David Epstein understands that his passion for customer service can become irritating.
“It drives my wife crazy,” says Epstein, the co-founder, chairman and co-CEO of C3/CustomerContactChannels. “If I walk into a store with her and I see something wrong, I’m immediately re-engineering the entire process of the store.”
For Epstein, customer service isn’t just a job; it’s a way to make a difference in people’s lives and help them solve their problems. As a well-known venture capitalist, one of the founding members of the American Marketing Association and the head of numerous successful business enterprises in his career, he knows that this mentality is even more powerful when it’s a group one.
“There isn’t a person that works at C3 who doesn’t understand the impact that they can make every day, not only on C3, but on our clients and our client’s customers,” Epstein says.
By filling C3 with employees who see their jobs as an opportunity to make a difference, and then giving them a culture and leadership that supports them, Epstein has helped grow the business process outsourcing (BPO) company from 15 to 7,200 employees in just two years.
Raise the bar minimum
To provide its BPO services for clients and customers, it’s been necessary for C3 to hire thousands of people in a rather short period of time. But as it’s filled its contact centers across 16 worldwide locations, the company has been careful not to take hiring lightly.
While the BPO industry is known for its triple-digit turnover and employees who look at the positions as “phone jobs,” Epstein says that the root problem, as in many industries, isn’t the job. It’s that companies aren’t being discriminating enough in the hiring process to weed out candidates who they know probably won’t be successful.
“Typically, for every 10 people that are interviewed, this industry has a reputation for saying that eight of them are qualified or they are offered a job,” he says. “There’s not been a steeped process for selecting the right kind of people.”
Just because someone can do a job, doesn’t mean that care about doing it well. When you hire employees who don’t care, that translates into the customer and client experience.
That’s why C3 has a talent acquisition team that is extremely judicious in selecting people who are the right ones to grow the business.
“We go through a whole different kind of profiling to understand if somebody is really going to have the propensity to be successful in this job,” Epstein says. “It starts with their communication skills but it really ends with, ‘Will they have that passion? Will they feel that energy and share the values and be here day in and day out in this job to do a great job for our clients?’”
For every 10 people that are interviewed, the company typically narrows the pool down to three or four that it thinks demonstrate the right skills and attitudes.
“We feel like making a difference is an important element to what we do every day,” Epstein says. “So our people who are out in the field select the right kind of people that want to come to work not just because they need a paycheck, but because they want to make a difference for themselves, for their company, their clients and the people on the other end of the phone.”
When you start with the right employees, you can feel comfortable tapping those people for referrals who they know share the same values.
“It’s the friend-get-a-friend concept, but it continues to grow,” Epstein says.
Since 2010, he says that the company has seen turnover 70 percent lower than the industry standard — only two or three percent of call center employees each month.
“Because we’re selective on the way in, it reduces our turnover down to a very, very manageable number,” Epstein says.
“We believe that we’ve really put together the dream team of the BPO space.”
Help people, not clients
There’s a true story Epstein frequently tells when he’s out in the field or speaking to training classes. It was several years ago when one of the company’s health care clients was walking through a contact center and came across a C3 customer service professional who was crying. After the agent regained her composure and finished the call, the client went back to her and asked about what had happened. She replied that she was assisting an elderly man with his prescriptions and he had been extremely appreciative, saying that he didn’t have any family around to help him. Noticing that his birthday was the following day, she’d also wished him a happy birthday.
“He began to cry because it was the first time in three years that he had heard those words,” Epstein says. “We tell that story and we say, do you think she made a difference for that gentleman that day? She made a difference in his life.”
Before you can make a difference with customers, Epstein says you need your people to care about customer service on a deeper level than a job or a business transaction. That involves creating a culture that engages people on a personal level.
“It is a paramount objective for us to make a difference for our clients,” Epstein says. “But first you need to make a difference for yourself. Then you’ve got a chance to make a difference for the company you work for.”
While it’s easy to write something on paper and make it a corporate goal, it becomes a personal goal when you actually live it. This is one of the reasons the company encourages employees to extend the culture of “making a difference” to its communities.
“When things become deeply personal they become deep corporate commitments,” Epstein says.
In recent years, the company’s centers have donated more than $1 million to various causes. But aside from the money, employees know that making a difference is also about community involvement. The organization’s 900 employees in Salt Lake City, Utah have been so involved with community activities and fundraising that they now have a reporter for the local paper assigned to follow their efforts. Another example is C3’s employees in Twin Falls, Idaho, which knit more than 1,000 beanies for the premature infants ward at a local hospital.
“They were sitting there at home or on break with knitting needles, learning how to knit to make these things,” Epstein says. “You won’t find that at most places, but that was a reflection of the culture we’ve tried to create and we have created.”
Around the organization, Epstein says that you’ll find employees using the expression “I’m MAD for C3,” which stands for I Make A Difference for C3. This personal commitment to helping others translates into people’s attitudes toward customer service. When employees are on the phone, they connect to the person on the other end of the line instead of only thinking of doing a good job for the client.
“When people talk about a brand online, it’s usually because they’re frustrated with the service of the brand,” Epstein says. “In the hotel and hospitality industry it’s something like 35 or 40 percent of Facebook messages and blogging is usually about the service. You have a chance to make a difference by helping somebody get through something that they are seeking help on and they are frustrated.
“That is why I think people want to stay part of C3. They aren’t looking for ‘Let me just get that paycheck’ and that’s it.”
Don’t “make it work”
Creating a culture that supports employees and helps them succeed translates into better customer service, which translates into more success for your business.
“When you have a passion in your culture for taking care of your clients and your customers, that will help manage a lot of the velocity of growing so quickly,” Epstein says.
But once you have the right people and the right culture, your company’s leadership needs to make the right decisions for employees to succeed long-term.
Being entrepreneurs, a constant test for Epstein and his partners is being able to say no to certain opportunities. Whenever an opportunity presents itself, there’s a natural inclination to want to seize on it even if it might not be good for your people or your business.
“It could be prospective client that doesn’t fit right with us today, and so it’s hard to say no because you really want to build and grow,” Epstein says. “It could be an acquisition that presents itself where as you peel it back more and more, you find out culturally it will never really work. There’s a tendency for entrepreneurs to say, ‘Well, I can make it work because I’ve been learning to do that my whole career.’”
Epstein’s advice? Know when to say no. When he became one of the owners of the NHL Florida Panthers hockey team 11 years ago, Epstein says he learned this lesson the hard way.
“I thought without a doubt I could change how the business model works for a hockey team and a sports franchise,” he says. “My general feeling was that they weren’t run well and that if me and my partners who were smart business guys and had built big businesses, we could get in there, then we’d be smarter than these other guys and we could change it. Guess what? No.”
If you want your employees to stay focused on customer service excellence, as a leader, you can’t afford to be lured into opportunities that will negatively impact your business. Being a good steward for them requires managers to be good listeners, listening to their people as well as to the market.
“When you stop worrying about how much talking you’re doing and you start to listen, you can hear themes that go on that tell you, ‘OK, maybe things are going a little too quickly over here and I need to pull the reins in a little or I need to add some more resources to that,” Epstein says.
If you see an increasing demand in a certain business line, as was the case for C3’s performance optimization business, don’t hesitate to add resources accordingly — more employees, better technology — to make sure you’re not outgrowing your infrastructure. While looking at metrics is important, Epstein says that being a good listener really helps you develop a gut feel about your business that will more often than not alert you to the right path.
“The biggest thing is not to fool yourself into thinking something can be something, even though deep inside you can hear that little voice — the one you try to ignore — that’s telling you that this is really not the right fit,” Epstein says.
The same goes for people, he says. Many companies hang onto people too long before eventually admitting the fit isn’t right and that they aren’t supporting the goals or the culture you want for the organization.
“It goes on for far too long and everybody would be better off if that person was doing something different,” Epstein says.
“If you’re building an organization and you have people who don’t belong, do yourself a favor and do them a favor and get them to move on quickly.”
As in any business, it’s hard to keep a perfect track record. Still, you can do your best to listen to understand the marketplace as well as your own instincts, which typically can guide you to the best decisions.
“Undoubtedly, we will make a mistake somewhere along the line and something won’t fit in the way we thought,” Epstein says. “That’s going to happen. It’s how you minimize that that makes the difference.”
