When Gary Ross joined family-owned Cott Systems Inc. as president four years ago, the century-old company needed a makeover.
One-third of the Worthington, Ohio-based company’s customer base had left in the ’90s, Cott wasn’t selling any new products, and the business was stagnating.
Ross believed the 90-employee company, which develops and provides software and information management services to county government in 22 states, could get a fresh start through the research and development of new products. Today, new products and services account for 33 percent of the company’s total revenue.
Smart Business spoke with Ross about how he reinvigorated his business through research and development.
Q: How do you grow a company?
You have to look at your situation and analyze it. The key for us was customer involvement.
Whether you have a declining base like we were faced with years ago or a stable base, it starts with keeping your current customers. If they’re leaving you, you’re going to be out of business soon. You have to make sure that you’re taking care of them, and they’re giving you ideas for growth.
We started a customer advisory board in November 2004. We put together five of our key customers from around the country. We bring them in once a quarter, and we have staff meetings. We share information with them, show them our new products that are in research and development, ask for their advice and listen to them.
Q: How have you benefited from that?
We have learned what our customers’ needs are and have responded to that. Our customer advisory board members were the first ones to adopt the new products that we started launching in 2006. They started purchasing our new products and have set a real example for us.
You don’t have to get real complex with a customer advisory board: The customers will tell you simple things, and you deliver those simple things.
Q: How do you communicate this message to your staff?
I give a book to all our associates every year. This past year, we focused on the book, ‘Execution: The Discipline of Getting Things Done’ by Larry Bossidy and Ram Charan.
Many companies have a strategic plan, and it’s all written down, but it never happens. Why doesn’t it happen? Execution is the missing link.
We invested in this book, and in our management meetings, we had department leaders stand up and talk about different chapters what they’re doing to change their department and execute better.
One of the things you have to execute on is your new product development. When you brainstorm and come up with new ideas, do any of them ever happen? When you have new product ideas that are on the table, how do you bring them to market?
Q: How would you respond to executives who say research and development is too expensive?
It’s expensive if you don’t execute. How do you execute? You need a process. We made our process fun; we developed everything around a racing theme because we wanted speed.
We called our new product ideas ‘Cars on the Road,’ and we have a week full of meetings every month called Speed Week.
We have a wall in our conference room that shows all these new products. We take all those Cars on the Road and everyone who’s involved with those and we talk about what we’re doing to advance them so that they launch.
Even launching is not enough because the product may not be effective, it may not be generating the growth that you thought and you may not be getting the return that you wanted on that investment. Even after it launches, we still do the Speed Week meetings to make sure we’re hitting the target we wanted. This process is building innovation into the Cott DNA so it becomes second nature to us.
You have to invest in new products and services. Those will bring you the future that you’re looking for. A product-driven company has to change to a service-and-solutions company if you want to beat the competitors and offer something different. If you don’t, there’s not going to be any value.
We’re trying to understand our customer’s need and how to adapt our solutions to fit their need. You also have to understand your customer’s customer: What are they looking for, and how can we help our customer serve their customers better?
Q: What advice would you share with other executives of growing companies?
Executives who are trying to grow their company should understand their costs, margins and cash flows. In a small company, balance sheets are so much more important to understand.
You have to get involved in the numbers because, in the end, your responsibility is to deliver a financially healthy, long-term company to the owners.
HOW TO REACH: Cott Systems Inc., (614) 847-4405 or www.cottsystems.com