Founders and childhood friends Jeff Baikie and Howard Bloxam saw a need for fresh, nutrient-rich dog food and treats in the market, and in 1997, they began developing a dog food that was meat-based, preserved naturally and convenient to use.
“We manufacture a lot of natural products ... things like peanut butter-filled bones, peanut butter and jelly-filled rawhide,” says Baikie. “I think as the consumer has educated himself, people want to feed their pets better foods. They want to make sure their pets are being fed quality products.”
Redbarn is feeding on that tendency to treat pets like members of the family, and revenue has grown from $13.5 million in 2004 to $19 million in 2005.
Smart Business spoke with Baikie about how the company plans to reach a broader audience and bring more products to market to continue growth.
What has been the key to your growth?
I think that the biggest part of our growth has been our ability to bring new products to the table.
Part of our mission is to bring a minimum of six new products to market every year. We have a phenomenal research and development department where we have two people working full-time on developing products.
Like any other business, I think once you get somewhat established, your customers want to see new and innovative products on a regular basis. And we’ve had the ability to do that because of our research and development department. It’s certainly an integral part of our operation.
When we have a new treat, we always bring it home and try it on our dog as most buyers do. But we’re starting to do, as we grow, some focus group studies, because it doesn’t always work by having the treat and giving it to your dog. Packaging and marketing plays an instrumental role in the success of your company, as well.
How do you reach the right audience?
A lot of it is obviously advertising. We advertise in all the major pet trade magazines. We attend all the major trade shows throughout the U.S. We have six salespeople out in the field that call on these people on a regular basis.
We both come from a sales background, and we understand our company is sales-driven. We understand that the customer is the one that signs our check every week, and we are there to make sure our customers are happy.
How are you planning to broaden your audience?
The pet industry overall today is a $35 billion business. Of that $35 billion, approximately 70 percent is in the grocery and mass end, which would mean the grocery stores ... and the Targets, Wal-Marts, Costcos and Sam’s of the world.
And our business, for the most part up, until last year, has been primarily on the pet side the 30 percent side. We’re trying to move now into the grocery or mass segment of the business.
How are you going to do that?
It’s a tough challenge. I think a lot of the grocery stores, because of the emergence of chains like Petco and PetSmart that have done a tremendous job with innovation and educating the pet consumer and bringing some very unique products to the pet consumer have lost some of the market share.
And I think they are waking up. They are starting to change, as well.
We attend all the major grocery shows now. We have a full-time salesperson that calls only on grocery and mass. It’s a slower process because you’re starting from ground zero again trying to get into these grocery chains.
And a lot of the time, these buyers [for grocery stores] aren’t as educated as the pet [store] buyers. Our products are so unique that, in the pet side of the business, when we go into a Petco or a PetSmart, they are very aware of the products and the market.
Now you go into a grocery store ... that grocery buyer doesn’t necessarily have the education that a pet buyer would have. They look at a product like ours like a peanut butter-filled bone or a lamb-filled piece of rawhide they are like, ‘Well, I already carry rawhide. I don’t need this.’ But the consumer ... is looking for these unique and innovative items.
What has been your biggest challenge associated with growth, and how have you managed it?
As with any company, it’s finding the right people and creating a family environment for our employees. We’re both fairly easygoing guys that create a very relaxed and fun environment. It has to be for us to be successful.
We look after our employees very well. We offer medical benefits. We offer a profit-sharing plan for all of our employees. We have a pension for them, as well. It’s the people that we have working with us and under us that really make the company successful.
HOW TO REACH: Redbarn Pet Products, www.redbarninc.com
How do you decide if being acquired by another corporation is best for you, your business and your employees?
Fred Bidwell, president and CEO of Akron-based Malone Advertising, faced a tough decision last year when J. Walter Thompson (JWT), the largest advertising firm in the country, approached him about acquiring Malone.
“It’s important for any business, any entrepreneur who’s thinking about selling his or her company, to understand that the concept behind an acquisition may be simple, but the details of actually completing an acquisition are extremely complex,” Bidwell says. “I think you’ve got to approach something like this recognizing that ... there’s a strategic reason to come together. And I had to be convinced there was really something in it for the staff. Otherwise, there would be no reason to do it.”
Bidwell says every individual business owner has to weigh his or her own issues when it comes to an acquisition. What works for one company won’t necessarily benefit another.
“Every deal is different, and there are different financial reasons to do a deal,” he says. “There is no one-size-fits-all. You need to be convinced you are doing it for the right reasons.”
For Bidwell, he saw the prospect of working under JWT as a great opportunity. The companies share three clients, Kimberly-Clark, Pfizer and Nestle.
