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Imagine the pressure of pitching that big idea, but instead of standing in a typical boardroom, lights and cameras are pointed at you as you face a row of investment sharks – among them, Daymond John, founder and CEO of clothing brand FUBU. You’re probably nervous, but be careful – you’re being branded.

This is the scene on Shark Tank, ABC’s reality series – which starts its second season on March 25 – where entrepreneurs pitch ideas to investors like John and Mark Cuban. Before the entrepreneurs open their mouths, John is already looking for branding cues.

“The entrepreneurs are being branded themselves when they’re doing a pitch,” says John, who also formed a branding consultation called Shark Branding and wrote a book called The Brand Within. “We’re all branding each other every time we see each other.”

John shared some Shark Tank takeaways with Smart Business and discussed how social media is changing the branding landscape.

What tips can leaders take from Shark Tank?

When you’re negotiating, the person is always just as important as the number. We want to know the owner we’re dealing with because you’re going to have to be dealing with them way more than anything else. We never jump into anything. If you want to just coldly buy businesses, then go to the stock market.

[Getting to know people] comes in the due diligence process. When you set a conference call up for 1:30 and the person’s always late, the person has excuses – you start to see in your daily dealings with people how they really are.

What makes an investment opportunity appealing?

First of all, that there’s no surprises. You see that it’s scalable; it’s a business with all the right ingredients just needing funding and/or strategic partners.

More importantly, is the person a good person, where you’re like, ‘If this business does not necessarily create a huge revenue stream, I could see myself see doing other businesses with this person’? Someone with a patent always may have potential, given time, to take off because it’s proprietary.

This is not charity. This is my money, and it’s easy to say no when you either feel like the person is irresponsible, or you went down that lane with similar products or businesses in your past and it just didn’t work for you. It may not be that the product is a bad idea, but if I invested in Laundromats and I lost money, I’m just not going to be excited about it.

When does branding begin for entrepreneurs?

They say that a jury either convicts or exonerates somebody within the first 30 seconds of seeing them. After that, all they want to do is listen to what is going to prove them right in their assessment.

When the entrepreneurs have to stand there for that minute with those lights on them and none of us have to say anything as the cameras are getting set, if they’re fidgety and they don’t want to give eye contact, there’s this funny feeling people get. And we understand you can be nervous, you know, if you’re fidgeting and you’re smiling and you’re looking at people like, ‘Oh wow, this is scary,’ (but) you’ve got that little smile, that’s natural.

So branding starts there. Then talking about the product, do you have a clear, concise message? I always say the best brands, whether you personally or a business, can be summed up in three words. Whether it’s BMW: Fine German Engineering, TBS: Very Funny, TNT: We Know Drama, White Castle’s What You Crave, if it’s the Terminator, ‘I’ll be back.’ If you can summarize your whole business or personality in three words, then you live off that motto. If you and your staff don’t understand your message, why will anyone else understand it?

What else goes into personal branding?

You’re sitting across the table from a banker. The guy has on a pinstriped suit but it’s really loose, and he has a lot of jewelry on. Generally people don’t invest in bankers and accountants that look like that. Now, you could take the jewelry off and make the pinstriped suit really close-fitting to the body. That is how you’re assessing where you’re putting your financial nest egg: how they look, how they act, how they speak.

Somebody’s telling you they have all these great business ideas, and you look and they’ve got dirty fingernails and dusty shoes. I hate to sound so frivolous about things, but this is really what we do every day.

Speaking of branding, you’ve rebranded FUBU as FB Legacy, correct?

Because FUBU had slowed down in the United States, as did other brands here, and started globally becoming really big, we decided to bring it back into the market. A lot of the kids may have not wanted the old FUBU name, so just like Armani Exchange has AX and Dolce has D&G, we decided to do FB Legacy.

Because we have a following, they know what it is and this is just an abbreviation. We always went under FB as well [as FUBU and 05]. There is a different audience. A fashion line in 15, 20 years, it’s a new generation discovering it.

How is branding different today?

With the Twitters and the Facebooks of the world, branding has become personal. No longer can you just plaster something all over and make it and they will come. Because of the way information is moving very fast, if it’s not a true message, it will be discovered that it’s not a true message. People will basically punch holes in it – if your model is holding Coke and drinking Pepsi, there will be a picture of them drinking Pepsi somewhere immediately.

The consumer, they need to feel special. They need to feel like you’re talking to them. That means you need to have a lot of interaction with them, like giving them discounts on Foursquare. It’s just not as simple as, ‘Alright, come to the store and maybe we’ll hook you up.’ You’ve got to reach out to them.

Branding in those aspects has really changed, but I always say that there’s nothing new created in this world; it’s only a new form or delivery. Branding has stayed the same in the one simple matter: a clear, concise message and the truth.

How should brands leverage this new environment?

I do a lot of consulting with other brands and I try to advise them and say, ‘Why don’t you punch your name or your product’s name into Twitter [or other social media platform] and just look at all the feeds that are coming through. You can’t have thin skin. That’s your report card.’ Once I advise them of that, they sit there for months looking to understand the real problems with their product.

Kentucky Fried Chicken was basically saying, ‘I don’t know why Chick-fil-A is beating us. Maybe we need to come out with this double-breasted sandwich.’ I said, ‘Look, that’s not your problem. Your problem is: There is an urban myth that your chicken is steroid chicken. You’ve never fought that issue. If you go on Twitter, most people are saying, “Look at the big breasts on that chicken, that’s steroid chicken. Isn’t that stuff grown in a vacuum where the chicken has nine wings?”’

I said, ‘Until you attack that, you cannot advance yourself because you’re not even taking care of the issue at hand.’

There was a misunderstanding that FUBU was just for African Americans, and it wasn’t. It was about making it for the consumer that we are. After you hear a certain message, a certain line that everybody’s saying, you have to pay attention to it and you have to address it.

What are the strongest brands in the marketplace today, and why?

They’re going to be Apple, Coke, Nike.

Interesting enough, I had a conversation with Phil Knight (chairman of Nike Inc.) yesterday on the phone, and I’m not throwing that out casually because I was very excited to have a conversation with him. He’s still so laser-focused on sports that I was amazed and impressed at the same time. He never veered off of his brand, and his brand is one of the biggest in the world.

Coke is purely marketing and they change with their consumers over the years.

Nike is clearly marketing, but they stayed very close to ‘Just Do It,’ [asking,] ‘How can my product enrich an athlete’s life?’

And Apple came out and said, ‘Computers are cool and everybody’s going to have computers but we’re going to make it fun and we’re going to make it sexy and we’re going to make it quirky.’

Maybe a smaller company doesn’t have that marketing reach or those product ideas. What can they learn from these brands?

They can concentrate on their market and stay true to their brand. That’s going to be first and foremost.

Deliver an exceptionally great product and look like you’re having fun. All three of those brands are doing what they love and they’re doing it with people they love. Phil Knight probably can’t get enough of seeing athletes and talking to them about how to advance their training.

What are the keys to branding?

First of all, before your brand even gets out there, what are we going to provide? People are buying into it for either one of two things: for a need or for a want.  So are we providing a need or a want?

The next thing is: What is the impression you’re going to give the brand when it comes to advertising and marketing?

Now, it’s: Where will they find this product, at what price?

Creativity in production is first, second of all is marketing it, and third is where will they touch it – will they get it online, will they get it at Target or will they get it in Louie Vuitton, will they get it from a street vendor, or will they get it in their five and dime store?

If we went to Target and we saw something with LV or Jimmy Choo on it, we would think either, ‘This is counterfeit and we don’t trust Target,’ or we would say, ‘I’m never touching Louis Vuitton or Jimmy Choo because this is garbage.’ It would be such a brand confusion that your head would pop.

