On a Saturday in early March 2010, Will Knecht was delivering some product for customers when he got a call on his cell phone, “Will, come back to the forge, it’s on fire.” He hustled back to find his flagship store, corporate offices and work shop of Wendell August Forge up in flames.
Knecht, president of the company, a retailer and manufacturer of handcrafted metalware and giftware that employs 106 people, couldn’t believe what he was seeing. As firefighters went to work, Knecht says he didn’t think the damage was going to be as bad as it ended up being.
“As that was burning, I had a very interesting peace about me that day,” he says. “I wasn’t anxious, I wasn’t stressed; it was what it was, and I really trusted the Lord that he knew what he was doing even though I didn’t.”
As the fire roared on, more Wendell employees came to the site where Knecht led them in a prayer, which ultimately set the tone for rebuilding and moving forward.
“As we broke that circle it was absolutely like the lights had been turned back on, and we were all about what do we do next. What are the next steps? What do we need to do to get back up and going?”
To add pressure to getting back to work and refocused, the company had just landed its biggest order in its history.
“We got an order from the Pittsburgh Penguins … two days before the fire,” Knecht says. “We were able to create 20,000 replica tickets of the last game at the Mellon Arena and we were able to deliver those on time.”
The Penguins order was a game changer for the company and following the fire it helped to keep Wendell August motivated and in business.
“That order took on added significance because it was the rallying point,” Knecht says. “We were going to deliver that and it put everything in focus.”
The first step Knecht had to take was to rally his employees and change their demeanor from wondering what was next to focusing on getting past the fire.
“As you can imagine … there was a lot of fear,” he says. “This fire wasn’t the end of the game. This was the closing of a chapter or the closing of a book on Wendell August and at the same time, that day was the opening and writing of a new book. We conveyed that confidence to each of our employees and said, ‘We’ve got to go about getting it done now and turning this around. This is a temporary setback, but we’re going to be OK.’”
Knecht did everything he could to continually communicate that Wendell August would make it through this hardship.
“Having faith, for me, was the cornerstone, but what that gave me was a sense of purpose and direction and clarity that it was incumbent upon me to communicate,” he says. “My job became the chief communicator inside and outside. I had to provide the stability. They had to see in me a calm and peace, strength, confidence, and they had to see a future focus.
“Bad things are going to happen. It might not be a fire, but a company might lose its biggest account. A company might lose a key employee. The leader’s job is to overcommunicate a sense of calm, a sense of focus and a sense of direction. That’s what we were able to do immediately after that fire. You have to communicate that clearly, directly and consistently. That’s what they needed from me. They didn’t need me to make the product or make a big sale. They needed me to calm and steady the ship.”
Eventually the company got itself back on track, and Knecht had to keep his employees motivated.
“When you go through a cataclysmic event like we did, it’s all about the here and now and getting us through today,” he says. “Then you change gears when you get through an event like that and you have to execute and get back to business basics. You’ve got to stay the course. You need to overcommunicate and you as the leader need to become the bridge to move on to the next phase of life. Put it behind you and change your demeanor, communicate and focus and then begin to throw the vision forward and cast that vision for the employees.”
HOW TO REACH: Wendell August Forge, (800) 923-4438 or www.wendellaugust.com
Wendell August was opened to exciting opportunities because of the fire and being forced to think in new and different ways.
“There is a realization on all of our parts that we are an almost 90-year-old company, so we’ve got a tremendous foundation, but we’re basically rewriting the book and we have this blank canvas now to paint on,” says Will Knecht, president. “There’s an energy and there’s an excitement about some of the new directions we’re headed.”
The Penguins order put the company into the realm of licensed products, which is today a big focus that the company is moving on significantly as part of the future.
“That Penguins order … and the success that we had with that allows us to talk to some teams in Major League Baseball and the NFL and other NHL teams,” he says. “You have to look outside of yourself and think differently and open your mind. One of the things we did was we weren’t stuck in a ‘This is how we’ve always done it.’ We as a company opened our horizons and we looked at what the possible was. What can we do now that we have this great foundation of a company yet a blank canvas to paint? That’s what I would challenge business folks who go through an event such as this to open their mind to the opportunities sometimes you don’t see when business is going as business as usual.”
Gary Kiedaisch is charged with leading one of the strongest consumer product brands in the country. The chairman and CEO of No. 1 cooler manufacturer Igloo Products Corp. understands that achieving the top spot didn’t happen overnight or by accident. It took Igloo’s industry awareness, brand building and unmatched innovation to keep the manufacturer atop the cooler industry.
The $250 million, 1,200-employee company originated the cooler category in 1947 and for more than 60 years it has held the No. 1 market share. Kiedaisch has helped excel Igloo’s brand and its products and has the ongoing challenge of keeping the company relevant and continuing its reputation as the top cooler manufacturer.
“We have, in my humble opinion, the best products in the category,” Kiedaisch says. “I don’t think anybody has a lineup of coolers like Igloo does. We live, eat, sleep and breathe coolers.”
While Kiedaisch can enjoy the comfort of leading a No. 1 market share company, he hasn’t been resting on his laurels. Here’s how Kiedaisch combines a strong brand with industry leading innovation to help grow Igloo Products Corp.
Build and advance your brand
Research shows that three in every four U.S. households own at least one Igloo cooler. Igloo has achieved this level of market penetration by being the best at what they do.
“We specialize in coolers,” Kiedaisch says. “Our two main competitors, Coleman and Rubbermaid, are generalists. The cooler business for them is a fraction of their whole. Coolers are our shirt, and with them, they are a sleeve on their jacket.”
Igloo’s ability to continually produce high-quality, durable cooler products is what helps drive the company’s reputation and relationships.
“We are delivering to our customers a truly great product that they need and we have good relationships with them,” he says. “What that shows is our branding and they’re going to then put our brand on the shelf front and center because retailers want to know what they’re buying and that consumers have confidence in it. That’s the first stamp in the marketplace.”
There’s a reason you don’t see a lot of marketing dollars for coolers and that is because the cooler itself is a billboard.
“Once you sell a cooler, it’s not going to get used only by one person one time and put away in a closet,” Kiedaisch says. “The first time it gets used it’s probably going to get used by at least three, maybe four, maybe five people. It’s going to be taken out repeated times and when it is taken out it is going to be the center of the party. You use it when you go to the beach or going to camp. I’ve got some contractors restoring a property in New Hampshire and at lunch time they’re all sitting around their Igloo coolers and its part of their daily life. They live with those products.”
The many uses of a cooler along with the quality and durability of each one of them have helped Igloo sell more than 20 million coolers a year, which exponentially builds the brand.
“You’ve got 20 million impressions going to the marketplace multiplied by two, three, four or five, utilized four or five times a year with a life cycle of how ever many years coolers go on and you just have a huge penetration in American households,” Kiedaisch says. “That’s why the brand is so well-known and recognized.”
To make your brand well-known and recognized you have to not only have a product that people want to use, but you have to associate your brand with things that your products are regularly used for.
“In sporting goods products there are many, many likes; for example skis,” Kiedaisch says. “You watch the Olympics and you see the skiers coming down and at the end of the race they pick up their skis and there’s a big billboard with the name of their ski right beside their head and that’s what’s commonly called sports marketing. I call it opinion-reader marketing and hundreds of thousands of consumer products companies use that strategy.
“It’s the same with car racing. I think it’s great that Chevrolet is on a NASCAR because that’s a Chevrolet engine and that’s a pretty tough piece of equipment. When you get a company’s brand on a NASCAR vehicle that has nothing to do with automotive or mechanical or engineering or doesn’t have a part in the vehicle, that’s just trying to get your name in front of the consumer demographic, but there is very little correlation between the two. It’s a very expensive and very indirect way to build a brand.”
