There is no denying it: Victor Nichols leads a complicated business unit housed within an even more complicated company.
Nichols is the CEO of Experian North America, the largest arm of Dublin, Ireland-based information services group Experian. In his role, Nichols oversees an operation that generated $2.2 billion in fiscal 2011 revenue, with 6,000 employees across four business lines: decision analytics, marketing services, interactive and, its best-known line of business, credit services — for which Experian has gained notoriety as one of the three main consumer credit reporting bureaus in the U.S.
However, for all the complexities that exist in the broad spectrum of Experian’s services, Nichols says they are, at heart, a customer service company. At the most basic level, Experian serves the people who work for client companies. It’s a fact that Nichols tries to keep front-of-mind for everyone within the organization.
“Experian’s challenge is helping customers achieve quality growth,” Nichols says. “There are certainly a lot of pressures on businesses, whether they be regulator, economic or consumer market driven, but our clients still have to achieve quality growth despite those market conditions. For our team, it’s really about stepping back from that and figuring out how we can address the unique requirements of each of our clients, matching our many products and services to help them advance in the way they need most, in order to help them achieve that quality growth.”
To step back, Nichols and the staff at Experian actually need to get closer — they need to maintain close relationships with clients, develop a deep knowledge of the challenges they face and how Experian’s array of products and services can help them address those challenges.
It’s a mentality that Nichols says is a fundamental part of Experian worldwide, and something he and his leadership team have worked hard to promote throughout the North American unit. Ultimately, Nichols says, great client and customer service has to be part of your culture, or the philosophy will never take root.
Keep your ear to the ground
Like many large companies, Experian has a sales force that relies heavily on travelling to various markets and interacting with customers in person. It is a critical component to Experian’s business model, not only from a sales standpoint but from a customer relationship standpoint.
When you have a sales force that has its shoes on the ground in the various markets you serve, they will develop and strengthen relationships simply by driving around and making their presence known by clients and customers. Those interactions become a valuable window into the daily business life of your customers, offering a glimpse of their needs, their challenges and how you can best serve them.
The key, Nichols says, is to take those salespeople who meet with your customers every day and give them a voice within your organization. The relationship they’re cultivating will be of no use to you and your management team if you don’t give your sales staff a means of reaching you with their observations and suggestions.
“When you have a strong sales team that is out there every day, a lot of what you learn is going to come from those team members,” Nichols says. “You need to realize that, more often than not, they’re going to be the voice of the customer to you. That’s why it’s important that team members have a strong voice within the organization, that they have input regarding the innovation and the enhancements that you are going to make within the organization.”
Apart from the sales force and the other members of the Experian team that interact with customers in person, Nichols also places an emphasis on finding and maximizing other touch points between the company and customers.
“You have call center people, you have product people getting input,” he says. “We also conduct customer conferences throughout the year, both large and small in size, to bring customers together with our team to discuss what is going on with them. In addition, we have various panel discussions and webinars that take place with our customers. The things that you would consider solid business practices by any business today are the things we do. It’s really about developing a culture of engagement between your business and the customer. In our case, we have a strong vision aligned with those values, centered on customer care. If you can get that established, all of the other practices start to take hold.”
Advance the culture
A commonplace saying that has developed in the business world is, “A company’s culture isn’t what the leadership says it is, it’s what the employees believe it is.” If you want a customer-centric culture, you need employees who embrace and promote the idea, and are willing to put in the work to develop strong bonds with customers.
At Experian, prospective employees are measured for their cultural fit throughout the interview process. The acceptance of a job offer is quickly followed by rounds of on-the-job training in the work environment.
Nichols says finding the right employees who can serve as building blocks for a customer-focused culture is the result of a combination of factors. You need solid recruiting practices led by a human resources team that has a well-defined concept of the core values and mission of the organization. You need a thorough interview process, and you need a training program that promotes your values to new hires early and often.
“Finding the right people for your situation is a combination of many things,” Nichols says. “You are certainly recruiting for people who have those instincts that align with your values. But you can train for it as well. You can teach people to ask the open-ended questions and go through the processes that you need to go through to uncover a customer’s core needs.”
Training at Experian happens largely in the field. Though classroom learning has a place in a training program, Nichols says the best education is less on concepts and more about practice. With that in mind, he wants to get new hires at the customer-interface level to the interface point as soon as possible, gaining firsthand knowledge of what it means to stay in touch with a customer’s wants and needs.
“You can’t do this type of training in a formal, behind-the-desk, PowerPoint presentation kind of process,” Nichols says. “The training comes from real-life orientation, a structured program in which people can go around, meet their coworkers, get a sense of the larger organization that they are now a part of, and get them on the job as fast as possible with a supportive environment around them. It’s a type of ingrained interaction as opposed to a formal classroom setting.”
Nichols frequently leverages relationships within the company to help promote the culture. If employees are engaged and taught by their coworkers, they’ll develop a heightened desire to interact with others, and those habits will spill over into their customer interaction.
“At Experian, we benefit from a tightly-knit team,” Nichols says. “We encourage our people to come together, talk and educate each other. We encourage diversity of thought, and I think we’re brave enough to continue encouraging it. It’s necessary, because it brings together different individuals who have different perspectives, and that enables us to reach richer, better-informed decisions.”
To help foster internal interaction throughout the Experian organization, Nichols and his leadership team have put a number of programs in place to offer opportunities for interaction among employees.
“We have centers for creative leadership, helping to advance select individuals who are demonstrating an aptitude to progress in the organization,” Nichols says. “In addition, we’ve established enterprise business networks that are held for a great number of team members at all levels in every region. And along with that, we’ve formed a strong mentoring program. Each of those individuals has a seasoned mentor in their line of business. Through that program, they get far greater insight into the strategy and execution of the company.”
In an organization of thousands with a massive footprint, you might think Nichols and his direct reports are so far detached from the customer interface point, that what they demonstrate might have a relatively small influence on the how the company conducts its customer interaction at ground level.
In reality, Nichols and his team are cognizant of how much what they say and do impacts the culture of the organization, and the level to which it is adopted by those who do talk to customers on a daily basis.
