderful way to create sales,” says Field, the president of what is now Field Packaging Group LLC. “We couldn’t do that because we didn’t have an efficient manufacturing facility. That’s when we created our efficiency bonus program.”
He told his 80 employees they could receive monthly performance bonuses for hitting certain ranges of labor cost and efficiency, as well as delivering on time at least 98 percent of the time. They’d earn $50 for reaching 70 percent efficiency and an extra $10 for every percent over that — minus any deductions for quality incidents.
But first, Field had to define efficiency.
“The key was to find a way to accurately measure efficiencies and then determine what reasonable industry standard is,” says Field, who purchased industry-specific software loaded with standard machine setup times and run speeds. “Then communicate to your employees what’s expected of them, monitor their performance and then, at the end of the month, communicate to them how they performed.”
For transparency, Field installed chalkboards on each machine to track efficiency. Now, if the previous day’s numbers aren’t posted by noon, employees come looking for reports.
Sure, that breeds some peer pressure, but Field sees it as motivation.
“An awful lot of the increased efficiency is created internally by [employees] themselves,” he says. “If a crew is waiting for the paper, the guy in charge of the paper has a lot of pressure on him through his fellow employees. Peer pressure has caused people to act as a team. They’re able to perform together and to perform a lot better.”
Field brings employees together once a month to recap performance and other influencing factors, like the economy and competition. They also go over quality issues, discussing improvement opportunities.
All employees — from the receptionist to the customer service rep — attend those meetings and participate in the incentive program. Employees need to understand the connectivity of how each role must seamlessly set up the next to achieve overall success.
“Without teamwork from everybody, we won’t be able to get the efficiency,” Field says. “If the order goes out to the factory and all the information is accurate and provided, that saves time from a crew having to try to figure out what they’re supposed to do. If the people who are supposed to provide the tooling are not efficient in what they do, then the crew is waiting for the tooling.
“Everybody in the whole company affects efficiency, and everybody in the whole company should be rewarded for it.”
The reward itself is motivation enough — with some employees earning monthly bonuses of $220 — but it’s also the concept. Employees know they have a hand in controlling not just their bonus but the company’s overall success. Employees took the reins and led Field Packaging to 2009 revenue of $40 million and are still improving efficiency.
“They really are self-motivated, and it’s not only for the bonus,” Field says. “They need to see that the company is successful, especially these days where there’s so much unemployment.
“They have a greater desire to perform better because we’re creating more business. The more business we have means more work for everybody. People have really bought in to it, because it’s good for the company and it’s good for them.”
How to reach: Field Packaging Group LLC, (708) 594-5260 or www.fieldpackaginggroup.com
Never say no again
There’s one word Marty Field doesn’t want to hear.
“If a customer calls and has an unreasonable request for a delivery, a customer service person is not allowed to say no,” says Field, president of Field Packaging Group LLC. “We have to find a way to get it done.”
It was bad enough that late deliveries were the norm when Field bought the company. He envisioned the other extreme where they’d not only be on time but meet any request.
There are a few exceptions, of course — like acts of God or unavailable tooling. Aside from those, Field never wants to be in a position where he has to say no.
“The more efficient we are, the more capacity we have,” he says. “The more capacity we have, the more flexibility we have to be able to take care of customers’ requests. The more customer requests we have, the more successful we’re going to be.”
One machine used to take a half-hour to set up and another hour to run. Now, because Field’s employees understand efficiency goals and use teamwork to achieve them, they’ve cut out dead time. They can set up the machine in five minutes and run it in 20.
“We have put ourselves in a position where we always will have more capacity than we have business,” Field says. “We should never be in a spot where we can’t say yes.”
Craig Mundie sees science fiction becoming reality all the time. The holodeck, for example – that futuristic simulation room on Star Trek – isn’t so futuristic anymore for the chief research and strategy officer of Microsoft Corp.
“It isn’t that many years away where you’re going to find it quite natural to interact at a distance,” says Mundie, who spoke at the Cleveland Clinic Ideas for Tomorrow series on Jan. 5. “In fact, one of the things that I think you’ll see quite soon is the ability for people to, at least in small groups, go and have meetings together where none of them are actually physically in the same room but their ability to look at each other and talk and communicate is as if you were in the same place.”
