David LaBonte came up with the concept of his book, “Shiny Objects Marketing,” several years ago while listening to a speaker drone on about a complex marketing theory.
“I thought, ‘Come on! It’s simpler than that,” says LaBonte, president of AdMatrix, an Orange County-based marketing firm. “Make your brand a shiny object, and you’ll sell truckloads.”
In the book, LaBonte explains how to make any product, service or brand irresistible and how to generate the urge for customers to grab it and not let go.
LaBonte gave Smart Business a peek at his five secrets for attracting customers by making your brand a shiny object.
1. Grab their attention. Catching the eye of your customer is the most obvious of the shiny object facets. But we are not merely concerned about creating a casual distraction. The operative question for this facet is: What will cause your customers to stop dead in their tracks and take notice of what you are selling?
To accomplish this facet, you must present the shiny object in its best light. This requires excellent design, constant attention, appearances where your customers will see it and a clear, concise message.
2. Create a driving curiosity. The second facet is to hold a person’s attention long enough to deliver the rest of the shiny object. The overriding question is: What will make your prospects want to invest their time and efforts to take a closer look?
Some time-proven techniques to accomplish this are to ask a probing question, make an alluring promise, give a brief peek into your product, make a provocative statement, issue a dare or challenge, use humor, display some forbidden fruit, or tap in to a fear factor.
3. Stimulate an irrepressible urge to touch. The third shiny object facet should inspire the customer to take action in order to draw them deeper. The driving question for this facet is: How do you get your prospects to reach out and try your product?
Some ways to make this happen include: making an offer, distributing samples, providing a demo, holding a seminar or giving a free trial.
4. Activate emotion. The fourth shiny object facet is all about getting people to experience your brand, product or service — not just to try it. The driving question is: Which emotions, evoked by interaction with my product, will lead to a sale?
Every purchase, no matter how technical or rational it may seem, has an emotional factor. I have successfully marketed semiconductors, electronic test equipment, property management services, title insurance and a host of other products that might seem to have no bearing on emotions. Yet, these companies were all successful in their marketing efforts because they discovered the right emotional button that connected their prospects’ view of a shiny object to their product.
5. Demand ownership. The fifth shiny object facet is not just to sell your product but also to create such a strong relationship between your product and your customer that the customer literally demands ownership. The driving question here is: What will make your prospects want to grab your product and not let go?
Some time-proven methods to engender this demand for ownership include the following:
- Consistently meet or exceed the promise of your product or service
- Create a sense of immediacy
- Instill comfortable familiarity — make it emotionally difficult to leave your product
- Provide uncommon courtesy
- Sweat the small stuff
David LaBonte is a seasoned marketing professional with more than 30 years of experience. President of AdMatrix, an Orange-based marketing/advertising agency, LaBonte teaches marketing techniques to clients nationally. LaBonte conducts “Shiny Objects Marketing” workshops to help companies implement the concept of his book. Learn more at www.shinyobjectsmarketing.com.
Sometimes, in the pursuit of success, you begin to fail your company.
That’s the position that Mike Gauthier found himself in at his $24 million company, Save on Everything, the brand name of Mike’s Market Share Coupons Inc.
Gauthier, the company’s founder and president, answered a period of rapid growth by altering the structure of his company and constructing a leadership team of outside hires. But in the process, he allowed his company to get away from the culture that had made it a success in the first place.
So Gauthier had to bring his company full circle, bringing it back to a culture that valued internal growth and promoting the ideas of its people.
Smart Business spoke with Gauthier about how to bring your company back to what it does best.
What is the biggest challenge you’ve recently faced in your role?
One of our biggest challenges was a culture change we went through a few years back. We grew substantially, and that brought in a bunch of smart people with their own policies and procedural habits. Although those things are a necessity, one of the things we lost was the essence of who we are as a company, what I like to term our ‘saga’ — what are we about, why are we here. We forgot about that and started making policies and procedures more important than who we are.
So I’ve had to do a huge shift back to what our company was about. We had lost really good people during that time, and I had to end up replacing the management to have more my style and my feel of how a company should run. So we really had to reinvent ourselves, change our products, add new products, and we’ve done that pretty successfully.
What does a business need to have in order to not be bogged down in procedures?
Culture has to be a shared environment. People have to know what is going on within the company. If you’re keeping them in the dark, you’re not going to build a very good culture. I try to bring in more of a family-type culture here, even though it’s tougher to do that as you get into being a larger company. Right now, we’re at about 120 employees, so it’s manageable. But it’s having that daily involvement of your people. We have daily updates so that people know what is going on in the company, what is going on in sales, how we’re doing against our measurements and so forth.
Cultures also tend to flourish when people have a reason more than a job. They have to know that their ideas are valued and viewed as critical to success. They have to see changes will be made if they come up with good ideas. And you have to not punish them for making mistakes. You have to let them try things.
How do you allow your people to try new things, but still stay on goal?
