Gregory Ebel has operated in a business environment of uncertainty and constant change for too long. He has worked hard to be at the forefront of his industry, helping people understand the important factors and circumstances in his business.
Ebel, president and CEO of Spectra Energy Corp., a Fortune 500 natural gas infrastructure company, operates in a regulated industry where things might not always go his way. Ebel makes numerous trips to Washington D.C. to be face to face with the legislators who set regulations and helps them understand how Spectra and other energy companies do business to allow for regulations that are fair and sensible for all involved.
“In a regulated business, obviously, what’s going on in Washington D.C. and in lots of states from regulatory overreach is our biggest challenge as a business and the uncertainty that that creates for our ability to invest,” Ebel says. “The pipeline business is a business that invests for 15, 20, 25, 30 years at a time. When you’ve got regulatory uncertainty and you’re trying to determine how good of an investment it’s going to be over time, that makes it very difficult.”
Spectra Energy employs 5,500 people, had operating revenue of $4.94 billion in 2010 and has $26.7 billion in assets, so it is critical that Ebel and the other Spectra executives fight the regulations that unnecessarily harm the business.
Here’s how Ebel communicates and educates his employees, legislators and others in the industry to help improve the uncertain environment.
Engage people in your business
Spectra is currently building a pipeline into New Jersey and New York that is critical to reduce the cost of energy for the people in that region and bring in new gas sources.
“It is only 15 miles long, and it will, from the time we sign the contract with the customers to the time we put it into service, take four years and cost $1 billion,” Ebel says. “If it was allowed to start and we’re two years into this, it could produce more than 5,000 jobs today without government support. Yet it is very difficult. In a country that needs a lot of jobs, in a country that needs cheap energy, in a country that is looking for clean energy, it’s amazing to me and I think a lot of people in different industries, how long it takes to get approvals.”
While there is no desire to get away from following good procedures and good regulation, the issue is the cost of regulation is far outstripping the benefit.
“That’s the big concern and the fight we have to have with the regulators and try to do it in as positive a manner as possible,” he says. “The natural gas industry in North America is undergoing extraordinary growth thanks to technological developments that have given the country a 100-year supply of natural gas at a time that it needs domestic energy, at a time that it needs domestic jobs, at a time that it needs cleaner energy, and that is a huge, huge game changer for the industry. Being able to manage within that is what it’s all about right now.”
In order to overcome the challenges of regulations facing certain industries, companies and CEOs need to be willing to speak to people about their businesses and talk about the issues they are facing and ways to make things better.
“I would say we do three things: engage, engage, engage,” Ebel says. “There are three elements to that. We engage with our employees. We’ve spent a lot more time in Washington D.C. making sure that legislators understand our business and the third area of engagement is our industry groups. We belong to things like the Interstate Natural Gas Association or the American Gas Association. We make sure that either I directly or other executives in the company are trying to muster the forces within our industry groups to make sure we are delivering a consistent message from the industry to government to prevent this regulatory overreach.”
It is that constant education of what’s going on inside Spectra, around the country, and in the energy industry that helps how government handles regulation and how an entire industry can work more efficiently.
“That’s been really critical,” Ebel says. “Generally, CEOs do not like spending time in Washington or state capitals, but it’s critical now. You have to engage with politicians who frankly, don’t seem to have a lot of foresight when it comes to creating regulation or understanding what’s truly going on in the economy.”
Spectra has been spending a lot of time educating not only politicians but its own employees, as well.
“We have what we call an ambassador program so that we can ensure that our employees have the best facts and the best information about the natural gas business and the really exciting changes and the jobs that we produce in the country, and we run a lot of employees through that,” he says. “So whether they’re at a cocktail party or rotary club or women’s auxiliary, they can speak about the company and the industry.”
No matter how you educate your employees or politicians about your industry, one thing has to remain the same: your message.
“You have to be consistent with your message to employees and be consistent with your message to government,” he says. “You need to constantly repeat that message and you have to engage. CEOs don’t like spending a lot of time dealing with government because it doesn’t generate revenue, but it really can generate speed to market. Speed to market for us means building projects faster, on time and on budget to serve our customers and that can be grossly restricted by regulations. So there is value in it, although it’s hard to see. More and more CEOs and C-suite executives need to spend time with our politicians to tell their story. We all like to stay below the radar and deal with our businesses, but when government is so much in your face and has so much regulation, it becomes a real necessity to be successful.”
You don’t have to fight regulations on your own. It is a huge advantage to join industry associations that have similar goals.
“Other than a few companies like GE, Ford, Dow, Microsoft or Berkshire Hathaway, if those companies say something, it might get picked up, but most companies, of which there are thousands and thousands, need the bulk of similar type companies coming together,” Ebel says. “For us, the biggest one we’re involved with is the Interstate Natural Gas Association, which is a group of companies with similar interests in a similar industry that come together. Because of that heft and the number of employees you represent, the amount of gas pipelines you represent, and the energy sources that you represent, you can have a bigger impact by speaking with one voice and one consistent message.”
Ebel became chairman of the INGAA this past October. It’s these types of connections that can make a big difference when you need it.
“We need more and more CEOs to be involved in those industry associations if they’re going to be effective in Washington. If you show your 80 percent of the industry a position on a policy or regulation, that has real resonance whether it’s with the White House or Congress; that’s why those associations are important. That’s why we put time into them and money and I think more CEO’s need to use their industry groups to mobilize an entire industry to get positive change.”
When it comes to getting people and, most importantly, employees to understand anything that is going on in your business, it is critical that you communicate and communicate often.
“The biggest thing is our ambassador program, which is educating our employees on what our business does,” Ebel says. “It’s amazing when you have thousands of employees, how many, through no fault of their own, don’t know exactly what you do. Everybody’s got a job inside the company and it’s good that they stay focused on that, but giving them a whole picture of what you do, they can become very valuable and powerful advocates for you.”
To get your employees more involved in your company you can’t make things complicated or they will lose interest. You have to make things simple and straightforward.
“We have a phrase here called the KISS method — keep it simple, stupid,” Ebel says. “We say, ‘Keep it simple, Spectra.’ We try to communicate very short and specific goals and messages for the employees. Most employees would know that we are trying to lead in three areas: safety and reliability, customer responsiveness, and profitability. By the end of 2012, we want to be leading our industry. That has been incredible in terms of focusing employees both in the field and in office positions. I think most CEOs know this, but we sometimes forget. Keep things very simple and have three to five messages and goals that the employees across the entire company can pursue and connect with. That’s a pretty valuable tool.”
Getting your message out to your employees is critical, but that message has to also go out to legislators who regulate your industry in order to create change.
“Most CEOs, no matter what industry you’re in, there is some form of federal government regulation,” Ebel says. “If you’re a public company, it’s the SEC. If you’re a company like Spectra, it’s the Federal Energy Regulatory Commission, which determines how quick your projects get approved, which determines how quick you build them, which determines how quick you take capital and turn it into revenue and serve customers. That’s a huge issue for us.
“Safety is our key license to operate. Particularly in this environment post-BP and oil pipeline spills, all of those often lead to knee-jerk reactions by government. So make sure that you are telling government your story and your safety standard is critical in terms of avoiding unnecessary regulation and there again meeting those goals of safety reliability, customer responsiveness, and profitability.”
Spectra doesn’t just express opinions every so often to legislators, the company has people full-time in Washington D.C. to really make its presence felt.
“We have an office in Washington,” Ebel says. “We have various consultants in Washington and many of us spend time in Washington, not just with politicians, but regulatory bodies too making sure they’re informed about what we do and being an adviser of choice to the government so when they’re thinking about issues they pick up the phone and ask Spectra, ‘What do you think about this?’ And they know they’re going to get relatively unbiased opinions, that they’re going to get constructive views and they’re going to get information that will be helpful for them to make policies. The worst thing is when government makes policies without having all the facts.”
It’s not enough to make a phone call to a politician or write a letter. You have to meet with legislators face to face and treat them like they are another customer.
“You have to go see them,” Ebel says. “You have to spend time with them. You’ve got to try and understand where they are coming from. What political pressures are they under? What public pressures are they under? Regulators are just another form of customer. What are their needs? What are they trying to achieve? How do you help them achieve their goal while at the same time making sure you achieve your goal? Treat the regulators like you treat your customers and try to get win-win solutions. That doesn’t mean you don’t have disagreements, because you have disagreements with customers every once in a while, but making sure you understand what their view point is gets you a lot further down the trail.”
HOW TO REACH: Spectra Energy Corp., (713) 627-5400 or www.spectraenergy.com
- Engage people in your business
- Join associations and groups that have similar interests
- Communicate your company’s message in order to create change
The Ebel File
President and CEO
Spectra Energy Corp.
Born: Ottawa, Canada
Education: He received a BA from York University in Toronto, Canada, and is a graduate of the Advanced Management Program at the Harvard Business School.
What was your very first job, and what did that experience teach you?
My first job as a kid was a paper route. It taught me how to market and how to expand and how to make sure you bring in more revenue. That marketing to customers was a huge part of it.
Who is somebody you admire in business?
I’m fortunate to have an entire board of former CEOs. They have consistently over years provided great advice and between them, they have launched at least 20 CEOs.
What is your definition of success?
From a professional perspective, it’s seeing the families that work for Spectra continue to grow as individuals and be able to achieve their dreams for their families. If we can do that at Spectra safely, consistently and profitably, that’s success.
What is your favorite thing about the energy industry?
It’s constantly changing. I like that and the fact that it serves people quietly and consistently year in and year out.
What’s something that you are excited about for the future of energy?
I’m excited by the fact that North America has an opportunity now to achieve energy independence with a clean abundant fuel that just a few years ago we weren’t sure would be around as a foundational fuel.
William Wang believes in the power of optimism. As Vizio Inc. endured the darkest days of the recession, Wang continued to believe that the brainpower of his 340 employees would be the ultimate separator that would allow his company to not only survive the recession but flourish after its end.
With that in mind, Wang has been relentless about creating a positive mindset throughout his company, starting with the example he sets.
“I believe that what goes around is what comes around,” says the founder and CEO of Vizio, a consumer electronics manufacturer. “I feel that I’m innovative as a leader, and the rest of the company follows me. Innovation isn’t just about the products we make, it’s about the way we operate. So we get our suppliers to move faster, we get our trucks to pick up merchandise faster, all the little details here and there. We’re a young company, so innovation is actually a pretty common thing within our walls.”
Wang founded Vizio in 2002, and has grown it to a company that generated approximately $3 billion in revenue during 2010. To keep Vizio’s people focused on what’s next for the company, Wang needed to engage his employees through many different avenues of communication, continually spread the basic principles of the company’s values and mission, and continually keep his long-range vision for the company at the front of everyone’s mind.
“I have to act as the cheerleader for the company,” Wang says. “There is nothing we can do about turning the economy around, so we’re going to focus on what we can do within the company instead of changing the economy around. Let’s just focus on the things we can improve ourselves, and remember that we have a good track record. If we keep on doing the same things we’ve done before, we can counteract a lot of the negative news in the environment.”
Set a common goal
If you want to develop a central focus within your organization, you need to form a central goal and put it in front of each person. No matter what task each employee performs within your organizational structure, they are helping the company achieve its goal.
In Vizio’s case, Wang wanted the innovative power of his employees leveraged to create products that are not just on the leading edge of technology, but affordable — and produced in an efficient manner that reduces process waste and gets products to market as quickly and simply as possible.
“Our business was fortunate in that it did not get impacted as much as some of our other competitors by the recession, and affordability was something that was of an even stronger focus as we accommodated the weaker demand in the consumer electronics sector,” Wang says. “That’s why our business is still hanging in there despite the economy, due to our strategy to make products affordable. For example, we recently launched a tablet computer, and instead of fighting with companies like Apple, we came out with a product in the $300 price range. Hopefully by doing that, we’re trying to create traction for Vizio in a new marketplace.”