In the last couple of years, the velocity of C3’s growth has been extraordinary, which Epstein says speaks strongly to the quality of people that work for the company and their drive to make a difference. The organization’s success in this mission also explains why 90 percent of promotions at the company have been internal.
“People look at that and they say, ‘This more than just a phone job,’” Epstein says. “This is a career path and this is a company that cares about its employees, cares about its customers, cares about the people calling and cares about its community. All of those things tied into what we do and culturally who they are have given us an edge and helped us continue to be successful.”
How to reach: C3/CustomerContactChannels, (954) 849-0622 or www.c3connect.com
1. Be selective about hiring.
2. Make your mission more than just a job.
3. Follow your instincts to lead people in the right direction.
The Epstein File
Co-founder, chairman and co-CEO
Born: New Rochelle, New York
Education: Florida International University
What goal would you still like to achieve in business?
To continue to spawn the next generation of entrepreneurs, whether it’s people that are entrepreneurial at C3 that are coming up with great ideas to build the company or it’s people who have all of this entrepreneurial energy and it doesn’t fit for C3 — helping them do it on their own or somewhere else. I think that spawning more entrepreneurism and doing that is a more personal goal. Also, it’s the idea that we continue to put people back to work.
Three things that business leaders need to know:
- Your business: “It’s important to be clear on who you are and what you are as an organization, not try to be something that you’re not.”
- Your go-forward strategy: “It’s like a tennis player. If you’re playing the game of tennis you either play the net or you play the baseline. You don’t play in the middle. When you play in the middle you’re dead. You have to pick your path and your strategy.”
- Your fears: “Don’t let fear be your driver. It’s important to recognize that while some fears are clearly legitimate — you should be afraid of certain things and you shouldn’t ignore the consequences that come along with it — you can’t let it rule the day. You have to put fear in its right place, and frankly the key is to master wanting that fear.”
Craftsman is a brand that resonates across the United States with do-it-yourself plumbers and weekend auto mechanics. But in early 2009, Kris Malkoski feared that the brand was losing its shine with the clients that depended on it the most.
“Between 2003 and 2008, there were only five product launches that had any substance,” says Malkoski, vice president and general manager for Craftsman. “For an almost $2.5 billion brand that has over 6,000 (stock-keeping units) and plays in 80 different business segments, that isn’t enough innovation.”
As Malkoski explored the situation and looked for reasons why innovation had dropped so much, she discovered that there were way too many things trying to be accomplished all at once inside Craftsman without any semblance of communication among the group.
“Each of the functions were somewhat siloed in the prioritization of activities to help deliver what they thought they should be doing to grow the business,” Malkoski says. “As a result, when I finally got everybody’s projects mapped out onto a piece of paper across an organization that was pretty lean, we had over 350 different priorities, depending on who you talked to.
“There is no way you can successfully move your business forward if everyone has a different three priorities because we all rely on each other. If we are all going about our business thinking we have X, Y and Z to do and the next person is doing A, B and C, you just don’t move the business forward as robustly as you can.”
Malkoski wanted to turn that around and get everyone back on the same page at Craftsman, a proprietary brand of the $41.6 billion Sears Holdings Corp., which has 293,000 employees around the world.
“You need to know what to focus on,” Malkoski says. “Any brand will tell you that by better understanding consumers’ unarticulated and unmet needs and by being able to address them in a meaningful way, that delights the customer and makes them more loyal. If we focus on the customer and focus on what does it mean to make the customer want to buy Craftsman because it solves a real problem in their life, the better it is.”
Create a spark
The first thing Malkoski felt was important for the Craftsman brand to do was to reconnect with the people who made up its target audience. These are the people who buy power tools, tractors and lawnmowers for their home maintenance needs.
“These are the people who have 10 projects going on in their home and 10 more in mind for things they would like to do at some point when they get their current projects done,” Malkoski says.
“These are people who buy tools or lawn and garden equipment in anticipation of a job and not because they are in a crisis and suddenly they need a new tool. It’s really understanding your customer and getting intimate with them. What drives your loyalty? What are their most important feature requirements for your key product lines?”
In an industry such as the one in which Craftsman does business, it doesn’t take a lot of research to know what type of person buys your product. But as innovation dropped to a mere five new product launches over a five-year period, it was clear that the bond between brand and customer wasn’t as strong as it used to be.
“How do you reach them in inspiring and innovative ways that really capture their attention and inspiration?” Malkoski says.
Malkoski was looking for a way to reach her customers that was different from what had been done before. She wanted to surprise them and create a new buzz for the brand.
“From a public relations standpoint, we put Craftsman into situations where people didn’t necessarily plan to see us,” Malkoski says. “But once they saw what we were doing, they were inspired.”
It was decided that Craftsman was going to make an appearance at the renowned Consumer Electronics Show. This is typically a place where you can get a look at the latest in laptop or phone technology or check out prototypes of 3-D televisions.
But in January, you could take a look at the first garage door that you could open from anywhere in the world.
“It was an electronic technology that could talk to the cloud and because we were juxtaposed in a way that people didn’t expect to see us, we got over 100 million media impressions,” Malkoski says, referring to a metric used to quantify how many people viewed in some way, shape or form, a particular offering.
The entity also launched an interactive venue in downtown Chicago where people could ask questions and see demonstrations about Craftsman products.
“Think outside the box in terms of inspiring your customer and reaching them in a way that they want to receive the content,” Malkoski says. “One of the mistakes we make with brands is it’s too formulaic. You have so much television advertising and this much print and this much radio and PR and it’s more of, ‘Let’s report that we’re doing a new product launch,’ as opposed to saying, ‘How can you use those vehicles in a totally different way? How do you create that buzz?’”
Stay on target
As Craftsman looked for new platforms on which to reach its customers, Malkoski also wanted to address the innovation problem. She wanted her employees to be part of the process, but she wanted the process to have a lot more order and structure than it had previously.
“You want your employees to ideate and constantly look for new solutions to the DIY customers’ needs,” Malkoski says. “But it’s all about processes and having the processes in place to maximize the input of ideas and minimize the extraneous work that won’t get you to the revenue and profit goals that you want.”
The first solution to this problem was the creation of the concept factory.
“We take any idea,” Malkoski says. “There is no bad idea and the idea can come from an employee, it can come from a trend we see in the industry or it can come from a current user saying, ‘Hey, I’d love it if you could figure out how to add foam padding on your tool storage units so they don’t ding up my car.’
“Then we have a very simplistic process where we can vet these ideas through a simulation model with different price points to understand whether or not the product has enough consumer purchase interest that we should pursue development of that product. When you put it through the concept factory, you’re lucky if half of the ideas in any one comes out the other end as having enough consumer purchase interest. But that’s OK. You’re trying to narrow them down to things you should focus on.”
The key is the vetting process and being clear with everyone in your organization about what your goals and priorities are.
“It’s really about focus and clarity,” Malkoski says. “It comes back to our conversation where we don’t need 300 priorities. We need 12 priorities that we know can deliver big results. Then you have to communicate it and you have to make sure each person owns part of the outcome of those priorities so that they come to work with a purpose.
“They know that this is what is important and not all the other stuff that is flying around. You can make the big innovation happen if you are crystal clear down to the last employee about what is important, what is success going to look like and what is their role in delivering success?”
You need to take caution, however, that in creating a structure and forum for considering ideas, you don’t go overboard with the parameters. The best companies will attain a mix of innovation and structure that really sparks the creativity of employees.
“One of my priorities is that people don’t come to work, they come to fun,” Malkoski says. “Even if we’re problem-solving some serious thing, we find a way to still have fun in every day. If people enjoy coming to work, if they have a clear purpose of what their role is and that they are important to the organization, you can make a lot of innovative things happen with a very lean work force.”
Keep reaching higher
It can still be difficult sometimes to whittle down your list of ideas when every suggestion seems like it has the potential to be a winner. If you set up a vetting system that looks at all the key components and you’re still unsure, ask yourself if the product is a potential game changer.
“Having the first garage door you can open from anywhere in the world beat out the digital torque wrench with tighter maneuverability for tightening bolts in your engine,” Malkosksi says. “So you look at how big the idea is and how much of a game-changer it can be. You need to ask yourself: Where do I need to win in innovation to carry the brand?”
One of the challenges in these tough and uncertain economic times that just don’t seem to go away is asking people to do more and think harder about improving your business when in many cases, they’re already maxed out.