In short, if you want engagement and customer service to be maintained as priorities, it needs to start at the top of the ladder.
“It repeatedly comes back to that high level of engagement from the top, having a management team that has strong skills, that knows the business,” Nichols says. “In our case, we have many leaders who have lived on both sides. They have been customers and consumers who have used many of the products and services we offer, and they are out there in the marketplace dealing with the team members who report to them.
“It all continues to be complemented by the formal processes as well. We have a periodic employee team-member survey, and we are very rigorous with how we approach that. We seek high levels of participation, soliciting opinions from team members on what they think is working best within the organization and what they think we could be doing better. We then develop action plans around that, and stay committed to those.”
Though the surveys provide a more direct way for upper management to stay in touch with the employees who work at or near the customer interface level, a much greater volume of information bubbles up through the organization from subordinates interacting with their managers. Nichols and his team keep those channels open and encourage their use, so that everyone in the chain of command hears the latest news and ideas, and stays focused on the latest trends involving customers.
“We have an organization that is constantly generating ideas, and they will bring them forth to the organizational teams, bounce it off of them, and they go through various processes to see what the business case would be for a given idea, and how it would manifest itself to be beneficial for the team or the clients. It’s really about selecting the highest-priority ideas and that are going to give you the greatest return and help your clients the most.”
Nichols and his team often don’t reject an idea outright. In many cases, an idea from the customer interface point can be used in some form or at some time. It might simply need altering to fit your current plans, or to be shelved for a later time when it makes more sense.
“It’s less about not moving forward, and more about moving forward with a new idea in phases,” Nichols says. “I would say that is almost always the case. Rarely does an idea go forward as initially conceived. You go through a structured development cycle and test it. We usually roll the product out in various markets where we think it will have the greatest ability. That’s the key, to make an idea successful, but at a pace that makes sense, both for the company and the clients you are serving.”
How to reach: Experian North America, (714) 830-7000 or www.experian.com
The Nichols file
Education: Bachelor’s degree in economics, University of California, San Diego; MBA, University of California, Berkeley
What is the best business lesson you’ve learned?
I’ve been lucky to learn a lot of different lessons from the leadership team here. What I’ve learned is that it’s good to care and it’s good to promote that diversity of thought, and you have to execute on your commitment. If you make a commitment, whether it’s for a customer or the community, or for our financial performance, you have to execute on that.
What traits or skills are essential for a business leader?
You have to demonstrate the same qualities that you’re expecting from the rest of the team, and that’s where that engagement and interaction becomes so important.
What is your definition of success?
Taking care of the customer by meeting their needs, helping them achieve that quality growth. Also, it’s about empowering them to make informed decisions, helping our clients to manage their customers, helping them to make smarter financial decisions and live better lives.
In addition, taking care of the team members, making sure their work equation is such that it enables them to be successful, while still having fun in the process.
Terry Cunningham knows that you need to have a compelling story for potential customers if you want their business. So when he joined EVault, A Seagate Co., around three years ago, his first objective was finding out how well the company’s story resonated with its customers and its 400 employees.
“We spent of time looking in the mirror and saying, ‘Well, would you buy it, and if not, why not?” says Cunningham, the president and general manager of EVault. “What’s not true about it? What is it that the customer would say, ‘I don’t really buy that story and here’s why’?”
Often, the problem isn’t that you don’t have a compelling story, but that you’re not communicating it correctly. Cunningham realized this was the case at EVault, which provides online backup and disaster recovery using cloud-based systems.
“So they had the right idea — the previous generation of the company,” he says. “It just wasn’t told in a way that had a broader market appeal.”
At the time, the company was serving only a small niche of industries that were legally required to backup their data anyway. But Cunningham knew that there was an opportunity to communicate to more consumers and markets that the cloud was a better way to handle their data protection and disaster recovery.
So how do you go about broadening the appeal of your story? Cunningham says the first step is floating the idea with people who may not think that they need your product.
“You begin with getting to the prospect that isn’t compelled buyers or compelled markets,” he says. “Go beyond the regulated industries that are required to do it and get to somebody that doesn’t care.”
Even if they seem unenthused at first, if you can open up a dialogue you will probably be able to identify some pain points.
“So now we get to the prospect or customer that at first doesn’t care that much because he thinks everything is OK, but then in the conversation, you discover that there are some challenges that they’re facing,” Cunningham says. “So OK, what’s the first problem you’re trying to solve, … what’s the second problem you have to solve … and so on.”
As you find these pain points, you can walk the customer through what a new solution might looks like and how a new story could meet them.
“Then it’s the usual sort of discovery process,” Cunningham says. “Let’s say we did have all of this. How much would you pay for it? When would you do it? What are all the other issues?”
Using this feedback, the company has been able to retool its story with pricing, packaging and other specifications that reach a broader spectrum of consumers. Now, Cunningham says the key to growth is being able to tell that story in a way that is simple and memorable.
“The early stage of that is to get out and tell the story and tune that story in the simplest possible way so that people can retell it,” he says. “If I give you the pitch, can you turn around and give it to somebody else easily?”
To help employees communicate it effectively to others, Cunningham regularly travels around to the company’s different offices to talk about the new story and why it is significant.
“The ultimate goal here is to communicate a story that gets told and retold by others, and we don’t have to keep doing all the heavy lifting,” he says. “If this is a better way, then eventually the world adopts it as proof that is really is a better way. You need everyone in your company to be able to communicate the story passionately and with the same enthusiasm.”
How to reach: EVault, A Seagate Co., www.evault.com or (877) 382-8581
The next best thing
When Terry Cunningham goes out to dinner, he loves to eat at restaurants that have paper on the table. That’s because when the whiteboard is out of reach, he has a spot to sketch out the next great idea for his technology business.
“They used to deliver crayons for the kids, now they deliver crayons for people like me to draw pictures while we’re talking about something,” he says.
As you continuously recast the story of what your business means to customers, you always want to be asking yourself, “What’s the next step?” even if it means sketching out the plan in Midnight Blue.
“[It’s] what’s changing from our customer’s perspective and how does it affect us to make sure that we’re not becoming irrelevant without even knowing it,” Cunningham says.