To Wang, efficiency in the production process is another form of innovation that ultimately affects the consumer. The end user might never see the process by which a product is conceived, tested, produced and brought to market, but efficiency plays a large role in Vizio’s ability to offer electronics at prices below many of their competitors.
“We still have maintained our strategy the same way, regardless of how weak the economy has been,” he says. “In a weaker economy, you have to be super-efficient to be able to pass the savings on to the consumer. That’s how you grab market share away from your weaker competitors.”
Wang’s plan for recession survival is based on basic principles that just about every manufacturing business has employed in some form. Streamline operations and try to get your product to marketplace with a competitive price attached to it. That in and of itself isn’t where you need to expend most of your energy as a leader. Where you need to do most of your work is in your capacity as a communicator.
At Vizio, Wang believes the best innovation comes from employees who realize that they are, in some way, a part of the company’s brain trust. They might not be in the boardroom making large-scale, strategic decisions, but they are constantly challenged to come up with ideas — new products, new spins on established products, new processes, new policies.
All of the ideas can’t be used, but the bigger issue is employee engagement. Your people need to be enabled to think for themselves. For Wang, it comes back to setting the example himself, and getting others to follow his example. Wang can’t afford to communicate simply to hear himself talk. The company won’t advance if he is the only person doing the pulling. Wang needs other employees to provide momentum, as well, by facilitating their own communication opportunities.
“It’s all about teamwork,” he says. “In order to build a team, you can’t just tell people what to do. At some companies, the leadership will tell people, ‘Go do this and do that.’ But that doesn’t always work. People have to be able to know each other. So it is critical in my opinion to have that lateral communication. I encourage that by trying to do it a lot. I walk around the building all the time and try to talk to as many people as I can. It still helps that we only have 340 people. It used to be extremely easy for us, because when you have 30 people, you know everyone by their first name. But we still try to spend a lot of time sharing ideas.”
Wang believes that setting the example for engaged, motivated employees isn’t something you can talk about. It’s something you have to do. The only way employees will follow the path you’ve laid down is if they see it demonstrated in actions instead of words.
“I don’t plan for communication,” Wang says. “I just do it. I like to communicate with everybody. I think it’s something you have to do and make part of your culture. It’s the communication age, you have e-mail — though I really don’t like e-mail because it’s a one-way form of communication — and you also have the opportunity to call each other, get out into the office and talk with each other. And especially if you are in a smaller company, you should take the opportunity to walk around and talk to people.”
Be a coach
The best CEOs are often like the best sports coaches. They set the goals, they forge a path to meet those goals, and they teach the principles that will allow their charges to walk the path. Beyond that, you have to trust that the lessons have taken root and your people will take the principles that you have taught and run toward the goal with them.
In other words, you have to delegate responsibility and accountability to the appropriate level. In Vizio’s innovation-centered culture, that means Wang sets the parameters within which employees can innovate but tries to exert very little control over the process beyond that.
“I want to be a coach,” Wang says. “I don’t want to be a player. If every once in a while someone goes off in a wrong direction, I have to point them back to the way I see fit. But once you decide to delegate, you don’t bring that responsibility back. I don’t spend a lot of time challenging them on what to do.”
If you are in Wang’s position and have either founded your company or been a key player since early in the company’s history, you might be used to certain processes. But as the company grows, you should learn to rein that in and, as much as possible, allow employees to come up with their own ideas and their own processes for trying out those ideas. As long as they aren’t innovating their way off into left field, away from your company’s goals and mission, you should allow room for the mistakes and trial by error that is inherent to the innovation process.
“I used to be more of a micromanager, but I don’t do that anymore,” Wang says. “I found it is a lot more effective if I find capable and willing people to help me execute on the goals of the organization. I don’t believe I can do it all, so I focus more on the vision and delegate the details to the great group of people that we have here.”
Your main roles in the delegation process are to hold your direct reports accountable for reaching the goals that have been established and to ensure that the goals are realistic and reachable. It is not an exact science, but it involves setting a balance between where you want to grow the company and the capabilities of your people. You want goals that are aggressive, yet can be attained without stretching your manpower and resources to the breaking point.
“Everybody has to have a common goal, but the goal has to be reachable,” Wang says. “I see a lot of CEOs set out in pursuit of impossible goals that their people will have a hard time reaching. You have to make sure the goals are achievable, which is why our goals as a company are approved by myself and my top management.”
Wang also points to incentivization as a way to ensure that goals are reached. If you put an extensive rewards program in place that include bonuses, recognition and other gifts, you will make the goals of your organization more personal for your employees.
It’s not wrong to ask your employees to be motivated by serving the greater good of moving the company forward, but personal gain is still a powerful motivator in just about any company.
“Ultimately, we’re in a business situation, so the rewards for us are going to come in the form of money, bonuses and profit sharing,” Wang says. “We do quarterly profit sharing, so the more the company makes, the more the individual team members receive. I believe that when people come to work, the single biggest reason is to make more money — that, and to fulfill their desire for achievement.”
To get the most out of your employees, you need to strike a balance between motivating them through personal gain and motivating them through serving the greater good of improving the company’s outlook. Wang says that stimulating innovation has elements of incentivizing, promoting employees to greater levels of responsibility and large-scale goal-setting.
“Money might be the No. 1 motivation for employees, but it doesn’t mean it’s the number one motivation for them to do their jobs right,” he says. “Our goal of being No. 1 in the U.S. in our industry is a great motivator, not only to give people a reason to work hard, but also to associate themselves with a company that is growing in spite of the economy.
“But it still starts with the person at the top. You have to be willing to give them an incentive first before the positive reinforcement takes place. People have to know that I want to share in our success, then people will work hard and want to come to work. If they have coworkers who share the same values, that is really how you start to get a family-type atmosphere in the workplace.”
How to reach: Vizio Inc., (949) 428-2525 or www.vizio.com
The Wang file
Born: Taipei, Taiwan
Education: Electrical engineering degree from the University of Southern California
What is the best business lesson you’ve learned?
My best lesson is to learn how to delegate, which I learned through years of experience as an entrepreneur.
What traits or skills are essential for a business leader?
The business leader has to be inspirational, has to have charisma and provide people with hope, and they have to be willing to share with everybody. A business leader has to be generous.
What is your definition of success?
Being in a position where you can come to work every morning with a smile on your face.
Gary Kiedaisch is charged with leading one of the strongest consumer product brands in the country. The chairman and CEO of No. 1 cooler manufacturer Igloo Products Corp. understands that achieving the top spot didn’t happen overnight or by accident. It took Igloo’s industry awareness, brand building and unmatched innovation to keep the manufacturer atop the cooler industry.
The $250 million, 1,200-employee company originated the cooler category in 1947 and for more than 60 years it has held the No. 1 market share. Kiedaisch has helped excel Igloo’s brand and its products and has the ongoing challenge of keeping the company relevant and continuing its reputation as the top cooler manufacturer.
“We have, in my humble opinion, the best products in the category,” Kiedaisch says. “I don’t think anybody has a lineup of coolers like Igloo does. We live, eat, sleep and breathe coolers.”
While Kiedaisch can enjoy the comfort of leading a No. 1 market share company, he hasn’t been resting on his laurels. Here’s how Kiedaisch combines a strong brand with industry leading innovation to help grow Igloo Products Corp.
Build and advance your brand
Research shows that three in every four U.S. households own at least one Igloo cooler. Igloo has achieved this level of market penetration by being the best at what they do.
“We specialize in coolers,” Kiedaisch says. “Our two main competitors, Coleman and Rubbermaid, are generalists. The cooler business for them is a fraction of their whole. Coolers are our shirt, and with them, they are a sleeve on their jacket.”
Igloo’s ability to continually produce high-quality, durable cooler products is what helps drive the company’s reputation and relationships.
“We are delivering to our customers a truly great product that they need and we have good relationships with them,” he says. “What that shows is our branding and they’re going to then put our brand on the shelf front and center because retailers want to know what they’re buying and that consumers have confidence in it. That’s the first stamp in the marketplace.”
There’s a reason you don’t see a lot of marketing dollars for coolers and that is because the cooler itself is a billboard.
“Once you sell a cooler, it’s not going to get used only by one person one time and put away in a closet,” Kiedaisch says. “The first time it gets used it’s probably going to get used by at least three, maybe four, maybe five people. It’s going to be taken out repeated times and when it is taken out it is going to be the center of the party. You use it when you go to the beach or going to camp. I’ve got some contractors restoring a property in New Hampshire and at lunch time they’re all sitting around their Igloo coolers and its part of their daily life. They live with those products.”
The many uses of a cooler along with the quality and durability of each one of them have helped Igloo sell more than 20 million coolers a year, which exponentially builds the brand.
“You’ve got 20 million impressions going to the marketplace multiplied by two, three, four or five, utilized four or five times a year with a life cycle of how ever many years coolers go on and you just have a huge penetration in American households,” Kiedaisch says. “That’s why the brand is so well-known and recognized.”
To make your brand well-known and recognized you have to not only have a product that people want to use, but you have to associate your brand with things that your products are regularly used for.
“In sporting goods products there are many, many likes; for example skis,” Kiedaisch says. “You watch the Olympics and you see the skiers coming down and at the end of the race they pick up their skis and there’s a big billboard with the name of their ski right beside their head and that’s what’s commonly called sports marketing. I call it opinion-reader marketing and hundreds of thousands of consumer products companies use that strategy.
“It’s the same with car racing. I think it’s great that Chevrolet is on a NASCAR because that’s a Chevrolet engine and that’s a pretty tough piece of equipment. When you get a company’s brand on a NASCAR vehicle that has nothing to do with automotive or mechanical or engineering or doesn’t have a part in the vehicle, that’s just trying to get your name in front of the consumer demographic, but there is very little correlation between the two. It’s a very expensive and very indirect way to build a brand.”
Igloo tries to team up with events or activities that directly correlate with the use of its products.
“We sponsor the FLW Tournament, which is the biggest bass fishing tournament in the country,” he says. “We’re on television with bass fisherman and … they have to bring these fish in for weighing and they have to keep them alive, so they put them in an Igloo cooler. That’s similar to the NASCAR race where our equipment and gear is being used by the celebrity. That is direct cause and effect and the person choosing a cooler at the moment of decision is going to recall, ‘This is the one that’s used by all those FLW guys, I see on TV all the time.’”
Discover avenues to grow
In order to lead a consumer category for more than 60 years, you need more than a good product to continue that dominance. You need to have strong employees that can recognize the right business strategies.
“Anybody will say that the toughest leadership challenges are always getting the right people focused around the right business strategies and having them executed and implemented with precision,” Kiedaisch says. “The most important thing is to really surround yourself with experts in fields of the discipline that you do business in. If you’re in the consumer products business and you sell products through whatever it is that’s your specialty, you need people that understand the habits and behaviors of not only the end user but the retailer that you’re dealing with and how they interface with their consumers.”
Kiedaisch has been able to surround himself with people who are experts in the cooler industry and that expertise has led to growth for Igloo.
“Since 2008 we’ve grown this company significantly,” he says. “We’ve grown more than 20 percent and in the specialty channels outside of Walmart, we’ve grown close to 30 percent. It’s come from recognizing what we do and doing what we do better.”
Igloo’s strong brand and market dominance has led to penetration in 70 percent of American households in a category that has penetration in 90 percent of American households.
“You could argue the market is saturated and there’s no room for growth or you could argue that it’s a staple of life that the product that you make, almost every household needs one or two or three,” Kiedaisch says. “All you really need to do is bring them new reasons to buy one — compelling new reasons to buy a replacement or take new consumers. It’s a combination of sustaining what worked before and also bringing new innovation into the category to improve it.”