It takes good ideas. You have to ask for them. With our sales staff, we’ll come up with new products from one of the sales members. They’ll see something, and they’ll tell us whether they think it can work in our organization. Instead of blowing it off, we’ll take the idea and see if it actually could work for us. We try to take ideas and work with them. We allow people on the production side to come up with new looks, new covers for the magazines we do. We tell them ‘Here is what we’re looking for; you come up with the product. You design it and come up with the idea.’ That gives them ownership. They take ownership and pride in what the product is going to look like. Then it starts to become more than a job.
How do you find people who are a good cultural match?
That is a tough part of the job. We went through all the scientific methodology and all of the other aptitude programs that are out there. They give you some idea, but in reality it’s all about who wants to step up to the plate. The trouble is, I’ve found that when you bring someone in from the outside, a lot of them are anesthetized from the neck up. They haven’t been cultured to think for themselves. So if you’re running a culture like ours, it takes a while to change that. Ultimately, it’s up to them. If they feel like it’s important, that they want to change and work hard, they’ll do it.
HOW TO REACH: Save on Everything, (248) 362-9119 or www.saveoneverything.com
They were planning to close at 9 a.m. that first day.
Dan DiZio had just co-founded a small pretzel bakery with his former college roommate. He had been a stockbroker; his roommate was a psychological counselor. They had tired of the daily 9-to-5 grind and decided to pool their resources and get into the pretzel business.
They had designs on being a two-man wholesale outfit, spending their early mornings twisting and baking the pretzels, selling them in large quantities during the morning hours and knocking off for the day before most people had made their lunch plans.
“We weren’t set up for retail,” DiZio says. “We didn’t even have a cash register. We rented a retail space only because the rent was cheaper than a warehouse would have been.”
But somehow, on that first day, they became a retail outfit. A line of customers formed at the door of their little storefront bakery and didn’t dissipate until late in the afternoon. In the span of one day back in 1998, the seeds of the company that became Philly Pretzel Factory were planted. And DiZio was thrust into a world of change management and rapid growth.
“I went on to open up eight more stores through 2004,” he says. “In 2005, we started franchising, that became popular, and in 2006 and ’07, it really started to take off. We opened 50 stores in ’07, 46 in ’08, so it jumped from a numbers standpoint very quickly. We were opening about a store a week at that point.”
Now, the company has 120 corporate and franchised locations, employing 1,500. It’s a meteoric rise, considering DiZio didn’t have much of a business plan at the outset.
“We didn’t have a typical structured plan,” Says DiZio, the company’s president. “We were flying by the seat of our pants.”
To get from a two-man operation to 120 locations, DiZio needed to formulate a business plan that gave future employees and franchisees rigid foundational principles, which still allowing room for flexibility as the company grew. And he needed to find the right people to facilitate growth — people who could help Philly Pretzel Factory broach new markets.
Build a framework
To formulate a growth strategy, you first need to set the ground rules for your business: who you want to serve, how you are going to serve them and what you are going to serve them.
Early in the life cycle of Philly Pretzel Factory — the brand name of Soft Pretzel Franchise Systems Inc. — DiZio decided he wanted to focus on customers who bought in volume. DiZio’s target consumer isn’t an individual walking in off the street for a bite to eat. He wanted to target people who are buying for large social gatherings, community sporting events and office parties, and spread the footprint of his business based on where those people congregate. City street corners were out, office parks and suburban neighborhoods were in.
“We decided that we were looking for family-type communities where there are a lot of sporting events, a lot of salespeople,” he says. “It comes back to picking the right target and having a product that follows that target.”
To aid in targeting the right markets and, in turn, the right franchisee candidates, DiZio and his staff use software to conduct studies that analyze demographics and purchasing trends. But he says it’s a folly to rely solely on computer data to plot your growth strategy.
DiZio and his team visit potential markets, experiencing them with their own eyes and ears. He says it offers a type of insight that is difficult to quantify but extremely critical in the process of deciding whether a given market is ripe for expansion.
“We drive the markets, look at the locations, look at the area, look at the schools, then really take it back to the office and look at our research in more detail,” DiZio says. “It’s not just on a screen or a piece of paper. It’s something intangible that you can’t really touch. You kind of feel the energy, you get a sense of a neighborhood and the way it is. It’s kind of like how Ray Kroc would go out and look for places to put a new McDonald’s. He was looking for church steeples. He wanted to put his restaurants where there were churches. But regardless of how it happens, you have to get out and feel if it’s the right location. For us, taking the word of a computer or demographic numbers wouldn’t be enough.”
Ultimately, DiZio says you need to keep your growth strategy as simple as you can. That doesn’t mean you completely avoid or fail to address complicated issues, but you should build your growth strategy around some central principles that never waver. The best bet is to figure out what it is you do best as an organization, and figuring out ways to leverage that strength.
“We wanted to keep it simple, and that was our philosophy and belief,” DiZio says. “We still have that philosophy of doing what we do best, but really trying not to do everything best. Everything else trickles down from that. There are always these great new products our there that we could come up with, but it would complicate the business model and we don’t want to do that. So we have to continue to follow those core beliefs of keeping it simple.”