“There isn’t a technology company on the planet that isn’t sort of assessing where they’re at because the world is changing very quickly. So they’ve got to sort of reassess and figure out what the customer, target or prospect is looking for today.”
The key to long-term growth is to consider what the customer or the market is saying today, but never stop looking forward and innovating.
“I see a lot of companies and people I’ve worked with just chase the current model or market and they basically end up saying ‘me too,’” Cunningham says.
Do you know who actually buys from you? I’m talking about the socioeconomic makeup of your best customers. Is it women 35 to 45 years old with an income of $60,000 that spend, on average, $200 on every purchase? Is it businesses with 10 employees or less? If you don’t know, it’s high time you found out. After all, you can’t clone your best customers until you know who they are.
Take the following steps to construct a model of your ideal customer:
1. Accumulate all the details of your sales for either the past six months or one year (it’s not necessary to exceed a year).
2. Add up the total gross income (GI) of each sale and divide that number by the total number of sales. This will give you your average ticket price. Example: 200 sales with total GI of $200,000 means your average ticket price is $1,000.
3. Take the top 10 percent of your invoices (based on sale price) and list all attributes you know about them. If you are targeting consumers, this should include gender, age, income, location and whether or not they have kids or own a home. If you are targeting businesses, this should include industry, number of employees, annual revenue and the title of the person at the company who worked with you.
Once you have the model of your ideal customer, you can begin to take steps to acquire more customers that are like them. If you don’t know some of the answers to the above, you can actually buy data and append it to your list.
I have found direct mail to be the most successful lead generation tool for my marketing, especially for acquiring specific customers. The reason is that you can get extremely specific with mailing lists and tailor your mail piece to that specific demographic for a higher response rate.
For example, at PostcardMania we mail to small business owners. We discovered from reviewing our invoices that dentists make up a whopping 20 percent of our revenue, so we pulled out all the data we could about our dental clients and by appending information, found that the bulk of them (not all of them) were the dentists with newer practices. So we targeted those newer practices and saw an increase in calls in, closes, and of course, overall revenue generated from that industry.
Say your target demographic, or ideal customer, is wealthy men in their 50s. You can simply get a mailing list of every man in your area whose age is between 50 and 59 with a household income of $300,000 or more. You could also further specify by home or car value, marital status, number of children and so on.
Not only does this list ensure you reach everyone in your potential ideal market, it also pulls great results. Since you know exactly who it is you are mailing to, you design a postcard (better than letters, no envelope to open) with copy and images sure to get their attention, rather than appealing to everyone. The more you hone in on the “button” that resonates with your audience, the higher your response rate (and conversion rate if your salespeople do their jobs) goes.
This is a simple strategy to target the customers you want to replicate by identifying your ideal customer, getting a mailing list of all the people that fit that model and mailing out marketing material that uses a message especially tailored message to them. For best results, continue to communicate this message over time. It takes an average of seven marketing touches for a prospect to respond to your message. So the more often they see it, the more likely they are to respond.
Joy Gendusa founded PostcardMania in 1998 with a phone, computer and no capital investment. Since then, she has grown the company into one of the nation’s most effective direct mail marketing firms, specializing in postcard marketing for small to large-sized businesses. Over the years, she expanded to offer mailing list acquisition, website development, email marketing ? all while continuing to educate clients with free marketing advice. She has been named Tampa Bay CEO of the Year, Business Woman of the Year in Tampa Bay and has been featured on MSNBC’s “Your Business.” PostcardMania is an Inc. 500 and 5000 company and has won awards for creativity, best business practices and leadership. Learn more at www.postcardmania.com.
Natural organisms have sensors to help them survive in the natural world. Sidney Winter of the University of Pennsylvania points out that some moth species can detect the sonar of bats. To avoid becoming a bat snack, a moth initiates evasive aerial maneuvers to survive yet another day in the competitive animal kingdom. However, in the environment of your family’s living room, these same moths can't detect the sound of a rolled up newspaper whizzing toward them.
Just like nature’s organisms, manmade organizations may have highly developed sensors that help them survive in a competitive marketplace. The key is to make sure that the sensors you use are appropriate for your marketplace and for gathering useful information. After all, if organizational sensors aren’t properly tuned to your environment, your business will take the hit.
Having effective ways to get feedback from customers or clients is critical to the success of any organization that wants to sustain itself for the long term. Your customers or clients are expecting you to help them in some way; you’re making a promise of some kind to them. It’s critical to know how well you’re doing. It’s imperative that you know what your customers perceive that promise to be and that you know how well they believe you’re fulfilling that promise.
Some organizations have sophisticated tools that use technology to gather critical data. In his book, “Business @ the Speed of Thought,” Bill Gates describes Jiffy Lube’s extensive customer database that helps them track customer needs and behavior. Other organizations may decide that a brief survey or phone conversation is sufficient. The key is to know your customers and marketplace. Is your marketplace a cave or a living room?
In considering how to “know thy customer,” it may help to ask yourself the following questions:
- How do I determine from those who matter most (our clients) whether or not we are fulfilling our purpose as an organization?
- How do I know whether or not our clients believe we are helping them in the way we promise?
- Should we hire a third-party consultant to provide objective analysis of client input?
- What will we do with the feedback and input we receive from our clients? Are we committed to act on even the most critical comments?
- How will we let clients know the action we have taken in response to their input? What action can we take immediately on the “low-hanging fruit?” How will we analyze suggestions that require a significant change in our business model?
- How will we use the input we’ve received from clients to develop ongoing communication with them?
- How will we identify our most loyal clients, find out why they’re loyal and show our appreciation?
- How do we enable our front-line employees to respond quickly and effectively to client concerns?
- How will we track the results of any changes we make in response to client input?
- What are we doing to avoid becoming the moth in the living room?
In answering the last question, it’s important to inquire of your clients how their needs are changing and, if your clients/customers are businesses, how their industry is changing. How have their needs changed during the last year? How do they see their needs changing during the next year and beyond? And then ask them how they think you can help them as they adapt. If your clients are businesses, are there ways you can help them avoid becoming the “moth in the living room”?
By answering these questions honestly and implementing effective ways of addressing the answers you receive, you will know your customers better and drive the growth you want and the profit you need.