To continue to grow your company, your products and your brand you have to be in the right mind set. You can’t be turned away at the first sign of adversity.
“You have to make sure that you know your business and never, never, never give up,” he says. “If what you try today or this morning didn’t work quite as you wanted it to, take a look at it and see what went wrong or what assumption was incorrect and keep going until you get the result you think you want. That’s not to say you go until death. Sometimes certain strategies are wrong and you need to course correct. You only course correct when there is clear evidence that the direction that the group felt the company should be going is unquestionably proven to be wrong.”
When you are trying to be new and different and make a stand in an industry there are always people who will disagree.
“There are a lot of naysayers, especially when you’re trying to do something new and you’re trying to be great, that are going to want to slow down or dumb it down or maybe not chase that ring and then you settle,” Kiedaisch says. “The worst thing that I’ve ever seen other executives do is settle. That’s when you get companies that don’t have great performance in their products, great performance in their innovation, great performance in their financials, and they don’t have, in my opinion, motivated and happy executives and employees.”
Innovate the industry
Kiedaisch and the employees at Igloo refuse to settle for anything less than their best. The company is always looking for the next innovation to keep its products relevant.
“It’s all about the quality and efficiency of the product,” Kiedaisch says. “It’s got to outperform anything else that’s out there in the marketplace and that’s what we’re constantly working on. If you’re not constantly reinventing your product there’s no reason to replace it, there’s no reason for somebody to be motivated to buy it, and you’re not going to have very good sales.”
Reinvention is what Igloo is great at. The company explores numerous avenues to make a good product even better.
“Take for example our soft-sided coolers,” he says. “The original soft-sided coolers are just square sewn together boxes with insulation in them and they were lunch boxes and they looked like that. What we’ve done is we’ve developed a series of bags, totes and across-shoulder messenger bags that are insulated and have fashion and design to them that women will carry to the office or men will carry to a boat that doesn’t look like it’s your lunch pail, yet it is.”
Igloo looks to other industries and product functions to get inspiration for its innovations.
“What we did was we studied the women’s handbag business and how women carry their daily accessory needs,” he says. “We look towards the luggage industry and we look toward the refrigeration industry to see what they’re doing. I don’t know who came out with wheels first, but I would bet that the luggage industry came out with wheels first and you can’t buy a piece of luggage today without a wheel on it.
“We’re in the food transportation and storage business. If you’re in that business you look at what other companies make products that move personal items by an individual and you can learn things from those people as to what you can do with your company.”
Igloo did something similar when designing its new rickshaw-inspired glide cooler. It took a page out of the Chinese lifestyle.
“We looked at the Chinese rickshaw and saw these frail people carting around two heavy people in a two-wheel wagon,” Kiedaisch says. “The art to it was the balance of the rickshaw and that the handle is set away from the wheels and acts as a lever. So we created a cooler that has a handle that extends out much like a rickshaw and you reduce the weight of lifting it by 50 percent and you also move yourself further away from the cooler so if you’re pulling it the cooler is far enough behind so it’s not bumping into your Achilles tendon.”
Kiedaisch doesn’t just look to similar industries or functions that could contribute to a cooler. He also watches how consumers utilize the products.
“We wander around a lot,” he says. “I’m often accused of being a chief product manager myself. We respect the fact of how the product plays. We watch how people use products. We look to related industries and how they manufacture products and what you can bring to the consumer in ways of better performance or better value and then we will incorporate it into the product. I probably on any given day of the week will see four or five innovative new things that the team will check and see if there is something we can do to incorporate that technology into our products.”
Innovation doesn’t stop at finding new ways for a product to be used it also applies to the ways you make a product.
“I’d challenge what technology ends up being used in the manufacturing or materials that are used in your products,” Kiedaisch says. “If Igloo didn’t do that we’d still be making metal fabricated coolers and they’d be horribly expensive.”
HOW TO REACH: Igloo Products Corp., (713) 584-6800 or www.igloocoolers.com
- Build your brand and align it with uses that directly correlate
- Use your brand and turn it into growth for your products
- Take what you do best and innovate to make it better
The Kiedaisch File
Born: Cambridge, Mass.
Education: Attended college for two years and was studying pre-law before joining the military.
Do you have a favorite Igloo product?
My 28-quart personal cooler that I use to travel to and from my boat with.
Who is somebody that you admire in business?
I admire Jack Welch and Steve Jobs. I say Jack Welch because when he ran General Electric, he had his hands on the ball. He had constant meetings with his employees and he was always motivating his employees and sharing where the company was and where it was going. I say Steve Jobs because he not only [ran the company] but he was the chief product development guy and he understood that the wellness of Apple Computers is as good as the last innovation you came up with and he drove that.
If you weren’t a CEO what job would you have?
If I were not running a company, I would be a lawyer of some sort because it is very similar to what I do. It’s getting the facts, preparation, presentation, cause and consequences, and it’s high stakes, winner takes all.
Cool facts about Igloo:
- Igloo is the No. 1 cooler brand in the world
- No. 1 market share in the U.S.
- No. 1 cooler brand used in the marine channel
- No. 1 cooler brand used on commercial worksites
- No. 1 brand recognized by consumers in the cooler category
- Igloo adds more new coolers to its line each year than any other cooler brand
- Playmate is the most recognized cooler product in the U.S.
- Almost three in every four U.S. households owns an Igloo cooler
- Igloo offers more than 500 different products
- Igloo coolers are sold through more than 15,000 outlets in the U.S. and around the world.
When Bob Puccini was appointed president of Mizuno USA Inc. in late 1996, the company typically had the lowest average selling price in the markets in which the sporting goods manufacturer competed.
“We were chasing revenue but weren’t building a brand,” he says.
He recognized that he needed to build the brand and find a way to differentiate it from the competition so people would choose Mizuno.
“We realized that product alone wasn’t enough,” says Puccini, who also serves as chairman for Mizuno Canada Ltd. “We really pride ourselves on superior product, but there are a lot of competitors out there that have great product stories.”
Within his company, he saw how his team really understood the biomechanical needs of athletes, and they could translate that technology and know-how into a brand experience.
“We made different products for different types of runners and golfers,” he says. “Why not bring that experience to the consumer and really bring a specific individual prescription for each runner or golfer that could be unique? We felt that personalization capability brought a specialty brands expertise to the respective consumer.”
So Puccini and his team created a “Run with us” campaign that had vans go to different locations. Each van had precision fit terminals where a person’s biomechanical skeletal structure and running needs could be identified by observing their cycle as they ran. Then a specific shoe could be prescribed based on that outcome.
They also launched a performance-fitting system for golf clubs. A golfer could come in and the Mizuno team had a device called a shaft optimizer that they would place on the club shaft. Then the golfer would take three swings, and based on five specific swing dynamics, information gathered would indicate which three head and shaft options would be best for the golfer.
On top of these direct reaches to customers, they built a structure to partner with retailers, such as Dick’s Sporting Goods, instead of competing with them. When an order would come in online, they would give the retail partner a set period of time to fill the order themselves so they got the business. If they didn’t fill it, then Mizuno would fill it.
“It’s tough to speak outside of both sides of your mouth,” Puccini says. “It’s hard to say, ‘You’re important to us,’ and then we go compete with them. That was a great unique solution for us.”
As a result of these and other efforts, in fiscal 2010, the Americas division of Mizuno Corp. brought in well over $200 million in revenue and had record profits.
“Now we are among the highest average selling price in the market, which is clearly an indication that we are a brand that is perceived as premium quality and people are willing to pay premium dollar for that product and service,” Puccini says. … “Obviously, if you don’t deliver the quality and the value, people aren’t going to pay for that.”
The transformation wasn’t easy, but here are the business keys Puccini used to turn Mizuno USA into a champion.
Be honest with yourself
Growing up in New York, Puccini had to develop street sense to get by.
“Sometimes you just have to be a smart guy growing up in New York to survive,” he says. “That means knowing which alleys not to walk down. It doesn’t mean you walk down every alley and pick a fight and win them all. It means also being savvy enough to know I’m not going to walk down that alley — that doesn’t look right, that doesn’t feel right. It’s knowing where to play and where not to play, and again playing to your strengths. If you don’t have them, you better acquire or develop them.”
That ability to be completely honest with himself was critical as a kid, and it’s just as needed as a leader looking at your abilities and your business.
“Sometimes it hurts, but that’s part of being successful,” he says. “You’ve got to be honest with your limitations.”
When Puccini looked at what Mizuno was good at, he knew he had to play to what the organization’s strengths were instead of focusing too much on improving its weaknesses.
“When you build a business, you have to recognize your weaknesses as well as your strengths,” he says. “You have to play to your strengths to win. You can’t try to be somebody else. You can’t try to play somebody else’s game and beat them at their game. You have to win at your game and where you’re strong.”
It ultimately comes down to being honest with yourself as you go through these processes. Puccini says he’s able to do that because one of the values that has driven Mizuno USA all these years is a spirit of humility.
“Humility allows us to step back,” he says. “If you’re going to get things done, you have to be honest with yourself and check your ego at the door and say, ‘OK, let’s take an objective view.’
“The truth of the matter is life isn’t really overly complicated if you can be honest with yourself.”
But often being honest is easier said than done.
“Recognize the value in what the honesty can deliver for you,” he says. “Create an environment where truth and bad news is accepted and used as a learning opportunity, which means you also have to check egos at the door. You have to build trust with your constituency — your employees — where it becomes safe to have those open discussions.”
He says the key is to also create solutions instead of just listing problems.
“The bottom line is you have to be honest with your weaknesses, but bring solutions so there’s an accountability to that openness as well,” he says. “I don’t like to deliver problems to my board. I don’t like my team to deliver problems to me. I don’t mind them bringing bad news, but I want them to bring alternative solutions, as well, and I expect them to bring business cases that support their recommendation, as well.”
Bring in the right people
The people at Mizuno USA have an adaptive culture, and having people who buy in to that approach has been key to the company’s success.
“For us, bringing the right people on board that have that innate style and value system, including humility, it keeps us driven,” Puccini says.
As the company has grown, he’s been proactive about bringing in people from reputable consumer products companies. For example, his new vice president of brand marketing and a new social media manager are both from Newell Rubbermaid. A new consumer insights manager is from General Motors and a new digital marketing manager is from Disney.
He expects their perspectives, talents and skill sets from these leading companies will help Mizuno move forward, as well.
When you’re looking to bring people into your organization, compare them against your plan rather than against another person.
“If you have a business vision and a business goal and say, ‘Here’s where we’re going and here’s how you have to play,’ those kinds of things allow you to recognize the kinds of skills you need to do that. You have to have a clear vision — where you’re going, where you’re going to play, where you think you can win, and how you’re going to play in order to win. Then you step back and say, ‘Wow, what kind of skills do we need in order to do that?’ Then you do a gap analysis. Here’s where we are, here’s where we need to be from a competency perspective, and what’s the plan to either acquire or develop those competencies?”
When you know what the core competencies are that you need in someone, then you can move forward.
“Then in the interviewing and selection process, it’s using those competencies as a basis for selection criteria,” he says. “We’re able to drill down on past experiences and see if those competencies are true there.”
That’s the objective side, but then there’s also the other side of the coin with the subjective side, which is fit. For Puccini, he wants someone that fits with the size of the organization and the matrix style of management present due to crossover and shared service.
One other specific element he looks for is someone who’s got experience at a larger organization because they’ll help bring people along as the company grows. But that’s a challenge in and of itself.
“Sometimes in larger companies, you have a larger staff and resources, whereas here, you may have to have that thoughtfulness, but do it yourself and roll up your sleeves,” he says. “That’s the challenger mentality. Sometimes you get one without the other. Sometimes you get the right spirit without the competencies or sometimes the competencies without the spirit, and you have to get both.”