Mundie presented Microsoft’s new innovations and shared how innovative technologies will change the game when it comes to long-distance interaction.
“Today we talk about collaboration as you make a phone call and talk; you can have a video conference,” he says. “But increasingly, we think this interaction at a distance is going to be really important. I generally tend to use the term tele-presence as a way to think about what it’s going to be like. … There was the telephone, which collapsed distance for people, but only with the spoken word. Then there was television, which allowed us to do that with images. And I think the next thing that we’re going to see is tele-presence, where more and more we’ll be able to interact with people in a very lifelike and realistic way that aren’t there.”
Your kids are already using tele-presence – gaming systems like Xbox use avatars to represent players and help them communicate with opponents who aren’t sitting next to them on the couch. Mundie said those will become more realistic.
“The idea that you can have some very lifelike representation that you’re essentially projecting yourself through is not really science fiction,” he says.
Why is this important? Mundie closed his presentation with a video demonstration of a system Microsoft is currently developing based on these technologies. They created a “triage nurse” out of a computer kiosk with the knowledge and question-asking capacity to prioritize patients and make recommendations.
“This is where I think all of these technologies have the promise to come together and be an amplification factor for the skilled, highly-trained people, whether they’re teachers or doctors, to be able to scale up our capabilities in a more cost-effective way on a planet that’s going to continue to see an increase of population,” Mundie says.
Or there’s the example from the University of Washington BioRobotics Lab, where researchers took an Xbox Kinect sensor into a new environment. In Mundie’s video, a man uses a force feedback system – similar to the joystick in a flying simulation – to “feel” objects in another room, perhaps a precursor for how surgeons will maintain tactile capacity during robotic surgeries.
“Many of these things are very important in terms of moving people to comfort in dealing with computers or dealing with people interacting [across] distance,” he says. “Many people today get great value and utility out of computers, but they historically require a lot of training and acclimation to really get a lot of value out of it. As we move to these advanced graphical interfaces and direct manipulation interfaces where you can do things with your fingers or add voice commands, then the ease can get a lot better. The things that have frustrated people in using computers are going to be overcome by making them behave more like we do.”
In other words, why mess with tiny keyboards when your cell phone responds to voice commands? With new direct manipulation interfaces like voice and touch, we’re at a transition point with computers. Until now, they’ve primarily been tools. With those capabilities as good as they need to be, developers are turning to the next phase.
“The key to this is essentially to make it work less at your command and more on your behalf,” Mundie says. “More and more, we’re trying to get these computer systems to anticipate the type of things that you would want to do. In essence, it’s like having a great assistant. They know when you ask them something that they take all of the history and what your preferences are and they factor that into what they do for you.”
Depending how many accounts, profiles and updates you have online, your computer might know you much more intimately than your real assistant. Mundie and his team are trying to use that to your advantage.
For example, they wanted Bing to do more work to satisfy your search, reducing your job to “one input, one click.” Now, when Mundie types in Denver, Bing thinks ahead to why he might be searching for that, and spits back real-time flight prices – kind of like an assistant would.
“We are at a point where computers are going to be more like us,” Mundie says. “From that, we can open up a completely new realm of what the computer can do for us and with us.”
James Marlow calls it just plain intuitive. Why wouldn’t you take advantage of an abundant energy source that saves money and the environment?
Of course, he’s passionate about solar energy as the founder and CEO of Radiance Solar LLC, an Atlanta-based company that designs, develops and installs turnkey solar energy systems. But thanks to energy innovations, price drops and tax credits – not to mention the satisfaction that comes with a smaller carbon footprint – solar makes more sense all the time.
“It’s never been a better time to put solar into your operations,” Marlow says. “The technology is better and more affordable than ever. It can help save money over that full 25-, 30-year life span, and it can certainly reduce the environmental impact.”
Marlow doesn’t have a problem attracting people to the concept of solar energy – especially those from companies with financial savings goals, environmental goals and innovative mindsets.