Andy Kanefield is the founder of Dialect Inc. and co-author of “Uncommon Sense: One CEO’s Tale of Getting in Sync.” Dialect helps organizations improve alignment and translation of organizational identity. To explore how to better align your culture, you may reach Kanefield at (314) 863-4400, by e-mail at email@example.com or at www.dialect.com.
Mitch Lowe found himself in an enviable position when Redbox Automated Retail LLC really began to take off. But the popularity also came with a few challenges. Namely, how do you sort through all the people who suddenly want to come and work for you?
“You start to have a lot of folks who are trying to get jobs there who are really good at presenting themselves, but are not so good at fitting in with the culture or the style of the company,” says Lowe, president at Redbox.
Lowe decided major changes were needed. In the end, he came up with a system that involves more people in the hiring process at Redbox. Here’s what other leaders we’ve spoken to recently said about what they look for when hiring.
“We hire people who are bright, inquisitive, have high energy and high integrity, and one of the most important things is what I call intellectual curiosity. They are interested in what’s going on around them.”
-- Richard A. Chaifetz, chairman and CEO, ComPsych Corp.
“We don’t care how much money somebody’s going to make us; if they’re going to make all of us miserable, we don’t want them here.”
-- Raj Fernando, CEO, Chopper Trading
“People do business with people that they like, trust and then ultimately respect. That goes whether you’re a customer, a supplier or an employee.”
-- Tim Jahnke, president and CEO, Elkay Manufacturing Co.
Summary: Look for people who are interested in what you do. Don’t underestimate character in prospective employees. Treat people the way you would like to be treated.
Two months into his role as president of American Beverage Corp., Kevin McGahren-Clemens was looking at a company that had realized a $40 million loss. The 500-employee, $150 million beverage company was in a dire situation.
It was January 2009 when American Beverage’s parent company, Royal Wessanen, had trouble with its European business. In order to raise cash to focus on that area, the company decided it would need to sell its U.S. divisions, starting with its strongest, American Beverage. That April, American Beverage’s previous president left the company for a job with a competitor. McGahren-Clemens, who had been hired in 2006 to aid with some of Wessanen’s other divisions, was called on to run the day-to-day operations until American Beverage was sold. However, within a couple of days on site, he realized the business wasn’t in good shape.
“Due to poor fundamental management over time, results were becoming impossible to deliver so financials began to be increasingly manipulated to achieve targets,” McGahren-Clemens says. “No reliable financials existed, meaning no clear picture of profitability by product line, channel or customers existed either.”
Not only did the company have an unclear financial picture but prior management also had built an organizational structure with little involvement, communication or transparency with the broader work force and its focus as a consumer products company was wrong.
“The company had been managed for quite some time with a very short-term focus of delivering quarterly earnings instead of building any sustainable value for the long term,” McGahren-Clemens says. “Very little time or money was ever invested in consumer research or marketing as the organization’s focus was on short-term sales customers and not relationship building with consumers.”
The company was taken off the market and a turnaround effort began with McGahren-Clemens at the helm.
Evaluate the business
American Beverage’s previous president led the company behind closed doors. Since very little information was shared throughout the organization, McGahren-Clemens had to evaluate everything within the business to understand where to start.
“It was a situation where we really had to start from scratch because this person who was running the company, everything went through him and he was now gone,” he says. “In some ways it was easier that way. We literally just revisited and challenged everything. Basically, we just took the company apart over the next three to nine months to really understand what we had.”
Since a lot of information was unclear, McGahren-Clemens had to prioritize and become clear on the fundamentals.
“I put together a top 10 ABC priorities list, and that’s literally how I explained to everybody what we were going to do,” he says. “The first step literally was confirm and clarify financials because we had no idea what we were working with. Nothing was as it seemed. Things weren’t as possible as they looked and thoughts were not in the right place, and everything was manipulated. It was like driving a car that had no speedometer, no gas gauge, no anything, yet you had to operate it day to day.”
Establishing those fundamentals was critical, but the way to do that was to make sure everybody in the company was involved, which was not the way things were set up before.
“It was really getting everybody involved, breaking down walls between functions, making sure everybody was talking, making sure everybody had input, gathering information from everybody we could,” he says. “Everybody knew a piece, but they didn’t know how it all worked together. So it was gathering all the information and getting all the brutal facts on the table so that we could say, ‘What do we have? What do we go do?’”
When your employees are not clear about how the company is performing or what is truly driving the performance, you have to gather that information.
“It’s kind of a combination of doing your own analysis and getting as much information as possible and just objectively looking at it versus what does everybody think it is,” he says. “You have to look at customer lists, your profit by customer, your product line, what’s selling and what isn’t selling. In time, you really do have to contact all the people in the company who have knowledge and have more of a dialogue with them and try to pull out of them what’s working and what isn’t working. How else will you know beyond the numbers and what the numbers are telling you what’s working and what isn’t working? There’s no manual for gathering this information when it’s not clear what’s true and isn’t true.”
Before going any further, ABC needed a new senior leadership team to help turnaround the company.
“I started by first working on ultimately gathering the strongest senior team possible because you can’t do anything difficult within a fairly large organization alone,” he says.
“As we stand right now today, there’s only one holdover, which was the HR person. Operations, sales, marketing, finance, and IT all turned over. There’s usually a transition period like that because in a situation like this or anywhere, it’s hard to really attract the talent you want until you have some stabilization. You have to work with what you have, and that’s what we did for a while. As we began to get some stabilization and I had a better handle on the situation, I could go out and recruit people. I could very clearly explain what they’re getting into and, at the same time, explain the opportunity, which was fantastic because it is a lot of fun being apart of building something from scratch.”
The next step in the turnaround was to confront the brutal facts and communicate those throughout the organization.
“The key is being very objective about the state of the business absent biases about what it used to be or you want it to be — you have to focus on what it is now,” McGahren-Clemens says. “In my mind, this is the single most critical step in any recovery because nothing matters if you don’t fix the right things. Next, with the help and full buy-in of the senior team, you need to set very clear priorities as a team that, in turn, are clearly communicated to the entire organization in a very candid, transparent way. It is important to then create a true dialogue with everyone in the entire company by truly maintaining an open-door policy and walking around a lot to gain input, answer questions and dispel rumors. And then provide regular updates, both by e-mail and in person about your progress.”