That’s not always easy, which is why a strong dialogue in the interview process is critical. Dialogue is also good for the candidate to learn, as well.
“It’s a two-way street,” he says. “We have to sell our story to prospective employees and see how that feels for them. This isn’t right for everybody. That’s OK. It doesn’t make anybody a good person or a bad person — it’s a matter of fit.”
Improve your processes
About 10 years ago, Puccini implemented new ERP platforms and the technology was a great catalyst for Mizuno’s growth, but he says it goes beyond the specific technology.
“It’s not the technology that makes a difference,” he says. “Technology is an enabler, but it’s the business processes that needed re-engineering that allowed us to be effective. Technology enabled us to execute these things quicker, but without really understanding what our business processes were and how they affected each other cross-functionally, we wouldn’t have been successful.”
The key is really understanding your processes.
“There are many ways you can attack that, but I suppose if you have a clear understanding of who you’re trying to be, where you’re trying to play and how you want to do it, you have to work backwards then and say, ‘What are the drivers that will allow us to do that?’” he says. “Reverse engineering is one way you can do that — here’s the vision, here’s where we want to go, what are the good things we need to do in order to get there, what does that look like, what are the processes?”
He says that examining your processes is critical to creating efficiencies, which will ultimately help your business improve.
“If you can have the process discipline and you get things done efficiently, you have more time to think rather than chasing errors and corrections and things like that,” Puccini says. “Sometimes people think, ‘Process, oh that’s going to be a bureaucratic organization.’ No, sometimes process can set you free.”
But it’s a balance that you have to effectively find.
“You have to have quantitative, objective measurements of your business results,” he says. “That’s certainly an indication. You have to have a clear indication of (key performance indicators) — what are you trying to measure? What’s important to you? Therefore, if those things are important to you relative to achieving your business goals, these are the KPIs you ought to be looking on a regular basis. If we’re succeeding or not based on certain benchmarks, that’s one indication.”
That’s just the objective set. There’s also a subjective side to that balance.
“You have to listen to the pulse of your organization — you have to listen to your organization, to your people,” he says. “It’s not the guy in the corner office that gets it done. It’s the people on the floor, the packers, the supervisory people, the middle managers. Those are the people that are making it happen day in and day out, so really listening to their feedback and being willing to [listen] — again back to that openness and objectivity about yourself and humility — and sometimes it’s not easy to hear.”
How to reach: Mizuno USA Inc., (800) 966-1211 or www.mizunousa.com
THE PUCCINI FILE
Bob Puccini, president, Mizuno USA Inc.; chairman, Mizuno Canada Ltd.
Born: White Plains, N.Y.; grew up in Eastchester, N.Y.
Education: I have a bachelor’s degree in marketing from Fordham University — that’s in the Bronx, home of the New York Yankees. I went on a baseball scholarship. I was fortunate to be selected to work for the Gillette Co. out of school. I started in sales and worked my way up into brand management. I went to school at night and received my MBA from Pace University. I didn’t come up the classical route — I didn’t go to Harvard or Wharton or one of the pedigree schools, but I went up the street side and blended it with my MBA.
Puccini on strategic planning: What we’re finding is planning is fluid. Market conditions change dramatically in a blink of an eye today, especially with the Internet and communication and things like that. ... You can’t say, ‘Here’s the plan, put it on a shelf, and we’ll get to it next year. Historically, you might look at the landscape and take a competitive assessment and look at what you are to your competitors. Consider strengths and weaknesses, do a SWOT analysis and decide what your strategic initiatives should be to reach your overall goals. … I don’t think you should change strategy regularly unless conditions warrant that, but you have to be flexible and adaptable enough to change your tactics and approaches on a regular basis.
As he looked around at his executive leadership team, Alain Couder saw no clear disorder or conflict. The reason that his company’s leadership was not effective had nothing to do with a particular leadership style or group dynamic. But then again, the issue wasn’t really what people weren’t doing at all. It was that they didn’t realize what they needed to do.
“They didn’t know what they didn’t know,” says Couder, the chairman and CEO of Oclaro Inc.
Oclaro — the product of two startup companies worth more than $200 million apiece — had quickly emerged as a tier-one company with potential to reach No. 1 in its core optical and high-powered laser markets. After completing three more acquisitions, it had risen to third in its industry and become an employer of thousands of people around the globe. Yet, that meant many of the $393 million company’s employees, who had come from smaller companies, now lacked the skill set required to operate in a larger, global company.
“To get all of those startup people and turn them into a company that can be operating at $500 million in revenue and get to $1 billion was my biggest challenge,” Couder says.
Choose the right people
With a career that included working at both large corporations and small startups, Couder knew from experience that Oclaro was not prepared to scale for the next phase of growth.
“Because of my background working in companies like IBM or HP or others that are really well-structured and well-organized, it was clear to me that Oclaro was not that way,” he says.
So he began the process of putting in place a new leadership structure — one that that made sense for Oclaro’s new size and objectives. He hired an external consultant to go into the company and take stock of its operations, people and processes. By using an outside consultant to evaluate his team, he was able to eliminate partiality and really find out who would be able to help scale the company.
“Specifically what you learn is that they go into the company and see how you operate,” Couder says. “They see what information systems you are doing. They speak to your managers and then they tell you, ‘This guy knows what he is doing and this guy needs to learn or needs to be replaced.’”
After getting this feedback, the first decision Couder made was to replace three of his key executives. While these personnel decisions can be difficult to make, a CEO has to be confident that the leadership team he or she has in place will be able to lead effectively when moving to the next stage.
“I choose an executive team that is appropriate for the size of the company,” he says.
“I make sure that I treat the people who are leaving well, but that I put in place people who are stronger and can help me scale the company to the next level.”
When you are growing a company significantly, you want to bring on executives who have experience and past success in their area of expertise. They also need to have the right personality and values to be a good cultural fit at the company.
“[It’s] are they going to be able to work in a constructive fashion with the rest of the team?” Couder says. “If you bring in someone who has a very different set of values than the ones that you have in place for the company now, then it just doesn’t work well.”
How do you identify the people who can scale successfully?
“It’s talking about what you want to achieve,” Couder says. “You create a dream of what can be achieved and then you explain what it takes to do it.”
When you start doing that, you’ll have some people who are enthusiastic and some people who start to resist change.
“I work with them and coach them and try to help them improve, but at some point in time when the company scales, some people are going to scale with the company and some people are not,” Couder says.
Once you’ve explained the vision, it’s more worthwhile to focus your time and resources on the people who seem energized about the vision for growth rather than on to trying to convince the opposition.
“You need to spend the time with the people who are enthusiastic and forget about the other ones,” Couder says. “Otherwise, you spend all of your time with people who are resisting and then do nothing in the end.”
Eventually anyone who has a “wait and see” attitude will either leave the company or decide to be part of the change and move with the enthusiastic people. The best thing to do is respect people’s motives and then focus on who can help you grow. While two of the executives that Couder replaced remained within the company, the third one left.
“They are able to drive their own lives and their own convictions,” Couder says. “And that’s fine. That’s part of change management. Not everybody is happy in a larger company. Some people are much happier working in startups and they should go work in startups.”
Empower your people
Leading an organization with more than 3,000 employees meant Couder and his executive team needed to start shifting their attention to more of the big-picture goals and high-level decisions of the company.
“You always need to shoot for the No. 1 position,” he says.
That means people lower in your organization need to shift to take over new responsibilities and decisions, as well.
“When you scale a company, you want to be able to move the decisions lower in the organization,” he says. “So this is the notion of empowerment.
“In a startup, the CEO is at the center of everything, is aware of all the decisions being made, in touch with every customer — he is involved in all of that. As you scale the company, if the CEO continues to do that then the CEO becomes a bottleneck.”
When you take a set of people with a startup mentality and ask them to manage in a larger, more structured corporate environment, you need to give them the right tools and support to be successful in that culture.
“It’s then helping the people you choose succeed in what they are doing,” Couder says.
“And as a result of that, the CEO becomes increasingly in charge of setting the right direction.”
To empower his managers as decision-makers, Couder implemented a global management training program for leadership teams all across the company. The three-day training program included approximately 80 managers and included twice daily training on leadership best practices.
“We coached them on leadership, how to make decisions, how to coach your team, how to train them, how to make them go, how to make them passionate about what they do, how you can create a team that is going to win together and all those kinds of things which are so important to success,” Couder says.
You and your people both want to feel comfortable with them making decisions independently. So first, you need to spend time giving them context of how to make those decisions and their impact on company.
“This is a part of the delegation and control,” Couder says. “As the company gets larger, I delegate more and more, but I want to make sure that we still have the proper controls in place and make sure that everything is moving the way that it should.”
By giving managers leadership best practices and skills that they can pass on to their teams, you push those practices out and the organization itself can become more nimble in decision-making for growth. Moving forward, a good measure of your team’s empowerment is how many decisions get pushed up in the organization. If it seems like too many, sometimes giving yourself some distance to think and reevaluate your own decision-making process can help you gain perspective. It also gives management a chance to brainstorm new ideas independently.
“One of the pitfalls is to always be acting and acting,” Couder says. “In fact, if I take a week of vacation, the team always comes back with new ideas and new things to be done.
“As you have a larger company, the best ideas are in the company. The CEO doesn’t need to have any ideas. He just has to listen.”
Dance to the same music
Lastly, when you are talking about scaling a global, multicultural organization such as Oclaro, which has operations in Europe, R&D in North America and manufacturing in China, to more than $1 billion in revenue, everyone in the organization needs to be working toward the same goal if you are to have any chance of success.
“You need to get the whole team and the whole company to be pushing and pulling in the same direction,” Couder says.
“So it’s also to encourage people to talk to each other and to learn from each other.”
That is where internal communication becomes incredibly important.
“There are three dimensions to the flow of information, top down, bottom up and also networking at the company level,” Couder says.
For a company that is growing very quickly, it’s vital to have good communication so that everyone’s expectation is clear and employees can work in harmony across different departments, divisions or operations.
“We need to make sure that we learn the same dance and that this dance fits the music,” Couder says. “Before in the company, you had different music and different sides and different dances, and therefore, the cooperation inside was a lot more difficult.”
To get everyone on the same page, Couder created a cross-functional task force to simplify and streamline some of the company’s key processes such as product life cycle, and train everyone — executive team included — on a set of leadership best practices. Part of that training included learning a standard vocabulary for operations that would be used by everyone in the company worldwide.
“You create a common language and that helps to have everybody dance to the same music across the company,” Couder says.
“When we talk between different geographies between China and the U.K. or California, we have the same terms and the same words,” Couder says. “We know exactly what we are talking about. There is now no ambiguity in what we want to do.”
When it comes to top-down communication, Couder believes that there is no replacement for meeting with your team in person.
“Through the questions, I get a pretty good understanding of what they know, what they don’t know and what kind of progress they are making,” he says. “That is one measure I use, and unfortunately I can’t find any replacement for travel. Video conference is great, but it doesn’t work for that. …You need to feel and communicate your actions with the people.”
Couder schedules a half hour with each of his direct reports three times a month to talk about their progress and maintain alignment on the organization’s goals. Whenever he travels, he also meets with his leadership teams during brown bag lunch sessions to find out what is working, what isn’t and offer his support to meet any challenges.
With a strong, empowered team that has everyone pulling in the same direction, Oclaro is no longer a bunch of pieces, but one united company that can scale successfully for growth.
“If you want to be able to be organized as a company, you can be empowered but within a certain context, within a certain set of processes and methodologies and tools that are common to everybody in such a way that it boosts harmony in the way we work,” Couder says.
“We know that we now have the best practices and the tools, and the means and the people involved to be able to compete in a much more effective way.”