How to reach: FB Legacy, www.fblegacy.com

Daymond John, @thesharkDaymond

For more about Shark Tank, visit ABC.

Published in Akron/Canton
Thursday, 31 March 2011 20:10

Getting the word out

If a tree falls in the forest and no one hears it, does it make a sound? Another way to position the general topic of the riddle is: Can something exist without being perceived? For the sake of argument, and this article, let’s just say that the answer to the riddle is no.

If sound is only sound when a person hears it, in order for an organization, company or individual to “exist” in the eyes of others, it has to make a sound. In other words, you need to get the word out about who you are, what you are doing, what your benefit is and where you can be found. Otherwise, no one is going to hear you.

You may have the best deal in town or be an expert in a particular field or offer a superb service, but if you don’t publicize it, then how will others know about it?

The first thing that comes to mind to most is to advertise, but that may not be appropriate for your line of business or may be cost-prohibitive to carry out effectively. So, how do you make a sound? The old-fashioned way: You walk, talk and announce.

Here are a few ways to let people know about your product — be it your organization, company or profession:

  • Develop a simple website that provides information about your company, your qualifications and areas of expertise. Write articles that are related to your line of business and submit them for publication or post them on your website or blog.

  • Start an e-newsletter and send it to clients and prospects on a regular basis. Provide them with useful tips and updates on your business.

  • Create an identifiable logo and/or stationery that represent your business.

  • Get involved in various business and civic organizations and get on at least one committee. Get to know the people in the organization. Position yourself as an expert in your area of business by seeking speaking engagements through business/civic/trade associations and organizations that may be interested in what you have to say.

  • Network, network, network. Every person you meet — whether it is at a business or social event — is a potential client. Your business can’t grow if you don’t network. Let people know what you do and “talk shop” with anyone willing to listen. Make sure that you always have a business card handy. Also, follow up with the people you network with by e-mail or using a handwritten note.

  • Finally, don’t be shy about what you’ve achieved. Publicize your accomplishments, including speaking engagements, appointments, awards and honors, new products and services, and so on.

Unlike traditional advertising, these public relations steps will help you build relationships that will either turn into direct business or referrals. Though each item may seem obvious, it is the synergy and consistency of “walking, talking and announcing” that will help you make a sound. While an ad in the paper can gain you instant recognition, it can’t substitute for third-party verification and it can’t build a reputable reputation. Only you can do that by making a sound and leaving an impression. Do these things on a regular basis and you can ensure a steady flow of business for your company.

Janice B. Gonzalez is the president and CEO of JBG Communications, a full-service marketing advertising and public relations firm that specializes in strategic marketing. In 2010, she honored by the Coral Gables chamber of commerce as a Business Woman of the Year finalist. Reach her at jbgonzalez@jbgcommunications.com.

Published in Florida

Ken Kocher is a very proud, very loyal fan of the Chicago Cubs. It doesn’t matter that the ball club hasn’t won the World Series in more than 100 years and hasn’t even been to the World Series since 1945. Kocher still loves the Cubs.

His office at Hat World Inc. is full of team memorabilia with a heavy emphasis, not surprisingly, on hats. But Kocher doesn’t impose his own fan loyalty on his employees. Instead, he encourages them to show their own colors and wear hats and shirts to work for whatever teams they root for.

While providing a chance to show some love for their favorite teams, it also serves to get employees more connected to the product he wants them to be out there selling to customers.

“You need to be cognizant that the people in your company believe in what you’re selling,” says Kocher, who took over as president of the 7,300-employee hat retailer, otherwise known as Lids, in 2005. “If you’re passionate about your product, which in our case is hats and sports because we sell sports as much as hats, you have a more passionate employee that understands what the customer wants.”

Kocher feels fortunate to lead a company so entrenched in the entertaining business of sports, but it’s not all fun and games at the $466 million company. Kocher’s organization doesn’t succeed because employees get to wear hats to work or because they aren’t allowed to wear ties. It thrives because they are excited about the product and energized to sell it to customers. And it works because employees take part in the process to set goals and then share in the reward when those goals are achieved.

“If you’re results-oriented, you can make any job fun,” Kocher says. “The key is to create competition. That will make your job fun no matter what you’re doing. Even if it’s competition with yourself to get more done today than yesterday or to sell more today than yesterday. Competition is a driving force with everybody. I don’t care who it is. You have to be competitive if you want to succeed.”

This approach helped Hat World navigate through the recession that began in late 2008 and devastated many in the retail business. While many retailers were closing stores, Hat World added 36 stores in 2010 and plans to add 26 more this year.

Here’s how Kocher takes employee passion and turns it into business success.

Engage your employees

You need to get your employees excited about the product or service that you’re selling. Give them opportunities to offer input about your product and how it’s being sold and how it might be presented in a better way to catch the eye of your potential customers.

“If you have management from the top down all the time, employees just don’t think you care,” Kocher says. “Let people be creative and come up with new ways to do things.”

Most of the hats sold through the Lids stores are already designed and licensed and come with vendors that deal with other companies. But Kocher works with his people to make decisions on what products to sell and how to market them.

“We have a very dialed-in sports culture and a fashion element to that, too,” Kocher says. “Our buyers know what the customer wants, because they are the customer.”

If you’re perfect and know everything there is to know about what you sell, it’s OK for you to make all the decisions. But since you’re probably not perfect, try letting others step up once in awhile.

“You have to be willing to let your leaders underneath you and your managers be leaders,” Kocher says. “Give them the direction they need to go, but stay out of their way. Everybody gets to a point in a different way. I may have an organized desk and think that’s the most successful way to do it. My counterpart may have a disorganized desk, and yet he’s still somehow organized. That’s the same way with leaders leading this company or leading people. Every individual is different in how they think. Let them figure out which way they want to go and how they want to do it.”

The only way your people are going to grow is if you give them opportunities to apply their talents and prove themselves. It shouldn’t be your job to make every decision in your business. Let your people experience the pride of making a decision that helps the company grow.

That way, you can stay focused on the big picture.

“My role is on the growth side,” Kocher says. “It’s to provide avenues of growth for our company, for our employees and for our shareholders that maximize profit. I’m kind of steering the ship in the direction I feel like we should go as a team to best make use of our skill set at as a company.”

In most cases, your employees are probably a lot closer to your customers than you are. When you enable them and empower them to think about how your product can be better, you give them a chance to grow.

“That’s what drives them and gets them going every day,” Kocher says. “If you can create that competition throughout the whole company, even if you’re a customer care rep and they can have some competition within themselves, they will be more successful.”

If you’ve delegated in the past and ended up with employees doing something that does not fit your company’s vision, the fault may rest with you. Did you take the time to explain your vision to employees? Did you make sure they clearly understood what you were looking for?

“You can’t just assume the job is going to get done exactly the way you want it done,” Kocher says. “If you’re not involved in the process as they are going through the project and teaching them what they should be looking for, you’re going to get a train wreck at the end.”

There may have been a time when you weren’t the CEO and you were excited when your boss came to you and wanted your opinion. You can’t lose sight of that youthful exuberance that exists inside your employees who want to help your company succeed.

“Don’t forget where you came from,” Kocher says. “That will always make you a better person and a better leader. I’m always about the future, but there are people who have helped me become very successful that I’ll never lose focus on. Everybody has those people. You just have to make sure you recognize and understand the importance of the past to your success.”

Identify leaders

Kocher is not looking for a show of hands when he seeks out leaders to help keep his company moving forward and growing.

“If anybody tells me they have leadership potential, I don’t want them working for me,” Kocher says. “You have to see it. Leaders go to the top. You can see a leader. If you walk into a cafeteria at a sixth-grade school, if you pay attention, you’re going to figure out who the leaders are of that classroom pretty quickly.”