Your growth equation will never be complete if you simply rely on acquiring new geographical areas. You also need to take a look at what you’re offering and if there are better ways to offer more value to your customers.
Though you might strive to stay devoted to your core product or service offering, a new opportunity can get your company’s foot through some very important doors. It’s something DiZio learned firsthand when some of his franchisees began pressuring him to broaden the menu at Philly Pretzel Factory.
“A few years ago, our product mix was pretzels and soda,” DiZio says. “That was the entire menu. There was no other version, just pretzels out of the oven. But as we moved along, I started to get feedback from franchisees who wanted to bring new ideas to the table, like sandwich pretzels. I shot them down for a long time, because I didn’t like the idea of sandwich pretzels, and I couldn’t envision each store making these sandwich pretzels and keeping them consistent.”
Some dialogue between DiZio and the franchisees resulted in a middle ground that took the sandwich pretzel concept and simplified it, making it a better fit for DiZio’s business model. The sandwich idea paved the way for party trays, opening up a new and highly successful element of DiZio’s business.
“That whole idea is what created a lunch business for us, and it has been a key to success for us,” he says. “That’s why, as a leader, you have to be able to make decisions quickly, but you also have to be flexible enough to make a decision to try something new. You can’t be so rigid that you can’t try something.”
By DiZio’s own admission, he sometimes misses on an idea from down the ladder that turns out to be a hit in the end. It has taught him to listen to the employees and franchisees under the Philly Pretzel Factory umbrella and give them latitude to try new things when appropriate.
Some ideas, like menu choices, can’t be planned and executed on a store level. Any business needs to have consistent standards and product offerings to customers. But DiZio puts a great deal of marketing in the hands of his franchisees and store operators.
Marketing is one area where he wants to see his store-level people try new things and report back on the success or failure of the idea.
“We want them to run with their ideas, because we learn from those and share those ideas with other franchisees,” he says. “We have round-table discussions where we talk about what has worked for various franchisees. Obviously, every idea won’t work for every franchisee due to differences in the markets. But if it does, we’ll take it and run with it.”
DiZio focuses on the importance of intimacy with a narrowly focused group of customers. Though a given location might attract youth soccer parents buying pretzels for a tournament that is miles away, each store is really focused on building a customer base within a five-mile radius.
“You want to build a presence in a given market if you’re going to enter it,” DiZio says. “It doesn’t really do any good to only have one store in a market. You’d think if you put more locations in a market, they’d take away from each other. But then you realize that the more locations you have in a market, the more business they all do. It’s the effect of brand recognition.”
Bring along others
To grow your company, you need people who can help grow it. You need brainpower that you can leverage.
DiZio states it simply: He wants people who are better than he is.
“I’m looking for people to be better than me, especially in their field,” he says. “I want them to be much better than me. Do I try to shape their thoughts a bit? I probably do, but after a while, I want them to run with their ideas, shape them, share them and keep them on the right path of where the company is headed. As long as they stay within our guidelines, we try to have fun with the concept. It’s a fun business — it’s pretzels, and we try to play that up.”
But if you want fun in your culture, you have to be serious about finding people who want to have fun. You need to find people who are a good personality match for your company. In the recruitment process, DiZio does what a lot of company leaders do. He brings franchisee and management candidates in for multiple rounds of interviews with executives from various areas of the company.
But he and his staff don’t do a lot of talking. They ask questions and do a lot of listening.
“We sit back and listen maybe 90 percent of the time in an interview,” he says. “We’ll ask questions and let them elaborate to the best of their ability. It goes back to the idea that as the CEO, you want people who are smarter than you.”
By asking initial questions, sitting back and listening, DiZio gets a gauge on how passionate a candidate is for his company’s mission and products. If DiZio doesn’t get a good feel for the person’s excitement, chances are it’s not a good match.
“We ask them what excites them about our brand and our products,” he says. “A lot of our franchisees were customers and already love the brand and the product. But some might not be familiar with it. Maybe they grew up in California, moved here and don’t have a feel for our brand. But if they don’t have that passion for what we do, it’s really hard for us to connect with them. You can definitely sense during the interview process how excited they are about what you do.”
How to reach: Philly Pretzel Factory, (800) 679-4221 or www.phillysoftpretzelfactory.com
The DiZio file
Education: Bachelor’s degree in management and finance, East Stroudsburg University of Pennsylvania
First job: I began selling pretzels on a street corner when I was 11. Now I’m 39, and I’ve been selling pretzels for all but two of those years when I was a stockbroker.
What is the best business lesson you’ve learned?
Startup money is so valuable, so don’t waste it. We wasted a lot at first and ultimately had to end up redoing a lot of the work. So really watch those dollars and know where the money is going.
What traits or skills are essential for a business leader?
You have to understand your product and know the business. You need to be able to relay your thoughts and passion to others, and train them.
What is your definition of success?
Success to me is going to work and doing something I love. I think people go on vacation to escape their lives, but I love where I am. I love watching where we grow, and watching our stores grow.
