Yogurtland has been a frozen dairy-powered rocket for Phillip Chang. The president and CEO of Yogurtland Franchising Inc. founded the chain of self-serve frozen yogurt bars in 2006, and in the six years since, has grown the company to more than 170 locations, owned by more than 100 franchisees and employing more than 2,100.
But when on a stratospheric trajectory sometimes things don't always go according to the script.
Which is why, several years ago, Chang threw out the script and began concentrating on the actors in his company.
"Before then, even though our stores performed pretty well, some people's behavior didn’t reflect the culture we wanted to have," Chang says. "We didn't see enough of the honesty side, the respect for each other, the desire to help each other."
Chang quickly realized that if he were going to build a stable culture that embodied high ethical and moral standards, he needed to find the people first. So he started to shift how he and his leadership team recruited, what they valued in prospective employees and franchisees, and what constituted a great hire.
In short, Chang began focusing on candidates' hearts first and their heads second.
"When the company started, I had hired too fast, and because of that, some people had a lot of experience as far as the technical side of things, but they didn't have high moral standards," he says. "So I started looking at this in terms of two areas. One was the culture, in terms of the level of ethics and honesty, and the other side was their technical experience.
"I looked at how each candidate performed in both areas, but I set my bar very high on the ethical side and was more generous on the technical side. You can teach technical skills, but you can't really teach ethics and morals."
Since refashioning the company's recruiting and hiring practices, Chang says it has had a profound impact on the culture of the company.
"It has been big for us," he says. "We now look at our company more as a family."
Ask the right questions
If establishing your ideal culture starts with hiring the best people, then hiring the best people starts with asking the best possible questions during the interview process.
Chang wanted to develop and nurture a culture that embraces high ethical and moral standards, but also promoted the idea that Yogurtland behaves something like a large extended family.
Though many company heads talk about the family atmosphere that exists in their companies, making the leap from professional colleague to something more familiar is difficult, and one that can't happen without close involvement from upper management.
Chang wanted a constructive bond to develop among the people in Yogurtland's Anaheim corporate office, so he started by developing bonds between himself and his team members. He developed relationships with his people in which he got to know the significant things happening in their personal lives.
If there was a way Chang could leverage Yogurtland's resources to help an employee realize a significant life goal, he wanted to help.
"In our situation, I think it’s important to look at a company as family members," Chang says. "When you have a parent, sister, brother, and you're working together, you're thinking about the ways you can help them and make their life better. You're asking 'How can I teach them to fish?' That's why, maybe you don't want to just hand them a prize, but you want to figure out a way that you can help them realize the dreams they have for their own lives."
One of the first questions Chang asks a job candidate has nothing to do with the lines on their resume. It has everything to do with trying to learn what really makes the candidate get out of bed each morning.
"For every single person I interview, I ask them what is their ultimate goal in life," he says. "That gets them to think deeply and reveal some truths about who they really are. Their goal can be relevant or irrelevant to our company, but I want to know what their goal is. If we hire them, I want to customize a path for their dreams.
"Maybe someone wants to buy a house for their mom. It really has nothing to do with us, but we look at the numbers, we put together our collective wisdom and try to see a way this person can achieve their goal. If that person can finally buy a house for their mom after so many years, that is very motivating for them.
"We see it as something we're not obligated to help with, but if you truly view your people as family members, as a brother or sister, that is my role. If they see me and those of us in the company going above and beyond to help them, they start to see and believe that we act as a family."
Finding those life catalysts is a critical component of motivating employees at their jobs. Employees do come to work each day for a paycheck. Without income, they don't pay their mortgages or utilities, don't make car payments and don't buy groceries. But the sum total of what constitutes gainful employment doesn’t begin and end solely with what ends up in each employee's bank account every two weeks.
People want to work at an organization where they can make a lasting difference. What defines "lasting difference" changes from person to person, but the greater need is always there. As the leader, it's up to you to ask the questions, both of your current and prospective future employees, and find out what truly motivates them.
"In a lot of cases, I don't think financial compensation is the real motivation for people," Chang says. "When they hear the company is trying to achieve something beyond just the numbers and financials, when they see that we come together as a company, we reach out and help each other achieve our goals so that we can achieve our overall company goals, that is a common motivation where people see we're not just out to make a profit. We don't come to the office each day just to make money. It's more than that."