“There was a time when I had three babies in diapers in less than two years,” Malkoski says. “I was launching Aleve pain reliever for Procter & Gamble and my husband was managing Asia-Pacific for another company and was never home. I was a little stretched on all my ends. I had a real talk with myself one weekend about what was important.
“I created a catch phrase for myself that I try to abide by as much as possible. Live, laugh, love and then let go. I try to live life to the fullest and live Craftsman to its fullest. I try those crazy ideas to see how high is up. If you don’t live to its fullest, you’ll never know what is possible. You might miss something that is really great.”
This philosophy and a better structure for fielding and considering new ideas has helped Craftsman to turn up the volume on innovation in recent years.
“In 2009, the first year I was here, we had about seven new product innovation launches,” Malkoski says. “In 2010, we had 25, in 2011 more than 100 and I would say we’re on track in 2012 to launch over 150 meaningful products.”
But Malkoski and her team are hardly resting on their laurels. The effort to keep finding new and meaningful products for Craftsman customers rolls on.
“It doesn’t matter if times are tough or abundant, you need to continually invest in your business and invest in your brand and invest in ways to ensure that you are creating loyalty and long-term value,” Malkoski says. “Customers who are satisfied today are going to have you on their consideration list a year from now, three years from now and five years from now.”
How to reach: Craftsman, (847) 286-9036 or www.craftsman.com
The Malkoski File
Kris Malkoski, vice president and general manager, Craftsman
Born: Columbus, Neb.
Education: Bachelor’s degree in journalism with emphasis on advertising, University of Nebraska.
What was your very first job?
When I was three years old, we had chickens. My parents would have me gather the chicken eggs. Eggs aren’t white and clean like they look in the store when you buy them. There is manure on them and straw and stuff. So I would wash a whole carton, a whole 144 eggs, and my parents would give me 10 cents a carton.
When I went to interview at Procter & Gamble, I was naive, green by the ears because I had never interviewed for a big job before. So the guy says to me, ‘OK, tell me about your first job and what you learned.’ So I tell him about the eggs and I say the eggs in the grocery store look a whole lot different than the eggs coming out of the barn. He looked at me with the most puzzled look on his face and he goes, ‘I meant when you were like 16.’
Who has been most influential in your life?
It’s my parents. I learned the meaning of hard work, but I also learned the meaning of perseverance and making the most out of a situation and pushing yourself to be your very best. My mother wasn’t allowed to go to college, but when she was in her 50s, she went back and got her college degree and works at a hospital now.
My father always did the extra. There was a period when a lot of farms were foreclosed upon or people had to sell off their acreage. My dad had everything paid off. He was a smart businessman.
Over the past 18 to 24 months, Gary Heiman has had to overcome obstacles and challenges from seemingly every angle of the textile industry. The president and CEO of Standard Textile Co. Inc. has had to face fluctuations in raw materials cost, capacity and quality challenges, and the pressures of operating across the globe. It has taken a resilient leadership and company to maintain the kind of professionalism needed to not let those challenges get the better of the business.
Standard Textile Co. Inc. is a 4,200-employee global provider of total solutions in the industrial textiles and apparel markets that saw 2010 revenue of $750 million. Heiman has moved the company into new areas of business and has built up the company’s reputation.
“There are several areas of strength that we have as an organization,” Heiman says. “No. 1 would be our global supply chain. No. 2 is innovation and creativity, which is something that flows throughout the veins of everybody in our company. We’re trying to improve upon every process as well as product in order to be more efficient and effective both for our customers and for us.”
Heiman, who has been in his current role for 20 years, has prided himself on continuing to build a culture of excellent people, professionalism, trust and values, which has been the main solution to overcoming business challenges.
“If you don’t have the key building blocks of your organization in place and you come upon a period which presents real challenges, is a real crisis and you’re not ready for it – and you don’t have the organization that’s ready for it, it’s pretty tough to get through it,” Heiman says. “It’s tough to get through it as an organization that has all of the attributes and is ready and has worked together as a team in difficult situations in the past. If you don’t have that, it’s a tough situation.”
Here’s how Heiman and Standard Textile have maneuvered through the many obstacles in the textile industry.
Evaluate the challenges
As a manufacturer of linens and apparel, one of the most critical elements of Standard Textile’s business is raw materials such as cotton. The price and availability of raw materials have a ripple effect on business.
“There have been really violent swings in the costs of raw materials over the last 18 months-plus,” Heiman says. “You take those raw materials like cotton and oil, which would affect energy and electricity, freight and transportation, and they also affect all of our synthetic raw materials. We’ve also had to deal with raw material capacities and quality consistency throughout the supply chain. With all of that, we’ve always wanted to maintain, and needed to maintain, financial stability, which many other suppliers either couldn’t or didn’t.”
The price of cotton during this time fluctuated from $0.70 a pound to $2.40 a pound. Heiman and his team were committed to make the raw materials available and not make any change in them so there would be no alteration in quality, consistency, on-time delivery, or service levels.
“As part of that, it’s probably been the toughest period in balancing our work-in-process and finished goods inventory levels and to forecast,” he says. “Our customers expect on-time delivery and product consistency, but they either won’t or can’t give us realistic forecasts. We basically have to guess at that and make sure we have enough product and take into consideration that there will be shortages in markets that we’ve just come through. We need to be the company that can make up for those shortages.”
On top of those challenges, the company also has dealt with political and economic volatility as a global company.
“If you just take the U.S. and China relationship and the politics involved there and having plants in the United States, North America, and China, we’ve had to deal with those political issues which have affected us,” he says. “If you think about the fact that we have 24 manufacturing plants in 13 countries and we sell to over 60 countries today, currency exchange rates have been a real, real challenge for us over that period. We’ve really had to have our finger on the pulse all around the world almost on a daily basis in order to manage all these things.”
To combat the consistent uncertainties and challenges that the industry presents, Heiman and his team have one annual and three quarterly strategic supply chain meetings that they conduct all over the world.
“In our last meeting we actually had 275 initiatives for lowering our cost and dealing with the challenges,” he says. “Of those 275 initiatives, 100 were accepted. We as a company are really committed to a lean continuous improvement process. As part of that, we’re always out there looking at new countries, new nations and new places where our next plant will be and the plant after that because it’s a continuous process. We have an aggressive and vigorous process that we follow in these supply chain meetings. Everything is put on the table. Anybody can bring up anything and there are no silos and that’s the only way that we are going to truly achieve continuous improvement.”
Build a professional culture
Adopting a culture of continuous improvement and building a company that is prepared for the challenges and obstacles that an industry can throw at you is a tough task, but a necessary one.
“There really are no easy answers,” Heiman says. “I’ve been CEO here for 20 years and I’m the third one. Our company is 72 years old and we’ve built up a culture of excellent people, professionalism, trust, and a whole system of values and respect, and it’s very hard to say to another CEO who hasn’t built this up over a period of decades to just do this, this and this. The one thing that we do and we find we can’t do enough of is communicate.”
The company is always communicating what is being done, why things are being done, and the results that are being achieved through those efforts.
“You can’t communicate enough and you can’t get the message across enough,” he says. “We also engage in continuous research so that the messages that we’re communicating to both our customers and our associates are things that have been researched. We show them charts and trends, and our customers have learned to trust what we tell them.”
Standard Textile’s global capabilities and presence allow the company to know what’s occurring in the market worldwide and gives customers a better understanding of their business in return.
“Because we’re diversified around the world, we know what’s happening in China, Europe, the Middle East, and what’s happening in North America and South America,” he says. “We can bring all of that together and they’ve gained a lot of trust over these many decades about what we tell them because they know that we know what we’re talking about.”
That trust is not just built up over a period of time, but due to a history of getting the right information and helping customers make sound decisions.
“You have to build an organization of excellence in every respect,” Heiman says. “You need an organization that has the best professionals in marketing, in sales, in both process and product innovation, in supply chain, in finance, and really every aspect of the organization. Your job as CEO is to find the best people and the best associates for all of those key areas. For the next level down, it’s their job to find the best people under them so that the organization becomes continuously strengthened.”
Building this kind of organization relies heavily on the CEO being able to identify where the company is going and what it needs to become in order to flourish.
“The primary role of the CEO is to No. 1, communicate a clear vision to all associates and to all of the customers that are around the company,” he says. “No. 2 is people and being responsible for interviewing and having the final decision-making on the key people in the organization. A CEO wants people that buy in to the vision, into the strategy, into the values and into the culture.
