Kurt Artinger turned an idea he had 10 years ago into a 40-employee business that made $8.1 million in 2010. Replacement Services LLC, which helps people find replacements for their lost or stolen jewelry, grew at an average annual rate of 30 percent over its first decade.
Few would have questioned Artinger if he slid into cruise control and just tried to keep a good thing going as long as he could, especially at a time when so many companies are struggling.
But Artinger had no plans to take his foot off the gas pedal. He wanted to grow even faster.
“If you’re thinking about continuous improvement, then I don’t care what I developed two years ago,” says Artinger, the company’s founder and CEO. “What I’m going to develop a year from now is going to be a heck of a lot better than what I did two years ago.”
In order to make that thought a reality, Artinger accepted that substantial changes might be necessary. The difference this time as compared to when he founded the company was that he now had a group of people around him to assist with devising a winning plan.
“So we sat down with basically a blank sheet of paper on a wall that was about 8 feet long and we put our value stream process down,” Artinger says. “What processes can we eliminate? What has value to our clients? Is that value worth that touch? We started identifying how to streamline what it is that we do.”
Artinger wanted to get down on paper every step that his company took to deliver a service to its customers. The goal was to figure out which processes worked really well and which ones required some tweaking to improve performance.
“That’s the reality of growing a company,” Artinger says. “The little problems that you have aren’t that huge, they are little problems. But if you double it or triple it, those problems become huge. So that’s what you have to identify.”
It becomes a simple process if you can set aside your ego and listen to what your people are telling you.
“Egos get in the way of so many good leaders,” Artinger says. “They have the ability to lead and change, but your ego comes into play and it’s like, ‘Is it about me personally or is it about the company?’”
Artinger just wanted the business to keep growing. Ideas that rose to the surface included achieving better inventory control and finding a simpler way to track items through the system.
If these problems were solved and the company grew even faster, Artinger would get all the glory he wanted. More importantly, his people who made great contributions to the effort by identifying key issues that needed to be addressed would get recognition and take a big step toward becoming leaders themselves.
Artinger just needed to take the time to work with them and see what thoughts they had in mind to integrate their ideas into the company’s work flow processes.
“It would be real easy for me to sit there and say, ‘You know what? That’s a great idea. Here’s what we’ve got to do,’” Artinger says. “If I do that, have I put them in position to be a potential leader later on? I haven’t. I’ve just solved the problem. It’s not my intention to beat them up, but to help them have a well-thought out plan.”
When your people have suggestions, ask questions to see how much thought they have put into it and don’t put them in a position to wait to be told what to do next.
“I don’t want to dictate how to resolve issues or problems,” Artinger says. “I want them to tell me what they think the solution is because I’m always learning how my people think.”
Through this effort which began in January 2011, Replacement Services has made progress, especially with its shipping department.
“We took a process that was about three days and our average turnaround time now is three hours,” Artinger says. “We exceed customer expectations and that’s one of the big things we look at.”
How to reach: Replacement Services LLC, (888) 205-2522 or www.replacementservices.com
Show your passion
Kurt Artinger looks forward to getting hit with a challenge when he arrives at work every morning. It’s what makes leading Replacement Services LLC fun.
“If you’re managing a group of people and/or you’re the CEO of a company, you have to be passionate about what it is that you do,” says Artinger, founder and CEO at the 40-employee insured jewelry replacement company. “In this environment, I don’t hit near as many walls as I used to. It’s always growing, always learning and always continuous improvement.”
Your people are going to look to you for clues about whether or not they should be excited about a new initiative or a new way of doing things. And one of the best ways to build excitement is through inclusion in the work that needs to be done.
“I’ve got people who say the only way I’m leaving the company is if you pry my dead butt from the seat,” Artinger says. “And that’s because they have value. That’s what people want, to be valued as employees and valued as people. If you do that, you’re going to have a very successful company.”
Unfortunately, when everything hits the fan, it won’t be at a time and place of your choosing, and most likely, it won’t be just one issue.
When you least expect it and when everything seems to be going OK for the first time in awhile, a severe lightning strike may occur, seemingly out of nowhere, even when the sun is shining brightly. Worse yet is that first bolt may be followed by multiple booms, bangs and claps in rapid succession.
It may start with a phone call informing you that the unspeakable has occurred. One of your top people encountered a personal problem that will shed a bad light on your company, or you get a FedEx letter from one of your biggest customers stating: “It’s been fun while it lasted; have a nice life. Sayonara.” As a wave of nausea sweeps over you, your chief accounting lieutenant barges into your office, holding your auditors’ notice and stammering, “earnings restatement.”