Perform daily maintenance
It's easy to project enthusiasm about a new strategy or a culture shift at the outset, when everything is new and exciting. But how about a month after, or six months after, or a year after?
At some point, you will leave behind the rush of blazing new trails and exploring new frontiers, and sustaining what you worked so hard to develop and roll out will be a matter of daily maintenance.
At Yogurtland, Chang considers his company’s cultural conversion a success. The atmosphere around the company's corporate offices — and by extension, at franchise locations — is based on Chang’s vision of a company that behaves as an extended family. It is a commonplace occurrence for Yogurtland associates to build and sustain meaningful and fruitful interpersonal relationships.
But if Chang were to rest on his laurels and consider the mission accomplished, he would run the risk of allowing his culture to backslide into the bad habits he spent several years eradicating. That's why he makes sure to create regular interaction points between him and his team, so that he can continue to reinforce the principles he introduced at the outset of the company's culture shift.
The company's rapid growth adds an extra layer of complexity to the equation.
"Right now, we have a corporate office of 40 and it is already difficult to reach to all levels," Chang says. "The only way is to remain vigilant about communication. In our regularly scheduled meetings, what we're discussing isn't just about simply store operations or the numbers we are trying to achieve. We discuss more than that."
Chang tries to address technical issues quickly so that he can spend more time reinforcing the culture. Whenever possible, he wants common-sense, uncomplicated solutions to issues involving the company's infrastructure. Since maintaining a great culture is hard work, he wants the nuts and bolts of running his company to be as simple as possible.
"When we need to visit the technical side of things, we can be pretty quick in figuring out what the best solution could be, and then put that in a memo to whoever it concerns," Chang says. "That way, it's in an e-mail, everybody reads the e-mail, and if the subject needs to be addressed in one of our meetings, we are all prepared beforehand. That hopefully leaves us more time to address our culture and how we are putting ideas together for the future. The meetings are where we really dissect what is going to help the company’s future. So we want to spend a lot of time on those big-picture, conceptual ideas."
Chang says the new culture at Yogurtland has affected the way he runs the business on a fundamental level. Like most CEOs, Chang used to focus on strategic planning before anything else. Everything — from hiring to culture to job descriptions — stemmed from the strategic plan laid down by management.
But as Chang advanced deeper into his new philosophy of focusing on people first, he discovered talent was his most important asset, and motivating that talent was his most critical task. Now, he values talented people who embrace the culture far more than he values strict adherence to any organizational strategy.
Yogurtland still has an overall direction and goals, but the method by which those goals are achieved is now largely up to input from his team.
It is something that requires a level of adaptability that might extend beyond the comfort level of some business heads. But Chang views it as an essential part of his leadership philosophy. He'll compromise on how something gets done, but he won't compromise on who does it.
"Typical company leaders, they will do strategic planning and everything related to that first, and then try to fill out the team by putting people in the right positions," Chang says. "We do it the other way around. As I've said, I find the right people first. That takes a level of risk, because sometimes you find a really great person and you know right away where they're going to fit in the organization.
"That's where it gets kind of strange, because what I've learned is that if I find the right person who fits the culture, someone who is honest, humble, receptive, confident and wise, that is where you really can't compromise. You can be pretty generous regarding how you hire for technical skills. If you've hired someone who is smart and receptive, they can catch up their skills fairly quickly. That is why you find the person first, then do the planning.
"If I were starting a company from scratch again, I now know that is how I would do it."
How to reach: Yogurtland Franchising Inc., (714) 939-7737 or www.yogurt-land.com
The Chang file
Born: Seoul, South Korea
Education: B.S. in mathematics, Sogang University
What is the best business lesson you’ve learned?
One thing that has impacted me throughout my career, and what I keep emphasizing to my people, is that you need to surround yourself with the right people. You need the right employees, the right partners and the right people around you in everything you do.
What traits or skills are essential for a business leader?
The ability to build a great team. You need to have the ability along the technical lines of what it takes to run a business, but you can’t go anywhere without a great team. And that comes back to how you communicate with people and share your goals.