“In addition, it’s putting together the strategy and the values that you want to have in your organization and the culture. That’s something that takes years to build and it’s something that has to be continuously reinforced and you need to communicate the message about what your values are and about the culture of the organization at every possible opportunity. You have to demonstrate it yourself, you have to speak about it, and you have to live it.”
Be innovative and diverse
Having a clearly defined vision, strategy and culture for employees to operate in allows them to be creative and innovative at a diverse company.
“You have to make a commitment to total organizational innovation, both product and process innovation,” Heiman says. “You’ve got to look at global diversification, both in raw materials and in manufacturing. If you have global customers who want to have global standards, you need to create a company that can service these customers around the world with the exact same standards and specifications in quality wherever they might be.”
To achieve that you need one culture and one set of values and those should be built around your customers and around your associates.
“Whether it’s local or global, every part of the company has to share and compare what their challenges are, what their opportunities are, and what their risk and exposure is in order to come together around best practices which they can then use as part of the company,” he says. “That type of training and continuous training is essential for creating a strong organization.”
One of the biggest success factors for Standard Textile has been its global supply chain which has allowed the company to be diverse and to innovate.
“In today’s world, you almost have to have a globally diversified supply chain,” he says. “The best and safest way to manage that supply chain is if you own your own supply chain. You’ve got to get out and you’ve got to travel the world and meet other suppliers because you’re going to have to use them. If you’re intending to work only through agents and just stay in the United States and not get out, you’re going to miss the bigger picture. It’s really important for a CEO to understand the bigger picture of what’s happening around the world.”
These continuous efforts to build a stronger, better company have led to industry-leading innovations in product development and cost.
“If you take a towel, you understand that 99 percent of people that dry themselves with towels will use the middle 50 or 60 percent of the towel,” Heiman says. “Because they want to improve the product, we’ll put more weight in the 60 percent of the center of the towel and reduce the weight on the 20 percent of the two sides. Or we’ll keep the weight used in that 60 percent in the middle and lower the weight on the 20 percent on each side, so you can actually reduce the weight of your product and therefore reduce the cost of your product.”
The company has also introduced technologies such as Centium Core Technology which is a patented weaving technology in the core of the product.
“The guest or patient or whoever is lying on the bed is effectively lying on cotton, but in the core of the product there is a synthetic product which actually weighs less. The specific gravity of the synthetic fiber weighs less, but the overall fabric will have over 200 percent more durability.
“Because the core weighs less it will dry faster and cut your energy costs and overall laundering costs. We’re developing products that last significantly longer and we’re creating products that process in a less expensive way.”
While Standard Textile has seen numerous challenges during the course of the past two years, the company has been able to roll with the changes and has come out of it as a stronger organization.
“Throughout this period we’ve gotten bigger because of the increase in pricing, but we’ve also gained about 19 percent in unit growth because we have taken market share from others that couldn’t supply or were supplying sub-par product,” Heiman says. “We’re bigger, stronger, and more recognized for having a truly professional team of people.
“We’ve gained the trust of our customers and we’ve come through it in a strong financial situation. We also have the trust and full confidence of our associates because they’ve seen where other companies have gone under or are struggling to survive. We’re flourishing in this environment.”
HOW TO REACH: Standard Textile Co. Inc., www.standardtextile.com
The Heiman File
President and CEO
Standard Textile Co. Inc.
Education: Received degrees in history and engineering from Washington University
What was your very first job and what did you take away from it?
As a teenager I worked at everything from mowing lawns to being a lifeguard to installing window unit air conditioners. The things that I took away from those jobs were being responsible, working hard, and trying to find better ways to do whatever I was doing more efficiently and effectively so my customer would be satisfied.
Whom do you admire in business?
I admire Jack Welch because of the issues that he dealt with regarding innovation, people, marketing, and sales on a global basis. Those were the things that I was dealing with.
What is your favorite thing about the textile industry?
The textile industry has been described as being a traditional industry, but there is nothing about it today that is traditional. All of the machinery that we use, all of the processes that we use are all high-tech, robotic and computerized. So whether you are in this business or another business, you are being challenged in the same ways. You’re being challenged in marketing, sales and manufacturing. So whether I’m producing a chip for a computer or a surgical gown, you still have the same types of challenges and same types of tools that you would use in getting to the best possible product. I really enjoy that part of the business which is built around innovation and creating new product that will better serve the customer in every way possible.
If you weren’t a CEO, what is something you would want to do?
I would like to be involved in innovation and product and process development of some type. Creativity and innovation is something that I really enjoy and really thrive on.
Mary Miller oversees a company that is responsible for cleaning 10 million square feet of office space in the Cincinnati area every night. To get that much business, you have to not only do a great job, but you have to differentiate your business from your competition. That is exactly what the CEO of Jancoa Janitorial Services Inc., a 320-employee commercial cleaning company that services large office buildings, is doing.
“Our business is better today than it was three years ago,” Miller says. “Back in the mid-’90s when employment was really low and we were short 38 full-time people, we knew we had to be more creative and ask different questions. You can’t just look at things and say, ‘This used to work yesterday.’ Nothing stays the same forever.”
It was this kind of thinking that led Miller and her team to create new programs that would differentiate Jancoa from its competitors.
Smart Business spoke to Miller about how to make innovation a part of your business.
Visualize the end in your mind.
Everybody has the ability to think of things they really want and to visualize how to see the future. At the same time, life brings opposition into our lives with walls to negotiate. The difference is taking the time to ponder the issue and devise ways to break through, climb over, go around or dig under — but to work through that opposition is when transformation takes place. It’s having the faith that knowing tomorrow absolutely can be better than today and being willing to do what it takes.
The more people ask the question, ‘What do I know that can create value for a company or for an individual?’ — that’s what really gets that motivation going and success starts happening. Too many people are sitting and waiting for people to give something to them and for things just to happen instead of going after it.
You have to begin with the end in mind. What is it you really want? If we were meeting a year from now or three years from now, what has to happen to be really happy? When you begin with the end in mind, look backward, ask those types of questions and you look at the dangers that you’re dealing with and different obstacles that are getting in your way, you start asking, ‘What would it look like if that wasn’t an obstacle or if we were to overcome that and moved on?’
Triumph over obstacles.
We look at obstacles or complaints that come in from customers or requests or suggestions that customers have to see what we can do to prevent that problem from happening again or what we can do to make it better to increase our productivity. You start breaking them down and looking at the results that you really want to have. What does that look like when you achieve that goal? You have to make a list of all the obstacles that are preventing that from happening and take those obstacles one by one and start putting things into place to overcome them.
Most of my people on my team have better answers on how to prevail over things or how to tweak our systems than I do, but so many employees think the owners or the bosses have all the answers. As management or a leader of a company it’s so important to ask questions and to shut up and listen to what your people have to say and to listen to what concerns they have because when you hear what’s really happening out there, there are a lot of possibilities for making things better and that’s when you change things from your competition.
Have a clear plan.
The challenge that comes is that it’s so easy to be seduced into possibilities that can lead you into areas that can get you into trouble. It’s so important to stop and have a plan. Every quarter we take the time to plan out what we want to have happen over the next 90 days. We also take a look at the previous 90 days and reflect on what we want replicated and what we never want to happen again. That’s a really important piece is to be able to take time to stop and have perspective and plan out what you want to have happen.
You also have to build a team of people that you trust are working within their talents and their skills that really creates an energy source of working together to achieve the results that you want to have.
HOW TO REACH: Jancoa Janitorial Services Inc., (513) 351-7200 or www.jancoa.com
As the president of the traveling exhibition company, American Exhibitions Inc., Marcus Corwin knows that creating the “blockbuster” exhibitions that the public wants to see involves creativity and ingenuity. But it also takes a lot of patience and upfront research.
“You don’t get Broadway successes overnight,” says Corwin, who joined the Boca Raton, Fla.-based exhibition company in 2006. “Most of them don’t make it. So how do you create something that people are going to want to see, that they’re going to be excited about, they’re going to be engaged?”
The company must develop new products all the time that it knows will resonate with customers. Corwin says that step one is figure out what fascinates and excites your potential audience — a million-dollar question for any business. This was the goal he had in mind when the organization developed its Mummies of the World exhibition, which focuses on a topic that has fascinated people for centuries.
“When Pepsi or Coca-Cola go to design a new soda, they’ve gone and done some focus groups, they’ve done some development, spent money on marketing,” he says. “And as good as they are, sometimes they get it wrong. So with regard to how do you find a product that you want to bring to market … sometimes we have it in our gut.”