Trouble comes in many sizes and shapes, and as the boss, you must always be prepared to provide direction. While any one problem could be monumental, two or more are almost debilitating. What can you do; what must you do?
First, figuratively and literally take three deep breaths and count to 10. Pick up a legal pad and write out the key issues, crystallizing options and setting priorities of who on your team does what. Also write out some ideas of how to get started. Step two, clear your calendar and focus.
The trick in attacking multiple major problems simultaneously is to compartmentalize each of them, quickly determining the downside risks and coming up with temporary fixes to stop any bleeding, followed by long-term solutions. Let’s say another crisis hits when you receive a notice that your largest plant has become the target of a unionization drive. You quickly recognize that if this effort is successful, then your other facilities run the risk of a similar fate. The economic consequences could be enormous, and as equally disturbing is the fact that fighting this will be incredibly time-consuming, costly and will surely divert the attention of management away from sales and earnings goals.
Rather than bemoan your current state of affairs, gather your team together, contact your attorneys and find out what precipitated this situation. Was there an underlying morale problem in the plant, or did the union simply choose your company because it was an attractive target? Don’t always expect the worse, but plan for it. Maybe you’ll get lucky and find out that it was a simple misstep by a lower-level supervisor that antagonized a very small group of otherwise well-meaning employees, which can be more easily fixed.
If the earnings restatement is the biggest threat, then most likely you will take charge of the accounting issues and have your vice president of human resources tackle the union problem. Time can be your biggest enemy or your greatest ally. If you procrastinate and don’t swing into action, the situations will simply proliferate. If, however, you jump in with both feet immediately, you may be able to stem the tide in your favor much more quickly. One thing is for sure: The good fairy won’t solve these problems and your only choice is to take charge.
Of course, you’ll have more than a few restless nights; your calendar will become an instant nightmare as you deal with these problems du jour. Nevertheless, at least, you’ll have started the compartmentalizing issue process.
A few words of caution: Certainly delegate aspects of the problems to your best and brightest but also make sure you’re constantly kept in the loop. An effective leader is much akin to being a juggler and having the skills to keep all of the balls in the air simultaneously.
One consolation is that if being the boss was so easy, then everyone would do it. In fact, being a good leader takes a keen mind, often an incredible sense of urgency and a strong stomach.
Troubles come with the territory. However, there is one major consolation: When you’re at the top, the height can be a bit frightening at times, but the view is certainly spectacular.
Michael Feuer co-founded OfficeMax in 1988, starting with one store and $20,000 of his own money. During a 16-year span, Feuer, as CEO, grew the company to almost 1,000 stores worldwide with annual sales of approximately $5 billion before selling this retail giant for almost $1.5 billion in December 2003. In 2010, Feuer launched another retail concept, Max-Wellness, a first of its kind chain featuring more than 7,000 products for head-to-toe care. Feuer serves on a number of corporate and philanthropic boards and is a frequent speaker on business, marketing and building entrepreneurial enterprises. Reach him with comments at firstname.lastname@example.org.
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Tricky problems call for expert advice, but there are times when even the most popular experts can’t help you — times when you face a challenge that is unique to your business. To succeed in one of these instances, you need to know first that they exist and, second, how to find a solution that will work for you.
At my company, Branders, we found out the hard way that common problems don’t always share common solutions. For years, among our biggest challenges was one shared by many other companies: how to boost repeat sales. There was no shortage of books and consultants claiming expertise on that very topic, so we hit the bookstores and engaged consultants.
The first big idea we tested was the theory that repeat sales depend on giving customers what they really want. Survey responses showed that our customers really wanted low prices and great service, and we charted a course for improvement in those areas. Month by month, our prices came down and our customer service rating rose. Not bad — but it didn’t do enough for our repeat rates. So we kept looking.
The next big idea told us to “wow” the customer. It wasn’t enough. This theory said to give our customers everything they wanted. We also had to surprise and delight them.
We sent bouquets of fresh flowers to each new customer. And when flowers didn’t work, we tried other “wows.” The result was that we got a lot of nice thank-you notes but not a lot of additional repeat sales. So we kept looking.
Eventually we realized that the popular ideas simply weren’t working for us. That’s when we learned how to find our own answer.
We started by observing what our customers were actually doing. No surveys, no focus groups, no experts — just quiet, patient observation. When we identified customers who told us they loved us but then ordered from a competitor, we asked them to describe their most recent purchase process, step by step: what they’d done from the moment they started shopping to the moment they placed the new order. It was like watching a video replay, frame by frame. What we discovered shocked us.