How to reach: Oclaro Inc., (408) 383-1400 or www.oclaro.com
The Couder File
Chairman and CEO
Education: Paris, Ecole Superieure D’Electricite
First job: Teaching in Africa at the Abidjan University
What would your friends be surprised to find out about you?
I have raised six kids and have nine grandchildren.
What do you to regroup on a tough day?
Hiking in the mountains is my favorite getaway.
What is your favorite part of the job?
Do you have an innovation tip?
You always need to invent a better way of doing what you do, a better way of communicating, a better way of writing a memo, a better way of making a presentation. It’s not only about product innovation. It’s about finding ways of doing things better in a smarter way. It’s about working smarter, not only harder.
Couder on choosing the company’s name: Oclaro is the new name that we choose to merge Avanex and Bookham. We are big believers that when you merge two companies of similar size and you have one which is acquired and the other which is the dominant … by adding a new name and a new set of values, that helps in fact create a new company. Oclaro stands for optical and clarity, which is how we created the name.
Of Beef ‘O’ Brady’s 213 restaurant locations, Chris Elliott has eaten at 50 of them to date. He’s tasted every single item on the menu and is prepared to tell you what he thinks, good and bad. Yet that kind of honesty was harder to dish out last March when he joined the company as its new CEO. After eating at several of the restaurants, Elliott had the difficult task of sitting down with his franchisees to tell them candidly, your food isn’t very good.
“What franchisee wants to be told by a new guy, who they think doesn’t know anything about our brand: ‘Guys, I’ll be honest with you. The food is mediocre, and on top of that, the execution is very uneven from store to store,’” he says.
As a new leader, Elliott was also trying to build relationships with franchises in 23 states — consisting of more than 5,000 companywide employees. Understanding that they had faced several tough financial years prior, he knew that to execute a strategy that could reposition Beef ‘O’ Brady’s for growth, he first needed to win the trust and buy-in of his people.
“You have a new guy coming in, and the last three of four years have been very difficult,” Elliott says. “So it’s a matter of gaining the trust of the franchise community.
“I said, ‘This is what I see, and then based on my experience if we are going to move this business back to where you want it, back to where it belongs, back to where it deserves to be — we’re going to have to fix the food quality and we’re going to have to fix the execution. We get focused on those things and then we get after it. That’s what we’ve been doing in the last year.”
When you are a new leader trying to gain perspective on where your company stands, a good place to start is by talking to the people in the company who have been there and understand the brand’s history.
“The first thing I do is sit and listen to what people have to say about the past, what they are passionate about as far as the brand is concerned and what they think the brand is all about,” Elliott says.
“You have this sort of window of opportunity when you come in new to company to establish this trust level that makes people comfortable in dealing with you, which makes people more likely to try and implement the things you ask them to implement.”
Because the company is 99 percent franchised, right away Elliott decided to create a ‘franchise advisory council’ to consult with him on decisions. Made up of a diverse group of 15 franchisees nationwide, the council has been vital in helping him gain a range of opinions and insights on how the business operates.
“I try to get a broad spectrum of people’s input to make sure that we fully vet the ideas,” Elliott says. “Sometimes a good idea is not meant for a particular system. So it’s not only finding the right idea, but making sure that you can actually implement the idea within your system. That’s why, for me, the more people I involve up front, the higher the probability I feel that we’ve made the best decision we can make.”
Furthermore, people are much more receptive to changes when they don’t feel like they are being bossed around. While Elliott knew major operational changes were in order across the board, he realized he couldn’t lead those changes successfully from a corporate office.
“There’s a natural dynamic tension between franchise owners and franchisees,” he says. “We own the brand, but they own the business. They paid for that business. So if they don’t feel like they are getting good leadership, good communication, good ideas and good business results from the franchisor, then they feel like, ‘I’ve got to save myself.’”
It would take relationship-building and strong, two-way communication to keep people from jumping ship and get everyone in the company moving together in a new direction.
“The power of a brand is in consistency,” Elliott says. “It’s everybody on the same team, everybody on the same page, everybody running the same menu and executing at the same level."
By showing people you want and need their help, you build a foundation for trust that helps them accept what you have to say.
“You involve them much earlier in the conversation,” Elliott says. “Collaborate with them on how to do it. Don’t come and tell them how to do it. Collaborate with them so it’s as much their ideas as your ideas, and that carries a lot more weight.
“I like people to challenge the ideas that we come up with and I look at a lot of different points of view to make sure we didn’t miss something. Almost inevitably you will if you don’t have that kind of organization where you are collaborating with the people who are actually going to wind up implementing your plan.”
To find out how he could improve alignment and engagement of his team, Elliott held private meetings with all 30 corporate employees as well as with franchisees on the advisory council.
“I said, ‘Look, I’m just here to learn what the issues are, what the challenges are, what’s been happening and how do we get better,’” he says.
“The human relations aspect of any business relationship is huge. It’s e-mail. It’s picking up the phone and calling. It’s getting out into the field and being present. There’s a lot of ways. Basically, we call it engagement. It’s one of the four principles of our franchisees.”
Elliott also began checking in more frequently on communication between franchisees and the corporate office, setting a more stringent expectation about getting back to franchisees, answering their questions and solving their problems.
“There were some silos in the departments and now that’s gone,” he says. “Everybody is working with everybody, communicating with everybody. The increased communication builds trust but also holds people accountable.”
To convince people to take action on the company’s issues with food and execution, Elliott realized he also needed some hard evidence on where the company stood against competitors. To put the business’ strengths and weaknesses into a larger context, he and senior managers spent a lot of time initially studying the company’s competitors such as Applebee’s, Chili’s and Buffalo Wild Wings to clearly define the company’s niche in casual dining.
“You need to thoroughly understand the business that you are working in,” he says. “You need to really understand your niche.
“You benchmark your company against other successful organizations, and you demonstrate the benefits of the types of changes that you are proposing in ways that are meaningful to your employees, that would be meaningful to your customers and that would be meaningful to your franchisees.”
Elliott principally examined Buffalo Wild Wings’ restaurant concept, which is similar to Beef’s in many ways and offered some key insights into where the company could improve.
“We looked at them very hard,” he says. “We benchmarked sales volumes. We benchmarked the sales in day parts. We benchmarked the sales in particular items. We benchmarked everything you can think of, the initial investment, the profitability and all of that. It was a real eye-opener for a lot of our franchisees to see how other companies that are similar to us in a lot of ways do so much better in certain areas of their business.”
Then you look to your customers. In addition to working closely with his franchise council, Elliott visited many of the restaurants in person to try the food and listen to people’s ideas, concerns, attitudes and recommendations. He also communicated the importance of making decisions based on experience and data rather than just people’s opinions.
“Very early on I said to the franchisees, ‘This is not about what I want and this is really not about what you want,’” Elliott says. “‘What it’s ultimately about is what our customers want. So in any arbitration of what we’re going to do next, we’re going to let them tell us what they want to do next, what they like.’ That makes it easy for us to make a better decision. We always come to the table with the consumer data to support what we want to do next.”
The company has done more consumer research in recent months than it did in a whole year prior, using outside research firms to evaluate ideas, conduct segmentation studies and put on focus groups.
“Every time we have an idea to go out in the field and set up a field test, we test it for several months and gather the data and then come back,” he says. “That’s very time-consuming and it takes a lot of energy and a lot of resources, but that’s the only way to do it.”
Even if you get people to buy in to the value and vision behind making changes, winning them over long-term is a matter of proving to them that you can deliver success.
“When you come in and you say we’re going to do these things differently, and then it works, that helps build trust,” Elliott says.
“Once we have an agreement to move forward and are excited about where we are going to go, then it’s be persuasive. You can’t force a plan down people’s throats if you really want it executed. You’ve got to persuade them. That takes relationships. That takes communication. That takes some selling skills.”
Instead of ordering franchisees to switch from frozen to fresh marinated chicken tenders, Elliott convinced them to make the menu change by showing them the results of doing it differently.
“They went bonkers,” he says. “They didn’t think that was possible. So we actually had to go into the stores on Friday night during the busiest part of the night, set up a little station and do it to show the franchise community that ‘Yes, you can do this.’ And not only can you do it, they got to see how consumers reacted to the new product versus the old product.
“There are a lot of things that we did like that. We just recently changed out our burger. We had a good burger, but we went to a better burger. We went from a frozen steakburger to a fresh Angus burger. And that’s one of the reasons our sales turned around in May.”
After pulling the entire menu apart at the corporate office and spending about seven months fleshing out and testing ideas, Elliott estimates there are now 20 examples of ingredients or products that the company has already improved on or changed. The lunch menu now includes smaller portions and lower prices, and there is a stronger focus on efficient execution. Phase one of the main menu innovation launched in January 2011 with phase two implemented in August.
When one franchisee said to Elliott, ‘Why you would spend your time working on something that’s not broken?’ he tried to explain the problem behind that way of thinking.
“I said, ‘It’s not about it not being broken,’” Elliott says. “‘It’s about: Is it as good as it can be? Is it better than what anybody else has got?’ Because the way you’re going to get somebody away from these other customers is to have a better burger, not just a good burger.”
Today, the numbers speak for themselves. The company achieved positive comparable store sales growth in the first quarter of 2011 for the first time since 2006.
“It sort of opened up their eyes to the possibilities that exist out there when you do things a little bit differently,” Elliott says.
“That process of explaining why we were doing what we were doing and then seeing the results of it is beginning to get more and more franchisees on board.”
As people see the small successes add up, they can buy into bigger changes ahead.
“What people are seeing is we can effect positive change in a difficult environment, if we stick to our knitting, if we do some of the basic things better than other people are doing,” Elliott says. “That builds confidence in the franchise community and it also builds the willingness to not just listen to your ideas, but to get behind your ideas, push your ideas harder. It builds that bond of ‘Hey, maybe these guys do know what they are doing, and if we work together we’ll really get this thing on track.’”
How to reach: Beef ‘O’ Brady’s, (813) 226-2333 or www.beefobradys.com
The Elliott File
Beef ‘O’ Brady’s
Born: Montgomery, Ala.
Education: University of Georgia, BBA in accounting, 1977
What is one part of your daily routine that you wouldn’t change?
Having my Starbucks Grande Bold coffee before I get started.
Who are your heroes in the business world and why?
Any and all entrepreneurs. It takes guts, determination and a belief in your own ability to step out and be your own boss. Where would we be without entrepreneurs? I wouldn’t have this job.
What would your friends be surprised to find out about you?
I play guitar and sing a little.
If you could have dinner with one person you’ve never met, who would it be?
Dead — Abraham Lincoln. He was a great storyteller and master politician. Alive — James Taylor. I love his music, and maybe I could get him to show me his technique.
Favorite part of the job: The whole act of drawing on your experience, assembling a team and the data needed to analyze a problem, then developing a solution that you find out later actually worked. In short: problem-solving.
Elliott on hiring good people: I’ve been doing this a long time and I can tell you if you have really good people working for you, life is good, and if you don’t, nothing ever changes. You spend all of your time managing people instead of managing the business. So a smart executive will hire really good people so they don’t have to spend all of their time managing people. They spend their time managing the business.
When Robert M. Korzenski took over as president and CEO of Solo Cup Co., the $1.6 billion food service product maker had a bit of a problem.
It had been two years since Solo had acquired SF Holdings and its well-known Sweetheart brand of cups, plates and other single-use food service products.
“The outlook for that combination was a great opportunity and one that could change the way the market was being serviced by taking two brands and putting them together to ultimately serve a much broader and larger customer base,” Korzenski says.
Unfortunately, the integration was not going as well as everyone had hoped.
“Part of what I had to try to understand and look at was what caused two companies of similar size and nature in the same industry with similar product lines and so forth, what caused them to be at the point that they were two years into the integration,” Korzenski says.
What Korzenski discovered was that these two companies that seemed to be so similar were actually pretty different.