To do this McGahren-Clemens met with 100 of the company’s employees one-on-one to gain a better understanding of what could be done and explain where the company needed to go.
“I believe the key is engaging everyone in an ongoing dialogue about how they personally fit into the big picture and why elevating their own game is crucial to our success going forward,” he says. “Once our situation had stabilized and moved out of crisis mode, since I only had around 100 salaried employees, I felt it important to sit down with each person individually for about an hour to connect directly. I would start by asking each person if they knew what had happened and why and whether they understood where we now were and what challenges we faced. Inevitably, people underestimated the seriousness of our situation, both past and present. Most importantly though, I would then ask everyone what performance barriers or morale issues they face plus what they thought we still needed to do to improve the company and our ability to complete a full turnaround and begin driving profitable growth.”
He had to be careful during this process not to scare his best employees away from the company but also make it clear that the company needed a change.
“From the very beginning, it was always challenging striking the right balance between creating a sense of urgency by explaining to people how dire the situation really was without being demoralizing or scaring people,” he says. “It’s a balance of painting a picture of, ‘This is a very, very challenging situation, but we can get out of this,’ and, ‘There is a lot of upside for people who help us with that.’ With the one-on-ones, you can tailor that message and tailor the questions much more specifically by reading the individual. How much do they understand or not understand? Some of them just had no idea how much the company made before or how little we made now or what the problems were. Some people want to know, and some people don’t want to know, and the reality is you’re trying to get a read on who those people are because that’s who you need going forward.”
To help get ABC to sustainability, McGahren-Clemens needed to find those individuals within the company who had the ability to be leaders.
“One thing I’ve always found to be true is, in general, there are some hidden gems within your organization that can move up to the next level,” he says. “Don’t immediately think you have to do everything externally. It’s going to be better if you can pull somebody from within who has some knowledge of the organization. Who’s acting without asking and doing the right things? When you really ask around and start to talk to people, they all know who’s who and who’s pulling their weight and who makes a difference and the same names begin to come up. You have to get out there and ask because it’s not going to be necessarily evident, but in times of crisis, it becomes a little more evident than normal.”
Now that a leadership team was in place, the right people were found and brought in, and progress was being made on understanding the circumstances of the company’s struggles, it was time to start putting plans in motion.
“It was very clear to me from day one that it wasn’t a situation where we could just cut our costs. It was about fixing the business and growing out of it. I believe all sustainable growth begins with a thorough knowledge of target consumers combined with engaged employees who have full access to information and the necessary tools to do their job — such as clear priorities and budgets — and none of those conditions existed.”
McGahren-Clemens had to switch the focus of the company from the short term to a long-term focus on branding and consumers.
“In the consumer marketing world of products, it always starts with spending, and there is a delayed gain on the profit because you’re going to have to invest first in market research to understand consumers, understand your competitors, understand what your product brings to the party, what gaps there are and its further investment to go fix those gaps,” he says. “We had products we had to improve the quality of. We had to add vitamins to our juice products, we had to change the packaging, we had to add benefits, and that’s time and money based on the consumer research. Then you have to go out to the market and support those products. Those are the basic steps that most brand companies do ongoing, but we literally had to start.”
Not only did the focus of the company need to change, but the employees needed to start thinking differently as well.
“It was getting everybody internally to understand that it is ultimately what the consumer thinks that matters, not customers,” he says. “Customers are very, very important, but those retailers and distributors care most about what the consumer says too. We had to go out and say, ‘We don’t know how good our products are. Let’s go do taste tests. Let’s get consumer thoughts.’ There were a lot of brutal facts that came up that you have to go out and be willing to hear. That commitment was something we had to build internally.”
With McGahren-Clemens’ leadership, the hard work of ABC employees and a renewed focus, the company has made a rebound.
“The company has been totally made over, and we have a great foundation from the ground up,” McGahren-Clemens says. “You can go in and renovate a house or you can take the whole house off and start over and that’s what we did. We know all the pieces and feel very good about the infrastructure and the talent and processes and the potential, and we feel we are just starting to scratch the surface. All of the investments we’ve made in consumer research, product enhancements, innovation and marketing the last three years are just starting to bear fruit.”
The journey from 2009 to today has been a long one. It took teamwork, communication and a unified focus to get there. The biggest key for McGahren-Clemens was to never let the task at hand bring him down.
“Don’t get too caught up in the enormity of the situation or the challenges or the tasks and just take it one day at a time,” he says. “Focus on ultimately where you want to be and know you can be and just work toward that. Trying to stop and think about how much has to be done can be overwhelming.
“I wish there was one clear formula or one sequential order of steps that would make it very cut and dried for people in a similar situation, but I liken it to a football game where you’re calling audibles along the way. You have a game plan, you practice it, you have a lot of ideas, you’ve studied your opponent, you know what has to happen, but the reality is you’re still going to have to make adjustments throughout. You have to be flexible enough to do that. You have to have a series of steps you’re ready to pursue and an order to them and a way you’re going to approach things, but you also have to be open to reading new information as it arises because it’s going to arise all the time.”
HOW TO REACH: American Beverage Corp., www.ambev.com
You need evaluate the business to understand what the problem areas.
Once you know the situation and where to start, communicate those facts to your employees.
Once you have buy in, put your plans in motion.
The McGahren-Clemens File
American Beverage Corp.
Born: New York City
Education: Studied economics at William and Mary and received a MBA from Northwestern
What were your biggest fears during the turnaround?
Looking back, I didn’t really think that much about it because it wasn’t productive. But if some of our biggest customers had said, ‘We’re not going to buy your product anymore.’ We wouldn’t have been able to get through the stabalization period. If Wessanen had not supported us and just decided to shut it down, but they did support us and were great throughout. Or if a lot of our talented people had walked out saying, ‘This is too big a risk. I don’t know how it’s going to turn out; I’m just going to leave.’ Any of those scenarios, particularly losing the talent we did have, would have been very damaging.