The challenge for you is to create situations where your people can demonstrate their leadership skills. Create situations where you can be out there observing employees in action and seeing who rises to the occasion.

“We’re moving one of our businesses called Lids Team Sports from Madison, Wis., to Indianapolis,” Kocher says. “It’s something that needed to be done to get the synergies out of both businesses. We went to our directors and employees and said, ‘Can you guys take on this project and make it happen?’ It’s basically a project that they took on above and beyond what they were already doing. During this process, we have about a half-dozen employees that have been living in Madison away from their families for about four to six months until this move officially happens to help with the process of moving. So it’s a pretty large move.”

It’s an important move for the company and an important opportunity to see what kind of leadership skills the employees who are seeing it through have.

“We have a long history of taking a store manager and working them through our system to where they play a major management role in our company,” Kocher says. “That’s a lot more inexpensive than going out and finding that person initially. You pass over a lot of people and you lose a lot of culture along the way. We try to teach our people.”

That teaching and gaining of experience is where it’s at when it comes to finding leaders. The Type A personality with the voice everyone can hear is not necessarily your best leader.

“I don’t think the leader is the person who always gets up in front of people to speak and is a good speaker,” Kocher says. “Good speakers don’t make good leaders. A lot of people get confused. They think, ‘Boy, that person can really handle themselves with a mic.’ That doesn’t mean they can be a good leader.”

You’re a leader. You know that it’s the person who gets things done, not necessarily the one with the million-dollar smile, that you want leading the charge in your business.

“It goes back to a leader in our culture is someone who is willing to get down and dirty with the group,” Kocher says. “You let people go out and be leaders and stay out of their way.”

You still ask questions and you still check in and make yourself available to that person for questions and feedback. But you let them do their job and see how they handle it.

“Be involved enough in the process that you can see that they’re going in the right direction,” Kocher says.

Stay cool

When the economy began to plummet in the fall of 2008, Kocher had concerns about what the effect might be on Hat World.

“People were cutting inventory, and everybody was really nervous about what was going to happen to the economy,” Kocher says. “No one knew how bad it was going to get.”

Fortunately for Kocher, sales rose from $378.9 million in fiscal 2008 to $405.5 million in fiscal 2009 and then even higher in 2010.

“I told everybody that we just need to focus on the little things,” Kocher says. “Small victories; that was kind of our thing. Let’s shoot for small victories and not try to hit home runs. Let’s just look at what we’re doing and make sure we don’t make any dumb moves and we’ll be fine.”

Kocher could have panicked. He could have called a town-hall meeting and sounded the alarm about the downfall of the retail industry. But that wouldn’t have been his style, and it wouldn’t have been consistent with a culture that is always looking for opportunities.

“We don’t knee-jerk,” Kocher says. “We don’t start saying, ‘Hey, everybody needs to work five hours more because we have to do this or we have to do that.’ We don’t have to do that. We treat people the same regardless.”

How to reach: Hat World Inc, (888) 564-4287 or www.lids.com.

Ken Kocher, president, Hat World Inc.

Born: Crosby, N.D.

Education: Bachelor’s of business degree in accounting, University of North Dakota

What was your first job?

I was a paperboy for the Devils Lake Journal. I did that for a couple years. That teaches you the importance of money at a young age. At that time, we had to collect money from all the customers.

I was a multisport athlete growing up, so I had to do it around practice and games. It taught me time management. I played football, baseball, basketball and track. In football, I was a linebacker and tight end. It was a small school and you had to play them all. Otherwise they wouldn’t have enough kids.

Favorite sports to play and to watch: My favorite sport to play growing up was football. My favorite sport now to play is golf. Baseball is my favorite sport to watch now.

Favorite hat: Any hat that has a Cubs emblem on it.

Dress code at Hat World: We don’t allow ties in this building. If our buyers are meeting with a vendor, they’ll wear khakis and a colored shirt that day. But no ties allowed. People pretty much know, if someone walks in with a tie, we’ll go, ‘Who is that?’

Is everyone at Hat World a Colts fan?

We have a fair amount of Colts fans, but it’s all over the board. It’s fun to do that because you’ll see [who employees root for] in their offices, and it’s really a conversation piece. Why do you have Oakland A’s or New York Mets? How did you become a Vikings fan? That’s our culture. I’d say there are probably more other teams in here than the Colts.

Published in Indianapolis
Sunday, 06 March 2011 21:02

SAP scales down for growth

It used to be that companies wanted to reach the big guys, Fortune 1000 companies, to secure huge deals for their products and services. Today, that philosophy has changed. Sure, people want to land the white whale that will inject large amounts of capital into their business. But they also want to have a stable client base that provides regular, predictable sales and won’t kill the business if one or two suddenly fail or stop doing business with your company.

Enterprise software and hardware giant SAP is no different. For SAP, making the move into the small and midsized enterprise space, otherwise known as SME, had more to do with spurring SAP’s growth than simply diversification — though that didn’t hurt.

Smart Business sat down with Kevin Gilroy, senior vice president, SAP Channels and Ecosystems, SAP Americas, to talk about SAP’s transformation and newly honed focus on the SME marketplace.

Kevin, how has SAP been targeting the SME space?

About 78 percent of our customers are in SME, so we’re a big player there. Our brand is certainly stronger in the enterprise and large enterprise space than it is in the SME, but we have a deep penetration in that space, and it’s been an important component of our strategy. Another is a fast-rocketing business analytics practice, along with an on-demand and mobility initiative.

Today, there’s a fast-growing channel ecosystem that is ramping up the channel partners that were in the program, and now we have 3,000 around the world, including 700 in North America, that are clamoring to get into the program.  And, we’re going through a transformation to make this a step-function improvement. The transformation is around six pillars.

What are those pillars?

Pillar No. 1 is to amplify the brand in SME. The SAP brand is the 25th most powerful brand in the world in enterprise, but you get down into SME and the brand isn’t quite as well known. So we have a whole team working on building that brand.

The second pillar is around a complete re-engineering of the marketing organization within SME. We know that SME is not a one-on-one enterprise selling motion; it’s a one-to-many selling motion. That’s how you scale. It’s not about knocking on each door. Instead, you have to get the marketing machinery out there, so we renamed that team to be ‘revenue marketing,’ not to be confused with ‘brand marketing.’

Revenue marketing is building pipe and demand for our channel to grow the business. Now it’s analytically driven, has the art and science of marketing combined, predictable marketing and predictable analytics in place. I can go to the company executives and say, ‘If you pour this amount of money in the marketing machinery, here’s what comes out of the other side.’

And we will predict it well.

That’s a re-engineering for SME because we had a market into the Russell 2000, but now we’ve re-engineered it to go after everyone else and spur fast growth.

The third pillar is our ecosystem build-out. Our goal is to add 1,000 feet on the street in two years, within our channel base and new channel partners. Now, in addition to those 1,000 salespeople, there’s demo, pre-sales consulting, installation and maintenance people behind it. So it’s probably more like 5,000 people.

How are you measuring that timeline to achieve the goal?

I’m pretty metric-driven and we are already ahead of plan. We’ve added more than 150 feet on the street in the first 120 days (through the end of November 2010), and there’s a pipeline of people knocking on our door to join our program.

One thing of note is that 100 percent of new business in SME will be through the channel partners. We will not take a direct order in new business.  So we’re building out that ecosystem quickly.

What about the other pillars?

The fourth pillar is operational excellence. It’s the experience team. The experience team’s goal is for end customers and partners to be delighted to consume SAP products. We want to make them easy to procure, easy to install, easy to enable and easy to use. It must be a delightful experience.