But there’s something keeping even the most interested heat-seekers at bay: The initial cost of many alternative energy sources can be a little steep. Even though the savings shine through long-term, it’s sometimes hard to wait that long in the corporate world.
The solar industry is helping potential customers overcome that hurdle by offering other types of payment plans to reduce the initial burden. Leasing is now an option, and others use Power Purchase Agreements, paying a monthly fee to a third party who owns the actual solar panels and provides maintenance. That option eliminates upfront cost and ongoing maintenance fees.
On top of lower-impact financing options, companies can also reap tax credits for going solar. The federal government is giving 30 percent cash grants to commercial customers that install solar in 2011, and allowing for 100 percent depreciation. Plus, Georgia offers a 35 percent state tax credit.
In addition to those perks, the price of solar is dropping. Panels dipped in cost 30 percent last year, and they’re becoming smaller and more efficient all the time – along with much of the accompanying equipment.
“Very similar to what you’ve seen in personal computers or cell phones or flat panel TVs, we’re seeing a drastic price drop and we’re also seeing an improvement in the efficiency and the quality of the products,” Marlow says.
With 100 different technologies available in the solar field alone, the industry’s internal innovation is making it easier for other innovative companies to lead the way by going green with alternative energy.
“Companies like GE, Apple computer, Nike – the really smart companies are in the forefront of this effort,” says Marlow, who cited Wal-Mart’s goals toward 100 percent renewable energy, zero waste, local sourcing and a sustainable supply chain that’s good for people and the planet.
With brands like that leading the way, the idea of environmental responsibility is becoming more mainstream in corporate America.
“People are thinking about sustainability as a good business decision,” he says. “If you lower your cost, that’s a good thing for your bottom line. It allows you to be more profitable and sustainable.
“If you lower your environment impact, that’s good for your community and the health of your employees. People are just beginning to understand system-wide thinking. People that are more siloed in their functions have a harder time with it because their scope of work doesn’t really involve the whole picture.”
Sometimes, it just takes education about the whole picture. Marlow talks about water a lot, explaining the “water-energy nexus” to help people understand the impact of their energy usage – that, in Georgia, it takes 1.5 gallons of water to produce a kilowatt-hour of energy.
Companies need to adopt that same big-picture mindset to truly embrace sustainability.
“It’s a different approach for many people and once they begin thinking that way, it changes their perspective,” he says.
How to reach: Radiance Solar LLC, (404) 885-9898 or www.radiancesolar.com
When other leaders opted for layoffs and furloughs to combat the recession, Ingrid Lamirault called for reinforcements.
“It didn’t make sense to make wholesale changes in the employees,” says the CEO of Alameda Alliance for Health. “They knew what they were doing and, more importantly, they understood our mission. It made more sense to bring in someone to support the organization. This was about making people see their own potential, boosting people’s self-confidence and helping people understand how to behave corporately.”
Lamirault hired a business coach, bringing Anna Scott on board to develop some of the 130 employees at the nonprofit managed care health plan, which had $227.5 million in revenue for the fiscal year ending in June 2010.
“If you’re going to develop somebody, it really sends a positive message to the company as a whole that they value their people,” Scott says. “It really helps the morale. It develops loyalty by the employees (because they see), ‘This company is investing in me and helping me grow.’”
Initially, Lamirault picked several employees with untapped potential.
“I recognized that there were some people I could promote, but they would need support in the beginning, because they’d never supervised a team of people before,” she says. “There were other people who had a really good work skill but they ran into a lot of interpersonal conflict. There were a couple who had really good potential, but they would make mistakes and wallow in them instead of learning from them.”
You may not be able to forecast someone’s potential but, as Scott says, you can tell when employees are getting in their own way of growing.
“Danny,” for example, was a high-level employee in the Alliance’s IT department. He was good at his job but didn’t handle interpersonal conflict well. On top of that, Lamirault worried Danny wouldn’t get any further in his field without a college degree. She suggested he attend both coaching and college.