Chang on the CEO’s role in sustaining the culture: As the company has grown, I’ve tried to set myself as more of a cultural leader, rather than an operations leader. I try to focus more on the bigger goals and being a good role model, demonstrating our cultural principles by example — honesty, high morals and so forth. As the leader, you are constantly watched by everyone, and they have to see me embody those core values at every turn, because they are going to follow my example.
When the recession hit, the only direction Bob Fish could turn was inward.
Up until then, it had been the best of times for Fish, the co-founder and CEO of Biggby Coffee. The chain of franchised coffee shops – which is based in East Lansing, but maintains a substantial presence in metro Detroit – had been growing by about 50 percent per year. But when the bottom fell out of the economy in late 2008 and early 2009, all Fish could hear was the sound of screeching brakes.
“Prior to that, it was pretty easy to get financing for new franchisees,” Fish says. “When we had the collapse, it became much more difficult for even our current operators to get financing. So it slowed our growth down, and that slowing had a morale impact. We fell back to about 20 percent growth per year.”
The good news was, Biggby Coffee — which is the brand name of Global Orange Development LLC — didn’t face an immediate existential threat. But growth slowed to a crawl, and Fish realized that if he didn’t reposition his company, the situation could quickly worsen. In an industry segment dominated by corporate titans such as Starbucks and McDonald’s, Fish’s burgeoning company couldn’t afford to slide any further. He needed to rally everyone at the corporate office and throughout the franchise chain, and to do that, he needed to draw the company closer together.
That meant Fish needed to revisit and refine what it meant to communicate with and engage his people.
“With our operations, we began to essentially change the style of our leadership,” Fish says. “We moved to a style that would be one that involved a higher degree of communication and a higher degree of inclusion between our office and our operators. We felt the need to get in touch with people on more of an in-person basis.”
Get tuned in
Fish believes one of the most powerful actions a business leader can perform is to get up in front of his or her company, and relate to them on a face-to-face basis. E-mails, videoconferences and newsletters all have their place, but nothing carries the weight of your words coming directly from your mouth.
“Communication is one of the most paramount things a CEO has to do,” Fish says.” You can have great ideas and a great vision, but if you are unable to articulate that to the balance of the community you are serving, it just doesn’t matter. The component that makes the real difference is to be able to create environments where there can be a dialogue on what you are communicating, and by extension, inclusion in the process of decision-making.”
As the economy slumped, Fish soon came to the conclusion that if his company was to maintain a healthy outlook, he’d need to create opportunities for educating employees and franchisees about the Biggby’s present state, and for facilitating an open dialogue about the company’s future.
“That manifested itself in the form of increasing frequency of in-person meetings,” Fish says. “At that point in time, we instituted what we called ‘in-market meetings,’ where I would go to each (designated market area) and hold about a three-hour meeting. We would discuss the current economics of the organization, and also cover what was going on in the immediate promotional period. We run promotional period cycles, and we’d talk about the performance of the previous cycle and what we were expecting in the coming cycles. Overall, that process created about six market meetings every 60 days.”
Fish also recognized the need for better lateral communication among the franchisees. As the company grew and fought the effects of the recession, Fish wanted to have a system in place by which franchisees operators could speak with each other, share best practices and find common ground on issues that affected the entire chain.
“What we did was to help establish something called an independent franchise association,” he says. “We have encouraged our franchisees to band together as one voice, creating an association that they could use to roll up their thoughts and opinions from throughout the franchise community, and then bring to us in corporate in a cohesive manner.”
One of the biggest keys to effective communication is high engagement. You have to have the attention of your audience if your words are going to mean anything to them. To engage, you have to give them compelling reasons to get involved. And to give them compelling reasons, you have to know who they are and what motivates them.
Fish identified the two constituencies he serves as CEO — consumers and franchisees. Consumers get involved in the business by purchasing the products and referral advertising through word of mouth. In order for consumers to engage — and stay engaged throughout the recession, when disposable income was drying up in households across America — Fish realized he’d need to know what his franchisees wanted and needed, and address those areas.
Through his avenues for communication and dialogue, Fish learned his franchisees wanted a voice and a tangible way to impact the direction of Biggby moving forward. Communication was only part of the equation. The ideas submitted by franchise operators had to turn into something that had a real impact on the business.