Igloo tries to team up with events or activities that directly correlate with the use of its products.
“We sponsor the FLW Tournament, which is the biggest bass fishing tournament in the country,” he says. “We’re on television with bass fisherman and … they have to bring these fish in for weighing and they have to keep them alive, so they put them in an Igloo cooler. That’s similar to the NASCAR race where our equipment and gear is being used by the celebrity. That is direct cause and effect and the person choosing a cooler at the moment of decision is going to recall, ‘This is the one that’s used by all those FLW guys, I see on TV all the time.’”
Discover avenues to grow
In order to lead a consumer category for more than 60 years, you need more than a good product to continue that dominance. You need to have strong employees that can recognize the right business strategies.
“Anybody will say that the toughest leadership challenges are always getting the right people focused around the right business strategies and having them executed and implemented with precision,” Kiedaisch says. “The most important thing is to really surround yourself with experts in fields of the discipline that you do business in. If you’re in the consumer products business and you sell products through whatever it is that’s your specialty, you need people that understand the habits and behaviors of not only the end user but the retailer that you’re dealing with and how they interface with their consumers.”
Kiedaisch has been able to surround himself with people who are experts in the cooler industry and that expertise has led to growth for Igloo.
“Since 2008 we’ve grown this company significantly,” he says. “We’ve grown more than 20 percent and in the specialty channels outside of Walmart, we’ve grown close to 30 percent. It’s come from recognizing what we do and doing what we do better.”
Igloo’s strong brand and market dominance has led to penetration in 70 percent of American households in a category that has penetration in 90 percent of American households.
“You could argue the market is saturated and there’s no room for growth or you could argue that it’s a staple of life that the product that you make, almost every household needs one or two or three,” Kiedaisch says. “All you really need to do is bring them new reasons to buy one — compelling new reasons to buy a replacement or take new consumers. It’s a combination of sustaining what worked before and also bringing new innovation into the category to improve it.”
To continue to grow your company, your products and your brand you have to be in the right mind set. You can’t be turned away at the first sign of adversity.
“You have to make sure that you know your business and never, never, never give up,” he says. “If what you try today or this morning didn’t work quite as you wanted it to, take a look at it and see what went wrong or what assumption was incorrect and keep going until you get the result you think you want. That’s not to say you go until death. Sometimes certain strategies are wrong and you need to course correct. You only course correct when there is clear evidence that the direction that the group felt the company should be going is unquestionably proven to be wrong.”
When you are trying to be new and different and make a stand in an industry there are always people who will disagree.
“There are a lot of naysayers, especially when you’re trying to do something new and you’re trying to be great, that are going to want to slow down or dumb it down or maybe not chase that ring and then you settle,” Kiedaisch says. “The worst thing that I’ve ever seen other executives do is settle. That’s when you get companies that don’t have great performance in their products, great performance in their innovation, great performance in their financials, and they don’t have, in my opinion, motivated and happy executives and employees.”
Innovate the industry
Kiedaisch and the employees at Igloo refuse to settle for anything less than their best. The company is always looking for the next innovation to keep its products relevant.
“It’s all about the quality and efficiency of the product,” Kiedaisch says. “It’s got to outperform anything else that’s out there in the marketplace and that’s what we’re constantly working on. If you’re not constantly reinventing your product there’s no reason to replace it, there’s no reason for somebody to be motivated to buy it, and you’re not going to have very good sales.”
Reinvention is what Igloo is great at. The company explores numerous avenues to make a good product even better.
“Take for example our soft-sided coolers,” he says. “The original soft-sided coolers are just square sewn together boxes with insulation in them and they were lunch boxes and they looked like that. What we’ve done is we’ve developed a series of bags, totes and across-shoulder messenger bags that are insulated and have fashion and design to them that women will carry to the office or men will carry to a boat that doesn’t look like it’s your lunch pail, yet it is.”
Igloo looks to other industries and product functions to get inspiration for its innovations.
“What we did was we studied the women’s handbag business and how women carry their daily accessory needs,” he says. “We look towards the luggage industry and we look toward the refrigeration industry to see what they’re doing. I don’t know who came out with wheels first, but I would bet that the luggage industry came out with wheels first and you can’t buy a piece of luggage today without a wheel on it.
“We’re in the food transportation and storage business. If you’re in that business you look at what other companies make products that move personal items by an individual and you can learn things from those people as to what you can do with your company.”
Igloo did something similar when designing its new rickshaw-inspired glide cooler. It took a page out of the Chinese lifestyle.
“We looked at the Chinese rickshaw and saw these frail people carting around two heavy people in a two-wheel wagon,” Kiedaisch says. “The art to it was the balance of the rickshaw and that the handle is set away from the wheels and acts as a lever. So we created a cooler that has a handle that extends out much like a rickshaw and you reduce the weight of lifting it by 50 percent and you also move yourself further away from the cooler so if you’re pulling it the cooler is far enough behind so it’s not bumping into your Achilles tendon.”
Kiedaisch doesn’t just look to similar industries or functions that could contribute to a cooler. He also watches how consumers utilize the products.
“We wander around a lot,” he says. “I’m often accused of being a chief product manager myself. We respect the fact of how the product plays. We watch how people use products. We look to related industries and how they manufacture products and what you can bring to the consumer in ways of better performance or better value and then we will incorporate it into the product. I probably on any given day of the week will see four or five innovative new things that the team will check and see if there is something we can do to incorporate that technology into our products.”
Innovation doesn’t stop at finding new ways for a product to be used it also applies to the ways you make a product.
“I’d challenge what technology ends up being used in the manufacturing or materials that are used in your products,” Kiedaisch says. “If Igloo didn’t do that we’d still be making metal fabricated coolers and they’d be horribly expensive.”
HOW TO REACH: Igloo Products Corp., (713) 584-6800 or www.igloocoolers.com
- Build your brand and align it with uses that directly correlate
- Use your brand and turn it into growth for your products
- Take what you do best and innovate to make it better
The Kiedaisch File
Born: Cambridge, Mass.
Education: Attended college for two years and was studying pre-law before joining the military.
Do you have a favorite Igloo product?
My 28-quart personal cooler that I use to travel to and from my boat with.
Who is somebody that you admire in business?
I admire Jack Welch and Steve Jobs. I say Jack Welch because when he ran General Electric, he had his hands on the ball. He had constant meetings with his employees and he was always motivating his employees and sharing where the company was and where it was going. I say Steve Jobs because he not only [ran the company] but he was the chief product development guy and he understood that the wellness of Apple Computers is as good as the last innovation you came up with and he drove that.
If you weren’t a CEO what job would you have?
If I were not running a company, I would be a lawyer of some sort because it is very similar to what I do. It’s getting the facts, preparation, presentation, cause and consequences, and it’s high stakes, winner takes all.
Cool facts about Igloo:
- Igloo is the No. 1 cooler brand in the world
- No. 1 market share in the U.S.
- No. 1 cooler brand used in the marine channel
- No. 1 cooler brand used on commercial worksites
- No. 1 brand recognized by consumers in the cooler category
- Igloo adds more new coolers to its line each year than any other cooler brand
- Playmate is the most recognized cooler product in the U.S.
- Almost three in every four U.S. households owns an Igloo cooler
- Igloo offers more than 500 different products
- Igloo coolers are sold through more than 15,000 outlets in the U.S. and around the world.
Ash Shah cut his teeth at a large global trading company that traded in petro chemicals and plastic polymers. After four years in the industry, he decided to start his own business, Impex Group Holdings LP, a worldwide supplier of plastic films and packaging products.