Part of creating a hit with customers is having a sense for what the public wants by doing your homework and knowing who your customer is. By looking at similar exhibits that resonated with consumers, for example, Corwin was able to recognize trends toward subject matter such as human anatomy. The fact that these exhibits were extremely popular with consumers around the world evolved into the concept of mummies.
“Our thought process was what else would be people interested in seeing, because people are always interested in their history and the cultures that came before them,” Corwin says.
From there, it’s finding out how much they like it, what aspects resonate and most importantly whether they will pay and how much they will pay for it.
“We went and we had focus groups here in Florida,” Corwin says. “We had focus groups in Boston, Mass., and we had focus groups in Philadelphia — all which helped us identify the public’s perceptions of mummies and the public’s needs of why they choose an exhibition to come to, why they chose a museum to come to, how they spend their money and what are their trigger points in coming to see an exhibition like mummies.”
With focus groups, it’s important to examine a variety of feedback. Corwin specifically wanted to know which points of interest appealed to the majority of the audience, what price points could turn that interest into business, and which marketing materials were inviting versus frightening.
In the end, the company was able to put together the largest collection of mummies ever assembled in history from Egypt, South America, Asia and Oceania.
“We’ve had over 500,000 people see the exhibit already,” Corwin says. “Over 85 percent of them liked the exhibit a lot and would recommend the exhibit to their friends, family and relatives.”
Corwin says that when you have a product that’s successful, you need to then be asking yourself questions such as “What is our progression of additional product?” and “How do we continue to grow?” so you are always building on success.
Since the company opened the exhibit, it has done exit surveys at every location to determine what drove customers to attend and what they did and didn’t like so they can continue to improve the product. Now that it has built this brand and knows that people like mummies, Corwin says the next venture is to create sequels, such as Mummies II.
“From my company’s viewpoint, it’s almost like being at the helm of an ocean freighter,” Corwin says. “When you’re at the helm of an ocean freighter, you are looking way ahead, because it’s going to take you a period of time to shift the direction and speed of the ship. So I’m looking not one year out, but where am I going to be two, three, four, five years out with our company.”
How to reach: American Exhibitions Inc., (561) 482-2088 or www.americanexhibitions.com
In any kind of strategic planning, budgeting is very important. When you’re putting on a nationwide exhibition for thousands of people, it’s critical to map out your budget as clearly as possible so you can deliver for your partners and customers.
“The budget and forecasting is the premise of why you’re going forward with a project,” says Marcus Corwin, president of the exhibition company American Exhibitions Inc.
This was the greatest difficulty for Corwin and his team as they planned for “Mummies of the World,” especially because the economy is so uncertain.
“Sometimes we’re in a strong economy,” he says. “Sometimes we’re in a weaker economy. You can only make the best effort that you can do, but sometimes with the outcome, you are powerless.”
Once the budget and forecast make sense, being able to execute on that successfully involves a number of factors. One of the most important things to keep in mind is not getting carried away with ideas that haven’t been thoroughly vetted and can end up draining more resources or money than you have available. By making sure you are effectively planning and managing the costs, you can deliver your product at a better cost and profit.
“You have to deliver your product within those parameters,” Corwin says. “We found like typical in all worlds, designers have great ideas. And sometimes those ideas are pie in the sky and you have to be able to make sure that those ideas work, those ideas work within a budget and that the exhibit can be produced within that budget.”
The customer is always right. For Maura Clark, this old adage has never been truer than in today’s business environment. Clark leads a business in an industry that is known for its tough competition and pressures to be at the top.
She is president of Direct Energy Business, a $4.5 billion division of Direct Energy, which provides electricity and natural gas solutions to businesses across North America. To overcome the economic conditions, remain on top of the energy industry, defeat the competition and answer the pressures of the market, she has had to keep the company focused on customer needs.
“All of our customers are feeling the pressure, and it just calls upon you to be a stronger leader through difficult external market conditions,” Clark says. “This kind of external environment and a very competitive landscape just really calls upon you to be extremely sharp, and it doesn’t leave much cushion for missteps.”
Clark’s leadership and the company’s ability to understand the customer and find opportunities have allowed the business to be a growth division within Direct Energy. The key moving forward will be to continue to listen to the customer and continue to differentiate the business from its fierce competition.
Here’s how Maura Clark has used the voice of the customer to continue growing in a tough industry and economy.
Differentiate your business
In any line of business, it’s good to have something that customers can identify as a differentiator. In today’s economy, everybody is experiencing similar challenges and obstacles and it will be those who rise to the top that will win.
“I’m not sure that our experience is really all that different from what many other business leaders would face and in fact, from our perspective, what we’re going through is probably no different than what many of our customers are experiencing,” Clark says. “I think it’s simply just a really difficult time to be in business.”
When you operate in an industry where there isn’t much difference between your company and your competition, you have to look for anything you can that will help make your business stand out among the rest.
“We’ve actually had tremendous financial success and we’ve managed to grow our business through the environment, so I think the overarching challenge is how to continue to grow a business in a very competitive environment,” Clark says. “In a commodity-based business, it’s hard to differentiate ourselves from the competition. It’s very hard to differentiate through products and it’s very hard to differentiate the end-user experience. You really have to think about the things you can do to set you apart from the competition and that usually has to do with the customer interface.”
How customers view your business, your products, or your services is what sells them on your company. You have to make sure you are doing what you can to make them happy and coming back for more.
“Increasingly, I think it’s all about how you differentiate yourself through the customer experience,” she says. “Its how that initial sales encounter goes when you’re trying to advise your customers around the choices they have and managing their energy needs. Then it comes up again in how easy it is for them to actually do business with you, whether that’s on the front end of signing up and executing the contract or whether it’s months down the road where they might have a question or a problem and how well we do in those sorts of encounters. Customers are getting way more discerning too, because it is so competitive and because so many other industries have really broken new ground in terms of defining the customer experience; you have to work that much harder to get people excited.”
Listen to the customer
If it’s the customer who will help bring your business to the top, then you have to be willing to listen to what they have to say. Set up ways to allow them to voice their opinions.
“We try hard to listen to the customer, and I think the things that we have done in the last couple of years that have really allowed us to really think about that customer experience are we’ve held a series of customer listening sessions as well as business partner and channel partner listening sessions,” Clark says. “We’ve taken quite a bit of time as a leadership team and throughout the organization to really listen to what the customer experience is like for our customers and what needs and requirements they have that we could do a better job of meeting.”
In order to make these sessions worth your company’s while, you have to make sure you get people involved in that process who can take what customers say and really make a difference in how your company operates.
“My entire leadership team is required to attend these sessions and we often have folks from all of the different functional areas, not just sales, but people who would be responsible for operations and so on attend these sessions,” Clark says. “They can hear from the horse’s mouth as it were, just what it’s like to be a customer and what things are important to them, how we’ve done well, times where we could have done better and it’s always a mixture of good feedback and sometimes not so good feedback. It’s unbelievably helpful to us as we think about making decisions around how we invest in our business to understand and really partner with our customers to understand what’s important to them.”
While the customer certainly has a big effect on how you could improve your product or services that they use, you can’t rely on them alone. It is very helpful to have some other way of measuring your customer satisfaction.
“We also use net promoter score,” she says. “It’s a measure of customer satisfaction that is actually one of our annual bonus targets. We’ve worked very hard to really institutionalize the thinking around this metric. We have lots of communications around how we’re doing. We share the results of our monthly metric and we share the things that our customers are saying so the voice of the customer is quite audible to our people.”
Getting this type of feedback and measurement is very valuable, but you can’t keep doing the same old thing once you have that information.
“Everybody can always challenge themselves around are you getting the basics right,” she says. “Just getting the basics right can be challenging, but you really have to understand the customer needs as deeply as you possibly can. We’ve historically thought about our customers according to the volume of consumption, but within those categories there are different needs and wants. It’s really taking that understanding of customer needs and customer requirements to a much deeper level and thinking about it almost like a consumer product as opposed to a commodity or a necessary evil.”
To get that customer interface to a deeper level you have to share what feedback you are getting from your customers.
