Sam Caster says growth comes from one thing: providing something people need. If you do it, and do it ethically, your company will grow.
“My personal work philosophy is based on two concepts stewardship and servanthood,” says Caster, chairman and CEO of Mannatech Incorporated. “Being a success is directly equated to your ability to serve others and their needs. Those are the opportunities I look for. That’s the way I look to manage the business, and that’s the way that I look to grow the business. Fulfill people’s needs in the most ethical way, and your business tends to grow.”
Caster founded Mannatech in 1993, taking advantage of a consumer base with increasing concerns about health, and a new law called the Dietary Supplement Health and Education Act, which allowed the nutritional supplements industry to distribute educational materials discussing specific benefits or ingredients in their supplements.
Caster believed Mannatech could be the way to help people find ways to improve their health through natural supplements.
It’s working. Mannatech’s sales have grown from $191 million in 2003 to $389 million in 2005.
“We looked at the opportunity of developing technologies that had good science, again to meet the needs of what we felt was a massive movement in health care toward the concept of wellness,” Caster says. “There are millions of people looking for answers and solutions to not only protecting their quality of life but improving their quality of life if their health was challenged.” Caster has built his company through three key factors staying focused on what will provide the greatest benefit to the company, finding the right people and expanding internationally.
Focusing on what matters most
Caster knew he needed solid science to back his nutritional supplements, but initially, Mannatech was a small company and couldn’t afford a large research and development team.
In addition to a small in-house scientific team, the company contracted with outside firms to do research for it. As it turns out, that’s been a boon as it’s allowed Mannatech to get the research results it needs while allowing it to stay focused on selling.
Caster recommends contracting out for research and development for firms that need a lot of scientific skill, because no one can afford to hire away the best researchers from clinical organizations around the world. Outside research also lends credibility to the company’s claims about its products. “You are contracting with people who have enormous experience in certain fields,” Caster says. “Secondly, they have staffs of people who already understand how to do protocols. Thirdly, their reputation is necessary from a standpoint of validating the legitimacy of the science behind it. You also get a more independent view. When you do it yourself, sometimes people think, ‘Well, you did your own research,’” and they are suspicious of it.
Outsourcing its manufacturing has also allowed Caster to stay focused on his products rather than on production issues.
“Good, quality manufacturing is not that hard to find,” Caster says. “What we have to determine is our use of funds. Is it more important for us to get into the business of manufacturing when other people do it just as good as you could do it, or is it more important for us to put our funding into research and development and try to find components that no one else has? If we are investing in what will create the leading edge for our company, it’s not in manufacturing.”
Customers obviously approve of the company’s methods, because 74 percent of them are signed up to automatically receive refills of their chosen products.
Finding the right people
Mannatech started with an executive team Caster hand-chose to help him build the business. But he has made some key changes in that team in the past two years and brought in more experienced people who can take the company to the next level.
Five people in senior positions have been changed out in the last two years, and other positions have either been created or changed to reflect the company’s new size.
Making sure you always have the right people in place is key to successful growth.
“Some of it is actually that we’ve crossed that threshold of being a small company, heading toward that half-billion to billion-dollar threshold,” Caster says. “In some cases, we needed people with a higher level of experience in the beginning. Part of that is that we honestly didn’t have the ability to hire that quality of individual, nor could we have attracted them because we didn’t have the track record to.
“In some cases, people can grow into those positions. In other cases, people find their skills are better-suited to smaller-company life.”
Caster used a combination of an executive search firm and word-of-mouth to find his new executives.
Screening those people was key. In terms of experience, he wanted executives who had worked for companies of a similar size and in similar situations.
“It’s the same as finding good people in every part of a business,” Caster says. “The very first thing is character, even over experience, I think. You have to find people who are congruent with your company’s philosophy. Interviewing people in any department for character issues is No. 1 with me.”
Caster says he likes to ask “why” questions of people he’s considering hiring to get information about their character. Beyond where they worked, he wants to know why they worked there and what motivates them to work.
For example, in interviewing attorneys for an in-house counsel, he wants to know not only what kind of cases they’ve handled but how they felt about the outcome of the case and the decisions they made.
With scientists, he wants to make sure they are open to outside opinions and expertise. Caster says he wants people who aren’t driven by their own ego or money. Those who are driven by ego or money usually won’t look out for the best interests of the consumer, which is ultimately what Caster wants to ensure the company’s growth.
He also likes to talk to a candidate about his or her volunteer experience. People with significant community volunteer activities have looked beyond themselves to better the world around them, and those are probably people who will be strong employees.
One of the best screening mechanisms Caster often uses is a surprising one: He asks his wife.
“If it is a real key position, I try to have them have either a meeting or a dinner with my wife,” Caster says. “She has incredible discernment about people. It’s not in their skill set, and it’s not their resume, it’s who they are. We can have dinner and have a discussion about our children, what they do, whatever it is, and she has great insight and discernment about quality of people.”
Caster says his own feelings about people are usually eternally optimistic, and his wife’s views help him figure out the best hire for the organization. He recommends that any CEO consider finding someone with strong discernment about character to help them make that call, even if they aren’t really in a hiring role, and even if they aren’t part of your company. “I like everybody I meet,” Caster says. “It’s hard for me to discern character. I want to believe the best in everybody I see or meet. That could be my biggest asset but also my biggest liability when trying to build the team around me.”
From the beginning, Caster has had his eye on international markets as key to Mannatech’s growth. He says large companies rely on international markets to reach the billion-dollar mark, and it’s not as tricky as you might think. “In the health care environment, it’s the same issues all over the world,” Caster says. “People in every continent and every country are looking for a better quality of life. It’s universal.”
What’s tricky are the more subjective aspects of the product, such as packaging. Caster says the company has to make sure the colors of the packaging and the way the product is packaged work for consumers in different countries, and has to vary the packaging according to the country.
Mannatech contracts with companies located in the country its targeting to help them navigate those cultural differences. The company also spends time researching online what the best-selling competitive products are in the country it is considering, and how those products are packaged and sold.
Some of the things Caster considers are whether Mannatech’s price point can be cheaper than the most expensive product on the market, and what sizes are popular.
The product itself is often tested on people who live in the United States but are from the country in question, more for cultural issues than anything else. Do they like the smell, look and feel of the product? Did they like the results?
International is also a good fit for Mannatech because it sells its products through home-based distributors, who sell the products directly to customers. In other countries, home-based selling is more widely accepted than in the United States.
And that brings it back to passion: Caster passes his passion for natural products to the associates who sell it, who, in turn, have convinced a wide swath of consumers that the product needs to be a part of their life. Caster sees almost no limit to the applications of good science to dietary science, skin care and other related areas. “The people who have been the most successful are the people who have the most passion for what we’re doing,” Caster says. “There are some segments of not only our industry but other industries in which trying to generate a high-dollar income is the priority. Honestly, what we find is that the most successful associates are the ones who have a passion for it, and as a byproduct of that, their income grows.”
HOW TO REACH: Mannatech Inc., (972) 471-7400 or www.mannatech.com