“The fact that we work together doing different things for those clients gave us an opportunity to get to know each other,” he says. “We do things that are different, but complimentary. In many ways, JWT has made changes to become more entrepreneurial, and as we’ve changed, we’ve made changes to become more strategic and professional. So we kind of met in the middle and found our styles were similar.”
Bidwell says one of the most important factors when considering an acquisition is whether the cultures of the companies are compatible. Both sides have to know how well they will work together.
JWT also did not want Malone to undergo any major changes. Its intention was not to bring its systems, styles and people to Akron for Malone to adopt.
“They saw what we do is different, and if they changed it, they would ruin what they bought,” says Bidwell. “That I think has made this offer different than other offers and discussions we’ve had with potential suitors. Their style is to leave their acquisitions alone and thrive as they are.”
A company’s current financial status and future projections also can play a major role in an acquisition offer.
“The fact that we were and are a strong company although we were the acquired company (meant) we were being acquired from a position of strength” Bidwell says. “And we were doing the deal for a strong strategic reason. I think that makes the whole process easier to do and easier to feel good about.”
Malone would still be a success whether the deal went through or not, a fact that made negotiations easier, he says.
Bidwell says surrounding yourself with an experienced legal and accounting team will help you make the right decision on whether to be acquired. He handpicked a team of people he trusted and whose abilities he felt confident in.
“The important thing to do is to recognize there is a lot of emotion involved,” he says. “You need very good advice.”
But ultimately, no one knows your business better than you.
HOW TO REACH: Malone Advertising, (330) 376-6148 or www.malonead.com
At the Santa Monica-based agency, which provides advertising, public relations, promotions and marketing consulting services, the general rule is that two heads are better than one. Associates work together in clientcentric self-management teams toward a common goal of doing a great job for the client and bettering the agency as a whole.
“The idea is if you get good people and you give them the right environment, and then you bathe them in enough feedback and collaboration, the answer will come,” says Phelps.
And not just any answers but good answers. The company billed more than $60 million last year and has seen double-digit annual revenue growth for more than 20 years.
Smart Business spoke with Phelps about how he attracts and retains customers by fostering agency-wide teamwork.
How do you get results for your clients?
I think it starts with the people at the agency. Once we have the mission and the vision and the values and the core competency determined which we have years ago then the No. 1 job is finding the right people and finding people who can do the job, want to do the job and are passionate about it. Once those people are in place ... it’s downhill from there.
We have a very heavy profit-sharing plan so that everyone in the agency wants every other team to be successful, and everybody’s headed in the same direction. When you get all the horses headed in the same direction, you have a lot more power.
How is this model different from what many of your competitors are doing?
The general way to organize is by functional department. You have a production department, a media department, a creative department, and those departments are headed by a director. And that director is often compensated by how much money goes to their department.
So the advertising guy will be with the PR guy at a client, and they’ll be hoping that the client doesn’t take their PR money and put it into advertising or vice versa. So what happens is the client’s best welfare is not at heart. What they are looking for is what’s best for the agency’s individual departments.
We don’t have functional departments. That is a real key differentiator for us. You always know who you are working for when you are at the agency. You’re working for the client. You are not working for a department head.
There’s a lot of conflict of interest that comes in those situations. I learned a lot working for other people and other corporations. One thing I wanted to do was design the conflict of interest out of our company.
How do you find people to carry out your mission and vision?
Because of our mission which is to do great work for deserving clients, and we define deserving clients as those clients whose products ... make the world a better place that’s tending to attract a certain type of person, a person that’s looking for a balance in life, worthwhile work and so forth.
I did an analysis awhile back, and over 60 percent of our people came as a result of a recommendation of one of our associates. And our associates care about who they work with 10 hours a day, five days a week. They pretty much know who is going to work out and who’s not.
When we look for people, we look for obviously talent, experience, desire, and I used to say a good heart. But then I met a few people that had a good heart but they couldn’t play on teams. So we changed it to a good team player.
What are your strategies for customer retention?
Once thing that’s happening and it’s happening at an accelerated pace is whatever you deliver for your client, they’re naturally going to want it the next year faster, better and cheaper.
What you do is you give input to your brain, you let it percolate for a while and then the answer comes. But if the demand is for faster, better and cheaper, you are losing time in the subconscious. So if you don’t have more time, then what we’re doing is we’re putting more brains on the business.
If a regular team of five people can’t come up with the answer in three days, what if they brought that question before a body of 50 or 60 people? The answer could pop faster. Having a lot of people look at the work really is not only a safety net but it’s a great research tool, and it actually improves the work.
What has been your biggest challenge associated with growth, and how have you managed it?
My biggest challenge personally is that if we’ve grown 20 percent a year for the past 18 years and that has been about our growth rate then I obviously can’t work 20 percent harder every year and cover 20 percent more territory. My job changes rather rapidly, and I have had to learn to let go and trust more.