A doctor who is the CEO of a hospital in Texas said to me, ‘When I plug in my electric razor in the morning, Kevin, I don’t think about the power to the fuse box, to the fuse box to the pole, the pole to the high tension lines, the high tension lines to the power plant. It just works.’

Small, medium-sized business owners and operators, that’s how they think: I want my business analytics to work. I want my ERP system to be up and running and easy to install and easy to deliver. I want to procure it easy. I don’t want a 40-page lease document or finance document. I don’t want a 30-page maintenance document that I have to hire a lawyer or contract officer to understand.

It needs to be easy — one pagers, one-and-a-half pagers. The team teases me, but with everything we do now I say, ‘Is it SME-ized?’

So how do you make it easier?

Again, taking the leasing document. I talked to our CEO, Bill McDermott, about this. I told him I wanted the finance document to go from 20 pages to two pages. He said, ‘No. One page.’ And that’s what they want — something they can fill out on the Web, something that doesn’t take very long to complete.

These guys want to spend their time doing other things. They worry about their balance sheet. They worry about cash flow. They are high risk from their business thinking and lower risk when it comes to their cash. We need to be sympathetic to that.

If you are an SME and I say to you, ‘Here is the maintenance contract for your software.’ If you see this incredibly complex document, you’re going to think, ‘I hate legal bills, and I can already look at this and tell you this is $5,000 legal bill for the lawyer to run.’

But if I hand you a one-page maintenance agreement that you can understand and that you feel confident about and that you have a local channel partner that you trust and who you know has the resources of SAP right behind it, you have a comfort level that’s important and that leads to a delightful experience. So that’s the fourth pillar.

And the final two pillars?

The fifth pillar is designed around talent and training and having a combination of legacy SAP people who really know their way around SAP, know application software and business analytics software cold and a group of new people who are challenging the status quo, have a DNA of partnering and have a DNA of SME. This gives you the best of both worlds.

So the sixth pillar is around products. We want to make sure that our channel partners and salespeople are talking about or developing products on a regular basis. Our channel partners talk to lots of customers every day, so we’re making them a focus group that will go to Waldorf, Germany (where SAP’s global headquarters is located) twice a year and meet with our development and design team. They share what they’re hearing on the streets from entrepreneurs.

What is the next end goal for SAP through this initiative?

We’re not looking at this as a 10 percent growth play. This is a potential rocket ship. Our vision is to go from more than 110,000 users to more than a billion, and SME is going to lead the way.

Describe the profile of your typical channel partner under this setup?

It’s generally a smaller organization, with between 20 and 30 employees, of which four or five are salespeople with a very technology-oriented background. These are people who really understand how to design and implement an application ERP solution or business analytics solution. We are also looking at larger partners, with 30 sales reps and 200 employees.

So what type of products are you offering in this SME space?

Affordable ERP scaled down for the SME creates all the obvious efficiencies of ERP, such as terrific supply chain gains and fabulous returns on assets. They add a lot of value in the way of equity for entrepreneurs who are looking to develop their exit strategy. Potential buyers, whether that’s private equity or other companies, see an SAP-based system and know it’s got value.

We are also seeing a generational shift in the adoption of technology. The baby boomers are retiring or turning the business over to the next generation of management, and those people are much more comfortable with business analytics and with mobility. They don’t want to wait a day, or even 10 minutes, for a report. They want to pull out their iPad and look it up.

Our SME products allow smaller companies to level the playing field with Fortune 1,000 companies because they can do remote management, have field mobility, and have all the analytics that a Fortune 500 company has. We think SME is going to lead the way with mobility-based products.

When you are out there in the field talking to customers, what questions do you ask them?

First, we look for pain points and provide solutions. But I also think that game’s changing a little bit. We’re asking them more about their growth plans these days, and then determining how we can be involved in helping them achieve their growth strategies. That’s one reason why we’ve developed an entire slate of SME products, so that we can be solutions-oriented in that space.

So listening to customers is critical to this evolution, correct?

Listening is a core DNA requirement to be a member of our team. But one of the things that you have to be careful about in SME is that it’s much more difficult to do one-offs. In SME, you really need replicable solutions and you need to discipline yourself not to get into too many one-offs because the cost of sales and the economics start to collapse on you. That’s the mistake that many hardware companies made — they took their enterprise selling motion and moved it down to SME without making real adjustments to the product mix. For them, the economics collapsed. Instead, build some flexibility into the part that the channel partner can play with doing some of the work, themselves, but for us, we look for replicable solutions.

So beyond some customization, what other opportunities are there for channel partners?

They wouldn’t be going to SAP unless they believed it, so there’s a level of predictability with what they know they’ll be able to deliver to clients. Predictability in a lunch school menu is boring, but predictability in a channel partner program is an absolute core component because they want to wrap their business around a predictable model, not a supplier or vendor that’s saying direct one day, indirect another day, 20 percent discount one day, 30 percent discount another day. Who can build a business model around that? So we are extremely predictable and listen to our partners. That’s the only way you can grow a business segment like SME.

How to reach: SAP, www.sap.com

Published in Akron/Canton

Every day, it seems the social media world is growing, making the physical world around us appear that much smaller. With those changes, the line that previously separated our personal and professional lives has blurred as websites and applications like Facebook, LinkedIn, Flickr and YouTube provide the ability to connect with family, friends and business colleagues and to share information, news, videos and photos.

So what exactly defines social media, and where is this new frontier headed? More important, how can we best take advantage of what’s out there?

Who better to answer those questions than Jeff Weiner, CEO of LinkedIn, the Web’s largest and most powerful network of professionals.


Q. Social media means different things to different people as well as companies. What would be a good definition of social media?

Broadly defined, it is the creation of content, information and knowledge, distribution of it, consumption of it, and leveraging social interactions. Whether that’s a status update, sharing an image, a video or a blog post, even retweeting a headline or sharing a headline — those are all examples of social media.

I think the social interaction component, the virality, really takes what historically has been behavior we all have done offline, and when you bring it online and digitize it, it starts to scale and moves at a speed with which we haven’t seen previously. It really has the opportunity to change everything it touches.


Q. So what do you see as the true cultural sea change that is being caused by social media?

This goes way beyond brand building and customer outreach, which is how many organizations are using social media. ... Leveraging social platforms is going to fundamentally change the way we work and how business gets done. It’s going to really revolutionize and disrupt all of it. So whether it’s the way you hire people, find your dream job, transition from cold calling to warm prospecting by leveraging the power of first-, second- and third-degree relationships or whether it’s exchanging and sharing information, knowledge, insight and data that you need to derive insights to make better and more informed decisions, I don’t think people can really afford not to participate within these platforms.


Q. Since it’s going to be everywhere, where would you start?

It starts with recognition. There are three behavioral changes we focus on the most at LinkedIn. First is the way in which we represent our professional identity. Think about that for a moment. The way in which individuals now build their professional brand starts with their profiles. And those profiles, when they’re kept fresh and relevant, are search engine optimized so that when people search for your name or the names of people like you with your experience, your skills, your aspirations, you’re the first thing they see when they do that search on Google.

This ability to carve out a piece of digital real estate that you, yourself, can control to put your best foot forward is an incredibly powerful and valuable dynamic. It’s not just the individual; it’s also your company. There are over a million active company profiles on LinkedIn. And these company profiles not only represent who you are and your company’s identity, but they enable you to build your talent brands, establish the way in which you’re going to recruit and how you recruit, and build word-of-mouth around your products and services. So identity is an absolute cornerstone.

The second is building your network. I think historically, when people hear the expression ‘professional networking,’ they think of the guy at the conference who is handing out as many business cards to people as possible, just building the Rolodex. That’s not what we mean anymore. We mean the way business gets done.