While Solo had always been a family-owned business, Sweetheart had gone through multiple transitions over the years. The two companies took very different views on the external world and the task of financing their operations.
“Those were two cultures that were clashing as they came together in 2004 through the period that I came in in 2006,” Korzenski says. “It was like we took a blanket off what was happening in the company to say these are all the problems. I certainly single-handedly am not smart enough to figure these all out by myself. And even the executive management team and all the talent and energy that is brought to the party isn’t capable of figuring these out themselves. We need all 7,000 employees in the organization helping us figure out how to do it better.”
Speak with clarity
One of the first things that became clear to Korzenski was that Solo Cup Co. had a lack of leadership. This shortcoming, combined with the lack of a clear identity that had come about through the joining of two conflicting cultures had created a lot of confusion for employees and customers alike.
“Whatever communication or whatever strategic plan existed, it was usually owned by outside consultants, outsiders to the company,” Korzenski says. “It wasn’t developed and owned by that leadership team at the time. It’s my belief that if you don’t own it and you don’t help develop it, you can’t execute it the same way as if you did own it and you did develop it.
“As I looked at the landscape at the time, you could clearly see they were internally focused and that there were confusing signals to the employee base about what was important and what we were trying to accomplish. More importantly, there were confusing signals to the marketplace about who we were and what we were trying to do.”
Korzenski needed to move quickly, because the company was bleeding cash and had a lot of debt, which put Solo Cup in a very precarious financial situation. There wasn’t a lot of time to get things turned around.
“One of my objectives was to bring in place strong people, a strong leadership team that could help right the ship and put it back on track,” Korzenski says.
Korzenski revamped the management team, bringing in people who he felt could make an immediate difference and deliver a clear message about what Solo Cup Co. was doing. It was both simple and desperately needed.
“Truthful and honest and open communication,” Korzenski says. “That’s what people want. People can’t solve problems if you don’t give them all the facts. People won’t want to solve problems or won’t jump on board if they believe you are misleading them and people will quickly begin to not follow you if they suspect that the company is really doing something else and communicating another story.”
Korzenski needed his new management team to step up and help him deliver this message. It would be a lot more meaningful if he wasn’t the only one talking. It also wouldn’t hurt if they did a little listening too. The key was for both Korzenski and his team to be approachable.
“It absolutely can’t only be me,” Korzenski says. “The executive team, which is seven other members that report directly to me, the team understands that my expectation is you listen carefully to what you’re hearing and what people are telling you so you can then translate that into what do we do in response to those situations that are unfolding.
“It really is about your own approachability and about how often you are out visiting not only with your customers, but with your employees and about how well you listen. Sometimes you come in and because of the position, people may be a bit intimidated and might not be as open and honest with their dialogue. But if you listen carefully, everyone is usually telling you what they are really feeling. You just have to listen to it.”
If you personally don’t feel comfortable being part of that communication effort to your people, lean more heavily on your team to fill in those gaps or find a way that falls more into your comfort zone.
“You may never be a speaker that can stand in front of 7,000 employees and address the group,” Korzenski says. “But if you can do that with smaller groups and more intimate settings where you feel more comfortable, use that. … It may not all look the same. It will be different. But everyone has that skill. If you have to do it five employees at a time, then that’s what you have to do.”
Korzenski and his team didn’t just hold meetings, they got out and visited factories and tried to canvas the company communicating with employees.
“It’s really making a strong effort to not only get everybody to hear what you’re saying, but making sure what you’re telling them, they can clearly understand, they can clearly believe in and that everyone is listening to the same message,” Korzenski says. “So it really is about getting to the factories, getting to the facilities and getting out with our sales people.
“Every action, every leadership move and every form of communication through the executive management team through every level of this company must be done in an honest and accurate way. Then people will believe and follow. Short of that, it won’t happen.”
Keep it going
Korzenski began to see the fruits of his and his management team’s labor through 2007 and into 2008.
“Our employees really signed on to what was happening and really started to get engaged in getting the company to new levels and new areas we expected to get to many years before that,” Korzenski says. “Our customers started to believe in us again. Our outside constituents, our suppliers and our board all started to believe that the company was moving in the right direction.”
Debt was reduced. Sales improved and so did cash flow. Then the economy tanked and demand, which was typically very reliable in the industry of plastic cups, plates and the like, took a big hit.
The loyalty that Korzenski and his team had earned in the first couple years was being put to the test.
“They were saying, ‘Look, you’ve been entrusted with a company that has a 75-year heritage,” Korzenski says. “It has one of the strongest brands in the industry. Don’t screw it up.”
The need to keep people informed and involved was even more important now than it had been before.
“I believe in the absolute expectation that all people will participate in a discussion and that we’ll reach consensus,” Korzenski says. “I don’t believe that an autocratic style is the way to win an organization’s heart and soul to move it forward.”
When you experience an obstacle in your path to achieving a goal, you can’t throw in the towel and give up. You also can’t be so loyal to your plan that you don’t recognize the need to adjust.
“You can set the target and you can set the end state, but if you don’t adjust along the way and you blindly follow that end game without halftime adjustments,” Korzenski says. “That will lead to failure as well. So it’s important to put that stake out there, put an end opportunity in front of the work force and in front of our customers as well so they understand where we’re going. But then it’s having the ability to change that, whether it be subtly or pretty significantly.”
But whether you’re adjusting or staying the course, remain accessible.
“My assistant knows that any customer that calls, whether it’s a hot dog stand down the street or Starbucks, she finds me wherever I am and I speak directly to that customer about any issue they may be facing with the company,” Korzenski says. “I expect that of every member of the leadership team as well. I think those are the critical pieces to being successful and then taking that information and turning it into results for the company.”
Continue to evolve
When the economy began to turn in 2009 and 2010, it was time to unleash the next phase of Solo Cup’s evolution. A new campaign slogan for employees, “Think Like a Customer,” was unveiled to indicate that the company had solved many of its internal issues and that it was now time to really focus on being a great brand again for customers.
“What it was intended to do was take this new company and say, ‘If every single employee in this company started to think like they were the customer, what would you do differently?” Korzenski says. “How would you act differently? What would you do in your daily lives so that the customer could visibly see a different Solo Cup?’”
The idea was to reinforce the notion that things would continue to change and employees needed to stay tuned in to so they could always be providing the best product and service possible.
“You want them to be able to depend on Solo to be the company that they can come to for their changing needs and for what they need to solve their solutions,” Korzenski says. “If you have an employee base that thinks that way, that thinks like a customer, then they bring that expertise. We know that listening to what the customers’ needs are in this changing environment is going to be critically important to our success going forward.”
How to reach: Solo Cup Co., (877) 765-6669 or www.solocup.com
The Korzenski File
History of Solo Cup Co.: The company was founded in Chicago 1936 by Leo J. Hulseman as Paper Container Manufacturing Co. It changed to its present name in 1946. The company has 10 North American manufacturing facilities and six state-of-the-art distribution centers, with additional manufacturing and distribution in Central America and Europe. The company is an exporter to more than 70 countries and has a broad product line encompassing many materials: paper, plastic, foam, post-consumer recycled content, annually renewable materials and compostable materials.
Innovations in single-use tableware that reflect the common culture:
1936 Paper cone cup
1946 Solo Cup
1950s 2-piece wax-lined cold cups
1960s Cozy Cup and reusable plastic holder
1970s 2-color, red Party Cup
1980s Traveler hot cup lid
1990s Clear, plastic PET cup
2004 Solo Grips product line
2004 FDA-approved post-consumer fiber hot cup
2008 Bare by Solo line of eco-forward single-use tableware
2009 Solo Squared
Korzenski on delivering a message: It really goes back to something that I did as an intern through one of my summer jobs. I was given an assignment and I was asked to give that assignment to the executive team. I launched into the solution within the first 30 seconds. One of the members of the team took me aside and said, ‘Part of what you have to do is you have to polish this up a little bit. You have to make sure everybody understands the work and the effort that you put into it.’ So take your time to talk about what it is you’re doing.
When Douglas Ewert first joined The Men’s Wearhouse Inc. in 1995, the specialty retailer of men’s apparel only had 200 stores and just the Men’s Wearhouse division. More than 15 years later, the company has 1,200 retail locations, six divisions, 17,000 employees and had 2010 revenue of $2.1 billion.
Ewert has seen the business grow quite a bit over the years, and as part of a succession plan, on July 15, 2011, he became the company’s new president and CEO. Previously serving as president and COO, he knows it will be a tough task to fill the shoes of founder George Zimmer, who will continue to serve as executive chairman of the board.
“I’ve learned a lot from George,” Ewert says. “Probably the two biggest are if you take good care of the employees, they’ll take good care of the customers, and secondly to listen to my instincts.”
Armed with years of knowledge in the retail industry and some guidance from Zimmer, Ewert is continuing to focus the company on a strong culture, customer satisfaction and retaining a No. 1 market share.
Since Ewert had a senior leadership history with the company and the management didn’t change much when he took the CEO role, Ewert had to focus on the strong aspects and initiatives of the company.
“Because I’ve been here for 16 years and George is going to be here for another 16 years at least, this has really been a succession story of continuity not of change,” he says. “One of the first things that I did do was reorganize the organization chart a little bit so I would have fewer direct reports to allow myself to fly at a higher altitude and spend more of my time focused on strategy rather than tactics.”
Part of that focus on strategy was aimed at getting more familiar with the investment community surrounding the company.
“I’ve met with a number of our shareholders, potential investors and analysts that cover our stock,” he says. “So I’ve spent time in the investment community more so than I have in the past. I think it is important for a CEO to understand the needs and motivations of all of their stakeholders: employees, customers and investors.”
The Men’s Wearhouse has always made sure that it pays attention to its stakeholders and most importantly its employees.
“If you had to rank all of our different stakeholders, we put our employees at the top of the list,” Ewert says. “We believe that if you take good care of the employees then all of the other stakeholders will get taken care of. It’s always been a focus in this company and I look forward to continuing that style of leadership.”
Ewert and the other executives in the company make sure that they are accessible to every employee in the organization. They want to know employees’ opinions and concerns.
“Every employee can contact me,” he says. “They have my phone number and my e-mail address and they have George’s. We hear from people throughout the organization every week, because we want to know what we can be doing better. Some of the best ideas that we’ve ever had have come out of the field. For example, our tuxedo rental business, which is something that we’re very proud of and is driving a lot of nice top and bottom line results for us, came from a suggestion from one of our store employees. So keeping those lines of communication open, remembering that our employees come first is just part of our heritage. We have a rich company culture that has always valued that.”
To get employees to voice their individual ideas, opinions and concerns, you have to be available and you have to be willing to listen.
“One of the keys is to spend more time listening than talking,” he says. “You have to be accessible. You have to be open to changing your mind with new information. It’s important to not to fall in love with your own opinions. You have to be open especially in retail and especially in this economy. Our company, just like most, has had to reinvent itself somewhat in the last couple of years. That took input from the entire organization and then winning the hearts and minds of the entire organization.”
Opportunities are all around you and as a CEO you have to make sure you utilize every avenue available in order to foster those creative ideas.
“If you hang on to your opinion on what the business requires too firmly, you may miss an opportunity or an emerging opportunity,” Ewert says. “A number of things need to be present for an organization to foster creativity. First, the CEO needs to believe that they don’t have to have the best ideas, but rather have to recognize the best ideas. Then you need to foster an environment that encourages creativity. Trust needs to exist throughout the organization. Trust that the ideas will be heard. Trust that they won’t be criticized and trust that employees will be recognized for their creative contributions. Finally, leaders have to create the space for people to share their ideas.”
To run a company as big as Men’s Wearhouse takes a lot of commitment and a lot of travel. If you meet those needs, employees will see that they have access to you.