“It’s not that he doesn’t have interpersonal conflict anymore, but he handles it in a very healthy way,” she says. “If someone’s not respecting him, he knows how to deal very directly and tell them that this is what he feels and this is what he thinks he brings to the project.”
When you approach those employees with the coaching opportunity, you have to frame it as just that – an opportunity. It’s not an assignment or a requirement.
“It’s a positive,” Scott says. “It’s a way to say, ‘I really believe in you, and we see that you have something to offer. We also see that there are ways that you’re getting beside yourself and we want to help you.’ It has to be mutual. (We) want to invest, but if they are not interested, (we) won’t force it on somebody.”
Coaching relationships at the Alliance begin with manager-imposed goals to help employees perform their jobs better. But you can’t separate your business initiatives from their personal motives.
“I get really clear about, ‘Here’s what Ingrid has said she’d like you to develop,’” Scott says. “Then I go, ‘What would make it worth it to have you do this? What else do you see in yourself that you would like to develop?’ It’s one thing to do something for somebody else, but when you’ve got your own skin in the game, (you’re) more willing to fully participate.
“If they don’t do those things that Ingrid wants, bottom line is, they’re not going to have a job. But if they’re not satisfied with who they are and what they’re achieving, they won’t do a very good job. By being able to focus both at the same time, people are so much more satisfied. When people are struggling in their personal lives, work really does suffer.”
What’s in it for you?
Investing in employees strengthens the overall organization, but who would have thought your leadership skills would benefit from the effort? Ingrid Lamirault, CEO of Alameda Alliance for Health, learned that when she focuses attention on her employees, she reaps some benefits herself.
“Anna had started telling people to be more direct and to say what they feel,” Lamirault says, referencing Anna Scott, who coaches her employees one-on-one. “It makes me have to speak very directly with them or she’ll tell me, ‘You seem to have some indecision about some changes you’re making, and it’s making people very nervous.’
“A couple of times, she’s told me the way I’m handling something is creating turmoil so it’s made me recognize how I need to improve my own leadership skills. It makes me aware of some of the language that I use. And so … I have changed, too.”
Be conscious of how you can grow along with your employees, because their development doesn’t happen in a vacuum removed from your leadership.
“No action is by itself,” Scott says. “If I’m not being clear, then my employee will not produce the results I want. If I’m leading and I need you to do something, then it behooves me to go, ‘What is it that I need to do to be effective with you?’”
If Kobe Bryant played for Greg Ashlock’s team, the star wouldn’t get much coaching about the fundamentals of basketball. Nor would he need it.
Ashlock knows that key players don’t need specifics about how to play the game. As the market manager and president of Clear Channel Radio Los Angeles, Ashlock has learned how important it is not to micromanage his 400 employees.
“You still need a coach to direct that a little bit … and think more strategically,” Ashlock says. “But as far as the day-to-day activity is concerned, I don’t really need to manage that in the same way Phil Jackson doesn’t really need to manage how Kobe’s going to get to the basket and score. He needs to orchestrate some of the plays. He needs to orchestrate the strategy on how they’re going to play against the Celtics.
“However, from a tactical level, they’re performers. They’ve proven to be performers and they don’t need somebody overseeing their minute-by-minute or hour-by-hour decisions.”
Ashlock has adopted that hands-off philosophy across the eight radio stations in the L.A. market of Clear Channel Communications Inc. By staying out of the way of his employees, he unlocks their creativity and makes the company stronger with their innovation.
A recent success story comes from Dan Granger, an account executive in Ashlock’s market who broke the radio mold to make his clients more successful. He took some tactics that have been popular in Internet advertising, applied them to radio and created what he calls audiolytics — radio ad campaigns founded on transparency, accountability and analytics.
Granger will be the first to tell you it’s not just about taking the ball and running — it’s about the result.
“All the creative ideas in the world don’t matter,” Granger says. “It doesn’t matter how much buzz you create. It doesn’t matter how many people laugh at your ad and are entertained by it if nobody’s buying your product. This economy is reminding people that we should be as accountable as we can be for the results we produce.”
Clear Channel encourages autonomy, but don’t assume employees just do whatever they want whenever they want.