“You have to try and bring this to life,” Clark says. “When you leave something in a spreadsheet or even if you leave something in a metric, it’s good to have everybody focused on the metric that ends up impacting your bonus, but to me the thing that brings it to life is to read the verbatims and read what customers have to say about you or what they experienced when they sat down with a sales person. It’s even better to hear straight from the horse’s mouth. People should be trying to get right to that customer interface as best they can to really not lose sight of how important that is.”
Turn feedback into growth
With the valuable information you can gain from your customers and your other satisfaction measurements, you have to use that to help your business grow.
“In terms of growth in the past, we’ve done a pretty good job of being in the right markets and having really good products to sell to our customers and we’ve got a fantastic front-end sales force and we’ve not gotten complacent around fixing the basics and making the customer experience a good one,” Clark says. “Ours is a business where you don’t necessarily have to be the first mover, but you definitely need to be where the action is and you need to be nimble enough to be able to capture some of those opportunities. We’ve managed to get to the right markets and get to the right customers with good products.”
In order to grow your business, you have to look for those opportunities to get into new markets or reach a new consumer.
“The area that we’ve really been focusing on quite recently is creating an offer or a value proposition to the small business customer,” she says. “In our space, the poor small business customer has really been ill-served, because most competitive retailers have kind of a plain vanilla offer that would go to a residential customer. The small business customer is really being neglected because some of the products and services you might offer to a larger customer would also not really resonate necessarily with a small business customer, so they’ve been lost in the middle. We have put quite a bit of effort into basically creating an offer and a customer experience that will meet the distinct needs of the small business customer.”
It’s these types of products or services that reach a demographic or customer that others haven’t paid any attention to that will help your business grow and get an edge on competition. You have to make sure you balance what you’ve always done with new initiatives.
“Balance is the right word,” Clark says. “You can’t get complacent just focusing on the basics. This is a really dynamic, competitive part of the energy world so you can’t just be inwardly focused and focused on the issues of today. We carve out time to think and explore ideas that might take off in the future rather than what’s relevant today. You have to make sure that you’re focused on the present and the future.”
As with products or services you develop today, what you are looking to in the future has to also have a customer focus.
“You’ve got to really be understanding of how your customer is thinking and really understand what’s important to them and try to proactively determine a product or a service that can really add value to that customer,” she says. “It has to be customer led because if it’s just something that we think is kind of nifty and doesn’t resonate with the customer, it’s not going to do any good.”
HOW TO REACH: Direct Energy Business, (412) 667-5100 or www.directenergybusiness.com
- Differentiate your business from your competition.
- Create ways for customers to give you feedback.
- Use feedback to help grow your business and create opportunity.
The Clark File
Direct Energy Business
Born: Ottawa, Canada
Education: Attended Queens University in Kingston and earned a bachelors degree in economics.
What was your very first job, and what did you learn from that experience?
My first job was as a bank teller. What that taught me was that I was not very good at repetitive tasks.
Who is somebody that you admire in business?
Howard Shultz from Starbucks. He is a guy who obviously had tremendous success in a business that’s gone off the rails and he had to really challenge what was important to the business and important to the company that he was building. He seems to be quite humble about his learnings and he’s also given back a fair amount to his communities. He’s been successful in a multifaceted kind of way.
What are you looking forward to in the energy industry?
One of the things about this space is it’s gotten sexy all of a sudden, which I think is fantastic. It’s got tentacles into climate change, innovation, technology, transportation, so I like the fact that it’s complex, dynamic, and a global business.
What do you miss about Canada that you don’t have in Pittsburgh?
I miss Tim Horton’s and peameal bacon sandwiches, but we do have pretty good hockey though, so that makes up for it.
When it comes to social media, many businesses now have Facebook pages, Twitter accounts, blogs and YouTube channels, yet they are left wondering, “What’s it all worth?”
Measuring the return on investment from social media is as challenging if not more challenging than measuring traditional marketing for a number of reasons.
Brand impressions differ
First, let’s face it. Many aspects of marketing are difficult to measure. A common quote in advertising states, “I know that half of my marketing dollars are being wasted. I just don’t know which half.” Marketing and public relations, two of the most common functions involved in social media, are notoriously difficult to quantify.
Time-proven metrics for measuring marketing don’t work well in social media. In traditional media the success of a television ad is determined by multiplying a score of how effective the ad is by the reach or number of people who see the ad.
This doesn’t work well in social media because brand impressions are not all the same. For example, there is a vast difference in the level of brand engagement of an individual who passively reads a tweet versus someone watching a two-minute video.
The true reach from social media is also elusive. A study from PageLever showed that only 3 percent to 7.5 percent of brand fans on Facebook actually see branded messages. So while many brands will claim to reach the 5,000 people who have liked them on Facebook, they are in fact only reaching a small percentage of this audience.
That being said, there are a number of strategies that can help assess the potential value from social media marketing:
Direct marketing return
This is the most obvious type of return from social media. It involves looking directly at indicators that social media is driving business. This may include areas such as website traffic, redemptions of coupon codes, leads generated or e-mail addresses obtained.
Customer retention return
Many angry customers don’t get satisfaction from traditional customer service, so they take to the Internet. It is a growing expectation that businesses respond to customers on social media sites.
In working with a company recently, an executive asked me, “We aren’t going to make everyone happy, so what’s the point?” I asked him what the lifetime value of a customer was, and he responded that it was a few thousand dollars. Next I asked how many customers they would have to keep as a result of social media efforts for it to pay out. The answer was one per month.
By using this logic, we can determine if it is reasonable to expect the social media efforts to keep one customer happy and prevent them from leaving.
Similar to the customer retention return, a return on word of mouth can be calculated by looking at the lifetime value of a customer and assuming that because of making the effort on social media, a certain number of incremental referrals were generated from customers. It usually doesn’t take very many of these to start paying off.
Awareness and exposure
Awareness and impressions do have value in marketing online. An old marketing principle known as the Rule of Seven states that it takes seven interactions or impressions with a brand before someone chooses to do business. By having a presence in social media brands can increase the general awareness and impressions of a brand.
The items above are just a starting point. The key to success in judging the return from social media is to fully understand the goals and objectives and then measure your campaign against your objectives.
Don’t hold social media too highly
When evaluating social media, be sure that you aren’t holding it to a higher bar than other media. I spoke to an organization recently and the VP of marketing asked how they should judge the return from social media. I told him to measure it the same way they measure the rest of their marketing. He gave me a funny look and said, “Well, we don’t really measure the rest of our marketing.”
Just because you can measure clicks and traffic, doesn’t mean that those are the only things adding value in your social media.
Be sure to think comprehensively about your social media efforts and set goals up front.
Krista Neher is the CEO of Boot Camp Digital, author of the bestselling “Social Media Field Guide” and an international speaker.
Faced with an industry that was shrinking by nearly 40 percent, Bryan Putt and his team at American International Relocation Solutions LLC (AIReS) realized that things were about to change in the relocation services market. Due to the onset of the recession in 2008, drastic changes in the housing market and the fall of several banks and institutions, companies and employees alike became more reluctant to relocate.
With a new business approach in the company’s future, Putt, president of AIReS, a global relocation services provider employing more than 300 people and having annual revenue of $180 million, had to think of new ways to continue to grow despite a shrinking market.
“The biggest challenge was leading into 2009 and recognizing that the realities of the economy were going to have a profound impact on our business, both from the standpoint of our clients being directly affected and … the reality that a fundamental part of our business is the real estate market,” Putt says. “The devaluation in many cases of people’s property values created a situation where a lot of people who historically would have been open to a relocation for their companies have had to evaluate that with a much different perspective than they did for the 25 years leading up to that.”
Putt now had a choice to make. A common response is to prepare for survival mode and look to where cuts can be made, but Putt knew there were ways around that. Rallying his team, the decision was made to focus more on customer service and making sure clients understood the current relocation market.
Here’s how Putt focused on thriving instead of just surviving in a shrinking market.
Collaborate on your plans
Before Putt went ahead with any proposed direction for AIReS, he made sure that the plans were a collaborative process that included his senior team and had buy-in from the company.
“Our senior leadership team got together in 2008 and looking forward we said, ‘OK, all the signs are that it could be really bad. What do we want to do? How do we want to deal with this?’” he says. “It really was a function of everybody on that team having a strong belief in what we do. There was a consistency in terms of our vision and where we want to go and how we want to get there.”
That type of understanding within the organization is something that took years to create, but it has been one of the biggest factors to the company’s success.