“Typically, change comes out of strategic planning,” Fish says. “Today, we do strategic planning with all department heads at the corporate office, but we also include two board members from the (International Franchise Association), so that we can represent that community in our strategic planning. Those board members have full votes, full participation and so forth. Very early in our operation, we have folded our operators into that dialogue.”
Form your process
Fish knew that in order to keep employees engaged and active in shaping the future of Biggby, he needed to form a process that turned employee and franchisee ideas into reality. The process was critical, because employees needed to see the system in action. A handshake and a promise doesn’t get you very far if your people don’t see the organization working toward results.
With that in mind, Fish divided the process of considering and implementing employee ideas into three parts: strategic, tactical and execution.
“All ideas are brought to the table at any given time for strategic planning,” he says. “Once decisions have been made at the strategic level, we have to deconstruct the idea and prepare it for the next level of feeding, which is tactical. That’s where we hash out the particulars regarding how we are going to execute it. Then we move into the execution phase, which is more or less a checkbox that tells us whether the task was performed or not.”
The process happens every day at Biggby on a small scale, but during the company’s recent revision of its catering business, Fish saw that his team could scale the process to tackle bigger issues.
“Our catering area in the past was relatively stagnant,” Fish says. “We weren’t getting any growth out of the area, so out of our strategic planning, we decided that we needed a way to stimulate bulk beverage orders. Through our market meetings, we came to the conclusion that our presentation on catering and education of consumers was poor, and it was delivered in the exact same manner as every other concept out there.”
The leadership team’s solution was to re-launch the catering business under the name “Grabbit2Go,” make it more responsive and throw marketing muscle behind it.
“We made sure the consumer knew that catering was not something you’d have to worry about days in advance,” Fish says. “It was something that you could make a relatively spontaneous decision on and still be accommodated.”
Out of the strategic planning phase, Fish and his team moved the idea into the tactical phase and hammered out the process for how the new catering setup would be implemented at the store level. Then, the concept was rolled out to the franchisees, who offered feedback on the concept, suggesting changes and refinements that would make the new service easier to implement.
“We then took that information back to headquarters, tinkered with the program until we had a formalized version and launched it on Nov. 1 of last year,” Fish says. “The process worked, because in that month alone, the new catering program contributed an additional 16 percent to our catering and sales area. And because we had to use beverage vessels that were purchased and reused, it also contributed 14 percent to merchandise sales.”
Normally, Fish says, getting franchisees to make the investment in reusable mugs and cups would have been a hard sell. But because the franchisees were actively involved in shaping the plan, they were actually anxious to see the program rolled out.
Throughout the recession and recovery of the past two years, Fish has geared Biggby to continue growing. He believes growth is his primary responsibility as CEO, and any change that any CEO makes to the leadership philosophy of the company should be made with growth in mind. Fish’s decisions have helped Biggby stay on a growth-focused path. At the end of 2011, Biggby had 139 units owned by 82 franchisees, employing about 2,500.
“The purpose of facilitating change as a CEO is to ensure growth for the company,” he says. “At our company, there are two pathways we can follow: same-store sales or adding new stores to the system, and I have to understand how to grow the business along those lines, and engage our people in stimulating growth. As the CEO, it’s your obligation to make sure that you understand all the components of your business, that you can measure every component and decide whether it is working or not, whether it is adding value.”
Change is going to happen, whether you want it to or not. So it is always in your best interest to ready your processes and engage your people in management of the change. If you haven’t geared your people to deal with change, your whole company will stagnate, and it won’t take a historic recession to cause serious problems.
“At this point, I bring ideas to the table just like everyone else here does,” Fish says. “I use my ideas to address the concept of change for the purpose of growth. This company started off in 1995, and the company we have now is remarkably different from the company we had back then. For me, it is really about managing the idea of change for growth, and understanding that change for growth is essential to remain a growing system.”
How to reach: Biggby Coffee, (517) 482-8145 or www.biggby.com
The Fish file
History: Bob Fish co-founded the first location of what would become Biggby Coffee in East Lansing in March 1995. The second Biggby location opened in Lansing in October 1997. The company began franchising locations in 1999, and the chain had grown to 139 units operated by 82 franchisees as of the end of 2011. About 2,500 people are employed throughout the Biggby organization.