“If you want that kind of freedom, then you have to have the successes to warrant that,” Ashlock says. “That autonomy’s not granted to everyone. You really do have to earn the right to get that autonomy.”
Employees have to prove themselves capable of the responsibility. It starts with bringing people on board who are already autonomous.
“It’s critical that you hire the right people, because if you’re going to grant autonomy to somebody, they have to be competent,” Ashlock says.
He looks for candidates who exhibit initiative and have some success to show for it. You have to dig to find that.
“The way you’re going to know somebody’s a self-starter is based on past experience,” Ashlock says. “Whether it’s the work they’ve done or through the people that you talk to that they’ve worked for, there’s no better example or backup for somebody on whether or not they take initiative.”
Start by asking candidates to elaborate on what they’ve done. But they can say anything. The real test is what their former bosses say, so check references heavily.
“I would never rely solely on an interview,” Ashlock says. “It’s going to be based on past work, reputation, past employers and what they have to say.”
Ideally, the reference will say the employee didn’t come to them with problems but solutions. Look for indicators that candidates are driven by results for the sake of personal achievement, not just to please a boss. When Granger talks about his project, for example, he’s so vested he’ll tell you he’s spending his money, not Ashlock’s.
“Some people crave freedoms, but they know that they’ve got to produce results to maintain that,” Granger says. “Those people put more pressure on themselves than you could ever put on them. For one, they don’t want to fail themselves, but they also don’t want to fail the people who have given them those freedoms and those opportunities.”
Once you hire self-starters, they should prove their ability to drive results before you loosen the reins. Don’t set new employees loose until they have credibility.
“Once you know they’re going to make good decisions, then granting them autonomy and freedom’s not a stretch,” Ashlock says. “Managers that don’t grant the autonomy means they don’t have a lot of confidence in the people below them.”
Once you have employees with initiative, you have to give them opportunities to innovate.
“The biggest thing is, at the top, you have to be willing to take some risks,” Ashlock says. “If you’re willing to take some risks, it actually encourages stepping outside the box and entrepreneurship. If you’re only willing to play it by the game and nobody is able to add their creativity or anything outside of the norm, then that becomes a stagnant culture.”
It’s a balance of encouraging innovation while emphasizing the expected result.
“Everybody knows that it’s a place where they can thrive on creativity and pushing the envelope,” he says. “I don’t mean you push the envelope without vetting the process out a little bit. You do it with a good idea of how and what the result’s going to be.”
In order to vet ideas, you need background. Set the expectation that employees do homework to make their case. Fortunately, self-starters tend to do that without urging.
“It started with just trying to answer the question: What works?” Granger says of his idea. “So many people spend money on radio and walk away and say, ‘Radio didn’t work.’ I wanted to find out why they would end up feeling that way when I knew that there was a way to make it work. So it came from a frustration, and it drove me to just start picking up books.”
Granger dug into “Tested Advertising Methods” by John Caples and “Confessions of an Advertising Man” by David Ogilvy, to learn how industry predecessors produced results. That research taught him about direct-response advertising and provided case studies for proving his idea to management.
“What it really required is just, No. 1, reading anything and everything that provides case studies — whether that’s from a recent online company that posts information about what they find or it’s reading a book from 85 years ago about what was done,” he says. “We’re all trying to accomplish the same goal, which is sell products for businesses. And it occurred to me that we could take all the same principles that are used in any form of advertising and apply them to our industry.”
Employees should have a plan for translating their case studies into your industry and your company specifically. To do that, they need a keen understanding of your core and future goals.
“We’re here to innovate, have fun and, at the end of the day, move product,” Ashlock tells managers. “And the way we move product is through the innovation and the encouragement of taking educated risk.”
Granger can recite the vision Clear Channel has had since it first began strategically purchasing radio stations in Texas to reach decision-makers in industrial regions — it’s about reaching advertisers and helping them sell. And he could tie that to his new model of tracking results to optimize advertising success.
“Dan, over time, took a very big-picture approach to not just getting an order on the air but, ‘How do I move somebody’s business?’ which is always the right way to approach any client,” Ashlock says.