HOW TO REACH: The Phelps Group, www.thephelpsgroup.com.
Dennis Barba, managing partner of the Oxford Group of Raymond James & Associates in Cleveland, knows that the financial planning process is neither precise nor does it provide any guarantees. But there are ways to reduce the risks you take with your hard-earned money.
- Use strategy, not emotion.
“We typically buy or sell because of an emotional reaction,” Barba says. “We become more aggressive when times are good because we feel we are missing out on potential large returns,” he says. “Likewise, when things are not going as well as planned, we tend to make wholesale changes based on our emotions and try and ramp up performance or avoid further potential risk.”
When people hear a mutual fund is doing well, they get excited at the thought of making money and want to jump on the “opportunity,” Barba says.
He suggests investors take the same strategic approach to investing their money that they would take to buying a car. Many people spend months researching, shopping around and weighing the risks of each potential car model, making sure they are getting the best return for their money. Applying the same logic to other investments will help ensure you’re getting the necessary earnings.
- It’s not just about returns.
There’s a lot more to ensuring long-term financial security than looking for investments or financial advisers who promise high returns.
“No money manager can guarantee you they are going to earn you a specific amount of return,” Barba says. “So when people buy performance and they are shopping around for money managers, there is no guarantee those past performance numbers are going to repeat themselves.”
There’s no guaranteed safety in diversity, either, Barba says. Allocating funds over three stocks, five mutual funds and some government bonds doesn’t mean one risky investment couldn’t tank the others.
- Know your goal.
It’s important to know your financial objective for investing, Barba says. Are you saving to pay for your children’s college in five years, to buy a retirement home in 10 years or to pay corporate taxes next year? Your objective weighs heavily on the type of investments you should make.
A longer-term goal may enable you to make more aggressive investments because you’ll have more time to recoup if you have a few bad years. However, if you’re investing to cover an expense in the near future, you’ll want to consider more conservative options that are more likely to guarantee the earnings you require to meet your goal.
And remember, there is no one-size-fits-all portfolio. What works for another family member or friend may not work for you. There are many variables to investing, including the amount of time until you retire, how steady your income stream is and your personal objectives.
- Do the math.
At Barba’s firm, associates develop models for their clients to show them what they can expect under different scenarios.
“For example, if your projected portfolio is composed of 75 percent large cap equities and you are assuming this asset class will earn 10 percent annualized for the rest of your lifetime, we can rerun these assumptions using different returns,” Barba says. “An 8 percent annualized return on this asset class may lead to the family running out of funds at age 70, thus outliving their funds.
“If you understand what can happen mathematically in good times, in normal times and in bad times, that gives them the emotional ability to understand and make better investments. The most important thing is not the return you earn or are seeking. You need to understand how much risk you are assuming. A good investor will realize this and not just focus on returns.”
An investment with large earning potential also has a higher risk potential, Barba says. If someone wants to invest conservatively and cannot accept a loss of more than a certain percentage, that portfolio may be too aggressive.
“Many people in their early working years wish to be more conservative and do not like volatility,” he says. “The thought of taking a loss is something they cannot handle. Likewise, many older individuals like and can afford risk and are happy to become more aggressive.
“Randomness favors the prepared. The more information we know about the potential incomes, the better the chances are for success.”
HOW TO REACH: The Oxford Group of Raymond James and Associates, (216) 378-0688
He and his wife, Susana, were able to transition their home-based office cleaning business into a booming company that now also offers maintenance, landscaping, security guard and food services. The key, Fortunati says, was never straying from their core values of speedy and superior customer service.
“Our company does a lot of business, and we have a 98 percent retention rate,” Fortunati says. “If we lose a customer, usually it’s because there’s a competitive bid. But we haven’t lost customers based on quality.”
Support Services of America has been on a solid track of double-digit growth since it was founded in 1996. Fortunati expects the company to log between $16 million and $18 million in revenue this year after raking in $12 million last year.
If Support Services continues on its current growth track, it should see $24 million in revenue by the end of 2006.
Smart Business spoke with Fortunati about how he’s grown his company and how he finds the right employees to help him do it.
How did you transition your company from a one-man side business to a multimillion-dollar company?
When we first started, we operated out of our house. We started with only one account cleaning a medical building. My wife and I, from 6 p.m. until 1 a.m., would clean this medical building by ourselves.
We got lucky. We basically did a great job, and by word of mouth, that particular customer started referring us to other accounts and other clinics and other buildings.
Little by little, a year later, we had 10 or 12 accounts and I was able to quit my day job and basically start growing the company. After three years, we were able to open a professional office.