What has been the best business advice you’ve ever received?
I remember having a manager once where we were in a pretty bad business situation where things weren’t going the right way. We were managing a cheese business at the time and he just stepped back and said, ‘All right everybody, remember it’s just cheese.’ The whole room just burst into laughter. I’ve used that so many different times and kind of had to use it in this situation.
What is your favorite American Beverage product?
It would be the one that’s selling the best right now; the Daily’s Frozen Pouch. It really is a great product. I also like the Little Hugs. I buy cases of it for my kids and the whole neighborhood drinks it and I drink it as well.
If you could switch places with somebody for a day, who would you switch with?
It would be fascinating to be the chairman of the Communist Party of China right now. They are such a hybrid between old-line communism and new-age capitalism and there’s no script for what they’re trying to accomplish as they become a global power economically, but at the same time their social freedoms are lagging behind. It’s fascinating how that’s going to play out and I would love to understand all the different tensions within the country.
Some time ago, I accompanied one of Cincom’s sales reps on a lunch meeting with a customer. When the conversation turned to our products, I smiled as I reminded the sales rep that he should be sure to focus on all of the value that the customer would be receiving.
Surprisingly, the customer laughed and jokingly put up a fight.
“We know all about value selling, that’s the way we sell everything we offer,” he said. “But, when we buy, we want to talk price.”
The conversation continued for some time, focusing on how selling value was an important decision for a business to make. This customer recognized the great advantage of selling value as a feature because doing so helped them be successful at what they do. But, the customer put the mindset in even further relief when he told us, “Losers sell on price. We want to do business with winners.”
Value sellers may not win all the business, but they win all of the nicely profitable business.
Price sellers are bottom fishers. They only catch those that will jump at anything as long as it’s the cheapest option.
Unless a company is extremely large, or has some highly unusual low-cost capability, low-price sellers simply cannot be viable. Their profits, if any, are simply too slim to stay in the game.
Price sellers try to provide as many features, functions, quality and potential benefits as possible, but they also believe that price is considered to be a feature. Because of this, they price their products as low as possible to be advantageous for the customer and for the seller.
Price sellers focus entirely on themselves and their offerings and do not attempt to enter into the value discovery and value delivery process. They leave all of that to a buyer’s discernment and realization and lessen their opportunity to share in the economic value their offerings provide.
In one sense, price sellers underappreciates and undervalues themselves.
That’s why price sellers usually do poorly in the long term while value sellers continue to grow their large profits. The value sellers may not have any better offerings than the price sellers but the value seller gets intimately involved with the potential buyer, and in this way helps the buyer to discover, discern and realize a great deal of additional economic value and utility that might otherwise never be gained or achieved.
When our customer said that he wanted to “talk price” he explained that he didn’t mean he wanted to buy from price sellers. Instead, he meant that he wanted to maximize every possible aspect of the value they would receive from the product.
Value sellers are also better buyers because they are able to recognize the value they will receive from products can far exceed the price they may pay. If they didn’t, they wouldn’t make that buying decision.
Price should never be considered a feature. Low price should not be a favorable feature or an advantage when we try to sell. Instead, we should all commit ourselves to focusing on the value and the very great gains that we can deliver that can dwarf the costs.
Thomas M. Nies is the founder and CEO of Cincom Systems Inc. Since its founding in 1968, Cincom has matured into one of the largest international, independent software companies in the world. Cincom’s client base spans communications, financial services, education, government, manufacturing, retail, healthcare and insurance. http://tomnies.cincom.com/about/
Scott Sumser had a moment of doubt as he prepared for his first day at work as president of Athens Foods Inc.
“There’s a sense of pride that you worked hard to get to this point,” Sumser says. “But there was also an enormous amount of anxiety. ‘Hey, can I do this? Have I bitten off more than I can chew?’”
Fortunately for Sumser, his nerves settled and his experience began to kick in.
“You have a bag of experience that you carry around with you,” Sumser says. “It really doesn’t matter what you do. You get to reach into that bag and use your learning from everything.”
Sumser decided the best course of action in leading the 200-employee fillo dough producer was to be what he was, a curious new employee.
Be a sponge
People take the transition too seriously. It’s important to show people that you have aptitude and that you’re in the role for a reason. But I think you really need to be a bit of a sponge. Use your two ears and one mouth proportionally in a new situation. Listen twice as much as you talk. Ask a lot of questions and admit when you don’t know something. You build credibility much faster than feeling like you’ve got to know everything right out of the chute. Further down your life cycle, it’s important to use leadership as a driving force. But initially, it’s better to create those relationships so that people feel like you’re willing to learn and listen rather than just come in and do.
Get to know names
It matters a lot. Everyone is going to know your name and the more you can do to learn theirs, the better impression you’re going to make. One tool I use is we have a plant of 150 to 200 people depending on the season. So I have HR take a picture of everybody who is working here. What I try to do is if I know I’m going to be in the plant, I’ll take a look at their picture. It will tell me what department they are in. It gives me one more tool to make sure I’m sending the right message that everybody, no matter what you do, matters to the success or failure of the company.
Take the stage
It’s probably good to have an all-employee meeting right out of the chute. Otherwise, depending on who you were able to tackle getting to know everybody, there’s going to be somebody who feels like they really didn’t understand who you are. It doesn’t have to be enormously formal and you can still use your one-on-one time and continual learning. But depending on the size of your organization, it’s just important for people to be able to hear you speak and find out what your background is. That kind of squelches a bit of the rumor mill. They hear it from you as far as what you are trying to do.
Be open minded to the current way the team gets things done. Too many leaders come in and try to put their stamp on too many things. It’s best to try to learn. You may think you have a better way to do something, but it may just be your opinion instead of the best way to do it. Do keep good notes for your first 30, 60 and 90 days of all your observations. That really allows you to go back after you feel like you’ve created a good relationship with folks and remember what you saw. You think you’ll remember it at the time, but keeping good notes of what your observations were - good, bad or indifferent - really helps you refresh your memory.
Athens Foods Inc.
Founded: 1958. Athens is the world’s largest producer of fillo dough and fillo products.