Because Granger’s idea aligned with the corporate goal and he could illustrate how it would improve a service he already provided, Ashlock’s decision was easy.
“If it’s part of their core business model and they’ve come up with a plan to help with that, then nine times out of 10 they’re dead-on because they know their business so well,” Ashlock says. “If it’s an area that they’re looking to branch out into — maybe it’s something in the digital space that’s not as much part of their core business at this point — I’ll bring in other people more knowledgeable in that area for us to vet out some of the possibilities and some of the concerns.”
Once the pros and cons are on the table, it’s an evaluation of risk versus reward. Think of it as a seesaw where you want to maximize the reward — whether in terms of revenue or customer satisfaction — long-term while reducing risk.
“If the risk that they’re wanting to take is not going to reap that much of a reward, then (we say), ‘Hey, go back and revise your plan a little bit where there’s a stronger chance for us to benefit greater, whether it’s from a ratings standpoint or revenue standpoint,” Ashlock says.
The key here, from Granger’s perspective, is that managers don’t bluntly turn down ideas. Give employees a chance to make them better.
Then consider whether the idea lines up with your core. Ashlock relies on customers for that barometer.
“If there’s some kind of huge revenue potential, but it would damage a brand, I wouldn’t do it,” he says. “If it’s going to compromise our integrity, if it’s not going to resonate with the listener, then we won’t do it. There’s plenty of things that we’ve decided not to do, because they don’t fit what the station’s about and it would seem like a sell-out or a disconnect with our listener.”
A great idea could have all the potential in the world, but that has to actually materialize.
“It’s not autonomy without some kind of measurement,” Ashlock says. “That autonomy … would be short-lived — and when I say short-lived, not a month or two (but) over a nine-month period — if there weren’t successes attached to it. Successes back up that autonomy.”
Ashlock gave Granger’s idea a thumbs up along with a timeline. When you give approval, you also give checkpoints that must be met to validate the proposal.
Those milestones will differ with each project, but obviously you’re looking for growth and improvement — whether that’s with your revenue or customer satisfaction.
“It really had to do with new and repeat business,” Ashlock says. “Are you able to sustain clients better under this model? Are you able to bring more new business on? [It’s] quite frankly talking to the clients and asking them about their experience. Is (the service) better than what they’ve had in the past? Are they getting better results? Are they moving more product? Is their return on investment better?”
When he got emphatic yeses across the board, Ashlock considered the model a proven success. That was easy to back up with facts because, due to the nature of audiolytics, Granger had built-in metrics. Along with a team of three others, he sets up unique phone numbers, landing pages and discount codes to track responses to clients’ ads. They also look at before-and-after trends, such as increases in overall Web traffic.
Legalzoom.com, for example, launched a pilot program with Granger in 2004. There was skepticism from an online company trying radio for the first time, but thanks to the success it has seen through audiolytics, it has grown to be the largest advertiser on the largest news/talk station in the country.
Now, Granger’s team grosses nearly $4 million annually in local radio spot sales.
He couldn’t have done it without an environment that supports innovation while stressing results.
“The biggest indicator whether something is working is if the client comes back,” Granger says. “There’s so much money wasted in the name of creativity, it makes me sick, when this is about performance. At the end of the day, if you perform, if you make (clients) profitable through their investment, they’ll give you more money.”
The Ashlock file
Market manager and president
Clear Channel Radio Los Angeles
Education: Undergraduate degree from Northwestern State University, La., and USC-Annenberg, for graduate school
What was your very first job, and what did you learn from it?
L.A. Dodgers PR department. It’s important to love what you do, and that still holds true today. As I look at business peers across multiple industries, those that are excited to go to work each day are the ones that are performing the best.
What’s the best business advice you’ve ever received?
‘Failing to prepare is preparing to fail.’ John Wooden
Describe your favorite radio station to listen to.
Hot 92.3 (old school and R&B). It just doesn’t get any better than Luther Vandross and Marvin Gaye when you’re looking to kick back and unwind.
What’s your favorite stress relief?
Hanging out with the kids, either in the pool, in the game room on the Wii or playing cards on the patio.