Once we opened up the office, we were able to hire people to answer the phones, and we got a professional accountant to help us. Today, we are in 23 states.
How are you able to outdo your competitors?
We created a model to duplicate. And the model was based on two or three very basic premises. One, to always go the extra mile. You never say no. If (the customer) gives you a lot more work that is not in the contract, you show them good faith and willingness. I think the customer appreciates that kind of attitude.
The second thing is we have predicated our company to be very fast. Speed has to do with everything you do. You take care of an issue, whether it’s a request or a complaint, and you take care of it fast. If you can turn around that request or complaint within 30 minutes 60 minutes at the most that shows the customer that you are on top of it.
Then you start to build your reputation around those two issues. We duplicated that every single time with every customer.
How do you find employees dedicated to your mission of customer service?
That’s always a challenge because our industry is a low-wage (industry). Obviously, we have turnover and we try to manage [that] as closely as we can.
The way we hire people mostly is by word of mouth. Our own employees bring us friends and family. They recommend people and ... there is a little bit more of a commitment when we hire that way.
We try to inspire them to do a good job and to be proud of what they do. If you manage that process well, then you have a happy customer and happy employees. And that makes a good company.
What has been the biggest challenge of growth, and how have you managed it?
We find it difficult to manage at a distance, and we’re trying to use all of the technology to be in constant contact with our supervisors and managers and work force. Finding competent management is an issue for a smaller company.
Competent management ... from larger companies still think that we are a small company, and obviously when you are a smaller company, [you] have more risk. That translates into difficulty in hiring good, competent management.
As we keep on growing and building our brand recognition of our name and our reputation, hopefully every year it breaks a little bit of that barrier in the eyes of outsiders. And I think every year we have been capable of recruiting better talent.
How did you penetrate the market for government contracts?
It took us a couple of years to penetrate the federal government contracting. We actually have a vice president of federal procurement, and he has been very capable in gaining market share.
It took us some time because the federal government is highly competitive, very regulated, and people that participate in that need to have a lot of technical skills. There’s a lot of performance reviews. It’s a lengthy process.
I think we got much better at the game, and finally we’re seeing the results. We persisted, and because of that persistence ... here we are. We’re gaining contracts almost every month.
HOW TO REACH: Support Services of America, (562) 868-3550
“We’re serving a very large unmet need in the market because most technology companies, particularly smaller and mid-sized companies, simply don’t have the scale or expertise or experience to build their own in-house licensing companies,” Ryan says.
With the patent-licensing industry estimated to grow to $500 billion, there is a lot of opportunity for Acacia to grow. In the first half of fiscal year 2006, the company has already matched 2005 revenue of $19.7 million.
Smart Business spoke with Ryan about how he defines success and how he finds the right people to help him get there.
How have people played into your success?
You hire people much smarter than yourself at all levels. You can’t do everything yourself, so you have to surround yourself with very experienced, motivated and talented people.
The top management of the company is very much a believer in a horizontal company and giving the people the stake and the responsibility and the rewards. The key thing is to empower the people who are in charge ... but by the same token, incentivizing them very well for their performance and not trying to micromanage or overmanage.
Find the right people who want to take responsibility and grow the company, and give them the authority to do that.
Why do you do that?
The best people are ultimately what makes a company succeed. Many CEOs don’t want anybody in the company who’s going to upstage them or look better than them, so from a defensive standpoint, they tend to hire down as opposed to hire people that have more experience than they do in every area and listen to what they say.
The biggest failure I’ve found, particularly in small companies, is the originator of the company just wants to do everything and assumes that they know how to do everything better ... (or) you have a dominant person in charge and, really, the key people are intimidated from taking risk. And usually those companies don’t grow very well.
The key for a CEO is to be the catalyst, help identify the unmet need in the marketplace and make sure the company stays on its path of serving that market. You’ve got to empower highly motivated people to be willing to take some level of risk. Otherwise, your company is going to stagnate.
What else can prevent growth?
The biggest one in history has always been not being adaptable to change. Great companies are very adaptable to change. They see new market opportunities, and they’re willing to take risks and move quickly.
If you go back to the railroads, they thought they were in the railroad business. Well, they were really in the transportation business. You have to look at your business in a broader spectrum of the customer, not necessarily how you, at that moment in time, are serving the customer.
Your business is always serving the customer. And if you can do it better and at a more innovative basis than anyone else, then your company is going to sustain. Seek out the opportunities and modify your business accordingly.
How do you build a good reputation?
We pride ourselves, when we’re in discussions, on giving the other side all of the information they need, as opposed to trying to withhold the information. If you’re willing to be all-cards-up with somebody and lay everything out, we feel that’s building a great reputation as opposed to companies who act in their own best interest.