Since founding the Alliance of CEOs in 1996, I have searched for the secrets to generating breakthrough ideas on a consistent basis. CEOs constantly seek ideas to improve, but incremental ideas don’t change the course of a company or an industry. I gain the greatest satisfaction when a CEO experiences that “aha moment.”
What is a “breakthrough idea”? Some people think that innovation applies primarily to new products like the iPhone or HDTV. However, I believe CEOs can innovate in virtually every aspect of their businesses. Michael Dell didn’t invent personal computers but gave us a way to buy them directly. Howard Schultz sold us coffee at five times the price by creating a better experience at Starbucks.
What are some other examples? Jim Cook, an Alliance Director, was on the founding team of NetFlix when the idea to deliver DVDs through the mail and not charge late rental charges was considered crazy. Larry Page and Sergey Brin didn’t have a clue how they would make money when they started Google. They simply wanted to help people find information on the Web for free. Herb Kelleher questioned the need for the hub and spoke airline system and created Southwest Airlines, which was profitable when other airlines were going bankrupt.
So what are the keys to finding those breakthrough ideas? There are several:
Diversity. The bestselling book, “The Medici Effect” by Frans Johansson, discusses how breakthrough ideas are generated at the intersection of diverse ideas, concepts and cultures. The Alliance of CEOs intentionally brings together CEOs with experience in different industries, markets, skills, philosophies, education, problem-solving techniques and cultures. CEOs who run very different companies feel free to ask all of the “dumb questions” that create an environment for fresh insights and new ideas. It’s critical to talk to people outside of your own industry — even your customers won’t offer breakthrough ideas. A Harvard Business Review article titled “Bottom-Feeding for Blockbuster Businesses” found that the contrarian approach of looking for “customers that others don’t want” resulted in companies that created new business models, such as Paychex, Schwab, Progressive Insurance and Salesforce.com.
Challenging. Patrick Stahler of Fluidminds says that the only way you can rock an industry is to “challenge the hidden dominant logic of the industry.” He calls it the “unlearning phase.” Every industry works on a set of assumptions that rarely get challenged. Cars are rented by the day and music is sold by the album — or at least they were until ZipCar and iTunes came along. No individual or company can challenge each of their basic assumptions every day — they’d go crazy. However, I recommend that CEOs make sure that their own assumptions are challenged on a regular basis. I have found that more breakthrough ideas are created when CEOs think about other industries and how they would change them “if they were the CEO.” It’s typically easier to see changes that other companies should make and, as a result, you naturally think about how similar ideas might change your own company.
Focus on the big picture. Too many people focus only on problems and trying to fix them. They never find time to ask the biggest questions such as: “What business are we really in?” or “What do our customers really value?” or “What if we started the business today from scratch – would we build the same facilities, hire the same people, provide the same products or services with the same distribution channels, price them the same way, etc.?” Disruptive new companies are not constrained by the infrastructure and processes that burden current industry players. To have a chance, industry players must think like they’re working with a blank slate — what would they do if they were starting today?
Patience. Breakthrough ideas rarely happen overnight. They evolve over time, as someone questions whether there is another way to do things than the way it’s always been done. Questions and ideas often have to ferment awhile until they come together. If the big ideas don’t come immediately, relax. The subconscious mind continues to work on the idea while your conscious mind relaxes. However, keep engaging with people who offer different perspectives than your own.
I hope that all CEOs have the opportunity to experience a breakthrough idea that propels their businesses to the next level. I’d love to hear about your next aha moment.
Paul Witkay is the founder and CEO of the Alliance of Chief Executives. Based in the Northern California, the Alliance of Chief Executives is the most strategically valuable and innovative organization for CEOs. Paul can be contacted at firstname.lastname@example.org.
Adam Adache needed to make a big change at Adache Real Estate LLC. If it was going to work, he couldn’t give in to the panic that was consuming much of the real estate industry.
“You have no option but to make it work,” says Adache, founder, president and CEO at the 20-employee real estate company. “You have to have that mentality. You run a business and a business is always susceptible to a bad economy and things that might happen along the way. You might have to change your business model. But in your mind, you have to be confident that you’re going to make it work.
“If you have that mentality, you’re not going to sit there and think about the worst-case scenario. You’re going to spend time analyzing and really diving into the heart of the problem and finding out what your true obstacles are. That’s when you’re going to make your decision and make your changes.”
The change Adache had to make was a merger of his firm’s project sales and marketing division with its bulk real estate division. The economic crash was leaving a growing number of distressed properties unsold and Adache needed a way to get them off the market.
By merging these two divisions, he thought the firm would be better able to use its resources to cobble together deals that would get the properties sold that were bringing down the rest of the market.
“We convert an offer that is rejected into a new opportunity and that new opportunity is still a revenue-driving opportunity,” Adache says.
The challenge for Adache was he couldn’t just gather everyone together and tell them, “Everything you’ve been doing is bad and it doesn’t work anymore.”
“When you’re coming in to sit down with your staff and tell them that your current model isn’t working, it has a negative connotation to it,” Adache says. “So you have to quickly know how to spin it into a positive. I talked about the successes we had in the current approach. I talked about how we need to make it more successful, which I think is what every company strives for.”