Fish on prioritizing ideas: If you have engaged people at the table, each one of those people understands what is important. This might sound a little ludicrous, but we vote on the items. There may be 25 or 30 items that are on the table to discuss, and we give everybody five votes. We approach the items from most amount of votes to least amount of votes. It is sort of magical out happens, the highest priority items do end up on the top.
Fish on travel time: Keeping everyone engaged on an in-person basis is time-consuming, but necessary. If we look at 2012 today, 85 percent of my business time is booked. All of those meetings are already booked for 2012, and I only have about 15 percent flexibility in my schedule.
More from Fish on the change management process: I think the most important part of managing change is — and it becomes almost an academic process — is you have to make the case for the change and you have to be able to articulate the vision. When we move forward with the process, there is a mini-white paper done, which makes the case for change and creates the vision. But when we get to the actual launch is where we have to make sure the skills, incentives and resources are there, and there is actually a plan in place to make it happen.
As former firefighters, brothers Robin and Chris Sorensen know that quality and quantity are both important when it comes to a sandwich. So when they co-founded Firehouse Subs in 1994, their vision involved providing better service and a better restaurant experience for their customers. It also involved more meat.
“We made a list of things we thought we had to do to be different and be competitive, and it came down to the concept, and it came down to the experience at the floor level and service levels,” Robin says. “And then it came down to the food.”
Over the years, Firehouse built a reputation for its appetite worthy portions of premium meats and cheeses. With the advantage of being one of the least expensive brands in the fast-casual segment — competitors include Five Guys and Panera Bread rather than Subway — the company steadily grew its regional foothold from Jacksonville, Fla., to 300 locations in 17 states.
But at the beginning of 2007, all of that changed. The restaurants started losing traffic.
“Up until that point, we never had a down quarter,” Robin says. “We’d been building on a continuous basis, and we didn’t even realize how good we had it.”
While the brothers didn’t know it yet, the company’s problem went deeper than the economic recession. The problem was “crappy” marketing.
“What we learned is that people who weren’t eating there — they didn’t really understand what we were,” Robin says. “The Subway customer assumed when they saw our sign that we were just like Subway.”
Root out the problem
Facing some of the darkest days in Firehouse’s history, founders Chris and Robin knew that the company’s franchisees were looking to them for reassurance. Feeling that they owed it to them to look at every opportunity to revive business, they took input from owners and employees, realizing that many of the ideas weren’t viable options.
“For the first time, we could feel the weight of the system on our shoulders, almost literally looking at us and asking, ‘What are we going to do?’” Robin says.
“Some of them were saying we should cut our portions down — which my blood pressure is going up thinking about it. But we had to look at different opportunities. That whole process — all it did was lead us to say, ‘We’ve got to do something.’”
Both felt strongly that they couldn’t jeopardize the quality or quantity that defined the Firehouse Subs brand in exchange for short-term profits. But they agreed they couldn’t stand still either. So as they debated how to handle the declining numbers, the Sorensens also started taking a hard look at their advertising agency.
The company had talked about changing advertising agencies in the past. And seeing the poor results of recent efforts, its leadership offered the agency one last opportunity to present its ideas on how to resuscitate customer traffic. Needless to say, they weren’t impressed.
“Basically, we were out of options,” Robin says. “We weren’t in great shape. So we did something drastic.”
Feeling more and more that the reason for poor performance stemmed from ineffective brand marketing, the leaders proposed a radical change.
In the summer 2008, they decided to rescind the 2 percent in royalties that franchisees paid the company for its corporate marketing efforts. Instead, they told franchisees that they could keep the money — if they agreed to do their own marketing.
“We came up with a comprehensive plan on what they need to do with that money at their discretion, the old fashioned stuff — hiring sign wavers, developing catering, knocking on doors, ‘touching’ people, speaking at the chamber — all of the things that helped us build the company,” Robin says.
Then they hopped on a bus, traveling around the country to present the new marketing plan to store owners with a national founder’s tour. A key part of the presentation was showing franchisees how to execute the new, guerrilla-style marketing initiatives.
“We’d have 10 people from our office get off the bus and we’d all hit three, four or five stores depending on the city,” Robin says. “We would go out and market those stores on the ground ourselves with them to show them how to get it done. We always built sales wherever we were at. So it was radical, but we tried it.”
