Making connections Featured

8:00pm EDT July 28, 2006
 In the early 1980s, Chet Pipkin was the head of a fledgling computer accessory manufacturer called Belkin Corp. It was one of hundreds around the country producing largely the same inventory of cables and other components, and Pipkin was content to keep his company on the same track.

“We got our start with copper cable assemblies,” Pipkin says. “We were pretty intent on just sticking with that product line. We were concerned about getting too spread out from a product mix standpoint. We wanted to stick with what we were really good at.”

But as companies started getting squeezed out of the market by high levels of competition, Pipkin, who serves as both president and CEO, quickly realized that in order to survive, Belkin would have to seek out new ideas and growth opportunities.

More than 20 years later, Belkin’s vigilant approach has made it one of the world leaders in its field. From the humble beginnings of Pipkin assembling computer cables on his mother’s dining room table, Belkin is now a Compton-based company with 1,300 employees and projected revenue of $1 billion for fiscal year 2007.

Here’s how Pipkin has kept Belkin one step ahead of the competition along the way.

Provide solutions, not just products
If Belkin were going to grow and survive, its ability to provide customer solutions would be key.

Belkin’s customer base is largely made up of what Pipkin calls VARs, or value-added resellers. The companies Belkin serves, in turn, serve the IT departments of other corporations. In the 1980s, Belkin’s customers were outfitting corporate offices with computers, some for the very first time.

By observing their customers, Pipkin says Belkin’s leaders noticed a trend: They would sell an individual component, such as a printer, but wouldn’t sell the cable that could hook the printer to the computer. Instead, they’d refer the customer to a competitor for the additional items.

Pipkin realized it was an opportunity to coach Belkin’s customers on how to sell computer components together as a unit — a given in today’s world, but a novel idea back then.

That revelation led Belkin’s leaders to form a systematic approach to serving customers. The company’s representatives make it a point to visit their customers, spend time with them, and educate them on selling not only the individual computer components but an entire range of products as a system.

The goal is to maintain a straightforward, streamlined approach that focuses on the end result, he says.

“We just use a very fact-based approach with this,” Pipkin says. “It’s a very common theme for us.”

To begin, Belkin outlines where a company is in terms of variables such as profit margin and customer satisfaction. They then form a plan to help the company reach its goals. The customer’s reaction once the job is done is the verdict, he says.

“They might be skeptical, but when you get it done, they are very appreciative, thankful, a little bit amazed,” Pipkin says. “Your credibility with them scales a lot, and they want to do more stuff with you.”

In a constantly-evolving business, the products that perform the best are those that have the best support, Pipkin says, and the companies that provide the best support are those most likely to retain customers.

Look everywhere for innovation
Belkin’s leaders are always on the lookout for innovations that can improve the company. Ideas are gathered through conventional means such as focus groups and surveys, but the tried-and-true methods are peppered with a large dose of people-watching to identify emerging trends.

Even Pipkin’s seven children are in on the act.

“My wife and I have six boys at home, as well as a daughter we adopted, and we are not bashful about watching them, about what it is they do,” he says. “We have a lot of their friends over all the time. It’s one of the ways we pick up on trends and the way things are being done.”

The same thing is done at Belkin’s locations around the world. The company does research in workplaces and homes, surveys members of the public, collects data about how people are using technology and uses that data to project future movements in technology usage.

Using research and observations to gaze out over the industry horizon has alerted Belkin’s leaders to a number of changes.

“For example, it became very clear to us a few years ago that the way we use computers was going to rapidly evolve from what we call a 6-inch experience to a 6-foot experience,” he says. “We were going from using computers mostly as a productivity tool to one that we would also be getting a lot of content and entertainment out of.”

Apple’s iPod, for which Belkin manufactures accessories, is among the most popular entertainment-centered computer devices produced in recent years.

“I don’t think we would have necessarily predicted Apple was going to be the organization that would bring a killer MP3 player to market,” he says. “We certainly could not have predicted what the iPod was going to be and what it would look like.”

What market research told Pipkin and his associates, however, was that something big was about to happen on the recorded music scene. Digital technology was on its way in, and the company needed to get on board while products such as iPod were still in the formative stages, he says.

The result is a series of highly successful products —the company picked up five of its seven innovation awards from the Consumer Electronics Association this year for iPod accessories — and a big revenue boost. iPod accessories now account for about 20 percent of Belkin’s total revenue, according to a MarketWatch report.

Provide the right environment
Belkin doesn’t only spot trends with binoculars aimed at the horizon. The company’s employees are also a valuable resource.

Pipkin says his employees provide a wellspring of ideas on how to improve the company, and he actively encourages open discourse with a flat organization, free of layers upon layers of management.

“Our organization is flat in terms of the organizational chart but also in the way we communicate between layers of the company,” he says.

Belkin’s facilities in Compton and around the world are constructed with a minimum of interior walls. Most floors are comprised of what Pipkin calls a large bullpen area in the center, with management offices around the perimeter.

“We like to have senior management located throughout our buildings,” he says. “We don’t want them stuck up on a separate floor or at the other end of a long hallway.”

The open style of Belkin’s buildings allows management and employees to share common space, which helps provide those on the lower rungs a level of comfort in speaking to their superiors.

“Sometimes, I’m the one making the coffee in our break room,” Pipkin says. “It’s a good opportunity for someone to come up and speak to me at that point.”

If employees are comfortable with their managers, they are more apt to take risks by speaking up and expressing ideas if they feel the ideas won’t be immediately dismissed.

“The best way to reach out to employees is to teach people that they are safe,” he says. “By that, I mean that if an idea is proposed or suggested, that it is not belittled or ridiculed.”

Once an idea is suggested, Pipkin says management is obligated to deliver some kind of response to the person who suggested it.

“People gain confidence in being able to communicate only if they sense credibility in the organization,” he says. “If they don’t see things happen, the organization gains no credibility. But if they see things happen, it adds credibility to the approach. People quickly learn that and want to be recognized for their ideas.”

If an idea can’t be used by the company, Pipkin says the person who suggested it still deserves a response.

“If we can’t use an idea, we let them know why it isn’t going to be considered,” he says. “That gives them an opportunity if they want to adjust and resubmit it, or simply to have satisfaction of knowing it was at least looked at and not ignored. Ideas shouldn’t disappear down a black hole.”

Pipkin says an employee who takes the risk of suggesting an idea will always be someone who is admired at Belkin.

“We may not always get the idea, or get it the first time, but we want you to take the risk to speak up,” he says. “If a suggestion is not embraced, we want the person to come back to us with more. If we do that well, people recognize that we want it in a sincere way, that we respect it and admire it.

“When people feel that way, they are inclined to keep coming up with more.”

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