Be open about the obstacles your business is facing and why what you’ve been doing isn’t working anymore. But make sure you follow that up with a discussion about what needs to be done to get things turned around.
“You have to explain, ‘I’m right there with you,’” Adache says. “They have to buy in to the long-term opportunities of remaining positive. The only way they are going to do that is if you paint the picture why we’re months away or even days away from turning the company around for the positive. You have to paint the picture and then get them involved in painting the picture even better.”
As you move forward in the discussion and gather input, keep in mind that you need to be the one who puts together the plan that hopefully gets you out of your funk.
“Give some ideas and a general direction of where you’re going to sail the ship,” Adache says. “Along the way, you can make some detours based on the input of everyone you have. Be open and simultaneously searching for other options while you’re moving ahead, even if it appears you’re moving in the right direction and things are going good. You need a backup plan and a backup plan for your backup plan.”
Most important, keep an open mind and an open ear.
“If you’re too hard-headed and not open-minded enough and you don’t listen to your people, you could crash and burn on whatever you’re doing,” Adache says.
How to reach: Adache Real Estate LLC, (954) 566-7400 or www.adachere.com
Lay it all out there
Adam Adache is all about projecting a winning attitude and being an optimist when things look bad. But that doesn’t mean he steers away from bad news that his employees at Adache Real Estate LLC need to hear.
“Our company, just like any company, hasn’t been averse to layoffs and the changing market,” says Adache, the firm’s founder, president and CEO. “Fortunately, we’re growing again and we are back on a hiring phase. But we had to make changes. When you have to lay off employees and cut pay, it’s not a positive discussion. In order to get them to buy in to everything, you can’t say, ‘OK, this person is laid off and your salary is cut. We’ll talk to you tomorrow.’ You have to spell out the short-term goals and long-term goals in a plan and explain how you’re going to overcome it.”
You need to find a way to stoke the passion of your people to help overcome this latest challenge.
“They can’t just say, ‘I’m going to do it because it’s part of my job,’” Adache says. “When you’re in business selling a product or service, it’s our belief you have to do it with passion. You can’t do it with passion unless you buy in.”
Sarah Sinclair says she could run a Toyota plant or a chicken farm. After all, it’s all about people and processes.
As the executive chief nursing officer for the Cleveland Clinic Health System and chair of the Stanley Shalom Zielony Institute for Nursing Excellence, Sinclair is charged with overseeing 11,000 nurses. When she started, her role was a new one, so she had to focus on the people and create processes in order to make changes to improve the organization.
“It’s not that hard, but it’s hard work because it’s about building relationships,” she says. “People will go with you in the change process if they believe you’re sincere and have good integrity and you’re not in it for something for you, but you’re in it for the right thing in the organization.”
It’s key to make sure you paint a picture of where you want the organization to go.
“It goes very much to being able to create a future state in the form of a vision, which allows people to get engaged in that process,” she says. “That’s the most important thing because if people can see where it is they’re going, why it’s important and be a part of creating that, then they have a vested interest in wanting to go there.”
To start, Sinclair asked whom the changes would impact the most in the organization, and she gathered groups of those constituents together to talk to them. This included patients, physicians, leadership, professionals with whom nurses worked and the nursing leadership and staff nurses. She talked to them about what was important and what needed to be prioritized to make the organization better.
“Surprisingly enough, there will start to emerge common themes of all the various stakeholders of things that are important and things that they see have an opportunity to be better in a future state,” she says.
As these themes emerged, she captured those in the work they did and went through a process called multivoting with each of those stakeholders to prioritize the objectives based on what they thought was needed most immediately. Each person was able to select his or her top three choices.
“It’s really looking at what gets the most votes,” she says. “It’s not a democracy, necessarily, but it is, in a way. If 40 percent believe this is No. 1, and the next closest is 20 percent, then probably that is the priority to the bulk of the stakeholders. There’s usually good thought put into it.”
She says to pick the top two to three items to focus on moving forward. It’s also important to remember that going through a process like this takes time, and you can’t rush it.
“Take the time to do it strategically, methodically, and cross all the T’s and dot all the I’s,” Sinclair says. “Don’t try to race through it to some end that you’ve determined — take the time to build the relationship and get your stakeholder input.”
It took Sinclair about three months to go through this process when she started, but that’s because the Cleveland Clinic is a large organization. If you have a smaller organization, you may be able to do this more quickly.
Once you determine your top objectives, then the real work starts. Make sure your structure reflects the objectives you’re working on and put people in key leadership positions who can effectively move you forward. You also need to create project management around your objectives.
“If you had three different themes, it would look like three different projects with timelines, objectives, how often are people going to meet, what are the outcomes, how are you going to measure their success,” she says. “It’s putting the structure around the process to make sure you hold people accountable to getting the work done.”
As you move along, it’s also important to make sure you’re prepared to make a change if need be.