Shah, founder, president and CEO of the $28 million company, now had to deal with the tough entrepreneurial world and the challenges of finding the right employees and growth opportunities. Fifteen years later, he continues to keep those challenges his top priority.
“I think we have been very fortunate of having very good people work in our company,” Shah says. “It’s always a challenge regardless of how large or small or growing or not growing a company is. People are really the key asset more than the products and more than anything else.”
Smart Business spoke to Shah about how he has been able to find the right employees and take advantage of growth opportunities.
Find and retain employees. To retain employees, you have to offer the right package and so on, but it’s also the corporate culture and whether they fit well and you fit well and working as a team. Retaining is more important than finding, especially in the current economy. With unemployment, there are quite a few good candidates out there. So finding isn’t as much of a challenge as retaining them.
You have to make sure that teamwork is very important regardless of how small or large your company is. Having that team culture and that feeling of everybody being a part of the organization … that bonding or family-type togetherness goes a long way. Money is obviously important for everybody, but over the years I think it’s actually more important that they grow to enjoy and like coming to work and working with their counterparts.
It’s like any relationship: a lot of give and take, understanding, and appreciating. For every organization it will vary. It’s difficult to say that one rule applies to everybody, but you have to see within your organization what types of people there are, what their likes are, how can you make it a cohesive unit, and as an entrepreneur, having that cohesive teamwork is really what is going to help any leader grow. People are your main assets and you have to take great care of them.
You cannot please everybody. If an employee doesn’t fit within the corporate culture, despite trying a few times, if it’s not meant to be then that is a good time for them to depart. It’s not at any given cost you have to try and make sure you retain an employee, you don’t. In a genuine situation, you try to understand what their issues are. If they’re valid and if it’s something that a company can do to address that issue and as long as it all makes sense and within reason, the employee can be retained. You have to try to do anything within reason to try and retain employees.
Stabilize growth. The key factors of success in our case have just been responsible growth, keeping our eye on the ball and the matured product that we deal in. With the economy not being good, the basic staple food product packaging products — the plastics, the paper, the foil, which are the main substrates we deal in — actually have grown because more and more people aren’t going out to restaurants and they are buying food from the grocery stores and cooking from home.
As you grow, you have to sustain the growth and not grow too fast or too slow and you have to maneuver the ship in the right direction and that’s a challenge. If you grow too fast, it can have some negative implications and same if you grow too slow. When you’re growing at a pace of 50 percent or so … and you’re growing fast, just like we have for a couple of years, if there was a period of slow down or any major recalls, and you’re growing at a fast pace, it is difficult to pull back and try to maneuver.
Growth is obviously good and important and in most cases very beneficial for the company and its employees, but a sustained growth is even more important. That continued sustainable, matured, responsible growth for any company would be very positive. It is difficult to kind of benchmark or difficult to gauge the speed of growth.
To every specific industry, the leader has to focus on the basics of the financials. You have to constantly do checks and balances whether it’s monthly or on a quarterly basis. If the owner or the CEO feels like the growth is too fast, look at sales or accounts that are not much of a profitable account and whether you really need that account. It all goes back to checks and balances and making sure the bank mandated ratios are met and those ratios are not going too much into the danger zone. For every company, every industry, every sector, the leader has to see if this is a sustainable growth or not.
HOW TO REACH: Impex Group Holdings LP, (281) 416-4449 or www.impexfilms.com
All Steve Shifman is hearing and reading today is how companies aren’t hiring, aren’t investing and aren’t growing. While that has certainly been the trend over the last couple of years with economic uncertainty still looming, Shifman has had the opposite challenge at Michelman Inc., a 250-employee global developer of water-based coatings for flexible film packaging, paperboard and other products.
“We’ve kind of bucked the economic trend during the downturn of the last few years,” says Shifman, president and CEO. “We continue to expand both here in Cincinnati and also around the world, and we’ve continued to hire.”
The company hasn’t been cutting costs or staying conservative to ride out the uncertainty. Instead, Shifman and his employees are embracing the position they are in and are hiring top-level talent and developing strategic plans to allow the company to keep growing for years to come so the organization can capitalize on its opportunities.
“It’s not growth for growth sake,” Shifman says. “Growth is important because we know that by doing that, we can continue to bring in the kinds of capabilities, skills and tools that will help our customers to win.”
Here’s how Shifman developed and led a strategic growth plan to allow Michelman to achieve its mission of helping its customers and continue to grow.
Formulate a direction
A strategic plan helps paint a picture for your organization of where you ultimately want to take the company. It provides a clear direction and strategy to get you there.
“We’ve made some decisions on the kinds of investments we’d like to make and what we’re prepared to do in order to grow the business a little bit more rapidly, particularly because we’re trying to find new solutions to help customers to win,” he says. “We started serving some of these industries and we recognized there’s more growth potential within these industries. There are more needs that need to be filled, let’s go invest around those industries so we can bring in new solutions and hire new people and build new facilities that will help us to serve those industries better.”
Shifman took this focus on customers and industries and made it the top priority for Michelman’s strategic plan.
“It’s very important to start with the customer in mind,” he says. “There are different ways you can organize a business. There are some businesses that organize around their production and they’re primarily manufacturers and some businesses are primarily around technology and those are right for them. In our case, our business begins and ends with our customers and we understand the markets and the industries we serve so well, so we start with those industries and with those customers and then we try and understand the kind of skills we need to serve the customers well — the kind of resources, assets, the kind of depth, the kind of distribution networks, etc.
“You have to understand who you’re serving. Understand what their needs are and help them to understand not only their needs today, but the needs they’re going to be facing over the next five or 10 years. Help them look around the corner to figure out where their businesses are going. Everything starts with the customer, starts with the industries and the markets that we serve and then we work closely with those industries and those customers to figure out where we think the future is going and then come up with our tactical plans to get there.”
In order to understand who you are serving you also need to understand the marketplace.
“We very much take an outside-in view of the marketplace,” Shifman says. “What I mean by that is we’ve organized our businesses around sets of customers in certain industries that have similar problems or similar challenges. That’s important to us, because instead of being a company that simply sells products, we’re a company that really focuses on industries that have needs and then we build solutions for those industries and then we build teams of people around these industries that have expertise. We work to hire people out of the industries that we serve. They understand the industries, they speak the language, they understand the challenges, and they can help us design solutions for those industries in a way we feel many of our competitors can’t.”
While there are many ways to put together a strategic plan and countless reasons for one, all those differences are moot unless you have smart people to help you.
“You have to get really smart people in the room to be part of the process,” Shifman says. “Plans created by one or two people off on high and handed down to the masses and say, ‘Here, go implement,’ tend to be less successful than those that are created by people who are actually going to be involved in executing, particularly in a business like ours where understanding the industries and understanding the customers is so critical. Also, have a grand vision. I believe in setting very large strategic goals for our company that challenge the company. If you really want to improve in something, set big goals. Don’t set them in the abstract. Set them because you know that by achieving these goals, you’ll continue to create a better place for your organization in the marketplace.”
A strategic plan or new direction will only be a success if you can build buy-in around it and gain support for what you hope to achieve. To do this, you must focus on communication.
“I’m a lucky guy, because I get to spend most of my time talking and communicating within the company and then also going out and seeing customers,” Shifman says. “It starts with me because the person in my seat in any organization has to be the one driving the grand vision. So it was incumbent upon me to have a big picture for where I thought we could take the company. We spent a lot of time as a team, first of all, making sure we’re all bought into this grand vision, because if the entire team is not bought in, then it’s probably not going to work. We work very closely together and we work very hard to make sure the team is completely aligned around it. Then it’s an awful lot of time spent with other members of the organization.”