Sumser on first impressions: Don’t judge your team too quickly. First impressions are a great data point. But once the smoke clears and people begin to act how they normally act, you get to better understand what people bring to the table. It may align with your initial feeling or it may not.
How to reach: Athens Foods Inc., (216) 676-8500 or www.athensfoods.com
Kaiser Permanente is one of the nation’s largest not-for-profit health plans, serving more than 8.6 million members. In Northeast Ohio, Kaiser Permanente addresses the health care needs of approximately 130,000 members in a nine-county area. Services are provided by more than 180 Ohio Permanente Medical Group physicians, 3,000 network affiliated physicians and more than 1,900 nonphysician employees. In 2011, Kaiser Permanente of Ohio celebrated 47 years of providing care in Northeast Ohio.
As a health care organization in the 21st century, we have a mission — to provide quality care for our members and their families and to contribute to the well-being of our communities. Our medical decisions are made by physicians and their patients working together. All patient care provided at a Kaiser Permanente Medical Center is united through an innovative, nationally award-winning electronic medical record information system that greatly enhances our physicians’ capacity to offer coordinated care to members — whether in the Ohio region or in any of the other Kaiser Permanente regions.
For more information, contact Kaiser Permanente at www.kp.org.
Meaden & Moore
Meaden & Moore provides a wide variety of accounting and financial management services for the manufacturing industry. The firm’s Manufacturing Services Group is focused on understanding topical issues that affect manufacturers and helping them develop solutions that reduce costs, adapt and implement innovative management systems and re-engineer business processes.
Among the services that Meaden & Moore offers for manufacturers are cost accounting design, analysis and interpretation, product line profitability studies, internal financial reporting, critical performance measures, rate of return and capital expenditure analysis, strategic planning, pricing techniques and strategies, budgeting, cash flow analysis, lease versus buy analysis, and financial transactions.
For 90-plus years, the firm has focused its expertise and resources on providing the highest quality assurance, tax and business consulting services to organizations throughout the country. It recognizes that hard work and dedication translate into building trusted business relationships. With almost 200 professionals, we extend integrity and competence to each of our long-standing client partnerships.
For more information, contact Meaden & Moore at (216) 241-3272 or visit www.meadenmoore.com.
Gallagher Benefit Services
At Gallagher Benefit Services Inc., they believe in the company they keep, for both themselves and their clients. The benefits of business are really about the measurement and success of our relationships. They believe what they do plays an important role. And, they believe that what they do for their clients helps them become more successful, no matter what business they are in or at what stage of business. At Gallagher Benefit Services, there is a rich history of successes with the firm’s people and its clients. For decades, its benefit consultants have created cost-effective solutions that have helped employers maximize the value of their company’s group insurance, retirement plans and executive benefits. When you engage Gallagher Benefits Services, it becomes an extension of your human resources efforts. The firm brings to this role years of experience dedicated to building benefits programs that not only foster employee financial security but also contribute to shareholder value by attracting and retaining talented staff. Their team delivers creative benefit solutions, responsive customer service, effective communication, expert advice, and technology tools and efficiencies. For more information, contact Gallagher Benefit Services at (216) 623-2600 or visit www.gallagherbenefits.com.
Key Bank has worked as the primary financial provider for manufacturing businesses for nearly a century, establishing strong client relationships with advisers who understand the industry, where manufacturers have been and where they are going.
At Key, you’ll work with an adviser who is acutely aware of your market, your competition, your industry’s history and the latest trends. Drawing on a team of product specialists, your adviser will leverage deep expertise and resources, resulting in value-added ideas, insights and solutions in a wide range of fields, including commercial financing, treasury management services, equipment lease financing, foreign exchange, international trade services, interest rate risk management, syndicated finance, investment banking, asset management, private banking and wealth management.
For more information, contact Key Bank at (800) 600-2680 or visit www.Key.com/commercialbanking.
Ohio.net is a full-service Internet technology provider with one of the largest service areas in Ohio and product offerings that range from high-speed access products to security and firewall-related services. With an extensive history in communications, Ohio.net has developed its network with a high level of adaptability and growth for an ever-changing Internet market. The firm has a history that extends longer than 100 years. Owned by Doylestown Communications Inc., Ohio.net is part of a communications consortium including local phone service companies, a cable television company and other Internet providers. Ohio.net has leveraged this background and experience to stay ahead of the technology curve and make development decisions that form steady growth.
For more information, contact Ohio.net at (888) 881-0805 or visit www.ohio.net.
Roetzel & Andress
With more than 220 attorneys and 12 offices located in Ohio, Florida, New York and Washington, D.C., Roetzel & Andress attorneys serve a broad spectrum of clients on a regional, national and international basis. Since 1876, our firm has been guided by the core values of innovation, client service, integrity and excellence in practice. Over the years, the firm has strategically grown in breadth, depth and strength of legal services offered in response to an ever-expanding client base and scope of legal needs.
Our commitment to excellence in client service includes investing the time to listen to our clients and thoroughly understand not just their legal issues but also their organizational structure and business goals. This, in turn, allows us to provide better counsel and offer our clients practical insight in matters that may affect their business. Roetzel’s entrepreneurial philosophy encourages our attorneys to think like our clients — with business minds, ready to embrace new challenges and implement innovative approaches.
For more information, contact Roetzel & Andress at (216) 623-0150 or visit www.ralaw.com.
Taste of Excellence
The products that Taste of Excellence provides — food — come from the earth. By supporting and protecting the health and cleanliness of the earth, the organization can help to ensure safe products for the generations to come. Taste of Excellence’s philosophy is this: We need to work as individuals and be accountable for our own actions. We must instill these behaviors in our children. By doing this, individual efforts will be felt globally. The collaboration of our thoughts, ideas and resources is the key, but it must begin with each of us.
Taste of Excellence has gone green on many levels. At its retail outlets, the company uses Yuban Coffee, which is not grown under rainforest canapés, like most coffee beans. Therefore, there is no deforestation when growing the coffee beans. They use “harvest collection” serviceware, which is a corn-based product and completely biodegradable and compostable. When possible, they use real china or laminate, glassware and flatware to service guests.