“It’s pretty clear,” Sinclair says. “Usually, it’s when your stakeholders are telling you something’s not quite right. It goes back to listening and intuitively watching the signs of your organization — when it’s going through fatigue, when it’s not moving at a pace you’d like to move at — sometimes you have to energize it. …You’ll know when your team is beginning to tell you things aren’t working or the team suggests something new.”
How to reach: The Cleveland Clinic Health System, (800) 223-2273 or www.clevelandclinic.org
Stodgy and old were not the words Jodi Berg would use to describe Vitamix Corp., but those were the ones that Forbes used to describe the high-performance blender company, and seeing that in print shocked her.
“My first reaction was how could someone think we’re old and stodgy because I knew our goal wasn’t to be,” says Berg, who is now president. “I had to make sure I wasn’t just having an internal perspective but having an external perspective of how our company could be perceived. It was one of those wakeup calls that everyone should have.”
Berg had an approach to business that would help her transform the company and make it more appealing to the outside judges. Throughout her career, she had used an acronym called DANCE to help her as she moved into new positions, and that same acronym was critical to move Vitamix into a new position, as well.
The D stands for determining what your destiny or goal is. She says to ask yourself, “What is it exactly that you want to achieve or you want to be?”
“Be very specific about that,” she says. “That’s the only way you’ll know if you get there if you’re specific about where you want to go.”
She likens it to when people plan vacations and says that often people plan their vacations more than they plan their daily lives.
“When you plan a vacation, you pick a destination, you know who’s going to go, you know how you’re going to get there, you know what you’re going to do when you get there, you have an agenda, you have a plan,” she says. “Oftentimes, when people go through life, they just wing it. Why would we put more planning into our vacation than our own life? I think it’s because they just don’t think about it. If you can think of your life as destinations or a project you’re working on as a goal you want to achieve, take the time upfront to define what that is.”
Then the next part of DANCE is the A, which stands for alignment. She says you have to make sure you’re aligned around that goal and uses the vacation example again.
“If we want to go on a trip to California, whether we walk or drive or fly, we’re going to head west, but if we don’t align our compass to make sure we’re going west, we may never make it to California,” Berg says. “If we head out and we start heading north, we may feel very busy and feel like we’re accomplishing something, but we’re not getting anywhere close to our goal, so align your decisions around where your destination is.”
The N stands for network — don’t assume you have to do it all on your own.
“If you look at other people, a lot of what you’re managing to do has probably already been done by several other people — good, bad or indifferent — and you can learn from all three versions,” she says. “Look around and find people who have done it before and don’t be shy about saying, ‘This is what I’m thinking of doing; this is where I’m going.’ Bounce your ideas off of other people. The more input you have from other people, the better your decisions are going to be, and the faster you’ll be able to achieve the goal you want to achieve.”
The C — care — is the easiest one to understand but often is the most difficult to execute.
“Make sure you care for yourself in the process, and make sure you care for the people around you,” Berg says. “In an airplane, they say put your oxygen mask on first for a reason because you can’t help other people if you’ve passed out. You have to be functioning, and you have to be in good condition in able to lead.”
Then lastly, the E stands for embrace success — in any large or small form it may come.
“Oftentimes, we set a goal, and we think that we’re not successful until we achieve that goal,” she says. “In reality, every baby step that we take along the way, if that step gets us a little bit closer to that goal, then that is a success, and we’re moving in the right direction.”
By following the DANCE approach, Berg transformed Vitamix so the outside critics could see the exciting business she had seen all along.
How to reach: Vitamix Corp., (800) 848-2649 or www.vitamix.com
In any endeavor, before anything can be successful, the people involved need to know what it is they are trying to achieve and what efforts and resources are directed toward achieving it.
The company vision is the manifestation of its purpose and its values. From it emanates the strategy by which its goals will be attained, the leadership approach of its executives, the motivation for its members and the inspiration for its customers. A clear, well-thought-out, inspirational and easily communicated vision is the wellspring from which everything else flows.
And yet for the vast majority of companies, their vision is created in isolation by the marketing department and relegated to become mere corporate wallpaper in employee manuals and annual reports.
Even when it is well thought out and inspirational and communicated to employees and customers, all too often the direction of the company and the values demonstrated by its leadership are at odds with the company’s vision that it renders the vision meaningless. For the vision to resonate, company leaders must be seen working toward fulfilling it and genuinely conducting themselves in accordance with the stated ethics of the company.
But before the vision can be bought in to, it has to be developed. Ideally, that should be a managed process throughout which the staff is consulted, instilling a sense of ownership — although that is a luxury that many companies, particularly larger companies, do not have. At the very least, the heads of departments and senior management should set aside enough time together to discuss the strategic vision of their company, to create one if they’re running a new company, or in light of changing markets and products, to assess the relevance of the vision they already have.
Inevitably, many will see this as a waste of their time. They’re good at their job, they know what needs to be achieved, and they resent the implication that any touchy-feely, marketing-gobbledygook corporate retreat is going to make them better at it. But it is often the skeptical ones who stand to benefit the most from the exercise.