Alignment is critical to the success of any strategic plan. To achieve that alignment you have to have the necessary communication tools.
“We do have some pretty well-tested communication tools that we use,” he says. “I spend a lot of time personally with our business units and business unit leaders visiting our facilities around the world and our people who are out in the field. It’s a lot of regular communication. It’s one-on-one communication. I write a letter to all of our employees every month that I send home, because I want their families to read it. We have lots of company-wide meetings and we have video conferencing systems. It’s just an ongoing communication process. It’s not a one-size-fits all and it’s not a once in a while, it’s constant. Can we do it better? Of course, there’s always a way to improve upon it, but I think it’s something we focus on a lot here and we make sure we are working hard to keep people aligned with what we are trying to accomplish.”
To aid in the communication efforts and provide total understanding of the tasks required by your employees, it helps to be transparent.
“One of the words that I try to live by is transparency,” he says. “I happen to believe that there are very, very few secrets within our business. We try to make our plans and our objectives and our results within our organization transparent, because it’s hard to hit a target you can’t see. If you make it transparent and you make people a part of the process and treat them like adults, they’re going to behave like adults and they’re going to be part of the process.”
It’s not enough to be transparent on one aspect of the plan or be transparent only for a little while. You have to make transparency and communication a big part of the strategic planning and buy-in process.
“It’s about transparency and it’s about rigorous, regular, constant, robust communication and dialogue,” he says. “Nothing is off limits to talk about, to debate, and to discuss within our organization. It may not be right for everybody, but within our organization, that really contributes to the culture of Michelman. It makes everybody feel as though they’re a part of the business, they’ve got a voice, they can assert an opinion. They’re not just told to do something. They understand why they’re being asked to do something. They have a chance to really debate and discuss that so that they know they’re a part of something bigger, they’re not just doing a job on a daily basis. It really is something that’s been baked into the DNA of our organization.”
Measure your plan
While a strategic plan begins with a vision for the company, a clear mission of what you’re trying to accomplish and the support of your organization, none of it will be beneficial if you don’t measure your plan on a regular basis to make sure you hit goals.
“We’ve got a lot of robust systems in-house that allow us to measure our business on a day-to-day basis, but we also have this high-level strategy map and balanced scorecard that tell us that we’re moving in a perfect strategic direction,” Shifman says. “Our strategy map is our high-level map of where we’re going strategically and we use a balanced scorecard. The balanced scorecard is not how we manage the business, but it helps us to know that we’re on our strategic path.”
The steps to measuring your strategic plan are to first, have a plan to measure and second, be sure to collaborate with others on your team.
“Many people just operate on a day-to-day basis and there’s probably no long-term plan of where they’re trying to take the business,” he says. “At Michelman, we have a very solid past and that past has helped to inform who we are today and we also have a very clear picture of where we’re trying to take the business. And that picture isn’t something that I keep to myself. It’s one that I have approved by my board. It’s one that my executive team is actively involved in helping to create. It’s one that we communicate actively and we share transparently.”
Once you have a plan and vision in place and buy-in from the company, you have to make sure you discuss and measure specific areas of the plan.
“Make sure you’re debating and checking that plan so it isn’t just something that you pull out of thin air, but something that you’ve actually imbedded and something that a team can buy in to,” Shifman says. “Measure yourself against the plan and be willing to adjust if things change. We have long-range plans, but it’s like talking about a battle plan — once the bullets start flying sometimes the plan gets tossed out the window. Our plan is not tossed out the window, but sometimes reality on the ground forces us to adjust our plan, so we need to remain flexible.”
Remaining flexible is exactly why you have to constantly measure your performance against your plan, otherwise if things change, your plan won’t be effective.
“Be willing to change that plan slightly if things that are happening dictate some needs to change the plan,” he says. “You have to also surround yourself with extremely good people, because it doesn’t matter how smart the person at the top is, it really comes down to the people on the team who are really helping to build the organization and execute the plans.”
No matter the reason for your strategic plan, always understand what you are trying to achieve.
“We need to continue to grow in order to continue to build the resource capabilities that our customers are demanding from us,” Shifman says. “With growth come the resources to be able to invest in new facilities, invest in new technologies, invest in new skills and new people.”
HOW TO REACH: Michelman Inc., (513) 793-7766 or www.michelman.com
The Shifman File
President and CEO
Born: Springfield, Ohio
Education: Graduated from the University of Colorado and received an MBA from Xavier University
What was your first job and what did you learn from that experience?
I worked on a beer delivery truck in Springfield, Ohio. I was a driver’s assistant. I wasn’t even old enough to buy beer, but I schlepped cases of beer off the truck into bars and restaurants. I realized just how hard people work. I also worked in a warehouse for these guys and there was zero training and one of my first days they tossed me the forklift keys and said, ‘Here, go move this pallet.’ We had guys regularly putting forks through the tops of trucks and you’d see pallets full of beer and wine falling off of the forklift. I realized that’s not the kind of work I wanted to do, and getting an education was going to be really important to me.
What is the best business advice you’ve ever received?
Surround yourself with really smart people. Recognize what your real strengths are and build a complementary team of people who have the skills and experiences that come together to create an organization.
What is your definition of success?
We define success at Michelman, first and foremost, by whether or not we are helping our customers to win. If we help our customers to win, then we have a right to win as an organization. Personally, I think success is adding value and giving back and being a part of something bigger. I’m a lucky guy. I have a chance to run what I think is an outstanding organization and I also have a chance to work actively in the community. I feel like I’m successful because I’ve got a beautiful wife, wonderful kids and a great family.
What are you looking forward to in your industry?
All I hear about and all I read about today is how people aren’t hiring and people aren’t investing and people aren’t growing and everyone is waiting for a signal from the government before they do anything. In our case, I couldn’t disagree more. Over the last number of years during a period of uncertainty, we continue to hire, we continue to invest and we continue to grow. I’m looking forward to the next few years because we plan to do a lot of the same. We’re on a rapid growth path, because we believe very much in the future of our business. I’m excited about our growth opportunities, because we’re not waiting for others to figure this thing out.
Samuel Bennett is used to being an individual contributor. Bennett, principal and eastern region client management practice leader for Buck Consultants, an employee benefits consulting firm, has had to adjust to a new mentality in his new role as leader of the Cincinnati office.
The 40-employee office has had to overcome challenges of a tough economy where everybody needs to work a little harder for less. Bennett’s job is to motivate employees and continue to right-size the business.
“The biggest transition into a leadership role out of sales is really making sure people you work with are successful and not just yourself,” Bennett says. “The best thing a leader can do is inspire others to be successful.”
Smart Business spoke to Bennett about how he is adjusting to a leadership role and motivating employees.
I always go back to, as a company, why are we here? Where are we headed? It’s easy with all the noise of the economy to get internally focused, but what I find is our people are happy and more motivated when they’re focused on the client stuff and not on the internal stuff.
You have to find and focus on the priorities both of your organization and internally on your relationships with your staff. It should be a combination. The staff should be well aware and motivated with the company direction and understand where you’re headed, but also see what their personal value is in that whole scenario and be able to connect that. I think all companies are headed in two directions. They want to grow and they want to be profitable, but if you make your clients happy all that other stuff takes care of itself.