After six months, about 20 percent of the system was really on board and executing on the suggestions. So the brothers decided to extend the efforts for another six months.
In the end, the local marketing ramp-up wasn’t enough to stop the decline. Continuing to lose traction, the company closed out the 2008 year down 6 percent in comparable store sales. By 2009, the company was falling nearly 7 percent. The Firehouse Subs brand still wasn’t registering with the customers; and Chris and Robin went shopping for a new advertising agency.
Focus on the right customers
As they began their search, the brothers looked for a smaller agency where they would know the owners personally. So they were skeptical when their consultant proposed a meeting with Zimmerman Advertising, an agency worth $2 billion whose clients include high-profile brands such as Papa John’s Pizza.
“I said, ‘Let’s not even go down there to Ft. Lauderdale because they are too big,’” Robin says. “‘We’re going to be lost in the shuffle.’ And the consultant said, ‘They are different people down there. They are a unique agency, and I’ve seen a lot of them. … I think you guys are going to hit it off.’”
Compared to the last 20 presentations they’d gone through, Zimmerman was the only agency so far that had no marketing ideas to pitch. As they sat down to meet with the company’s leadership, its staff admitted that they didn’t know much about who Firehouse was. Instead, they pitched themselves.
The agency’s founder, Jordan Zimmerman, pointed out that both of the company’s previous agencies had pitched their ideas for the business before they even had time to research who and its customers were. But Zimmerman did things differently.
“His point was how do they know if that’s right when they haven’t had enough time or money to go out and really do thorough research?” Robin says. “And he was right.”
So when the meeting was over, they hired Zimmerman as their new agency. They also gave them the money to go out and do the necessary market research to develop their brand strategy. The agency used techniques such as intercepting customers — going into other stores and offering them a free lunch at Firehouse Subs in exchange for feedback — Zimmerman soon figured out why the company was losing customers. The brand needed to reach more people.
At the time, the company had lost about 10 percent of its traffic. But while the owners were so focused on getting those people back in the door, they’d also overlooked an essential question: are these the right people?
“The point is — they’re gone,” Robin says. “We weren’t really focusing on the 90 percent that are OK with our proposition. So we started trying to better understand who those customers are and who other customers are.”
The agency also told the brothers that it would take a 4 percent investment from each of the franchisees to execute a new brand marketing strategy.
“I said to them, ‘So you’re asking me to go our franchisees and say not only do you have to give me the 2 percent back that we let you keep temporarily, but you’re required to, and you need to give us two more that you’re not required to?’” Robin says. “It was radical.”
But while knocking on doors worked occasionally, the customer data made it clear that Firehouse Subs had to reach more consumers with its message if it was going to stay profitable.
“The simplicity of it was just 'find more people,'” Chris says. “Tell them who we are and why we’re better. With the economy down, there were a certain number of people who couldn’t afford to eat with us, and we weren’t going to get them back until the economic situation was corrected. But there were thousands upon thousands of people that we could reach, which is what we did.”
Try a new tactic
With the help of Zimmerman, Robin and Chris began making the changes to the company’s marketing and advertising. First, the company increased its emphasis on the items that make it different from competitors — its big portions of quality meats. At the heart of the strategy was the radio.
The agency suggested that, as founders, Robin and Chris should represent the brand in radio commercials. Instead of discounting the price, they’d focus on Firehouse Subs’ bigger portions and fresh-sliced, steamed meat and cheese. The commercials would also include a new slogan: “Our way beats their way. If you don’t agree, it’s free.” By mentioning the price in the commercials, customers would know exactly what to expect coming into the restaurants — a medium hook and ladder for $5.39, not a $5 footlong.
“We’re giving a guarantee,” Robin says. “So if you take one bite and you don’t like it, we’ll give you your money back. While everybody is talking about smaller sandwiches — $2 torpedoes, $5 footlongs — we’re going to be the only one talking about premium.”
At first, Chris and Robin were hesitant about going on the radio, even as they helped write and develop the spots. So they began a 10-week test run, doing radio spots in Jacksonville, Fla., Knoxville, Tenn., and Augusta, Ga.