To make it work, it therefore needs the wholehearted support from the very top of the company. Ideally, it should be conducted by an experienced third party who can bring a dispassionate objectivity to the process. Money is well spent on hiring a training or consultancy firm for this. Putting all the senior executives in the same place — those who by nature of their positions are likely to be strong characters — and giving them free rein to voice and defend their opinions almost guarantees a relevant and important exchange of ideas. Even people who have worked together at the same company for a long time and who might be expected to have a similar vision will discover that they all have differing views of what the company is all about, where it is going, how it should get there and what it will look like when it does.
Julian K. Hutton is president of Merlin Hospitality Management, where he oversees the company’s hotel management and distressed asset management operations, drawing on 20 years experience in the worldwide travel and hospitality industry.
No one who lives in southeast Michigan needs a reminder that the region has been one of the epicenters of a massive economic recession. But it might help to remember that there will be a light at the end of the tunnel, and you can reach that tunnel in better shape if you are prudent in how you lead your business. You can take steps to become more opportunistic, managing your spending and focusing your employees on the vision and mission of your company.
Over the past couple of years, Smart Business Detroit has spoken with a number of Detroit-area business leaders about the steps they’re taking to help their companies weather the economic storm. Below is a sampling of what three of them had to say.
“Employees are smart, and many of our employees have been here a long time. They can see when we are going after the real problems, not just the appearance of problems. That’s one way we convinced them of our intentions through actions instead of words.”
Marty Kahn, CEO, ProQuest LLC
“Take all of the other distractions away. Get rid of ancillary businesses, ancillary and unimportant initiatives, things that are taking away from the core, uniform strategy that you’re trying to deploy. It’s an ongoing effort. It’s an evolution, and you keep working through it. You keep building momentum over time, and eventually it does pick up."
MaryAnn Rivers, president and CEO, Entertainment Publications LLC
“As you think about the future of your organization, you have to do scenario planning. You need to come up with best-case, most-probable-case and worst-case scenarios. You need to be able to anticipate and stay ahead of the curve. Leaders need to do that all the time.”
Patricia Maryland, president and CEO, St. John Health System
Employees know when you're addressing the real problems
Get rid of factors that take away from your core businesses
Plan for many possible situations
Stephen Polk senses a slow return to normal for the automotive industry as the coming months and years progress.
It’s just that “normal” is going to come with a new definition.
Polk is the chairman, president and CEO of 1,400-employee R.L. Polk and Co., a provider of information and marketing solutions to the automotive industry. He has had a front row seat as General Motors and Chrysler declared bankruptcy and were forced to undergo massive internal restructuring. He’s watched as countless auto suppliers have gone bankrupt or been sold to interests outside Michigan.
But it won’t always be this way. And when things do begin to rebound, businesses all across southeast Michigan will need to function in a new, post-recession environment.
“With the energy we’ve seen so far this year, we’re starting to see a return to normal,” Polk says. “Not to the normal of five years ago but to a new kind of normal. I’m optimistic about the future. Our forecast for 2011 is 12.9 million vehicle sales in the U.S., and I’m confident we can achieve that.”
What will the new normal be? Polk says it will center heavily on every company’s ability to develop and maintain close relationships with customers. Businesses will need to give the employees at the customer interface points the tools and the sense of purpose that will allow them to build those relationships. Corporate leaders will need, more than ever, to stay in touch with customer wants and needs and the ongoing changes in the marketplace.
The coming years won’t be a time to assume. It will be a time to listen and react and to remember that the success of your company’s relationships will determine your long-term success.
“It’s about the success we’ve had in staying close to customers, understanding what their needs are as the world has changed,” Polk says. “While the OEMs, the manufacturers, represent a piece of our business, there are a number of other customer sets we’re dealing with, [such as] the agencies trying to promote products, the dealers trying to sell products. We need to align ourselves with where they are in the world today.”
Commit to your people
In any economy, if your customers are consumers, you have to keep them buying. If your customers are other businesses, you have to keep them selling.
Polk’s company falls into the latter category, so the job that he and his team will have moving forward is to support clients in the auto industry so they can keep producing products that find their way into new car models and, in turn, into consumers’ garages.
Your role as supporter is critical when your customers are going through hard times. It’s something Polk recognized early on, and as the industry emerges from the deepest part of the recession, he anticipates being able to reap the benefits of the support and loyalty his business showed.
“Our commitment was to serve those immediate customers so they could continue to do day-to-day work as they went through the whole bankruptcy phase and came out of it,” Polk says. “Some of it was on our own nickel, as we realized that during the bankruptcy proceedings, we weren’t going to get paid for some things right away. But we were able to maintain a continuity of service, and that helped our customer to continue to sell throughout the recession. There was some recognition that we were there when they needed us.”
In order to commit to your customers to that extent, you need to commit to your employees. Your employees need to be supported by your leadership if they are ever going to be able to support your customers through trying times.
And the key element of that support system is a soapbox — many of them, actually. You need to give your employees a means of being heard by you and your leadership team. If your employees on the front lines feel empowered to relay what they’re hearing from customers, if they feel like management is actually going to listen to them and use their information to make decisions, you’re going to have a staff on the front lines that will engage customers, ask questions and remain aware of their changing needs.