Get to know employees and clients
There are very few people in my office in the first six months of my tenure where I didn’t buy them lunch, take them to breakfast, meet them for a drink or whatever it is to just figure out what it is that they’re about. It’s just a personal relationship-building exercise. You can transfer that over to clients too and getting to know clients on a personal basis. What their needs are, where they’re at in the organization and what their expectations are. It’s more of a communication thing and if you take the time to get to know the employees and the clients, a lot of times you’re headed off in the right direction because most employees and clients will tell you exactly what they want and exactly what they need.
You’ve just got to create that avenue of communication. It’s hard. When you’re in a leadership role you’re tugged in 25 different directions, but if you don’t make the time to build those relationships and you’re focused on the tasks, you’re missing out on the big piece of it.
You have to learn as much about every individual as you can, because there is no single way to motivate everybody. Everybody has their own little thing that motivates them. Some are motivated by money. Some want autonomy. Some want some credit when things go well. You have to figure out each individual and what makes them tick. Does it work when you kind of spread it like peanut butter and treat everybody the same? I think you leave half the people out when you approach it that way. When you individualize it and really learn what makes everybody tick, you can adjust your style to meet what motivates them.
That takes a while to do. That’s not something you read in a book or is easy to figure out. It takes a little time. There’s no one way to be a true leader, but you can learn from everybody you interact with every day. Adjusting your style to fit your individual employees is more successful than to say, ‘Here’s my style, everyone adjust to me.’
HOW TO REACH: Buck Consultants Cincinnati, (513) 784-0005 or www.buckconsultants.com
After forming a company that designed software for applications such as FedEx Ship, QuickTime for Apple and Palm computing, Doug Engfer found an unlikely application for computer software.
His partnership with Palm led him to his co-founders, Saul Shiffman and Jean Paty, who had been doing diary-based research with clinical patients. Together they formed Invivodata Inc., a $25 million, 150-employee software solutions organization with a focus on patient reported outcomes for biopharmaceutical companies.
“What we’ve been dealing with lately is the outcome of 10 long years of work to not only build a company, but build a market,” says Engfer, president and CEO. “What we’re seeing right now is the positive outcome, the benefit of that longer-term focus.”
The company’s innovation of electronic diaries and ability to build a market and utilize the resources available in it, have allowed the company to grow at 40 percent a year.
Smart Business spoke to Engfer about how to grow your company with a long-term vision.
Build a market. You have to clearly identify all the stakeholders in your entire ecosystem and understand where you can make a difference and how you can make a difference with each of them. For us, it all starts and ends with the patient. Our mission is to amplify the voice of the patient in clinical research.
There are lots of other players out here who contribute and we’ve done a good job over the years of understanding the needs of each of those constituent groups. You have to really understand all the stakeholders and think broadly and orthogonally about that. Who are some of the strong outside influencers that might make a difference within your market and whose toes are you going to be stepping on? You have to understand who is going to be reacting negatively to what you do and figure out ways to be able to co-op those folks and maybe involve them in those solutions in a way that helps you advance your cause.
Keep up with change. In order to understand what’s going on in your market and optimize and maximize your chance to be able to respond to it and help your organization change, you need to listen well to all concerns. You have to listen to your market both positively and negatively.
We regularly poll our customers on their satisfaction with what we do and it’s tracked as a key dashboard metric. We talk to our customers about our products and services and our product road map to help them understand where we’re going and to get their insight. We engage intimately with our key partners. Given that we have a special relationship with many of those partners, we’ll divulge to them where we think we’re going in order to hear how we can better fit in with what they do. We listen very carefully to our competitors and how they’re talking about themselves and how they’re talking about us. We pay attention to where we think they’re going so we can identify potential threats to our continuing progress and at the same time understand when they have good ideas whether those good ideas apply to what we should do.
In this day and age, you cannot survive as an innovative growing company if you have a centralized idea factory. That model just doesn’t work. You’d never know where the good ideas are going to come from. It’s the people who are closest to your customers and closest to your delivery who often have the best ideas and the most innovative and impactful ideas.
Form an innovative culture. The culture has to be one that builds on mutual relationships of trust and accountability. People need to feel that they’re not going to get punished for bringing up an issue. The organization has to be able to distinguish between good mistakes and bad mistakes and see those good mistakes as opportunities to improve and see those bad mistakes as opportunities to solidify improvement and make sure that you avoid them.
Folks need to feel free to innovate in order for that innovation to happen and for an organization to prosper. You have to trust each other to be engaged in what you do, to care about what you do, trust people to listen to your ideas and help you build them and support you in exploring how to deploy those things.
The lines of communication need to be bi-directional and need to be open. It’s something you’ve got to reinforce every day. You’ve got to reinforce by your actions not just your words. Model those behaviors and demonstrate that you’re going to be able to listen well to what people are saying and help them articulate what it is they need in a constructive way so the organization can absorb those ideas and move forward.
HOW TO REACH: Invivodata Inc., (412) 390-3000 or www.invivodata.com
Ted Teele left his job as CEO of one of the largest sales organizations in the gift and home décor industry for an opportunity he saw as new and different. He saw the growth and potential of social media and how that platform could be used in the industry. His idea formed a company called SnapRetail LLC, a 55-employee wholesale supplier of marketing solutions.
“We were looking around and we could see how social media was in an uptick,” says Teele, CEO. “We saw this big opportunity because in our market were these 100,000 independent retailers selling gift products and furniture and home accent products and they all know marketing was changing but they needed somebody to help get them there.”
Teele capitalized on discovering an opportunity in his industry and began to focus on helping independent retailers evolve and adapt to new marketing strategies.
Smart Business spoke to Teele about how to recognize and grow new opportunities.
How do you form partnerships?
When you are working on a partnership arrangement, it’s very important to be able to model the arrangement financially from the perspective of the partner; what is the benefit to them? The way you do that is you ask really good questions and understand what the partner needs.
You should come up with a list of at least five companies that you most want to partner with and then come up with a value proposition. The first meeting should be all about understanding them. You may have some ideas about the value you can provide and you should talk about them, but you’re probably not going to have a complete proposal. You don’t want to come to somebody with a complete proposal when it comes to partnerships because you don’t understand what they need. Once you understand what a partner needs then you can come back to them with some ideas on how you could help meet those needs. If you are able to show value, then they will look at you as an equal.
How do you find the right partnerships for your company?
You have to learn who would be the best partners and who would get value. The first thing is to identify who the companies are that you want to go after. You have to be important to them too. You have to find people that have similar goals. Part of it is just asking. Partnerships allow you to build a brand, extend yourself broader, and get more information.
What are some keys to finding new opportunities?
We’re living in a world that is changing very quickly. If you’re running a company and you’re looking around, whatever your specialty was 10 years ago is now vanilla. You have to create a new special sauce and that’s true for individuals and it’s true for companies. So many companies just hold on to their old business model and they hold on for dear life. You have to be willing to make transformational decisions. You have to be able to adapt to the changing world and you have to be solving a problem that needs to be solved.
How do you find the right people to help grow the company?
There are two parts of hiring any person. There’s the buying and the selling. The buying is finding somebody that is right for the job and selling is having that person want to work for your company. Some CEOs spend too much time on the selling and some CEOs spend too much time on the buying. You’ve got to find the proper balance.
You need to find people that have the right skills, know what they’re doing and don’t need to be told what to do. The second thing you need are people that fit the culture. They have plenty of options and you want them to want this option. You have to be relevant. If you’re not relevant you’re not going to be able to hire great people. People want to solve big problems.
HOW TO REACH: SnapRetail LLC, (877) 459-7627 or www.snapretail.com
When Michael Brunner looks at all the challenges posed by the economy over the past few years, he has always stayed true to one thing: client satisfaction. While the economy has put everyone in a tough situation, Brunner makes sure that his clients are the No. 1 priority. M.J. Brunner Inc., a 220-employee, $200 million full-service advertising agency, understands that in a down economy you have to be stronger to push through or you don’t survive.