If we believe the world is getting flatter, more global, more digital, more networked, this is the way business gets done — it’s the way people are tapping knowledge, exchanging information — and if you’re not taking advantage of that and building out your network, your competition is.

And then lastly is the whole notion of sharing information and knowledge — collaborating, sharing business intelligence and competitive intelligence. To be able to really derive this kind of insight from whatever networks or social environments you’re operating in becomes an enormous advantage versus those folks who aren’t able to do the same.


Q. You mentioned identity. How accurate do you think people or company’s identities are on the Internet? Who and what should we trust?

When you’re talking about a professional context, I think things change versus a social context. One of the first things people do when they meet in a professional setting is exchange business cards. The more your professional identity is out there, the more opportunities potentially accrue to you. It’s kind of a tried-and-true practice. So when you’re putting your profile out there for everyone to see publicly and transparently, the people who work with you and know exactly what you did, well, they’re going to call you out if you’re not telling the truth.

It’s very much self-policing in a professional context. The comments you see and the quality of interaction from people’s professional identities are very different than what’s shared outside of the professional context. It’s that important. If you’re sharing what you’ve done in a professional context or what your company is about, it’s perfectly transparent.


Q. And if you look at work/flex integration, where do those boundaries start and stop?

For a platform like LinkedIn, one of the reasons that we create the value that we do is that no matter where in the world we go, what cities we go to and the members we meet up with, we hear that people want to keep their personal lives and professional lives separate.

That context matters to people, for very obvious reasons. We all went to school, and we all had fun at school. And when I was back at school, not everyone was carrying a camera around in their pockets via a phone and uploading essentially everything that everyone did every minute of the day, having those images tagged and then having those images viewed by everyone they met.

I think people appreciate keeping their personal lives and professional lives separate, if that’s what they want. But there are also environments where those are unified.


Q. Should you have different conduct online than you do offline?

Generally speaking, for the most part, you need to conduct yourself online the same way you conduct yourself offline. This whole notion of creating a separate social media policy, save for regulatory environments where you have compliance issues, and there are very hard and fast rules, you really want to conduct yourself the same way. You want to be true to yourself. You want to be true to the values of the company you operate for. I think the sensitivity comes from the dynamic described earlier — when it goes online, it moves at the speed at light. So you’re talking about a far different scale at a far different speed with greater sensitivity.


Q. Are there some good ways to create a company’s social media strategy, and how do you measure a return on investment from that strategy?

Pursuing a social media strategy for the sake of having a social media strategy is not the right thing to do. It will end up being a big waste of time. And it wouldn’t surprise me if a lot of folks are doing it because they’re told this is something you have to be doing right now. But try to figure out how you take your organization’s top priorities and leverage social connectivity to create greater value. That, I think, is a very, very smart thing to do. So trying to align your priorities and objectives makes a lot of sense.

If you’re trying to go out and do recruiting using social tools, how is that going to benefit your organization? Explicitly, there are ways of measuring that.

Historically, people are filtering through hundreds or thousands of active candidate resumes. Now technologies exist that you can find the perfect person, which creates huge efficiencies for your recruiters. They can target the ideal candidate instead of constantly spending 90-plus percent of their time saying no.

For your salespeople, how are they tapping first-, second- and third-degree relationships to eliminate cold calls? Think about the effectiveness of tapping warm prospects and how much more business you’re going to be able to do as an organization. That kind of stuff can be measured.

And then there’s the implicit stuff, such as how your company, in and of itself, can leverage social connectivity ... or the ability for your organization to share news or insights that one person in the company has identified as being valuable to everyone else in your organization is going to be a little more challenging to measure the explicit ROI of that. But implicitly, as people start to share that kind of information, best practices and knowledge, your organization is going to work more productively.

And so it comes back to what are your objectives and how are you going to leverage these technologies to achieve greater productivity.


Q. What’s the most fundamental change coming up?

It’s going to be transparency. These technologies are going to eliminate, if not dramatically reduce, the ability for organizations to conceal the things they don’t want people to know about — both internally and externally.

And the best part of this transparency is the efficiencies it creates in the marketplace. For example, when you take the friction out of the ability for people to move from one company to another, guess where they’re going to end up? They’re going to end up at those companies that are the best places to work because they know those opportunities because recruiters from those companies are able to identify them in ways that were impossible before because they can align their skills, objectives and their aspirations with those companies.

There are myriad examples of companies that are going through situations where they’ve introduced a bad product or service and are getting customer complaints over here. Historically, they’ve tried to hide that. That’s no longer possible because everyone’s an influencer. So if you’re not constantly having dialogue with your customers via some of these tools, you’re going to be punished for it.

Steve Jobs said an amazing thing at a conference I attended when asked whether he liked doing business in an enterprise setting or with consumers. He said he loves doing business with consumers because, at the end of the day, they vote with a thumbs up or a thumbs down. They’re either buying your products or they’re not. That’s the kind of efficiency that’s created when you have this kind of transparency. 

HOW TO REACH: LinkedIn, www.linkedin.com

Published in Northern California
Tuesday, 01 March 2011 17:16

Get in the game

Imagine your biggest competitor announcing that it is shutting down its website and will no longer participate in “the Internet experiment.” I suspect you would find it foolish and look for ways to capitalize upon your competitor’s mistake.

Many companies, however, are failing to define their brands and engage with consumers across social media — a decision that is just as foolish.

The Internet became all-important to dialogue with consumers at the turn of the century when 50 percent of U.S. households achieved access. Companies that resisted or were too slow to adapt to the changing digital marketplace suffered losses of brand equity and market share, especially with young tech-savvy customers and early-adopters.

According to the Pew Research Center, today more than half of all Americans use the Internet to participate in one or more social networks. If your competition is engaged and delivering a positive brand experience in the networks and your company is silent, you are missing out on powerful consumer touch points. You may also be alienating the people you are spending marketing and advertising dollars to attract.

Missed opportunities are one of many downsides to your company being absent in the social network. Douglas Karr, founder of DK New Media and author of “Corporate Blogging for Dummies,” advises that, “These conversations are now becoming part of the public record.”

Social media dialogue can be indexed, organized and discovered in a search engine in a matter of seconds. People are paying attention to what’s being said, both good and bad, and a simple mistake made by your company can turn into a major problem that affects your company’s reputation.

While things can happen in the blink of an eye, the landscape of social networking can be a tough one to navigate. It is hard work. Consumers’ appetites for information are insatiable and less-than-immediate responses can be viewed as lackadaisical or even rude.

There are tools that can help to simplify managing your brand across social networks, but there is no substitute for thoughtful, genuine conversation with your customers.

Authenticity takes time and effort. Underestimating the resources required to be effective is one of the most common missteps in social media brand management. You wouldn’t put an intern in charge of your accounts receivable, but at far too many companies, it is interns and other low-level employees unfamiliar with the company’s history and culture driving social media participation. Management should recognize the necessity of staffing the social media function with a professional or professionals who can speak with authority, resolve customer service issues and accurately project the company’s brand position.

Jay Baer, founder of the Convince & Convert blog and author of “The Now Revolution,” which looks at the impact of real-time business on organizational structure and process, considers CoTweet by ExactTarget and HootSuite to be two of the leading “response” systems that allow companies to engage with customers effectively on multiple social media platforms. Both allow you to schedule tweets and offer simple options for replying, retweeting, sending direct messages and other features.

CoTweet’s dashboard allows for “co-tagging,” which displays the user’s initials in a tweet to identify who is answering — a helpful feature for the reader and the user both. CoTweet also allows you to assign the task of responding to a tweet from the search pad. Because so many companies discover technical support and other customer service issues through mentions of their brand name, this is an increasingly important management tool.