“We were concerned about not doing it well, and we don’t want the system thinking that we think it’s all about us,” Robin says. “What if we fail at it? So Zimmerman was like, ‘If you suck, we’ll be the first to tell you.’”
Within days of starting the radio campaigns, the stores saw 10 to 15 percent lifts.
“Without discounting, without changing who we were, without coming up with the next cheap sandwich, we stuck to what’s made us who we are and just started blasting the airwaves and finding new customers,” Chris says. “And it worked.”
Bring the fight home
The company now had real data in its back pocket showing that the radio worked. But now, Chris and Robin had to go back to owners with the new marketing strategy and convince them to invest in it. In summer 2009, the company held its first ever corporate-wide conference to introduce the new agency and new marketing investment.
The brothers explained the tests and the results of radio campaigns. They explained the big picture and the vision. Because the plan to give owners the reins over marketing hadn’t worked, they felt that they had even more authority to ask franchisees to support the changes.
“If we hadn’t given them money to try it on their own, they may have demanded some other options,” Robin says.
“We said, ‘You’ve had this for a year. We tried an agency. We couldn’t get results. We gave them an opportunity to present their ideas. They weren’t good. We tried it. Check. Then we gave you the money for a year. It didn’t work enough to turn us around. Check. Now we have a new agency.”
They asked the 80 percent attendance of franchisees in attendance to double down on their investment into the corporate marketing. In the following five months, they held meetings with the other 20 percent to get their support. In the end, everybody who was eligible to be on the radio voted to do it.
“As much money as we spent, it came down to buying the right media to talk to the right group of people, and hitting it heavy with the right message,” Robin says.
“The bottom line is that it was a major risk, a double down in a bad economy, and it absolutely was the most phenomenal thing we’ve ever done.”
Since the second quarter of 2009, the company has continued to increase sales 4 to 6 percent every year, fueling its expansion to approximately 500 locations today. Revenue for 2010 was an impressive $256 million. The brothers have already invested close to $5 million of their own money in the radio campaigns. Yet there is still one thing they would have done differently a second time around.
“Fired our agency earlier,” Chris says.
How to reach: Firehouse Subs, (800) 388-3473 or www.firehousesubs.com
1. Figure out where you need to improve.
2. Rethink your market of customers.
3. Step outside your communication comfort zone.
The Sorensen File
Chris and Robin Sorensen
Born: Jacksonville, Fla.
Favorite Firehouse sub:
Robin: Smokehouse Beef & Cheddar Brisket
Chris: Smoked Turkey Breast
About the Firehouse Subs Public Safety Foundation
Mission: To buy life-saving equipment for fire, police and other public safety institutions
Robin: We’ve saved lives with the equipment that we’ve donated, and it’s really taken on a life of its own. People understand Ronald McDonald House, and that’s big part of who they are. We want the same thing with Firehouse, because not many companies have really made a great connection like that, like we have. We started it from the heart because we enjoyed it and thought it would be great. One of our agencies put it as one of our brand pillars in who we are. It’s one of the pillars of building a great business in the community.
About 50 percent of the donations come from the store and our customers. The other 50 come from our vendors, franchisees, Chris and I and our partner Steven. We’ve put in almost $600,000 of it ourselves.
What are the best business lessons that you’ve each learned in your careers?
Robin: One of the biggest failures — there’s two parts to it. One is people just aren’t willing to do what it takes to grow their business. You hear it in the way they talk about it, ‘I’m willing to do this, but I’m not willing to do that. I’m not willing to put the hours in.’ They set parameters on themselves: ‘I’ll work five days a week, but I’m not working on Saturday during the college football season.’ When we opened up, it wasn’t that we said we’ll do anything; that was our philosophy and mindset. The other part of is, are you in it for you or are you in it for the company — the frugality piece.
Chris: I was told this advice from an old mentor of mine. He told us if you want to be a smart business owner, you don’t buy expensive cars or a yacht. He told us if you can’t write a check for it, don’t buy it. My brother and I still practice this to this day.
Anybody who survived the fifth grade understands the soul of branding. Branding is about being different — and just like in a fifth-grade class, there are many ways for a brand to be different.
In my fifth grade class the most popular boy was Gary. He was good looking, confident and our best athlete. He was the best kind of different — for the fifth grade. There was another boy who wasn’t any of those. In fact, though he was at least modestly good looking then, he was nearly the opposite of confident and athletic. So he was different too, but not in a way to be envied.