“Building a culture that’s collaborative to begin with is paramount,” Putt says. “I’m one guy in the organization and honestly probably the least important individual in the company on a day-to-day basis. I’m very fortunate to be surrounded by really awesome people … who believe in the mission. They get it. They believe in what they’re doing, what we’re doing and they’re turned on by it. You’ve got to build a culture that is wrapped around that kind of singular focus of who you are, what you are and is a collaborative one.”
Having the ability to leverage that collaboration will help eliminate hasty reactions and will make people more comfortable about where your business is going.
“We go through a strategic planning process and not having a knee-jerk reaction is built on people feeling comfortable to put their ideas on the table within that group and to validate the thinking behind it,” he says. “Challenge each other in terms of the assumptions that are being put forward and the ideas, but always at the underlying level of that is what’s best for your customer. Focus on how you take care of the client and how you best service your customers because that’s what leads to profitability. For too many organizations the first thing they think about is the P&L. They focus on profit — dollars and cents, return on investment. The first layer of focus has to be on the customer. On the heels of that, profitability is going to follow.”
Changes in direction are oftentimes met with opposition. How a leader goes about making those decisions plays a big role in creating buy-in.
“If you happen to be the owner of a business and you get the 51 percent call and make the final shot, you can always walk in and provide a mandate or a dictate that says we’re going this way,” Putt says. “The problem is the minute you do that if you truly have people opposed, they’re not going to be pulling in the same direction as you. At best they walk out of the room kind of indifferent. They may not openly work against the agenda, but they’re certainly not going to be 100 percent in it trying to help you go in the right direction.”
Investing in a collaborative process and getting consensus on where you’re going helps eliminate doubt and puts employees at ease. That collaboration within AIReS led to the decision to retain employees and focus more on customer needs.
“It boils down to that point where everybody on the team and everybody in the room can be into that process and at least say, ‘Maybe that’s not exactly how I’d do it, but I buy in and I’m good to go and I’m with you all the way.’” Putt says. “Building that consensus is absolutely critical. Invest the time. If people are pulling against it, if they’re fighting where you think you need to go, invest the time in understanding what their concerns are and why. Try to understand how you can address those concerns, get them onboard and get that consensus built. It’s a big investment in time, but it’s well worth it.”
Decide your direction
When the signs that the relocation market would shrink began to appear, companies approached the situation in different ways. Putt was set on differentiating the business.
“We said we were going to retain our talent and we’re not laying people off,” he says. “Our knowledge capital is the value that we bring. We made a conscious decision that rather than try to hunker down and cut and save our way to profitability, we opted to aggressively sell our way through the recession. Our approach was somewhat unconventional in comparison to certainly what we saw others in our marketplace doing and that was looking at different ways to cut their costs and try to save their way into a positive financial position.”
Before making these types of decisions in your company’s future, you have to first understand your market position and value proposition.
“Anybody sitting in that position and saying, ‘OK, I think we’re going to have a declining market; we have all these things going on. How are we going to deal with it?’” he says. “You’ve got to have a pretty strong understanding of your value proposition and how to leverage that. It’s having an objective, realistic perspective of where you sit in the market with value proposition in comparison with the client base and the competition that’s sitting out there.
“If you are a commodity-type provider and the market is just shrinking in general and you can’t bring a new value proposition, it may not be the right decision to retain all your staff and continue to invest that way. You may just have to ride the wave because of where you’re positioned in the marketplace.”
When times become tough and you have to change course, try to avoid instinctively looking to make cuts within your organization as a first reaction.
“I wouldn’t tell everybody to continue to invest, plow into it, and sell your way through if all of the markers are telling you it’s going to go the other way no matter what,” Putt says. “If you do have a strong culture organizationally and if you focus on your people, the first approach from my perspective is not to cut. Try to find that yes. Try to figure out how to retain your knowledge capital.”
A lot of times there is that kneejerk reaction to tighten the belt. However, there is a time and place for doing that.
“Certainly assessing your cost structures, cutting out unnecessary expense and limiting the expenditures is all part of any good organization even in best of times,” he says. “That knee-jerk reaction of ‘we’ve got to cut’ is amazing because a lot of times the first thing people want to cut is in the sales force, but they’re the folks that are out there in market bringing you business. The idea that you can just hunker down and spend a year or 18 months or whatever and just protect what you’ve got — I don’t subscribe to that theory.
“If you’re not actively working to sell and grow, you’re dying and shrinking. There’s no such thing as ‘just stay level and hunker down.’ If you’re not actively out prospecting, the reality is some of your existing wells are going to dry up. Even in the worst of times regardless of the industry you’re in, cutting the sales force to me would literally be one of the very last steps I would want to take. There are other avenues to look to before you start cutting out the hunters in your organization that are going to bring the opportunities in the front door.”
In the case of AIReS, the customer is the company’s focus. Putt made certain not to eliminate the critical things that would make the new direction successful.
“If you have a focus on the customer as your primary reason for existing, generally the first reaction isn’t let’s get rid of the things that make the customers happy,” he says. “Building that into the organizational DNA is probably the most important thing and that’s a long-term process. You don’t build a team or react to scenarios when the bad times come along. That’s a process that during the best of times you’re focused on building an organization that thinks about what’s coming down stream. You’ve got to be cycling through that process all the time.
“When you’re staring into an inevitable negative situation you have to take the right steps. You’ve got to have the managerial courage to do it, but it’s figuring out the priorities of when and where and not doing the easy things because it looks good for a quarter.”
Meet customer needs
Now that Putt had decided on a direction for AIReS and got buy-in from his company, he had to understand where the company could better meet customer needs.
“One of the big areas of concern is the real estate market,” Putt says. “You want to move your staff members and their families around. Probably the most valuable asset they’ll ever own in their lives is their home, and the market is plunging precipitously depending on where you’re sitting.
“The home that that transferee owns that was worth a half a million dollars a year ago is suddenly worth $350,000. It’s pretty easy to say, ‘Aha, this is a great area of concern for our clients. How can we help them with this? How can we add value in the process and support them through this?’ We can’t go in and suddenly make that house worth $150,000 more.
“What you can do is you can add value to your selling process of helping your clients and helping the individual transferee come to grips with the realities of the market.”
Since AIReS’ clients’ livelihoods are at stake when they decide to relocate, the company decided to focus on helping them understand the current market.
“A big part of what we had to do was to go through a coaching process with each of the transferees to help them get a truly objective perspective of what the value of their home is,” Putt says. “You need to move through your employer and you need to sell your house. If you’re not realistic about what the value of your home is in today’s market, you’re not going to be able to sell your home and you’re going to go through a process that’s a lot more painful.
“So it was helping people get that realistic perspective and investing the time with the transferees to help them understand the market so they can make good knowledgeable decisions that helps them and it helps their employer.”
AIReS used its knowledge capital to the max in order to provide its clients with better service and understanding than before.
“It’s spending that time and being a problem solver for them as much as being simply a service provider and really leveraging that market knowledge we have of dealing with 400 or 500 corporate clients,” Putt says. “It becomes a process of evaluating what they’re doing and sharing good solid strategic business intelligence with them to help them obtain their goals.”
To help clients achieve their goals, the process was simple.
“You have to ask,” he says. “Go to your market and ask the questions and understand what their pain points are and where they’re seeing things not generating the kind of results they want to generate and then evaluate how you can help in that respect. The term ‘think outside the box’ is overused at this point, but come up with innovative alternatives to help clients overcome what’s occurring in their market. Generally, there are alternative ways to tackle a problem or concern that is going to be more palatable than just going down the path the way it currently is.”
The new direction of AIReS helped the company overcome the potential trouble of a shrinking market.
“We saw good returns on our investment even in the face of a really difficult year, and 2010 and 2011 have continued with even more healthy growth,” Putt says. “Our overall market shrunk somewhere between 30 and 40 percent, yet we were able to maintain an 11 percent growth rate. We have to continue to focus on building our team, recruiting and retaining great people who buy in to our culture and get it.
“We also have to continue to focus on the core services we deliver … and continue to automate and streamline and find efficiencies of our underlying activities so we can focus more time on the client.”
HOW TO REACH: American International Relocation Solutions LLC, (412) 788-0461 or www.AIReS.com
- Form a collaborative environment to create a unified business.
- Avoid kneejerk decisions and make customers your focus.
- Find unmet needs of customers to differentiate your business from competition.
The Putt File
Born: Indiana, Pa.
Education: Attended Indiana University of Pennsylvania and studied information systems.