A Taste of Excellence donates untouched leftovers to homeless shelters around the area — rather than wasting and throwing them out. In doing this, less food is needed to support these organizations’ demands. Reach Taste of Excellence at (440) 845-0800 or visit www.taste-food.com.
Colortone Staging & Rentals
Colortone Staging & Rentals is a premier audiovisual and staging company with expertise in event design and production. We stage a multitude of events, including corporate meetings, awards banquets, special events, trade shows, concerts, webcasts and videoconferences. CSR also manages audiovisual equipment for hotel properties and operates a full-service equipment rental division. The solutions we provide, combined with our highly trained technical staff, ensure the success of every event. Our quality is unmatched and our attention to detail is unsurpassed.
The staff at CSR consists of the best in the business. Our technicians have an average of five years in the audiovisual and event management business. Their diverse backgrounds allow us to think on our feet, act quickly and provide flexibility and creative problem solving to every situation we find.
The company is also an active member of the community, consistently finding ways to give back where it can. Learn more by calling (440) 914-9500 or visit www.colortone.com.
Founded in 2003, Corporate College offers Northeast Ohio businesses and individuals professional training and development, along with state-of-art meeting and conferencing space. Corporate College delivers training and development solutions for organizations and individuals. It has internal organizational development and content experts, along with a professional external talent bench that includes the best and brightest minds in Northeast Ohio. And with Corporate College’s relationship to Cuyahoga Community College, it is able to provide access into an even more extensive network of faculty and programs to ensure it delivers the right solutions for your unique business needs. When you work with Corporate College, you will transform your organization — and transform yourself. For more information, call (216) 987-2800 or visit www.corporatecollege.com.
Amware’s AmRate Logistic Solutions is a portal on the Web that allows anyone in your company, from your shipping manager to your sales representatives in the field, to quickly and efficiently find the lowest cost carrier based on your own business protocols. AmRate Logistic Solutions is a technology based LTL freight management company. We have taken our knowledge and expertise of more than 75 years experience to develop, in house, our own proprietary software. Our customizable programs save our clients substantial time and money on LTL shipping. What differentiates AmRate from other companies in our industry is that AmRate takes the time to listen to each potential client and customizes a program around what each client is looking for in a 3PL. At no upfront cost, AmRate will analyze a few weeks sample of LTL Carrier Freight Bills to validate a savings opportunity. On average, we are saving our clients upward of 30 percent NET on their LTL Shipping spend. Reach Amware at (866) 997-7371 or visit www.am-rate.com.
All Things Eventful
All Things Eventful, a Bountiful Baskets Inc. company, is the premier source for creative solutions to your special event and gift-giving needs. In 1999, Bountiful Baskets began designing custom-filled baskets and expanded in 2003 to offer special event design and theme decor, as well as promotional products and keepsakes — then, accordingly, updated its trade name and corporate branding over the past year. Whether your company needs décor help for an open house or recognition dinner, giveaways for tradeshows or apparel for employees, or gifts for clients or referral sources, you can count on the integrity, expertise and value of All Things Eventful. For more information, visit www.AllThingsEventful.com.
The future is all about digital, and the companies that will come out on top will have the most outstanding user experiences, Amy Buckner Chowdhry says.
Buckner Chowdhry is co-founder and CEO of AnswerLab, a consulting firm that helps many of the world’s leading brands build user experiences across digital platforms.
“We wanted to offer the whole tool kit — that no matter what a client’s business question is when they’re developing a digital product, we wanted to be able to offer the right research methodology to answer it,” Buckner Chowdhry says.
Founded in 2004, the firm of 30 has worked with clients such as Google, Facebook, Microsoft and Honda.
Smart Business sat down with Buckner Chowdhry at the 2011 Ernst & Young Strategic Growth Forum to discuss how AnswerLab works to create and implement user experiences that meet the needs of both company and customer.
How is bringing in an outside firm beneficial to the development process?
In your average organization, you don’t have one person who’s that decision-maker. You have multiple people, and what happens is that the competing needs of each of the groups can result in an experience that gets watered down.
It’s incredible to see how easy the user experience within an organization can go south because there are too many stakeholders — there are too many people involved in making the decision around what gets launched.
When you bring in an outside, independent and objective research firm to help in your process, you can get back to what the voice of the customer is.
How do you engage the customer to identify their needs?
It typically involves recruiting them into a research environment where we’re engaging with them one-on-one or in a group setting.
We can start with a database or a list that our client has of their customers. We reach out to them for a particular research study and maybe do focus groups with them. We may visit them in their homes to watch how they use a product, bring them into the lab environment and watch them behind the mirror as they try to use a product or bring them in to do something on a page to track their eyes to see what they’re looking at on the page. Do they notice the fad or do they not notice the fad?
What process do you have to turn a good idea into a tangible product or service?
The day to day is about getting these projects out the door to clients. That’s what most of our teams focus on. But we need to also be innovative in taking what our services and research are and taking them to the next level. We go through a rigorous strategic planning process where our entire management team meets quarterly.
We do a SWOT [strengths, weaknesses, opportunities, threats] analysis, and we sit down and look at what are the opportunities here. When a new product will help address some of the items that come up on our SWOT analysis, we turn that into a strategic priority for the quarter and we track against it.
If we identify that a specific threat may be that a competitor has a competing product, or if we identify that there’s a huge opportunity on the table to basically grab this unmet need from our clients, then that becomes a product or a goal that we drive through as a strategic priority. We take the results of strategic planning process and put it into a one-page plan ... and that’s on every single person’s desk in the office.
We have an online tool that we use. Everyone has to log into on Friday and update it, and it shows our progress toward implementing these strategic priorities. So there’s the goal to get this product launched, and there are all the tasks associated with it and all the people who need to help make sure that happens.
How do you stay motivated and keep creativity flowing for yourself and for your organization?
We focus a lot on trying to ensure that our team can get the right professional development that they want. We have a series of learning luncheons that we set up where we’ll bring in outside speakers to talk with the team and keep them engaged. We’ll watch a ‘Ted talk’ during lunch together. We’ll have individuals within the company present on the work that they’ve been doing.
How to reach: AnswerLab, (415) 814-9910 or www.answerlab.com