If you’re going to have a sustainable business ... it comes down to the real simple thing: Treat people like you’d want to be treated. That goes a long way, and it’s amazing how many companies can along the way forget that basic premise.
How do you define success?
A motivated group of people with a common goal. The energy that comes from that and the inspiration that comes from that is what really builds great companies. There are some companies that make money.
There are some companies that serve a market adequately, but I think there’s certain companies that just have an energy. They’re on a mission. Their mission is to simply serve customers better than anybody else.
A company like Starbucks, when you think about it, they weren’t really serving an unmet need there were coffee shops around but they did it in a way that made people want to go to Starbucks.
HOW TO REACH: Acacia Technologies Group, www.acaciatechnologies.com
Since 1940, when Mintie Corp. was founded by Mintie’s grandfather to provide indoor air-quality solutions, it has adapted its focus to meet the changing markets and new opportunities brought by each decade.
“Everything is an evolution of our past services and not a complete change in direction or expertise,” Mintie says. “We’re constantly thinking about how we can evolve and stay ahead through innovation.”
In 2003, the company introduced a line of containment units designed to control the spread of harmful airborne particles during construction or maintenance a big shift for the traditionally service-based company.
“Our risk was, yes, we could make an investment, and this might not be as big a success as we’d hoped it would be but ... to pass on it would be worse than taking a risk and have it (be) only mediocre,” Mintie says.
Since then, the company has seen annual average sales increases of 25 percent, and Mintie expects a minimum growth rate of 18 percent to 20 percent for each of the next five years.
Smart Business spoke with Mintie about how he nurtures an environment that encourages change.
What is the key to anticipating and adapting to change?
This ties back mainly to knowing our customers and listening to their needs. Through close personal relationships and always being available, we’re able to help our clients and customers find solutions to their challenges.
We kept an eye on various industry developments and how they affect or created new opportunities with our own business. We worked hard to stay focused within our own fields of expertise.
Innovative ideas come from so many different places, so we make sure we’re listening to our customers, our channel partners and then our employees. Our employees are key to the ideas, because they’re actually out in the field and see what’s taking place and what the needs might be.
How do you promote a culture that values innovation?
It’s basically challenging that entrepreneurial spirit. Innovation can and should be the backbone of a growing business. We promote a culture of innovation at Mintie by challenging each other to think differently, and I think the overused term is ‘think outside the box’ and just do things better than before.
My experience has been people tend to be motivated by being able to make a difference, to have their efforts mean something in the overall picture. So by allowing everyone to bring their ideas to the table and often be in charge of developing those ideas, we keep this culture of innovation alive.
How do you keep employees adaptable to change?
With success and growth comes change, and that can sometimes be difficult ...You bring new people in, and some of your longtime employees may feel threatened. You bring in new technology and processes, and someone may feel intimidated.
You must try and create a collaborative culture where employees feel they have a stake in the success of your company and where their efforts actually make a difference. What we do is we come to the understanding that change makes us all more effective and, in the long run, most likely (makes us) more creative or more innovative.
Change also requires effective communication, a lot of personal involvement in changes that are essential to helping an employee adapt to a growing organization. Teamwork and collaborative meetings help change evolve naturally, because they allow the employees to be part of the process or the changes you may be trying to achieve.
How can a company prepare for growth?
The challenge now is not to be seduced by the excitement generated over a hot new product. Instead, we want to make sure we keep our eye to the future and be ready for it when it arrives. This has required us to do a lot of careful planning ... and appropriate the resource allocations necessary to continue into the future.
For a small business, resources are finite, so it really becomes a challenge. But I believe it’s just absolutely critical to stay focused on your future if you want to come out ahead even though you’ve got something positive right there before you.
Stay focused on the needs of your employees and your customers. If you can be truly committed to shaping your business around that and are willing to challenge conventional thinking, instill responsibility in your employees and make the changes necessary, whether in your office or in the marketplace, you can accomplish more than you probably ever dreamed.
HOW TO REACH: Mintie Corp., www.mintie.com
Sirois knew he had to focus his attention on the company’s operating systems if he was going to present Checkers as the opportunity that he knew it was and improving the operating systems would improve the bottom line.
“While the company was struggling, it was obvious there were many positive attributes to build upon,” says Sirois, who served as vice president of franchise operations before becoming CEO. “The most important thing we’ve had to do to get it done was to develop a culture where everyone was working toward the same thing both franchisees and employees.”
Sirois and his team of executives had to get the company back on the path of great operational execution if they were going to continue to increase revenue and thus attract franchisees. With franchises comprising 604 of the company’s 804 locations (under both the Checkers and Rally’s Hamburgers brands), they are a key component to continuing growth.