To understand what happened next, it’s important to know a bit more about our business. Branders is a leader in the promotional products industry. We put logos on thousands of different products — pens, mugs, hats and countless others.
We saw that whenever our customers needed a new type of product, they looked for a new vendor. If they had a fantastic experience shopping for logo pens at Branders.com, for example, they didn’t necessarily come back when they needed logo hats. Instead, they asked colleagues for referrals or turned to Google.
Now that we knew what our customers were doing, we very quickly understood why they were doing it. They weren’t unhappy with us. They weren’t being “wowed” somewhere else. It simply hadn’t occurred to them that the company selling logoed pens would also be the place to look for logoed hats and vice versa. No amount of improving customer service or “wow” was going to change that. But as simple as the answer was, it wasn’t in any business book or a part of any expert’s big idea. It was a multimillion-dollar insight, and we had nobody’s expertise to thank but our own.
You can use the same approach to solve the most stubborn problems in your business. If the popular theories and explanations aren’t helping, it might be because the root cause of your problem isn’t like most others. So make your own observations and construct your own theory because sometimes, the only expert who can help your business is you.
Jerry McLaughlin is CEO of Branders.com, the world’s largest and lowest-priced online promotional products company. He can be reached at JerryMcLaughlin@branders.com.
We’ve all read or heard the perennial favorite old English nursery rhyme about Humpty Dumpty who fell from that darned wall, was irreversibly damaged and could not be put back together again. In business, we spend a lot of effort fixing what has been broken, rather than preventing the breakage in the first place. Think of your own organization and recall how much effort went into trying to fix that last big problem that could have been critical to your business and, ultimately, sales and earnings. No doubt that once the issue reared its ugly head, you went into fire drill mode, barking out orders to get to the bottom of the problem and fix it immediately, as measured in hours and days, not weeks and months.
Stop and think about the cost, the interruption factor and diversion of effort this “pick up the pieces” exercise inflicted on the organization. Key people had to drop everything and scramble, not to make a penny but to stop the loss. Of course, every business periodically hits a slick spot and has to maneuver quickly to regain control; it comes with the territory.
Wouldn’t it have been easier, however, to prevent the crisis before it became one? Just ask BP about its oil spill last year and what it cost in hard dollars (or pounds), not to mention the almost irreparable harm to its reputation and perhaps long-term future. This is a dramatic case of failing to take the necessary steps to avoid the oil damage itself, as well as the near cataclysmic peripheral stumbles made in handling communications. The amateurish PR efforts are what really pushed BP’s Humpty Dumpty, aka the Gulf of Mexico Deep Water Horizon spill, off that proverbial wall. What actions can your company take to ensure you don’t encounter your own Humpty Dumpty?
Sure most companies have risk management programs, which involve assessing potential dangers, working to prevent them and determining the costs if the unimaginable does occur. Unfortunately, too many companies apply the risk management thought process only to issues that are most associated with accidents. The Humpty Dumpy theory has to be extended to all areas of a business, from customer service to employee productivity and everything in between.
It starts with paying attention and sweating the small stuff and taking action when the first whiff of a problem occurs. It’s almost a gut feeling that surfaces when good executives encounter something that just doesn’t seem right. Call it a sixth sense, but it can happen at any time and in some of the most unusual places.
As an example, you’re reviewing an internal report on an important new project, and as you study the material, something just doesn’t seem right. The numbers add up, but nonetheless you know that all the dots aren’t connecting as they should — you’re just not sure what’s wrong. You pause and put the report down for a few minutes, and then it hits you. Kaboom, a subtle yet critical step was omitted from the plan. Now that you’ve found the missing piece, you make a few calls and a potential problem that could have easily morphed into a big issue is squelched.
These same gut feelings apply to “reading” people, not necessarily by what they say or do but many times by what they don’t say or do. Here’s another scenario, your biggest vendor normally touches base with you like clockwork, sometimes if only to say hello. One day you realize you’ve not heard from this supplier recently. You wonder what’s up with this? However, you’re busy and the thought quickly passes. Big mistake. You should have picked up the phone, found out what the story was, and if there was an issue brewing, fixed it then and there.
It all gets down to trusting your instincts and recognizing when your Humpty Dumpty might be leaning too close to the wall’s edge. That’s the same wall from which anything can topple and shatter beyond repair. Preventing that from occurring requires paying attention, looking for telltale signs of change and then being perceptive enough to know that there is something that needs scrutiny — even if you can’t pinpoint exactly why or what.
The risk in your own little kingdom is that when your Humpty Dumpty falls you may not have enough of the King’s horses and men to put the pieces back together again.