“A lot of it is just listening and training your staff to make sure they’re listening to what the customers’ needs are,” Polk says. “You communicate what you want, really try to build it into your meetings and various avenues of communication. Then you listen back, make sure everyone knows what is important, everything from performance evaluations to planning for the year, it all has to revolve around some kind of customer metrics.”
Use what you hear
If you’ve put your front-line people in a position where they can reach upward in the organization with ideas and information, you need to be able to take what they’re telling you and use it to better the company. Otherwise, you’re sending a negative message to your employees about the effect their work is having on the company’s overall mission.
Polk uses the engagement of his customer-level employees as an opportunity to gain a realistic picture of where his company’s customers are headed and what their needs will be in the foreseeable future, which allows he and his leadership team to begin sketching a strategic plan for the coming years.
“The first part is starting with that very open and realistic assessment of what the current reality is,” Polk says. “What your strengths, weaknesses, opportunities and threats are. You take an environmental scan of where your customers are growing and where they see the most value in the products that you deliver.
“We want to know where we can create efficiencies to help our customers and ourselves, then try to project that into the future. The real challenge is creating a living plan out of it, something that isn’t going to sit on the shelf.”
A living plan has to have some degree of flexibility. If you are going to place an emphasis on listening to customers and reacting to their needs, you can’t formulate a market strategy that is so cumbersome or rigid, you can’t react to an unexpected change.
It’s a delicate balance to stay on your core competencies but remain willing and able to pounce on an opportunity that allows you to employ those competencies in a new way. Polk says you can’t deviate from your mission as a company, but your products, services and areas of focus have to exist in a fluid environment.
“You have to start with a recognition that what you are putting out there in the market is really about how you want to conduct the business,” he says. “There are focus areas that are going to have to change, but it’s understanding the types of services you want to be at, the types of products you want to be building around in each environment. You have to communicate the fact that those areas are flexible, create an understanding with everybody in the company. That is probably the most important thing.”
To understand when you need to take advantage of an opportunity or forge a new direction, you need to be able to measure your progress against your goals. That means you need process checkpoints and a willingness to allow your team to assess where you are in relation to your goals.
“You really need to be able to understand what your checkpoints are along the way in any process or product or in any initiative that you are outlining,” Polk says. “It really needs to be a candid self-assessment of what is the reality that your customers are dealing with, the reality of how you’re delivering on expectations, then making adjustments to it.
“Sometimes you need more effort, and sometimes conditions dictate that you stop doing what you’re doing — even if it’s something that you had been committed to. The right answer is ultimately to be open and honest about the reality you’re facing.”
Make it cultural
You can engage your employees by builing avenues through which they can communicate and make sure that their input and ideas have a bearing on the decisions that will affect the future of the company. It’s all great in theory and better in practice. But over time, as the economy improves and the business environment becomes more stable, it will become easier to let some slack into the organization philosophy to which you once rigidly adhered.
The only cure for that is to make customer focus and employee empowerment a part of your company’s culture. You make that happen, in large part, by rewarding the behavior you want to see and promoting your best and most experienced employees to more influential positions.
“It all starts with building a culture that employees can appreciate and thrive in,” Polk says. “A big part of that is the importance of having a great leadership team in place. Our senior leadership team includes a variety of experience in all aspects of the automotive business. You have to fit the culture to you business, to where you want to take the business in the future. For that, you need to instill a common values system that is shared by all employees and reinforce those values by ensuring that your people are well compensated and are going to have avenues for career growth within your company.”
Ultimately, employees want a fair salary, but more than that, they want to feel like they’re working with upper management, not working for upper management.
If you build strong relationships within your organization, your team will be better able to build strong relationships with the people you serve. The often-referenced cliché about happy employees leading to happy customers — it’s a cliché for a reason. Because it’s tried-and-true.
“If employees understand your business goals and objectives and what their role is within the organization, they can effectively contribute and provide valuable insights in their areas of expertise,” Polk says. “That is why we host regular communication meetings with our staff and also communicate important business announcements in a timely manner. It helps continually engage our employees in an open, honest dialogue with management, which helps solidify our overall communication structure within the team.”
How to reach: R.L. Polk & Co., www.polk.com or (800) 464-7655
The Polk file
Education: Bachelor of science degree, Denison University, Granville, Ohio
History: Great-grandson of R.L. Polk & Co. founder Ralph Lane Polk; employed by company since 1981; president since 1990; chairman and CEO since 1994
Polk on the CEO’s role in setting the stage for the future: My role is to lead the organization and prove a foundational direction for the business. The senior leadership team we have in place at Polk is effective and dynamic, and all of them are accomplished leaders. I work very closely with them, both individually and as a team, to help further develop our business goals and objectives, develop strategic ways we can be supporting customers and representing Polk in the marketplace.
Polk on achieving success in the current business climate: It may sound cliché, but it’s the reality of things — if our customers succeed, we succeed. In our business, it truly is about the relationships and strategic partnerships we have with our customers, to help them achieve their business goals and to help them succeed in the marketplace.