“We do a lot of training and cultural events in our company and George and I both attend as many of them as we possibly can,” he says. “Every spring, we bring every store manager and assistant store manager out in California for three-day meetings and George and I make presentations at each of those meetings and spend the evenings socializing with all of our employees, giving them our perspective on the business and giving them an opportunity to share their perspectives. We have 55 holiday parties throughout North America every fourth quarter and George and I attend as many of them as we can. We visit a lot of stores and that just gets back to that access. I think most of our employees feel comfortable with us and feel comfortable talking to us.
“You have to be accessible. I wander through the office every day. I pop into offices and ask questions. They come into my office and ask questions — the door is open all the time. I visit stores and spend a lot of time talking to employees in the stores. With e-mail now and BlackBerrys, access is 24/7.”
Maintain market dominance
Having a No. 1 market share doesn’t mean you’re safe and have time to relax. You have to constantly be looking at ways to continually improve and protect that spot.
“One of the things that we did as a company about a year and a half ago was we changed our business model from being an every day value retailer to being a promotional retailer,” Ewert says. “We found that in this economy our customers weren’t responding to every day value pricing, so we adjusted our model to be much more promotional and the customers responded nicely. Our business is strong right now and we’re having a great year. We reinvented our company to figure out how to maximize our opportunity in what everybody’s defining as the new normal — this sluggish economy.”
To mitigate the challenges that the company is facing, Ewert has had to lean on his team to help find the best solutions.
“You need to surround yourself with very competent people and listen to their ideas and suggestions and trust your own instincts,” he says. “When it comes to reinventing your business those are pretty big decisions. You’ve got to be careful and you can’t do it all yourself. You need a strong team to reinvent the company and you’ve got to keep the lines of communication open so that everybody understands the direction you’re going and everybody is pulling on the oars at the same pace to move the ship, so-to-speak.”
The company had to leverage its suppliers to combat rising commodity prices, which helped increase its buying power. It also hedged certain materials like wool to help absorb cost increases.
“Most of the changes that we had to make we were able to test the change before we implemented it throughout the entire network,” he says. “We moved cautiously, and we didn’t make any dramatic changes without some assurance that we thought it was the right move and was going to work. You have to utilize the people around you and listen to their advice. You have to try and prioritize the areas where you think you can make the biggest impact.”
If you think protecting one No. 1 market share is tough work, Men’s Wearhouse has to look after five No. 1 market shares.
“We’re the largest seller of suits in America and the largest seller of suits in Canada and the largest tuxedo rental operator in both the U.S. and Canada,” Ewert says. “We’re the largest corporate uniform company in the UK and the largest retail dry cleaning operator in Houston. Our opportunity is to continue to drive our business with that strong dominant market share.”
The company’s biggest focus is on its prominent tuxedo rental business and its blooming Big & Tall stores.
“I think there is a lot of opportunity for us to continue to take more market share in tuxedo rental,” he says. “We believe that we have a compelling strategy. As a national retailer, we believe that we have market dominance throughout the country. Our competitors are primarily small independent regional players. For an out-of-town wedding where the wedding party is spread out around the country, we’re the logical place for that type of event, because you can go into any one of our stores and get measured and get fitted and pick up your tuxedo in one store and drop it off in another or pick-up your tuxedo in the city where the wedding will be held so you don’t have to travel with it.”
The company’s Big & Tall stores also continue to do well.
“Our Big & Tall business is growing at a double-digit pace and we are aggressively growing that business in all three of our retail divisions,” Ewert says. “In Big & Tall, we are increasing the amount of inventory that we carry and we’re also testing three free-standing Big & Tall stores — one in Houston, Manhattan and Dallas.”
By focusing on two of the company’s strongest markets, the company is doing what it can to remain on top.
“You need to evaluate the strengths of your brands,” he says. “You need to keep a close eye on the macro-economic conditions and the outlook. You need to keep an eye on the strengths and leveragability of your management team and the needs of all of your stakeholders.”
Ewert isn’t just reinventing areas of the company to beat business challenges. He is making these moves to also beat the competition.
“The pitfalls of being the No. 1 market share leader in a category is that everybody is trying to take that away from you,” he says. “In order to protect and preserve your position, you need to continually reinvent yourself, because whatever you’re doing this year, your competitors will be doing next year. You need to focus on constant reinvention and paying attention to your customers as the best ways to make sure you can retain that dominance.
“We have 1,200 stores and our employees are facing customers every day and getting feedback every day from those customers. We get hundreds of phone calls and e-mails from customers every week. We have a customer service call-in center where if somebody has a question or suggestion or compliment or concern, they can reach us. If you’re not satisfying the needs of your customers, you’re not going to have customers for very long.”
HOW TO REACH: The Men’s Wearhouse Inc., (800) 851-6744 or www.menswearhouse.com
- Lookout for employees and be accessible to hear their ideas
- Trust your instincts and ideas from your management team
- Reinvent areas of your business to keep market share
The Ewert File
President and CEO
The Men’s Wearhouse Inc.
Born: Riverside, Calif.
Education: Graduated from San Jose State with a bachelor’s degree in business
What was your first job and what did you take away from that experience?
My first job was as a bus boy in a restaurant. The only job I ever got fired from was as a disc jockey in a roller rink. I got fired because I wasn’t playing the kind of music the audience wanted to hear. I guess 7- and 8-year-old girls don’t like Van Halen. The lesson there was to listen to your customers.
What is the best business advice you’ve ever received?
I would go back to the things that I focus on most from George: listening to my own instincts. Don’t let self-doubt creep in too much.
How would you define success?
It’s always been important to me to be in a job that I enjoyed and I’ve been fortunate that, for 26 years, I’ve looked forward to coming to work every day, and I think that’s pretty rare. If you’re doing something you love, you’ve got to consider yourself successful.
In the corporate world, the suit-and-tie style is no longer the typical attire, how have you seen it change?
I think we’ve seen the suit transform itself from being a Monday through Friday, 9 a.m. to 5 p.m. uniform to being an element of your wardrobe that has a reason for being at times in the evenings and on the weekends. We’ve seen the suit jacket become an important piece to be worn with a pair of jeans and an open-collar shirt. You go back 10 years and you never would have seen something like that. The suit has become less of a uniform and more of a utility piece.
Do you have any plans to film your own Men’s Wearhouse commercial?
No. I promised my wife that I would not become our spokesman on TV. That was actually a condition of me accepting this job.
Crime doesn’t pay. Protection from crime, on the other hand, has paid off in a big way for AlliedBarton Security Services LLC.
The 55,000-employee company bucked the downward trend during the recession, growing from 2006 revenue of $1.2 billion to 2010 revenue of $1.7 billion. Chairman, president and CEO Bill Whitmore attributes the growth to a selective, informed approach to business, along with a dusting of opportunism.
“The good news for our industry is that during an economic downturn, there is a focus on crime,” Whitmore says. “There is a concern with protection, a concern with preventing workplace violence. Those things still exist, and a company like ours is here to fill that need.”
The seeds for AlliedBarton’s winning approach to business in a recession were planted in 2007 and 2008, when Whitmore and his team formulated a strategic plan. Whitmore’s team didn’t know the depths to which the economy would sink, but they controlled what they were able to control — the markets they decided to pursue and how they reacted to whatever the markets and the economy, threw at them.
“When we sat down and wrote the plan, we saw a couple of things that we believed would happen,” Whitmore says. “One is that contracts in our industry would be consolidated. They were, and we put together a national accounts team that works with customers embarking on initiatives. That program didn’t exist in 2007, and now it is roughly $400 million of our run rate. The strongest pipeline we have in our company is for those clients that are looking to consolidate.”
To make a strategic plan strong and accurate, you need alignment. That means you need your plan to fall in line with the vision and cultural values you promote as a company, and you need a team that is willing to embrace those values and work toward the goals outline in your strategic plan.
It’s a task that requires you to be equal parts cheerleader, lookout and air traffic controller.
Get focused on goals
Every item in the AlliedBarton strategic plan is tied to a goal, which in turn ramps onto the overarching goal of the organization, which is to protect the people, property and assets of clients.
With goals ramping upward, the responsibility for achieving the goals has to be communicated downward and tied to goals and incentives that directly impact each of the 55,000 AlliedBarton associates around the country.
“Goals get translated into an annual performance plan, goals get translated into compensation metrics as basic as performance planning documentation for individuals, which is then cascaded into the company,” Whitmore says. “Then we sit down and measure people on how they did against those goals and how well we did as an organization. That’s the accountability part, that we hold people accountable for doing it.
It’s a mentality that is shaped by management from an employee’s first day on the job. From the beginning of the first day, employees are schooled in the company’s goals, strategy and values. They are given a copy of the company’s cultural primer, “Dare to be Great.” The booklet is often referenced by Whitmore in conversation, and employees are expected to know its contents.
With “Dare to be Great” providing the template and Whitmore providing the guiding hand and reinforcement, the culture of accountability has taken root throughout the expansive AlliedBarton footprint.
“The one thing I’m very pleased with is we’ve had a number of examples in the last few years where people in our markets would kind of light up in various ways,” he says. “They would say to us, at the account level and regional offices, that there is a leader who is not living up to the standards that we as a company expect. We expect more out of our leaders than this, and we know that you on the corporate level do as well.”
If an employee, particularly on the management level, is not knowledgeable about the goals and values of the company, their technical competency matters less. Technical skills can be learned, and in management-level positions, is often a job prerequisite. Values and a willingness to work as part of a team toward common goals are far more innate to each person.
“Anyone can learn the software and technology of the job, but you want people to lead,” Whitmore says. “I was interviewing a woman for a senior position recently, and I brought the ‘Dare to be Great’ book with me. I showed her what we’re all about, what we’re hiring for. She had the technical skills, we was a seasoned executive, but I told her if she doesn’t believe in what is in this book, don’t come with us. You have to reflect on whether this is in your heart.”
Continue the challenge
Employees stay motivated to strive for goals when they are constantly challenged by management to test the boundaries of their capabilities. It’s something Whitmore has kept in mind as he has continued to fashion a future direction for AlliedBarton.
“One thing I always try to be clear about is that ‘Dare to be Great’ is exactly what it says,” Whitmore says. “I’m daring you to do something great. I’ve had competitors say to me, ‘You guys think you’re great,’ but that’s not the idea. We’re the first to admit that we’re not perfect. With 55,000 employees, not all of them does the right thing or gives 100 percent every day. It’s about challenging everyone in the organization to be great.”
Whitmore says that mindset should be at the core of every leader’s thinking, if a company is to stand any chance of growing and thriving.
“It is at the core of everything we do in leadership,” he says. “You walk in every day and say to your employees, ‘I want us to be better and better.’ I’ve been here a long time, and I come to work every day trying to think of ways that we can better this business today. What can we do differently? What new thing can we try? How can we enhance what we do? And that’s generally the feedback we get from our clients, as well — that our managers come to work each day asking how we can improve our service, better improve and develop our security officers.
“It’s fundamental. I don’t care if you’re running a single McDonald’s restaurant or General Electric. You have to come to work every day and challenge your folks to do better.”
Developing a culture of continuous improvement is so integral to the process of strategic planning, Whitmore says he has trouble separating the two when it comes to explaining how AlliedBarton does business. Without driven, motivated employees, your strategy will never bear fruit. Without a strategy as a structure, your employees will have nothing on which to focus their efforts.
“It’s just at the core of everything we do,” he says. “In order for us to meet our goals, in order for us to build our business, none of it is going to happen without the desired culture in place. You can say you’re going to be anything you want. Without the culture for it, you just can’t do it. We could just work on selling contracts and making money. But one of the reasons you see us going from a small regional company 10 or 11 years ago to where we are today is our belief that the financial results will happen if you do all the other things well.”
To point your company in a given strategic and cultural direction, you need raw materials in the form of good people.