So they developed a plan to improve training, communication and technology to both bolster Checkers/Rally’s revenue and its reputation.
On the go
The company’s unique double drive-thru format and 99-cent burgers were no longer enough to keep pace with the competition.
“We’ve performed very strongly, but the whole industry has gotten quicker at the drive-thru over the last several years, and as we’ve gotten quicker, we’ve gotten weaker in the accuracy department,” says Sirois. “Our customers continued to tell us that they loved our food and they loved our delivery system the double drive-thru but what they didn’t like about us was our inconsistency and their inability to rely on us to do it right more often than not. It was simply, in my mind, getting back in and addressing the basics and providing the consumer with what they relied on us for.”
The proposed solution was a Guest Obsessed training program. The GO program is driven toward achieving excellent speed while maintaining a high level of order accuracy and providing guests with the best possible experience at all of Checkers/Rally’s restaurants in 26 states and the District of Columbia.
A cornerstone of the GO program is to reinforce basic operating standards, such as service with a smile, that are absent in so many quick-service restaurants today.
“We talk a lot about making eye contact with the customer when they’re at the window, that there’s a very limited period of time where we interact with the guest, and we need to make sure we take full advantage by making eye contact, smiling, thanking people,” says Sirois.
It’s the little things that often make a difference and keep customers coming back which is why part of the training involves standing outside by the ordering speaker to hear the difference between short, curt replies and what Sirois calls “smiling through the speaker.”
The second part of the program gives employees a reason to strive for excellence. Sirois believes strongly in incentives and acknowledgment to reward good work.
Checkers/Rally’s makes use of a third-party national shopper program at every restaurant six to eight times a year. He also has internal employees doing secret shopping more often.
“The third party goes to the restaurant, and they order their food according to guidelines and have their drive-thru experience,” says Sirois. “And if that restaurant meets ... specific criteria, that shopper immediately pulls over, parks the car, goes to the restaurant and awards that crew some type of an award depending on what part of the program we’re in at that point.
“It may be ‘Guest Obsessed’ pins. It may be gift cards. It may be any number of things. It may be shirts but some type of immediate recognition that they demonstrated their Guest Obsessed abilities.”
Incentives for general managers are even better. Twice a month, Checkers/Rally’s gives away automobiles in a drawing of general managers who have placed in the top 25 percent of sales growth. And every year, the top 100 general managers and their spouses are taken on a five-night Caribbean cruise.
“We focus on our general manager level because we think that’s the critical position in our company,” says Sirois. “That’s where the rubber meets the road in our business. The general manager hires and oversees the training of the staff. They have ultimate control over costs, promotional execution, guest relations, etc. They are the company to our guests and employees.”
It’s no surprise, then, that Checkers/Rally’s has retention rates well above industry averages, and 75 percent of promotions come from within the organization. And while industry turnover rates for general managers averages about 33 percent, turnover rates for managers who have gone through the Checkers/Rally’s GO program is 13 percent.
“We could save a lot of money this year if we cut out our incentive programs cruises and cars and things like that but we think that’s money we get a great return on,” says Sirois.
The incentives and praise also play into improving Checkers/Rally’s corporate culture which, in turn, encourages people to work harder and drive sales.
“We’re all the time acknowledging excellence and acknowledging achievement, and that’s important because all around them, they’re being viewed as something less than excellent because they’re burger flippers,” says Sirois. “We’ve changed how a burger flipper is viewed in our culture.”
Tools for improvement
With more than 5,000 employees nationwide, Sirois knows that good communication and technology are critical to improving the company’s operational execution.
The company implemented a Web-based system to streamline and foster the exchange of information among corporate, franchisees and employees. The intranet improves the reporting of sales results and makes sure that everyone is getting the same unified message. It allows Checkers/Rally’s to communicate with its employees instantaneously and ensures that information such as promotional and training materials are up-to-date and sent out on time.
“People are able, via that Web site, to ask questions of our training department about materials or if it wasn’t clear to them what we’re talking about,” says Sirois. “It’s usually within 24 hours they get an answer to their question. And that question stays posted up for everybody else in the system, so if one person asked a question that 100 people had, they get the answer, too.”
The company has also spent the past few years upgrading Point of Sale (POS) systems in each of the restaurants.
“It’s very easy for folks to utilize these pieces of equipment,” says Sirois. “When they step up to a touch screen piece of technology, they understand it almost immediately. What that allowed us to do is shorten the time it takes to teach a cashier, for example, how to take orders and ring up things. If I can teach people quicker, that ... shortens the cost of training.”
The new POS system also enables the company to put prompts on the register screens so that employees don’t have to rely on memory to remember to ask if a customer would like fries or suggest adding cheese to a burger.