“One of the things I learned along the way is something that we absolutely have to and we did do is stay close to our clients,” says Brunner, chairman and CEO. “It is so important to remember that you’re not the only person going through this, they are as well. The last thing you want is to work your way through the down period and then find that once you’re through it, your client feels that you were very little or no value to them during that time.”
It is through the company’s continued effort to deliver success and its focus on a people-first culture that allows the ad agency to work with companies like H.J. Heinz, Huffy Corp. and GlaxoSmithKline.
Here’s how Brunner focuses on the client and consumer relationship and a strong culture to get great results.
Get close to customers
When tough times are eminent, it is critical that you find ways to help your clients improve their business. If you do, those efforts will be rewarded.
“I found it just makes more sense to get even closer, to be more sensitive and more aware of the issues and the challenges that they have,” Brunner says. “If you can find a way to really help them through that period, you’re going to be so much more valuable and particularly at the end of the downturn that relationship has probably been strengthened considerably. That’s one of the things that we’ve done or at least we’ve tried to do. In many cases, we’ve done it by being as creative as we can or inventive or imaginative in looking for answers to questions that they’re facing and problems that they’re having. It can go in lots of different ways, but when they need you most is probably when you need to be most sensitive to that need.”
Creating client satisfaction in a down economy takes more creativity and the ability to get results with fewer resources.
“You have to be very sensitive to their needs and to their problems and then help them solve those problems, which may mean you most likely have to invest more in resources than you normally would,” Brunner says. “That’s hard because in most instances their spending is probably down. I call it basic human nature. If I stay with you through a tough period or if I help you through a tough period, most likely when that tough period is over, you’re going to remember that. You just may have to do more with less in those kinds of times. You may have to find ways to answer problems that are very difficult, because you don’t have the resources that you normally would to do it.”
One of your most important resources is your team and the partnerships they make with clients.
“Our customers and clients are satisfied when we are building and delivering successful programs that drive results for their organization,” he says. “It takes a tremendous amount of communication and work that requires partnering with the client so that you clearly understand whatever their specific issues and needs are. One strategy isn’t going to work for every client. If the only tool you have is a hammer, then every problem looks like a nail. Every client is very different and has very different kinds of needs and has different marketing issues. Can there be similarities? Of course, but one size does not fit all. One size fits one and the challenge is finding the right size.”
To figure out the unique qualities of the clients you are working with, you need to have people responsible for those clients.
“The way we do that is we put teams on those businesses and those teams work with those clients over periods of time and the knowledge gets deeper and hopefully our approach gets stronger and better with each passing year,” Brunner says. “One of the first questions you have to ask is, ‘What problem are we trying to solve?’ Then you apply the necessary resources.”
Whether times are tough or not, it’s not enough to produce good results for your customers. You have to be looking to produce great results.
“If you’re not doing a good job with your clients you’re not going to keep them,” Brunner says. “That’s really the price of admission. It’s a matter of creating a program or campaign that catapults a client to the top of their category, one that achieves dramatic results, one that fires up the entire internal organization, one that’s built around a big game-changing idea that transforms their business; a radical departure from the norm. Those are the kinds of things that I would say are going above and beyond.”
To offer that kind of result, you have to really get inside your client’s business and they have to be willing to let you in.
“You really have to understand the nuances of what they do, how they do it, how they make a profit and the best way to do that is to saturate yourself in their business,” he says. “The best way to try and understand what the client is all about is to try and live the client’s world. You’re not going to be able to do it forever, but you’re going to try and learn as much and as quickly as you possibly can about what factors ultimately become important to help you grow their business.”
Understand the consumer
A big part of getting close to your customers is to understand who they do business with and who their consumers are.
“It’s important for us to make sure that we’re lockstep with today’s consumer,” he says. “Today’s consumer is equipped very differently than yesterday’s consumer. I say that because that’s due to marketing technologies. One of the things we did was launch a lab called B-Hive lab and essentially it’s an idea incubator and it’s focused on inventing new ways to engage people on the go through emerging technologies. It’s incumbent upon us to make sure that we’re understanding the technologies that are in the consumer’s hands so that we can take those and make those meaningful to our clients situations. If we’re not out there in front, then why should the client invest in us or expect us to be the agency that handles their brand? Things like that are investments that you make when you look at your existing clients and you say, ‘Those clients are very important to us and we need to be ahead of the curve.’”
Staying ahead of the curve is critical when it comes to keeping pace with consumers. If you don’t, you won’t be effective for your clients.
“You want to know how their consumer thinks, how they behave, how they act, what drives them to a purchase,” Brunner says. “The better you understand what they do is imperative so you can put the kinds of programs together that will be most effective in terms of driving that purchase intent and getting them to be interested in whatever your clients’ products and services are.”
To find out what drives consumers to make certain choices you have to put in the effort.
“Some of it is plain old-fashioned hard work,” he says. “You need to learn the category and then you need to learn where your client is in that category and what the factors are. There’s no short cut to do that other than just spend time digging in. On the consumer side, you have to look at the past research and design different tools that will allow you to get to the way the consumer thinks.”
Create a winning culture
The culture of your company says everything about your business and when client service is your top priority, you have to have employees that enjoy their work.
“If you do not have a motivated and inspired employee base, you will never have clients for a very long time,” Brunner says. “If you don’t have a motivated and inspired employee base, then I don’t know how you can be doing the best job you can for your clients, because they’re cross-purposed then. There is uncertainty. I want them to know where they stand so we can put all of our energy, all of our efforts into the clients we have so we can be mutually successful. We can win and the client can win. That’s what we want at the end of the day.”
To keep a company running well with employees that strive to deliver the best results possible, you have to have a culture that breeds success.
“We have a culture here that’s dubbed people first,” Brunner says. “It’s about letting the people in this organization know that they’re important, that they are critical and that they are the difference in terms of what we do and that we will make all decisions in that direction. We will make decisions that will let them know how important they are and try to constantly find ways that either reward them or incentivize them to perform at the highest levels.”
No matter what your business is your people are the ones that make it successful or not and you have to be able to recognize and reward that fact.
“Ultimately, your own internal resource is what makes the difference at the end of the day,” he says. “Make sure that your top performers are rewarded and that you provide an environment where people not just feel comfortable, but they feel challenged and they know that there is an expectation of growth. They expect the company to grow and you expect them to grow.”
To grow your culture you have to be open and honest with employees about how the company is doing and where it is going.
“Communicating and being honest seems pretty simple but it’s not always done,” he says. “You have to let them know where you stand. It’s important for them to know where the organization is. You serve no greater good by telling them one thing when they’re seeing the company perform in another way. I think one of the most important attributes a CEO can have is to go out and be honest and frank with the entire employee base. I think they deserve that. They’re making decisions on their livelihood by working in your organization. At the very least you should be able to be candid with them and let them know where the organization is.”
Communicating the position of the company allows you to focus more on the task at hand.
“If you’re letting everyone know where you stand, then you can put all your energy and all your effort into trying to accomplish whatever it is that you want as opposed to trying to send mixed signals or not sharing information and making people worry,” he says. “If you’re making people worried then how productive can you be. All those things do not bode well for client service.”
Having a people-oriented culture is more than just letting people know where the company is. It’s letting them know where they are as an employee.
“It’s letting them know how they’re performing,” he says. “It’s having meaningful, honest appraisals and evaluations on an ongoing and regular basis. If you don’t do that then they don’t know where they stand. What you ultimately want to do is give them that opportunity to improve, to be better, to be stronger, and you want to do your best to make sure that happens.”