Finding the right people for the job at AlliedBarton — regardless of what the job is — means finding people who have a high emotional IQ.
If your IQ is a measurement of your capacity for head knowledge, your emotional IQ is a more ambiguous measurement that takes the temperature of your softer, people-oriented skills and traits.
“We mean people who are good at dealing with individuals, who are willing to take responsibility, who are oriented around growth and can make a connection with people,” Whitmore says. “People who can show leadership skills.”
Whitmore and his leadership team promote teamwork and attempt to heighten the collective emotional IQ throughout AlliedBarton through the company’s training and continuing education programs, where leaders emphasize the concept of building a collaborative culture around the company’s strategic goals.
“Sometimes I get complaints because we have too many people working on different projects,” Whitmore says. “But I like it because it’s what drives our culture. We have a class here called ‘212,’ which is a reference to the Fahrenheit temperature at which water boils. I once went around asking people how long they had been coming to the classes, expecting them to talk in terms of weeks and months. But one person had been going for five years. The person was a former operator who had moved over to the sales side, and one of the reasons they kept coming back was the number of people who stepped up and volunteered to guide and advise.
“Those are the types of things that become voluntary when they become a trait of your culture.”
Whitmore likes large numbers of people working together on projects because he feels it is critical to the culture to have people in different disciplines and locations working together toward common goals and developing a mutual understanding of what is happening in the departments and locations of their project-mates.
“You get interdisciplinary groups of people working together on projects, processes and initiatives, and that breaks down the silos that can develop in an organization,” Whitmore says. “But I’m not going to kid you, it’s work to do that. You get someone who works in, say, El Paso, and because of what they do, they get very inner-focused. It is something we have to work on all the time, because if we let that go, everything else won’t work as well.
“It’s all because in any business culture, the number one thing — and it’s been said over and over again — is teamwork. If your company is made up of leaders who can work together for a common cause, and who are there for each other in good times and bad, I think those are the companies that survive.”
How to reach: AlliedBarton Security Services LLC, (484) 351-1300 or www.alliedbarton.com
The Whitmore file
Born: King of Prussia, Pa.
Education: Bachelor’s degree in business, Philadelphia University
What is the best business lesson you’ve learned?
Be curious. The world is changing, so don’t get tied into what you do every day. Ask why people do things a certain way. As part of that, do a lot of reading and keep yourself intellectually stimulated.
What traits or skills are essential for a business leader?
Integrity, honesty and being highly communicative. And do what you said you would do — walk the talk.
What is your definition of success?
I think if we meet all of our plans, then it is a win-win-win for customers, employees and shareholders. That is what I define as a success.
A while back, there was a problem with the chicken breast at Johnny Rockets.
“It didn’t cover the whole bun correctly,” says John Fuller, president and CEO of The Johnny Rockets Group Inc.
It’s not unusual for a restaurant chain that specializes in burgers and sandwiches to have some issues like that. With nearly 300 locations around the world, Fuller and his staff are constantly tinkering and adjusting in an effort to keep the food, service and atmosphere at every Johnny Rockets consistent.
The real story is how Fuller achieves that consistency. It’s not through top-down mandates. It’s from the restaurant level, as Fuller frequently seeks input from franchisees and company-owned store operators on how the entire chain can do things just a little better.
To improve the chicken breast, Fuller went into the field — as he does once every few weeks — and started talking to the people on the front lines.
“We talked about different ways to cook it, or the possibility of going with a different product,” Fuller says. “Do we change the cooking style or try some other things? Through that process, we’re going out and asking our franchisees for input. Certain franchisees will test some different things. Then we’ll come back and look at what had a positive reception, we’ll work it through other restaurants, and we’ll come back and share the data. Based on that feedback, we’ll come back and try to make a final decision.”
In some ways, it might be easier for Fuller to simply tell store operators what to do and how problems should be solved. But Fuller believes the best ideas often come from the people who interact with customers each day. He believes that, as a company leader, you should leverage the brainpower and experience of your people to drive the company forward.
Fuller — who has a finance background and also serves as the company’s CFO — views his job as one of support. If you want to adequately support your employees, you should be prepared to enforce standards, coordinate resources and ensure that the people who have expertise in your field have whatever they need to perform their jobs at an optimum level, no matter where they are in the system. It’s an approach that helped Johnny Rockets generate approximately $300 million in revenue last year.
Focus on people
With a background in finance, Fuller is used to managing by the numbers. Numbers are important. You can’t lead a business without knowing where you stand in regard to your key metrics. But in his time at the top of Johnny Rockets, Fuller has learned that you can’t afford to let metrics get in the way of people.
“I have worked at other companies in the past where a lot of the systems the people in the field used to report information to the accounting department were done to make the accounting department’s job easier but were kind of onerous to implement in the field,” Fuller says. “It was kind of the accounting tail wagging the operations dog. That’s why I think it’s important that everyone understands who their customer is and how to provide service to them.”
Fuller has long held a belief that the more that leaders are able to talk to the people they lead, the better the result for the entire organization. If you deal with reports and spreadsheets first and your people second, your business will suffer.
“More district manager and general manager time on the floor is what we should be striving for,” Fuller says. “If they’re spending more time doing administrative stuff, more time crunching numbers and generating reports, then we in corporate have failed them as a support center. Because the more time they’re on the floor interacting with guests, you can’t help but improve the experience that way. Providing a great customer-guest experience and giving customers a reason to come back, is our whole reason for being.”
That’s why Fuller gets new members of management in a customer-focused frame of mind from the get-go. Each new management-level team member at Johnny Rockets has to spend a week in a restaurant, serving in various capacities. The assignment allows new managers and executives the opportunity to see operations through the eyes of their new subordinates. It also allows them to have direct contact with customers and gain a feel for what they expect from a trip to Johnny Rockets.
“If you’re going to provide support to employees, you have to see what their needs are,” Fuller says. “Don’t guess what their needs are, go out there, talk to them and ask them. Feel it and live it. Don’t lose sight of the fact that, in business, it comes down to the customer interaction. So you always have to know what it is you do, and what you can do better in terms of providing guidance and support.”
Be the culture
Fuller has a few other reasons why he wants new ideas, policies and procedures to well up from within the Johnny Rockets organization — namely, what and where. As in, what are the circumstances surrounding a particular location, and where is the restaurant located?
With several hundred locations and untold miles separating all of them, not every restaurant has the same local resources or the same needs. That means in order to maintain consistency, Fuller has to relate the Johnny Rockets culture in a way that makes sense for each audience in each location.
It could be in words or it could be in actions, such as finding common solutions to the same problem.
“One current issue we have is that we’re changing our music,” Fuller says. “Depending on what music system you have, we have to provide three different solutions. It’s knowing what each of our restaurants have and what that particular item is. Each restaurant is not set up the same way, so you can’t be foolish enough to start mandating things without understanding the implications on all sides.”
Fuller wants to hear about what matters to each restaurant operator, what would allow them and their staffs to work at an optimum level. But he still has to maintain standards that allow all locations to stay true to the Johnny Rockets brand.
It’s a fence Fuller has to walk between brand recognition and embracing a culture that allows a certain degree of flexibility so that store operators can tailor their offerings to meet the needs of the specific market.
“I’m not necessarily interested if they all want to serve pizza and wraps, things that are inconsistent with what we want to be as a restaurant,” he says. “We’re burgers, shakes and fries. If you want to move into something that is radically different, go open your own restaurant. However, if someone wants to try serving different kinds of soups at a location in the Northeast during the winter, go ahead and try it and see what you have. Come back and let me know if it’s something that we could leverage throughout the rest of the chain. Ultimately, you just have to make sure they’re focusing on things that are consistent with the brand and the company. We do it on a case-by-case basis.”
Fuller views a CEO’s role as someone who sets firm boundaries, but leaves enough space between the boundaries to allow for ideas and innovation — and encourages team members to move freely within the boundary space.
“You have to give your people opportunities and enable them,” he says. “I’m not going to micromanage someone who is doing their job right. I’m going to enable them and allow them to do things within the guidelines and mandates that have been laid out. We have a very good flow of communication going back to our franchise support center, and try to be very transparent within the organization as far as where we’re at, where we need to be better and where our challenges are.”
As the head of the company, the key to promoting the culture is to relate it to each employee. You need to show employees how their daily tasks allow the company to strengthen its brand, reach for its goals and remain profitable.
“You have to emphasize to everyone how they can be a key member of the organization,” Fuller says. “You have to show them what role they play and how they play it. To me, it’s reporting back through financial results and tying those results to their specific role, showing how they impact those results. You emphasize how they have made a difference, and how they can make more of a difference.”
Find the right people
In order to build a solid support system for your organization, the responsibility lies not just with the corporate management providing the support. It is also the responsibility of the employees to take the logistical, financial and cultural support that you offer and turn it into something that advances the company. You need team members who are willing and able to take advantage of the support system to better themselves and the company.
That means finding the right people who not only bring the talents and skills to the table for the position but also have an attitude and values that match the culture.
If you want accountants who do more than just crunch numbers, you need to hire for that, because you can’t teach personality traits and personal values.
At Johnny Rockets, Fuller wants team players who meet management in the middle on the communication front. Management provides resources, and people throughout the organization are willing to take a wide-angle view and understand how their utilization of those resources affects the company as a whole. The mutual understanding of the big picture helps create dialogue throughout the various levels of the Johnny Rockets system.
“Whatever role they play in the organization, I want them to know the endgame in that role,” Fuller says. “You can be an accountant and just kick out numbers and put them in a pile. But tell me how you use those. How have business decisions been made off of the deliverables you provide? I want to get everyone thinking about the deliverable that their department provides, what decisions are made from that, and what cog you are in the overall organizational structure of the company.”
In the end, Fuller says it is a service-oriented mentality that will enable your company to continuing growing and achieving. Management feels the need to serve employees, employees feel the responsibility to serve the company, and everyone wants to serve the customer.
“Go out and meet your customers, talk to your customers, and don’t just sit in the office,” Fuller says. “Go and find out what is happening in the department, go and ask what you can do to help. Go and see if there is anything your department can do to help others. It’s a mindset, and over time, you can spot pretty quickly who has it and who doesn’t. You can see who would rather stay in their office, and who wants to go out and help others.”
How to reach: The Johnny Rockets Group Inc., (949) 643-6100 or www.johnnyrockets.com
Last December, John Fuller, president and CEO of The Johnny Rockets Group Inc., was the subject of an episode of the CBS reality TV series “Undercover Boss,” in which the chief executive of a large company volunteers to work undercover as a low-ranking employee. Filming took place in October 2010, at several Johnny Rockets locations in the New York and Washington, D.C., areas, as well as a day filming at Fuller’s house. Smart Business spoke with Fuller about his reality television experience.
It was great for me, because I had really not worked in a restaurant. Getting out there and being able to see things without people knowing who I was, it was perfect for what I wanted. The show worked quite well and I got a lot of great experience that I wouldn’t have gotten otherwise.
That worked well for me. It also taught me — because I’m very analytical in how I think — how to simplify things. All that really matters is improving the process of the guest-server interaction. Develop a rapport, make eye contact, trying to make them smile once in a while. You build a relationship for the 20 minutes or so that you’re going to be with them, and if you can do that, you’ve kind of won the battle. If you build that relationship, people are more forgiving if things don’t go right and more excited if things go great.
I also learned about the passion that these people working in our restaurants have, and how excited they are to be a part of the Johnny Rockets family. It shows how each location that shows up as a line on a spreadsheet here is really a living, breathing collection of people who have a passion for what we do.
It was really good and it really emphasized the importance of being in the field. That’s why I have made it part of the training for anyone we hire at the manager level or above, so everyone can experience enough of what it is like to work in that environment, to cook during a lunch rush, to serve eight tables at once and all of that. It is important for management to have some kind of empathy with the people working on the front lines.