“All those little slices of cheese add up,” says Sirois. “And by the way, the consumer who forgets to say, ‘I wanted the cheeseburger’ is glad you told them.”
The company has also added timing systems at each restaurant’s two drive-thrus.
“There’s a little digital readout so that not only does each side of the restaurant see what their current time is on that customer, but they see what their average time is so far for that meal period, and they can compete back and forth, which helps improve the speed,” says Sirois.
Even though the company’s turnaround isn’t complete, Sirois is confident that it is now operating at the highest standards and is starting to see the fruits of its labors.
Although Checkers/Rally’s revenue fell from $194 million in 2004 to $187 million in 2005, mostly due to restaurant closings as a result of Hurricane Katrina, the company still posted same-store sales growth 19 of the last 20 quarters. And in 2005, Rally’s was named “Best Drive-Thru in America” by QSR Magazine, whose annual survey ranks the top 25 quick-service restaurants in the country.
But Sirois knows that doesn’t mean the company can relax. He and his executives are constantly analyzing the GO program and technology, a process he compares to a TV show he once saw in which a man was trying to spin plates on sticks.
“By the time he started to spin the seventh, the first one would start wobbling like it’s going to fall,” says Sirois. “And that’s kind of how our program is. As we go through the GO program and work on various parts of the business, as we get two and three years into it, we’ve got to go back to the first wobbly plate.”
Sirois hopes the company’s dedication to accuracy, speed, great service and communication will help Checkers/Rally’s continue to expand through increased franchise operations. It has entered into development agreements for an additional 129 franchised units by 2009.
“Our turnaround and our success has come from us embracing who we are as a double-drive-thru restaurant,” he says. “Our consumers are coming back more often and spending more money with us, and our business is growing as a result.
“The better we do at our execution, the more we get awards like ‘Best Drive-Thru in America,’ that makes us much more attractive to potential franchise candidates and helps us accomplish these goals we have to add franchisees and new franchise restaurants.”
HOW TO REACH: Checkers Drive-In Restaurants Inc., www.checkers.com
After the mid-market technology solutions provider acquired Redrock Communications and Integrated Technologies Inc. in 2004, CEO Casper Zublin Jr. built the company’s success on a solid foundation of communication with employees and clients.
“Most of leadership’s job here at DynTek is to ask a lot of questions and be quick to listen and slow to speak,” says Zublin. “People, I think, are a little tired of inauthentic leaders, so we’re trying to create an environment of leadership that is both transparent and authentic. It leads to having some faith and trust in the leadership of the firm.”
DynTek’s revenue has grown from $49 million in 2004 to $76 million at the end of its 2005 fiscal year last June.
Smart Business spoke with Zublin about how he uses internal and external communication to keep DynTek on a path of success.
How do you show your employees that you and the other members of the leadership team are transparent and authentic?
All leaders at DynTek publish monthly an accountability report detailing what will get done in the next month and how we fared this past month. Honest, direct and straight communication is key.
Additionally, we are starting something called the DynTek Scorecard. Essentially, during our quarterly conference calls, we announce to the team what we define as our key metrics for the upcoming quarter. We then report back to the team on how we fared. We really believe in being an open and honest management team business may not always be rosy, and we think people would rather hear about truth rather than spin.
How do you communicate your culture to your employees?
We’re actually going through a bit of a cultural reinvention at the moment. We want to create more of a bottom-up corporate culture, so we are reaching out to our employees through a series of conference calls, webinars and in-person town hall forums.
[We handed] out an employee questionnaire. How would you rate our sales, technical and corporate services? How would you rate DynTek’s future outlook? What internally drives you? What are our distinct advantages in the marketplace?
With the answers to that employee questionnaire, we provide the summary answers at the town hall meetings as kind of a baseline of information of how we’re doing. We want to actively listen to what our associates have to say about our culture, how they view it, and then tell them what we heard. From that baseline, we think our work is to shape the culture we have today into an ideal that everyone can believe in.
How do you also listen to your customers?
Customer surveys, customer advisory board and then me personally being out talking to our customers on a regular basis. (The board) is really like a long lunch with three or four of our key customers.
The advisory board advises me on what they’re seeing in our market from their perspective. You get very open and honest feedback, and because there’s multiple CIOs around that table [you also get] them kind of confirming each other’s thoughts. That’s just extremely valuable feedback to listen to multiple CIOs saying, ‘Yeah, the world’s heading in that direction. And we’d sure like you guys to head in that direction.’
When you’re in the services industry, everyone is focused on customer service. One of the things is you have to be asking your customers, ‘How are we doing for you?’ I think part of our corporate culture is creating that willingness to ask the customer how we’re doing on a consistent basis and then listening very carefully to what they have to say and adapt.