Other tools, such as HyperAlerts, which sends you an e-mail when someone posts something to your Facebook page, can save you time by eliminating the need to log in over and over to search for new content. Websites like TweetFX.com are great resources for more Twitter-related websites and services that can help you manage your brand on the social network.

James L. Jay is president and CEO of TechPoint, Indiana’s technology industry and entrepreneurship growth initiative. Jay also serves as president and CEO of TechPoint Ventures, which has invested more than $16 million in early-stage capital in 12 Indiana-based technology companies through HALO Capital Group since 2009. An Indianapolis native, Jay has a successful track record as an entrepreneur, business leader and public servant.

Published in Indianapolis
Tuesday, 01 March 2011 13:06

Live your brand

Creating a brand-focused organization shifts it from a commodity to a position of brand preference, which equates to higher marketplace value. Making the brand the central focus of the organization helps employees understand what is on brand and what is not. This is essentially why brand development and brand commitment is a top-down initiative and is the CEO’s job.

It is all about the customer experience

In their book titled “Satisfaction,” authors Chris Denove and James D. Power IV offer research and case studies that prove the impact a great customer experience has on organizations. From their studies, I have developed a simple exercise to help companies determine the impact that improving the customer experience can have on an organization. It is eye-opening. To access that exercise, go to www.brandproblog.com/customer-experience.

Here’s the bottom line: If you’re like most businesses, the majority of your customers are relatively happy, but they have no attachment to your organization. Most companies have a small customer base that is so committed, they would never leave. According to the studies by J.D. Power and Associates, relatively happy customers have a loyalty rate of 40 percent versus committed customers, which have a 70 percent loyalty rate. It speaks volumes when you think about your customer attrition rate and the cost of customer acquisition. If you increased customer loyalty, how would that impact company sales?

As said best by Denove and Power, “Every company says that customer satisfaction is a paramount goal. … In truth, talk is cheap, particularly when it comes to customer satisfaction. … The leaders, like Lexus, Starbucks, Volvo, Nordstrom’s, BMW and Ritz Carlton have made the commitment that goes beyond conversation, below the surface and into actual daily mechanics of doing business.”

Building the culture

Employees need to feel a sense of pride, ownership and personal connection with your company, its brand and its customers. When this occurs, there is energy, excitement, empathy, passion, purpose and conviction. Employees who interface with customers play the lead role in living the brand, but all employees are members of the team and have a role in delivering the brand experience. The goal is to have every person aligned in thinking, speaking and behaving in ways that create the experience and the lasting impact that your brand promises.

There are three primary stages that employees must surpass in becoming advocates of the brand: hearing it, believing it and living it. This translates into observing from you that it is important and why it is important. As leaders, it is our job to keep the brand top-of-mind and to weave it into the fabric of our daily operating procedures. Identify barriers that prevent employees from delivering the brand promise. If you’re not sure what those are, just ask your employees.

Making the commitment

Obviously, there is a lot of work to creating a brand culture and keeping it alive within an organization. So where do you start? I suggest you start with your commitment to embrace the brand as an essential asset of your organization and then become the champion of the brand as you drive it through your organization. Building on and leveraging the brand over the next three to five years should be a part of your strategic plan. Tie the brand to specific financial goals and commit publicly to the brand promise.

Parting thoughts

To operationalize a brand requires a major shift in how the company is run. And, the most important element of bringing a brand-driven culture to life within your organization is your employees. It will require an investment in resources and training, but there is no telling the impact it can have on the future success of your company.

Kelly Borth is CEO and chief strategy officer for Greencrest, a 20-year-old brand development and strategic marketing firm that turns market players into market leaders. Borth has received numerous honors for her business and community leadership. She serves on several local advisory boards and is one of 30 certified brand strategists in the U.S. Reach her at (614) 885-7921 or kborth@greencrest.com, or for more information, visit www.greencrest.com.

Published in Columbus
Tuesday, 01 March 2011 11:45

Bringing chocolate back

David Taiclet wasn’t ready for the scene at the Fannie May store in Oak Lawn, Ill., when he showed up around 7 a.m. that day in November 2004. He was there to prepare for the chocolate maker’s first soft launch, scheduled two hours from then, that would set off a chain of reopenings and reignite the brand.

“When a retailer does a soft launch, it means we don’t do a lot of publicity about it, because we’re just trying to get organized to open the store, and then we’ll do a grand opening maybe a couple of days later,” Taiclet says. “We picked that store, because we didn’t think it would attract a lot of attention.”

He wasn’t expecting to find a line of people flooding out the door flocked by TV news crews — not much different from the scene 30 days and 45 stores later when he reopened the flagship store downtown at Michigan Avenue and Wacker Drive, where 800 customers stood in a line three blocks long.

“Picture this: You’re at this store, and you have these TV cameras there,” Taiclet says. “And the TV camera starts talking to a customer who just came out of the store, ‘Hey, I have so-and-so customer right here. What do you think of the product?’ And she’s like, ‘Well, I haven’t tasted it yet.’ So she opens her product up, grabs one and puts it in her mouth and starts chewing on it.’”

Now, keep in mind, this wasn’t quite the same Fannie May that many Midwesterners had fallen in love with when the brand’s mouth-watering sweets became tradition. When the chocolate maker’s parent company, Archibald Candy Corp., sank into its second bankruptcy in 2004, it closed the plant and 250 retail stores and started looking for a buyer. It found one in Taiclet’s company, Alpine Confections Inc., which had recently purchased Harry London, another chocolate company, out of bankruptcy.

So what would the response be now, with new ownership and a few other changes in store?

“She’s like, ‘This is the best Pixie I’ve ever tasted,’” Taiclet says, continuing his story with a reference to the chocolate-covered caramel candy. “You couldn’t pay for that kind of public relations and marketing to say, ‘Hey look, Fannie May is back and our product is outstanding.’”

It was proof that during the tough times that shuttered Fannie May, customer affection didn’t falter.

During the relaunch and beyond — like when 1-800-Flowers.com Inc. acquired Fannie May in 2006 and, after a couple years, asked Taiclet to stay on board as president of the gourmet food and gift basket group — customer service has been Taiclet’s focus. He leads 1,100 full-time and 1,500 seasonal employees under brands like Fannie May, Harry London, Cheryl&Co., The Popcorn Factory and 1-800-Baskets.com with the goal of maintaining the customer experience while staying relevant.

“If you look at any brand, they’re going to have ups and downs through their life,” Taiclet says. “But what makes it an enduring brand is the experience that customers have with it. You can talk about a brand being a logo. You can talk about a brand being a recipe. But a brand is really the experience a customer has with it. As long as you stay focused on that customer experience and maintaining the integrity of that experience, the company may go through ups and downs financially, but in general, you’re going to have a long, successful run.”

Understand tradition

Although the soft launch turnout was surprising, Taiclet already knew about the bond between customers and Fannie May. It’s crucial you understand your brand through consumers’ eyes, too.

Taiclet learned about the customer experience during due diligence, when he had a three-month window to accumulate information before the acquisition. He spent that time with customers and previous retail store managers alike, even hiring back many employees to tap into their understanding of the brand. Then he compiled the feedback.

“The most important thing is we focused on, what is the great part of the customer experience?” he says. “What is the relationship this customer has with the brand? What’s the most important thing? We realized there’s this love affair between the customer and the brand. That love affair is the product quality, one; two, the tradition that people had with this product.

“When people described our brand, it was like, ‘Hey, it’s tradition. It’s a trusted friend. It never fails. I know it’s going to be good. You can’t go wrong with this.’”

From those consumer descriptions of the brand, Taiclet knew that going forward, product quality would have to stand up to the legacy of recipes that hadn’t even changed when ingredients ran low during World War II. Of course, hiring back the same employees and using the same recipes helped ensure that the product would stay the same. But he was so concerned about quality that he sent old and new samples to a university food research group for scientific analysis.