What was your very first job, and what did you take away from that?
I was an office cleaner. That taught me that you have to focus on what you’re doing. Sometimes what you’re doing isn’t fun. Sometimes there are days when what you do can be a dirty job. If you focus on doing it well and you take care of the end user, it works, it pays off and there’s value in it.
What is the best business advice you’ve ever received?
Take care of the customer, and if you do that, profitability will follow. That was an epiphany for me. If you don’t focus on the customer, none of the numbers will matter because they won’t keep coming back. That was a defining moment for me in terms of defining my perspective of business.
What advice do you give others?
One of the things I tell people during orientation is you’ve got to have passion about what you do. Life is too short to just show up for a paycheck. You’ve got to do something in your life that you can connect to.
What geographies are you seeing the most relocation in?
It’s global. Within the U.S. there are key markets where you see a lot of corporate presence so you see a lot of relocation tied into those markets. On the international side, there is a heavy concentration and interest in the BRIC countries. Brazil, in comparison to what it used to be, is heavy. You wouldn’t compare it in the same way to China, but as a representative percentage against what they used to be, Brazil is a hot spot. China is huge right now because Asia is booming. The Chinese government is doing a pretty good job of setting a regulatory and investment environment where companies are comfortable. Then there are the traditional markets such as the U.K. and Singapore.
Kevin Reddy has a reason to like social media. It’s because of those data points that the chairman, president and CEO of Noodles & Co., a fast-casual lunch and dinner restaurant chain, decided he had to bring the chain to Pittsburgh.
The Colorado-based company has more than 5,200 employees and more than 280 restaurants in 22 states. Two of its newest locations are Market Square and Oakland.
“One of the wonderful things about social media is the amount of data points and guest feedback that you get,” Reddy says. “That’s one of the reasons why we decided we needed to get to Pittsburgh because we’ve gotten quite a few requests over the years about opening in Pittsburgh. It got to the point where we couldn’t ignore it; we’ve got to go.”
In an industry that has seen a decline in restaurants for the past three years, Noodles & Co. has been seeing double-digit growth.
Smart Business spoke to Reddy about what makes the Noodles concept so successful.
Execute growth plans.
For any business to grow successfully today, you’ve got to be one of the better, stronger performers within your niche and within your segment. One thing that we’ve been successful at is we have a pretty simple, focused philosophy on creating a dining experience that we’re really proud of and it’s based on three things; really good food, served by genuine, nice people, in a friendly, welcoming place. That’s what we’ve been doing over the past five years and we just keep getting better and better and better at it.
It starts with being very objective and critical about what you’re currently doing well today and what you’re not doing well today and really understanding how the guests view the brand. It’s one thing if a management team believes something but if the guests believe something else, you’re never going to create that connection that you need to. You have to be very objective and truly understand your guest’s perception of your brand. You’ve got to be very honest and objective of what your system is capable of executing and how well they’re doing it. Once you assess that you can put the right strategy together and form the whole discipline around identifying what’s important, being rigorous in how you innovate, and having a slightly unreasonable expectation in execution.
Grow your infrastructure.
Infrastructure for growth starts with understanding the right risk tolerance level. It’s about funding, it’s about capital, it’s about expectations around growth and you’ve got to believe in your own brand to grow. For anyone to grow, you first have to look at real estate. You really need to understand who your guest is, what influences how far they’re willing to travel and how frequently they come. You’ve got to be able to define those areas that make up the key decision criteria. Understand those big blocks of demographics and how they influence sales within the range of your own concept. Then it’s how do you replicate it. When you’re growing fast, you have to have the analytical model down pretty tight, and then you’ve got to have the discipline to stay true to your site screen.
Enter new markets.
Every year we add two to three brand-new markets. We pick those based on what we can get on data. We try to find out which cities and states are thriving and growing and which are struggling. We picked Pittsburgh because Pittsburgh has done a phenomenal job in staying relevant and transitioning its economy.
You have to really understand the elements of your business and which ones are critical to replicating success because not all things are important equally. You have to look at what’s on the consumer side, on the operation side and then the real estate side. You have to willing to build those systems — the training programs and decision logic before you start growing. You’re always going to modify and get better, but it gets really difficult to build the ship as you’re sailing it and you don’t want to make fatal mistakes early on. What’s critical to the right real estate? How are you going to merchandise and market the guests? How are you going to make the brand relevant and make people aware of it so they’re going to try you? You can’t just chase a number for growth. You have to pay attention to every one of those details because they all have a chance to dilute your ultimate success.
HOW TO REACH: Noodles & Co., (412) 562-2191 or www.noodles.com
When Ken Kemerer looks at the 80 percent revenue growth SilMix Ohio has achieved since 2001 when it was purchased by Wacker Chemical Corp., he gives a lot of credit to getting involved in industry associations.
Not that it was the only factor ? a rebranding effort three years ago was also part of the mix ? but being an active member of industry groups was a must.
“That’s where the networking is huge,” says Kemerer, director of SilMix Ohio, a manufacturer of custom silicone compounds. “We have added 50 customers since 2009, and we truly believe this branding and networking has resulted in the new customers.”
To get going with industry group networking, you need to research the organizations through universities, libraries or the Internet.
“In the rubber industry for instance, the American Chemical Society is an umbrella group that has a rubber division and a subset for regional and local groups,” Kemerer says. “You want to support financially and technically through manpower and participation all those groups. We support basically all those groups in North America now.”
In terms of support, it means more than paying membership fees.
“You can sponsor their websites, sponsor their fundraising, their golf outings and donate to their scholarship funds,” he says. “The regional groups have technical meetings. You can give technical presentations at their meetings. The technical service is important because other companies may not have an expert on site and you can provide that technical side of the industry.”
The fact that you are at a regional conference giving a presentation and answering questions about your specialty goes far in establishing your brand.
“It’s all about the networking in getting the name out, so that if people are not familiar with your specialty, and they have questions, yours will be the first name they think of,” Kemerer says.
One thing that obviously helps the initiative is encouragement from company ownership.
“Our owner is a corporate citizen, which means we have a responsibility to the industry,” he says.
This attitude should underlie your involvement in the industry groups ? you are not just giving a presentation as a sales pitch for your company.
“The industry groups had been the only place to get knowledge unless you hired somebody who had been trained by somebody else,” Kemerer says. “As the Internet has come along, and online training, they have changed, so the industry groups are really providing networking opportunities on a high level. It’s almost more of an awareness than technical training. These opportunities are out there.”
With your interaction in the industry groups, you are advancing your knowledge throughout the sector.
“There are not that many technical experts out there if you are in a niche,” he says. “Yes, it’s self-serving when you present, you may get your name known as somebody who has the answers, but it is not just about that. It’s also about corporate citizenship.
“There are many opportunities to present new and innovative things if you can in particular areas such as the medical field. That’s on the cutting edge as is helping customers in the industry become aware of new ways to do things or new developments.”
One other fact to keep in mind while attending or presenting at a conference is that your competition may be present, and while it is wise to guard what may be trade secrets, with care, you can still deliver an effective presentation. Don’t use it as a soapbox to show your differentiation.
“We do see competitors, but we see them more on a regional level,” Kemerer says. “We all have the same general purpose products. Some competitors may also be your customers ? so you want to keep good relationships, a good working knowledge and make sure you don’t cross any of them.”
How to reach: SilMix Ohio, a division of Wacker Chemical Corp., (330) 628-5017 or www.wacker.com/silmix
Formula for rebranding
If your company can’t decide where your rebranding should start, do what Ken Kemerer did at SilMix Ohio: look to your “Pillars of Success.”
“We identified our ‘Pillars of Success,’ that’s what we call them ? our customer service, our technical service and our flexibility, and we made them our focus,” says, Kemerer, director of the custom silicone compound manufacturer.
With that simplified mission statement, it gives you a basis to build a branding and marketing effort that will represent your company well.
“We built three different advertising ? let's say modules ? based on those,” he says.
“Identify your pillars of success, and then customize your advertising both visually and verbally along those lines so you can publish it in different media ? magazine, newsletter and website. Have a variety of pictures, so they don't get stale. Use text that describes each pillar of success.”
Then to help support the industry groups, use the same collateral to expand your brand to that outlet as well.
“It worked out real well for us for the past three years, and now it is a good time to have a new angle and still build off the same things ? and more as video opens new opportunities,” Kemerer says.