Being in the services industry is largely about adapting to the customer requirement on an ongoing basis.
What is the concept behind your ‘technology, process, people’s philosophy?
If I asked you what’s your experience been with technology, has it been just as wonderful as promised? Probably not. It’s not just about technology.
Let’s add another leg to that. Let’s say we get the technology right, but we also get the process for procuring it, for installing it, for supporting it right. Does that make your experience a little better?
Then, what about now you, throw in the people aspect of people actually caring about your experience with the technology? Does that kind of round that whole triangle out?
It seems like it’s a three-legged stool. You can’t just be saying it’s about the technology without also talking about the process and the people that are part of that. It takes all three to have a successful and meaningful impact of an implementation of technology for any kind of organization.
At the end of the day, we really are staking our reputation on helping our clients build their reputation. So many of our clients are not only the executives of mid-market companies but really the IT professionals within those mid-market companies. If we can’t go in and fundamentally make them look like heroes, then we’re not doing our jobs.
HOW TO REACH: DynTek Inc., www.dyntek.com
As CEO of ATEN Technology Inc., Sampson Yang knows all about making good connections.
His business model involves the right mix of people and innovation to bring quality products to the customers of his company, a manufacturer and distributor of KVM (keyboard/video/mouse) and remote connectivity solutions.
“We’re not happy just to compete for market share with established products,” says Yang. “We want to develop products that meet the needs of our customers that no competitor has imagined yet.”
Since its founding in 1996, the company has doubled its revenue every two years, going from $46 million in 2004 to $62 million last year, while the number of employees has risen from two to 101.
Smart Business spoke with Yang about how he has grown ATEN Technology and how he differentiates his company from its competitors.
How have you grown your company?
Being a manufacturer, we are able to control the quality and cost, and we can react quickly to the demand of the market. The result is we can provide solutions to our customers in a more cost-effective manner.
We try not to diversify our business too much. We stay focused, making sure that we can do one thing well before we move on to others. We just recently turned down a half million (product order) from Asia because we are not perfectly comfortable with the fact that we can service the customer well.
The other thing is our commitment to providing excellent customer service. We provide dedicated tech support to all of our business partners and to the end-users. Our tech support hotline is 24/7/365. We think that’s a part our customers very much appreciate.
We have a group of hardworking people who really care about our company, and in fact, many of our employees have worked for the company since it was very, very small. They are still very loyal to the company. And the new employees, they are as good as (the old).
How do you attract those kinds of people?
I think it’s our philosophy. Innovation, creativity, fun are the three components of it. People are not necessarily coming looking at just the salary. They want to feel that they can do something; they are in a fun environment.
How do you promote that philosophy internally?
I have an open door policy. Whenever any employee has a new idea or product some business process, anything, even if it’s a crazy idea all those are welcome. Sometimes we go out to lunch together in a more casual, nonbusiness environment to brainstorm about new ideas.
Everyone is encouraged to try new things. Sometimes the result may not be as good as we expected, but we appreciate the passion and the willingness to try new things. You learn from mistakes sometimes. Next time you come up with something new, you learn from your experience.
How do you ensure the quality of your products?
Every product we ship out of the door needs to pass 26 stations. Each station has its functional tests, feature tests and electronics tests.
Quality control is important to us because of the commitment we have made to our customers to provide products that are economic, user-friendly and highly dependable. Our focus on quality actually starts during research and development. We aim our R&D efforts at creating new products that are both creative and reliable. We question our designs at every phase of development and constantly look for ways to keep them simple and efficient.
How do you differentiate your service from that of your competitors?
The tech support hotline is one way we can add value. We recognize that there is often a learning curve in using technology. Our customers can be confident that if they buy one of our products, someone will be available to answer their questions and provide advice.
We sell our products around the world. It doesn’t matter where a customer makes a purchase; he or she can receive help 24 hours a day, seven days a week.
We’re very proud of the quality of our technical support. Our commitment ... begins with training. The team receives its training from our product managers, who know their equipment from the ground up. Each product manager has a solid understanding that extends to initial research and development.
In addition to passing on their technical knowledge, the product managers communicate something else of critical importance. I call it the customer mindset. They teach the tech support reps to constantly think about our products from the end user’s point of view.
Another way we make a strong commitment to technical support is by ensuring all of our reps have hands-on experience. In fact, they work only steps away from a lab where they can test our equipment any time.
How do you come up with new products?
We do listen very carefully to what our customers say ... what they are using, what they see the future will be. We do have a survey after each call, which asks the customers if there’s anything they would consider buying in the near future.
That is very helpful to our R&D and product management team to determine what will be the next product we want to introduce to the market.
HOW TO REACH: ATEN Technology Inc., www.aten-usa.com