Understanding the customer experience takes more than upfront research — it’s an ongoing endeavor. When 1-800-Flowers.com acquired Taiclet’s brands, he was able to leverage its e-commerce platform and social media presence — in other words, become more accessible to consumers and get more personal with customers.

“Feedback has become a lot easier these days, both good and bad,” he says. “You’re deepening your relationship with your customers by offering them these [interactive] opportunities. You get instant feedback. It doesn’t get any better than that.”

Direct contact can even be a business in itself. The company acquired DesignPac Gifts, which created wholesale gift baskets for third-party retailers. Tapping into the capability and name recognition of 1-800-Flowers.com, DesignPac sprouted a direct-to-consumer brand called 1-800-Baskets.com, which has become the fastest-growing brand in the company.

But customer interaction can get even more personal than e-commerce or Twitter can allow. You need to get out and interact with customers, too. Taiclet regularly visits stores, plants and distribution centers, both to work alongside employees and to chat with customers. Whether he’s stocking shelves or attempting to giftwrap boxes — which, he’ll admit, is not one of his strongest skills — he’s facing customers and getting a glimpse into their experience.

“Our management team is active and involved, and I think we know what our customers are saying,” he says. “We live in a world where it’s not hard to get customer feedback, and if you just go stand in a retail store, you know. If you’re standing in your distribution center and you’re seeing the product go out the door, you know the kind of experience that your customers are probably getting.”

Keep things fresh

While it’s crucial to understand what has kept your customers coming back, you shouldn’t limit your brand to what has been successful in the past. After all, you want customers to keep coming back in the future, too.

“What’s important to be relevant to your customer is the tried and true but also that you’re out there being interesting and new, as well,” Taiclet says. “It’s a fine line. But it’s important that you’re giving people a reason to come in: ‘Oh, what’s new?’”

You need to marry the tradition of your brand with a few fresh touches. The challenge is determining whether any changes or additions will influence the overall brand perception.

“Look, not everything you do is going to work,” Taiclet says. “We’re not afraid to try some things. But I can tell you we’re not going to change the things that we know work.”

So don’t mess with the staples of your brand — like the customer experience — that you identify as important through feedback. You can take small steps to improve those things, but you shouldn’t change the game completely.

Many of the new Fannie May products, for example, partner the famous chocolates with other well-loved snacks, like ice cream and Eli’s Cheesecake — and these don’t replace traditional favorites like Pixies, Trinidads and Mint Meltaways.

But most of the changes came simply as an effort to “freshen up” the stores through signage, displays and uniforms.

“Clearly, when we came back, people were quickly pointing out differences,” Taiclet says. “But any differences, we tried to make sure they had nothing to do with customer satisfaction. I mean, the uniforms were a brighter color because we wanted to freshen the look. So the changes that we did make were with the understanding that this would be seen as a positive.”

To help lessen any shock when customers walked in and saw the differences, Taiclet communicated changes they could expect and what those meant.

“At the end, I think they came to appreciate why it was different — it just presented the product better,” he says. “[We] told the customer what it was: ‘Here’s a small little change to tell you that, hey, we’re a new Fannie May, but at the same time, we didn’t mess with the quality of the product.’”

Grow smart

Maintaining your brand’s legacy while keeping it relevant really translates into sustainable growth. It’s a balance that Taiclet thinks will differentiate his brands.

“Companies get themselves in trouble trying to grow at all costs and to grow anywhere and everywhere,” he says. “What we’re trying to do is grow in a smart, sustainable way.”

Along with keeping an ear to customers to confirm that his blend of tradition and freshness is keeping them satisfied, Taiclet also uses financial analysis to temper growth. Before opening a store, for example, he evaluates economics to predict returns. Even though he could have opened eight stores last year, he only opened the five where analysis signaled the best chance for success. At the end of the year, there were a total of 85 company-owned stores, and he also recently launched a franchising program.

“We could grow aggressively on the wholesale side through some of our third-party retailers,” he says. “But it is incredibly competitive in certain areas and we’re going to make darn sure that we don’t get too aggressive. We could go out in that wholesale market and sell a lot of product and grow the top line, but it might not necessarily grow the bottom line. When we talk about ‘grow smartly,’ that’s what I’m talking about is that you’re constantly finessing between top-line growth and bottom-line growth.”

Taiclet has found that balance by focusing on the customer experience.

“We’re fortunate that we have growth opportunities, [and it’s] because we have focused on those things,” Taiclet says. “We just need to be thoughtful and prudent about the different directions we could grow and make sure it’s profitable, sustainable growth and not just one-off. There’s a lot of one-off places to grow for a lot of companies.”

The long-term test for Taiclet is that any changes or growth ventures won’t lead the company astray from the customer experience that has made Fannie May the No. 1 chocolate brand in the Midwest. That focus has helped him grow the entire gourmet food and gift basket business to about a third of the revenue generated by 1-800-Flowers.com — about $250 million.

“(It’s about) the relationship of your product with the customer and the customer experience,” Taiclet says. “Across all of our food brands, what we’re trying to focus on is the positive relationship that a consumer has with you and your product. It is that experience that embodies your brand — and that is your brand, really.”

How to reach: 1-800-Flowers.com Inc., (800) 356-9377 or www.1800flowers.com

The Taiclet file

David Taiclet

President, Gourmet Food and Gift Baskets Group

1-800-FLOWERS.COM Inc.

Born: Monterey, Ind., a town of 200

Education: Graduated from Notre Dame in 1985 on Army ROTC scholarship, then served four years active duty. Earned MBA from Harvard Business School in 1991.

What was your first job, and what did you learn from it?

I grew up in a family business; my father owned the local grain elevator. So I grew up working in that business, doing everything. That was probably my first experience with customers and doing anything you could to keep customers happy — and farmers are a tough group of customers.

Favorite candy?

I’m a Fannie May Pixie fan.

If you could have any superpower, what would it be and why?

I’m married with four kids, and I love my family. If I could just have the power to have those moments with my family that are very special to last a little longer, maybe go back in time and relive a couple of them, that would be pretty cool.

What’s your favorite way to relieve stress?

One, I like spending time with my family. Two, I don’t read a lot of books, but I’m a voracious newspaper/magazine reader. Wall Street Journal, New York Times, Fortune and The Economist are my four things I like to carry around. And if I have a lot of time, I love to fly fish.

What’s the best business advice you’ve ever received?

The best advice I ever got was probably from my father, who said, ‘Surround yourself with good people — both your friends and your businesspeople — because it will make not only you better but your organization better. Throughout my life, whether it was in college or the army or when I owned my own business or worked for others, I’ve always focused on: Am I surrounded by good people, and have I hired good people? I would say that’s been one of the elements of Fannie May’s success is that we’ve attracted, hired and retained really good people to the organization.

Favorite local spot for a business lunch?

Maybe it’s because of my roots growing up in a small town, but I love the local diners and I love the local flavor. We have a plant in Lake Forest and there’s a Liberty Restaurant in Libertyville, Ill. In Glen Ellen, Ill., there’s a small restaurant called Baroney’s there that we’ll go to. In Cleveland, there’s Gasoline Alley down in Bath, but for formal dinners in Cleveland, Ken Stewart’s Lodge is my favorite. And then in Chicago it’s typically, for a formal dinner, Gibson’s. I typically stay at a place called The Talbot Hotel downtown Chicago on Delaware street and there’s a casual dinner right across the street called The Feast Restaurant that I think has really interesting food and wine.