HOW TO REACH: M.J. Brunner Inc., (412) 995-9500 or www.brunnerworks.com
- Remain close to customers to meet their needs
- Understand your customers’ consumers to better serve them
- Create a culture that breeds a winning attitude
The Brunner File
Chairman and CEO
M.J. Brunner Inc.
Education: Bowling Green University, Communications and Education; MBA from the University of Pittsburgh
What was your very first job, and what did you learn from that experience?
I was a paper boy. Delivering newspapers in many ways was the perfect primer. I quickly learned that better service meant better tips. I also learned how to manage money.
What got you into advertising?
My dad always had an interest in advertising even though he spent his career working in a steel mill. Obviously, it was enough of a spark. I also had two cousins that were in the industry, and I found it fascinating.
What kind of ad was the first one you worked on?
A newspaper ad for Isaly’s
What is your favorite type of advertisement to create?
One that gets noticed
If you could invite any three people to lunch, past or present, whom would you invite and why?
I would invite Bobby Jones, Ben Hogan and Jack Nicklaus. After a thorough discussion on their approach to life, we would go out for a round of golf. I can’t think of a better way to spend an afternoon.
The co-founders of CHR Solutions Inc., a provider of technology and business solutions to communication services companies, come from very different backgrounds. James Taylor, chairman and CEO, grew up in Missouri and Arun Pasrija, president and COO, grew up in India. Regardless of their varied backgrounds, they run their 550-employee company in absolute agreement.
“You’ve got to go through and clearly agree on the core spirit of the
organization, the mission, values and philosophies,” Pasrija says.
It is through collaboration on the culture of the organization, the growth of the company and treating people with dignity and respect that they have built the company into a $50 million business.
“As part of being process-driven or process-centric, you need it to be part of the culture of the organization as you grow to be able to create size and scale,” Taylor says.
Smart Business spoke to Taylor and Pasrija about what has been crucial to the growth of their company.
Make mergers and acquisitions.
Taylor: We began to acquire technology services companies that had a common vision and mission and shared our philosophy of the world and were looking to be part of a bigger team to help us execute in this marketplace. We viewed it as a mosaic.
We recognized that to create this beautiful picture we needed to fill in certain pieces, whether they were clients, technology, locations or talented people that would help us execute. When we made acquisitions, we were simply looking at things to help us fill in part of that mosaic and create that size and dominance in that marketplace.
Pasrija: We ask two fundamental questions as we look at a merger or acquisition and we need to answer with a definite positive. One is what’s in it for our customers. Is this going to add additional benefit to our client base? If we can’t answer that with an immediate yes, then we’re going to pass. The second is what’s in it for the employees on both sides. It has to come across as this is better from a professional growth perspective. Those two questions … have to be answered in a resounding, ‘Yes, there is benefit.’
Taylor: If it’s good for the clients and it’s good for the employees, it will be good for the shareholders. There are a lot of deals that are focused on the shareholders and not the employees and the clients.
Align your culture.
Taylor: The first thing you have to do is write it down. You have to have agreement on it. It is so important to get people together. If you don’t communicate, people will create their own communication. You can’t communicate too much and you have to write it down and articulate it.
Pasrija: When you look at the whole integration, there are things that you look to do right away, but there are other things that might take nine months. Those are the things you can’t force to go any faster. The actual culture will require time to get gelled. Part of the cultural integration is that we have certain core philosophies which are nonnegotiable. There are certain core values of the organization and a core mission and all of those we share. You have to create the clarity of purpose, the clarity of accountability and the clarity of the core values.
Taylor: We spend a lot of time on culture and organization. Every month, we do either a company chat with all of the employees in the company or a ‘lunch and learn’ to educate them. Every meeting we start off with our basic sheet that talks about why we’re here to help our clients succeed, our mission, our vision and our goals. We do that so we can make sure people align with them.
Pasrija: You have to make sure you collectively come up with what are the right performance measurements. As long as you can make it analytical and where you can actually measure that’s going to help you make decisions. There are two kinds of measurements. One is your financial results. When you look at financial results for a month, the month’s already gone and all you can do is learn from that history. There are other indicators called leading indicators, for example, the sales pipeline. That’s a leading indicator of what the sales might look like in the next quarter. You have to make sure you can focus on a few critical indicators.
Taylor: Pick three [indicators] in every area and keep it simple. If I give you 53 indicators, you can’t track 53. What are the three most important? Could there be some places in business that have five? Absolutely. Could there be some places that have one? There is a general rule that if you’re in the three-to-five range you’ve got a pretty good feel for what that activity is.
We all have visions of grandeur and visions of what we want to create and build and do, but you’ve got to be careful that there’s reality set into how you’re going to get there. That doesn’t mean don’t dream big. It doesn’t mean dream audacious, but you’ve got to figure out what the dots are to connect to that point.
HOW TO REACH: CHR Solutions Inc., (713) 995-4778 or www.chrsolutions.com
When Douglas Ewert first joined The Men’s Wearhouse Inc. in 1995, the specialty retailer of men’s apparel only had 200 stores and just the Men’s Wearhouse division. More than 15 years later, the company has 1,200 retail locations, six divisions, 17,000 employees and had 2010 revenue of $2.1 billion.
Ewert has seen the business grow quite a bit over the years, and as part of a succession plan, on July 15, 2011, he became the company’s new president and CEO. Previously serving as president and COO, he knows it will be a tough task to fill the shoes of founder George Zimmer, who will continue to serve as executive chairman of the board.
“I’ve learned a lot from George,” Ewert says. “Probably the two biggest are if you take good care of the employees, they’ll take good care of the customers, and secondly to listen to my instincts.”
Armed with years of knowledge in the retail industry and some guidance from Zimmer, Ewert is continuing to focus the company on a strong culture, customer satisfaction and retaining a No. 1 market share.
Since Ewert had a senior leadership history with the company and the management didn’t change much when he took the CEO role, Ewert had to focus on the strong aspects and initiatives of the company.
“Because I’ve been here for 16 years and George is going to be here for another 16 years at least, this has really been a succession story of continuity not of change,” he says. “One of the first things that I did do was reorganize the organization chart a little bit so I would have fewer direct reports to allow myself to fly at a higher altitude and spend more of my time focused on strategy rather than tactics.”
Part of that focus on strategy was aimed at getting more familiar with the investment community surrounding the company.
“I’ve met with a number of our shareholders, potential investors and analysts that cover our stock,” he says. “So I’ve spent time in the investment community more so than I have in the past. I think it is important for a CEO to understand the needs and motivations of all of their stakeholders: employees, customers and investors.”
The Men’s Wearhouse has always made sure that it pays attention to its stakeholders and most importantly its employees.
“If you had to rank all of our different stakeholders, we put our employees at the top of the list,” Ewert says. “We believe that if you take good care of the employees then all of the other stakeholders will get taken care of. It’s always been a focus in this company and I look forward to continuing that style of leadership.”
Ewert and the other executives in the company make sure that they are accessible to every employee in the organization. They want to know employees’ opinions and concerns.
“Every employee can contact me,” he says. “They have my phone number and my e-mail address and they have George’s. We hear from people throughout the organization every week, because we want to know what we can be doing better. Some of the best ideas that we’ve ever had have come out of the field. For example, our tuxedo rental business, which is something that we’re very proud of and is driving a lot of nice top and bottom line results for us, came from a suggestion from one of our store employees. So keeping those lines of communication open, remembering that our employees come first is just part of our heritage. We have a rich company culture that has always valued that.”