Published in Chicago
Monday, 28 February 2011 19:01

Victoria Tifft

Call it an elevator speech or a value proposition, but when it comes to communicating messages about your company, a solid 10- to 12-word statement that conveys who you are, what you do and what makes you different is imperative. If you’ve ever needed to apply for financing or venture capital funds, then you’ve been down this road. Creating the right value proposition for your firm takes a bit of thought and often a change of perspective.

Creating the right value proposition forces you to think about what your customers perceive as value. Ask yourself, ‘If you were in your customers’ shoes and they didn’t have your product or one similar — what would happen? Would they lose customers, would they be late for a regulatory finding? Would their car rust faster?’ Next ask yourself, ‘If they bought a competitor’s product instead of yours, what would they be missing? Would they have pretty graphs, but miss detailed information that could pinpoint a potential problem? Would they spend twice the money and delete their weekly pocket cash? Would they get their project started later and encounter administrative hassles that would slow their ability to deliver a critical project?’

Then go a step further. How does it affect the bottom line? Does the subsequent car rust decrease the car’s useful life and make them need to buy another car sooner; does the late project delay the release of a product, or even worse, let a competitor grab the initial market share? If they missed the critical information, could it cause a recall or even brand damage? Begin to think of your product in terms of how it affects the person you are selling to, and then how it affects their company. In very complex sales with multiple buyers, these questions also extend to the political affect on a player and often the impact on their compensation or status in the organization. However, to get a value proposition right, start by putting yourself in your customers’ shoes and asking the basic questions we’ve gone through.

My firm is currently re-evaluating our value proposition to ensure that we are in alignment with what our customers perceive to be valuable. We’ve done our homework, met with several customers and feel that we understand their perception of our value. We entered into a two-stage process. In the first stage, we developed a broader proposition statement that captured who we are, what we do and what makes us different. This statement was: “Clinical Research Management Inc. helps government and commercial customers accelerate research and product development timelines for basic and applied research, through late-stage clinical markets for drugs, biologics and devices. Our customers repeatedly come to us for our extraordinary customer service and ability to craft successful, innovative and knowledgeable solutions for their needs.”

Next, we refined the broader statement and chose 12 words that clearly stated our value proposition. In the end, that gave us the following: “Our innovative and knowledgeable solutions accelerate customers’ research and product development timelines.”

As a corporate leader, once value propositions are truly identified as the path to a customer, you need to ensure that your infrastructure, services/products and capital expenditures align with delivering innovation and knowledgeable solutions for our customers. Requests for expenditures outside of these parameters are potential loss leaders because they won’t align with your customers’ interests.

The most successful businesses are born of ideas that fill an unmet need. Value propositions are the mechanism to institutionalize that concept as you grow. So listen to your customers, get your team together and craft a value proposition statement that identifies who you are, what you do and what makes you different from everyone else.

Victoria Tifft is founder and CEO of Clinical Research Management, a full-service contract research organization that offers early- to late-stage clinical research services to the biotechnology and pharmaceutical industries. Reach her at vtifft@clinicalrm.com.

Published in Akron/Canton
Sunday, 06 March 2011 13:45

Kohler "lives on the leading edge"

Herb Kohler believes in doing things big. And as chairman and chief executive of The Kohler Co., the Wisconsin-based plumbing fixture giant founded by his grandfather in 1873, he is in the perfect position to do so.

Kohler sets the vision for the family-owned business and its four divisions, 50 brands, 50 manufacturing locations and more than 30,000 associates scattered across six continents. He’s also a Forbes billionaire who has a passion for golf. Kohler’s Hospitality and Realty Group owns two world-class golf courses — Whistling Straits, site of the 2010 PGA Championship, the 2015 PGA and 2020 Ryder Cup, and Blackwolf Run, site of the 2012 U.S. Women's Open. It also owns the five-star American Club hotel and the Old Course Hotel in St. Andrews, Scotland, the latter of which sits on the fairway of the most famous hole in golf, the Road Hole.

“It’s just a fledging little business,” Kohler says. “It’s sort of wonderful.”

Smart Business sat down with Kohler to talk about myriad issues, including why it’s important to encourage risk-taking and how social media is changing the way business is done.

Mr. Kohler, you’ve forged partnerships with several major golf organizations in a relatively short period of time and expanded Kohler’s brand. How important is that ability to build and foster different kinds of relationships in order to diversify a business?

We’re fortunate to have a growing, multidimensional company that today goes well beyond just our core products. We historically put on large exhibitions in furniture, kitchen and bath products, so we have a talent in dealing with large crowds and large events. When an organization like the Royal and Ancient, United States Golf Association or the PGA America picks partners, they select the course first but then put all the infrastructure in support behind it.

Having our expertise is a major factor in their selection and final resolution. But it is relationships that make this possible; it’s what gets them to look at you in the first place. They are equally important, but relationships can’t carry a day. It’s the quality of the facilities and the quality of the support organization, the people and whether or not they have the capability on a continuing basis to support these larger things. These Majors provide a sizeable amount of the annual income of these organizations, so you have to be able to execute without fail. They really rely on you.

You’ve built a reputation as a leader who embraces risk. How critical is it in a culture of innovation to have risk-takers on your team?

It’s not easy in a large organization to foster any degree of risk-taking, but we ask all of our businesses, regardless of what they make or what they serve, to live on a leading edge.

They have to understand where that edge is — what’s at the forefront of their particular business field — and then, they have to have the imagination and the technology, combined, to be able to leapfrog that edge — get out there in front and stay out there in front.

We’re asking for an entrepreneurial spirit, and we do that with every business in our portfolio. Some do it better than others. Our senior executives in China are doing wonderfully well as an example.

Is that where you see the next big market for growth?

Yes. We have 10 plants there — eight for kitchen and bath, one for engines and one for power systems. Eighty percent of the product that’s manufactured in those plants stays in China. We are building a brand as fast as we can build it because within a relatively short period of time — 10 years — (China) will be the largest plumbing market in the world and the largest satellite power market in the world. It behooves us and everyone else to take a hard look at China.

What other international markets are on your radar?

India. India is perhaps 10 to 15 years behind China in its escalation, but it’s extremely important.

When you’re playing in a global market how do you protect your brand while you’re focused on growing it?

I make sure we live up to our guiding principles. The first is to live on the leading edge in design and technology, in product and process. The second is to maintain a single level of quality across all these product categories and across all the price points (that) are within a product category. We market from the low end to the midmarket to the high end and to the mass market. That’s a broad range of price points. Our prices vary because of materials, function and because of the level of detail but never in quality. That level of quality must be consistent. And, when you combine that level of quality with leading-edge products and services, that establishes our reputation. So that’s where I put my time and energy, making sure we live up to our brand.

You have embraced technology as part of your innovation. Where has it played a larger role?

There are many aspects of technology — the technology that we use to communicate, the technology we use to run our machines. We’re obviously seeing this explosion of technology in all aspects of our lives. When I built the first golf course, which opened in 1988, I was compelled to do it because of a stack of suggestions slips — physical suggestions slips. One hundred of these little slips of paper. It’s almost unimaginable today, but that was the mid-’80s. How recent! The world has totally changed. You would never find a piece of paper like a suggestion slip around today. No, you find your BlackBerry and send a message.

What about social media? What is Kohler doing in that area to connect with customers?

That also is a constant evolution. It’s remarkable. We’re just undergone a major renewal (at Kohler). We created a website for over 100 different organizations within Kohler. It was so broad. And then we created sites within those sites — and each of those works for the business and does what that business wants. But the engine underneath had a lot of standardization. It was a big task to standardize the approach within product fields, but on the other hand, it had to have a very local feel for people in places like China, Thailand and Vietnam. You can’t do business globally if you try to make all of your customers worldwide interact with you as if they were Americans.

How to reach: Kohler Co., www.kohler.com

Published in Akron/Canton
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