To get employees to voice their individual ideas, opinions and concerns, you have to be available and you have to be willing to listen.
“One of the keys is to spend more time listening than talking,” he says. “You have to be accessible. You have to be open to changing your mind with new information. It’s important to not to fall in love with your own opinions. You have to be open especially in retail and especially in this economy. Our company, just like most, has had to reinvent itself somewhat in the last couple of years. That took input from the entire organization and then winning the hearts and minds of the entire organization.”
Opportunities are all around you and as a CEO you have to make sure you utilize every avenue available in order to foster those creative ideas.
“If you hang on to your opinion on what the business requires too firmly, you may miss an opportunity or an emerging opportunity,” Ewert says. “A number of things need to be present for an organization to foster creativity. First, the CEO needs to believe that they don’t have to have the best ideas, but rather have to recognize the best ideas. Then you need to foster an environment that encourages creativity. Trust needs to exist throughout the organization. Trust that the ideas will be heard. Trust that they won’t be criticized and trust that employees will be recognized for their creative contributions. Finally, leaders have to create the space for people to share their ideas.”
To run a company as big as Men’s Wearhouse takes a lot of commitment and a lot of travel. If you meet those needs, employees will see that they have access to you.
“We do a lot of training and cultural events in our company and George and I both attend as many of them as we possibly can,” he says. “Every spring, we bring every store manager and assistant store manager out in California for three-day meetings and George and I make presentations at each of those meetings and spend the evenings socializing with all of our employees, giving them our perspective on the business and giving them an opportunity to share their perspectives. We have 55 holiday parties throughout North America every fourth quarter and George and I attend as many of them as we can. We visit a lot of stores and that just gets back to that access. I think most of our employees feel comfortable with us and feel comfortable talking to us.
“You have to be accessible. I wander through the office every day. I pop into offices and ask questions. They come into my office and ask questions — the door is open all the time. I visit stores and spend a lot of time talking to employees in the stores. With e-mail now and BlackBerrys, access is 24/7.”
Maintain market dominance
Having a No. 1 market share doesn’t mean you’re safe and have time to relax. You have to constantly be looking at ways to continually improve and protect that spot.
“One of the things that we did as a company about a year and a half ago was we changed our business model from being an every day value retailer to being a promotional retailer,” Ewert says. “We found that in this economy our customers weren’t responding to every day value pricing, so we adjusted our model to be much more promotional and the customers responded nicely. Our business is strong right now and we’re having a great year. We reinvented our company to figure out how to maximize our opportunity in what everybody’s defining as the new normal — this sluggish economy.”
To mitigate the challenges that the company is facing, Ewert has had to lean on his team to help find the best solutions.
“You need to surround yourself with very competent people and listen to their ideas and suggestions and trust your own instincts,” he says. “When it comes to reinventing your business those are pretty big decisions. You’ve got to be careful and you can’t do it all yourself. You need a strong team to reinvent the company and you’ve got to keep the lines of communication open so that everybody understands the direction you’re going and everybody is pulling on the oars at the same pace to move the ship, so-to-speak.”
The company had to leverage its suppliers to combat rising commodity prices, which helped increase its buying power. It also hedged certain materials like wool to help absorb cost increases.
“Most of the changes that we had to make we were able to test the change before we implemented it throughout the entire network,” he says. “We moved cautiously, and we didn’t make any dramatic changes without some assurance that we thought it was the right move and was going to work. You have to utilize the people around you and listen to their advice. You have to try and prioritize the areas where you think you can make the biggest impact.”
If you think protecting one No. 1 market share is tough work, Men’s Wearhouse has to look after five No. 1 market shares.
“We’re the largest seller of suits in America and the largest seller of suits in Canada and the largest tuxedo rental operator in both the U.S. and Canada,” Ewert says. “We’re the largest corporate uniform company in the UK and the largest retail dry cleaning operator in Houston. Our opportunity is to continue to drive our business with that strong dominant market share.”
The company’s biggest focus is on its prominent tuxedo rental business and its blooming Big & Tall stores.
“I think there is a lot of opportunity for us to continue to take more market share in tuxedo rental,” he says. “We believe that we have a compelling strategy. As a national retailer, we believe that we have market dominance throughout the country. Our competitors are primarily small independent regional players. For an out-of-town wedding where the wedding party is spread out around the country, we’re the logical place for that type of event, because you can go into any one of our stores and get measured and get fitted and pick up your tuxedo in one store and drop it off in another or pick-up your tuxedo in the city where the wedding will be held so you don’t have to travel with it.”
The company’s Big & Tall stores also continue to do well.
“Our Big & Tall business is growing at a double-digit pace and we are aggressively growing that business in all three of our retail divisions,” Ewert says. “In Big & Tall, we are increasing the amount of inventory that we carry and we’re also testing three free-standing Big & Tall stores — one in Houston, Manhattan and Dallas.”
By focusing on two of the company’s strongest markets, the company is doing what it can to remain on top.
“You need to evaluate the strengths of your brands,” he says. “You need to keep a close eye on the macro-economic conditions and the outlook. You need to keep an eye on the strengths and leveragability of your management team and the needs of all of your stakeholders.”
Ewert isn’t just reinventing areas of the company to beat business challenges. He is making these moves to also beat the competition.
“The pitfalls of being the No. 1 market share leader in a category is that everybody is trying to take that away from you,” he says. “In order to protect and preserve your position, you need to continually reinvent yourself, because whatever you’re doing this year, your competitors will be doing next year. You need to focus on constant reinvention and paying attention to your customers as the best ways to make sure you can retain that dominance.
“We have 1,200 stores and our employees are facing customers every day and getting feedback every day from those customers. We get hundreds of phone calls and e-mails from customers every week. We have a customer service call-in center where if somebody has a question or suggestion or compliment or concern, they can reach us. If you’re not satisfying the needs of your customers, you’re not going to have customers for very long.”
HOW TO REACH: The Men’s Wearhouse Inc., (800) 851-6744 or www.menswearhouse.com
- Lookout for employees and be accessible to hear their ideas
- Trust your instincts and ideas from your management team
- Reinvent areas of your business to keep market share
The Ewert File
President and CEO
The Men’s Wearhouse Inc.
Born: Riverside, Calif.
Education: Graduated from San Jose State with a bachelor’s degree in business
What was your first job and what did you take away from that experience?
My first job was as a bus boy in a restaurant. The only job I ever got fired from was as a disc jockey in a roller rink. I got fired because I wasn’t playing the kind of music the audience wanted to hear. I guess 7- and 8-year-old girls don’t like Van Halen. The lesson there was to listen to your customers.
What is the best business advice you’ve ever received?
I would go back to the things that I focus on most from George: listening to my own instincts. Don’t let self-doubt creep in too much.
How would you define success?
It’s always been important to me to be in a job that I enjoyed and I’ve been fortunate that, for 26 years, I’ve looked forward to coming to work every day, and I think that’s pretty rare. If you’re doing something you love, you’ve got to consider yourself successful.
In the corporate world, the suit-and-tie style is no longer the typical attire, how have you seen it change?
I think we’ve seen the suit transform itself from being a Monday through Friday, 9 a.m. to 5 p.m. uniform to being an element of your wardrobe that has a reason for being at times in the evenings and on the weekends. We’ve seen the suit jacket become an important piece to be worn with a pair of jeans and an open-collar shirt. You go back 10 years and you never would have seen something like that. The suit has become less of a uniform and more of a utility piece.
Do you have any plans to film your own Men’s Wearhouse commercial?
No. I promised my wife that I would not become our spokesman on TV. That was actually a condition of me accepting this job.