Our class also had its smart kid, its funny kid, its short kid and its weird kid. Which one was I? I’ll leave that to your imagination. But all of us, intentionally or not, had personal brands.
Branding starts with differentiation. This can be almost anything, as long as it sets your brand apart. Maybe your product is made from superior ingredients — juice made from organic fruit, or socks woven from cashmere. Maybe your product is made for a special demographic — a deodorant for women who wear black dresses or cigarettes for independent men. Maybe your product was designed by someone who is believed to have a superior aesthetic sense — a shirt by Ralph or shoes by Ferragamo.
There are no rules about the basis on which you differentiate your brand. Many of the best-known examples are as different as they are famous. For instance, when all the major U.S. carmakers were packing their products with power and chrome, Bill Bernbach decided to play up the Volkswagen’s personality. David Ogilvy differentiated Hawthorne shirts not by changing the product, but by telling us what kind of man wore them.
Still, not all bases of differentiation are equally valuable. Some, for example, seem to last longer than others. Food brands may top this list with century-old winners such as Coca-Cola, Wrigley, Heinz and Hershey’s. It seems that we get fairly attached to our opinions about our taste preferences. Pepsi may win the blind taste tests, but they don’t win many converts. Coke’s differentiation is too well established in our minds.
Other products are differentiated on sheer performance. These tend to last from a few years to a few decades, depending on the rate of product innovation. Readers old enough to remember taking pictures on film may remember dropping it off for development at Fotomat — once a 4,000-plus chain of parking lot kiosks where rolls of films could be dropped off one day and printed photographs picked up the next. One-hour photofinishing eventually ended the Fotomat run before digital technology killed film and film developing almost altogether. Fotomat was a well-differentiated brand, but its power was ultimately at the mercy of technological progress.
Each type of differentiation has its advantages and disadvantages. The most important thing is to have one — to be unique in a way that creates a customer preference for your product or service. If you can think of more than one way to stand out, great. But consider which will be easiest to keep to yourself and to keep for a long time. Then trumpet your point of differentiation from the rooftops, so that customers come to associate it with your brand.
There is no single right way to differentiate brands. But there is almost certainly a way that works best for you.
Jerry McLaughlin is CEO of Branders.com, the world’s largest and lowest-priced online promotional products company. Reach him at JerryMcLaughlin@branders.com
I recently had the opportunity to attend a Keith Urban concert. I had never attended one of his concerts and I’m not a huge fan of country music, but I thought it would be fun and an enjoyable night.
As the concert started, I was pleasantly surprised at how much I enjoyed the experience and how much I learned about business during the show. Let me explain the comparisons that I see between a Keith Urban concert and a successful business:
- Communicate: Urban addressed the crowd a bunch of times during the night with a fun story and a clear message.
- Use surprises: Urban walked into the crowd playing his guitar. In fact, he did this with security to the other end of the stadium. Lots of performers do this — but I have never seen one give away his guitar. At the end of the song, he gave his guitar to a fan!
- Use the latest technology: Urban had some cool video screens behind him that reinforced his message and kept everyone’s interest for the entire concert.
- Highlight individuality: Urban did an amazing job introducing his band and their talent. Every lead singer will do this, but Urban really personalized them and genuinely looked like he was having a great time.
- Flexibility: Urban jumped around and was very flexible. OK, maybe this is a reach, but don’t we want our businesses to be flexible?
- Leave your customers wanting more: Urban did two encores, and at the end of the second one, not one person out of the 20,000 people in the audience wanted to leave. Clearly, everyone left wanting more.
- Create raving fans: Urban did just that. The tweets, the posts on Facebook and the discussions that everyone had because of that night will pay enormous dividends in the future. I’m sure most of the younger attendees downloaded Urban’s songs from iTunes that night, and the older ones went to Best Buy the next day and bought a CD.
- Use PR: Everything Urban did was highlighted on the video screens. He gave away his guitar; it was highlighted. He walked into the crowd; it was highlighted. He brought someone up on stage; it was highlighted.
- Engage the audience: Somehow, some way Urban seemed to notice everything in the crowd. A sign in the top deck of the stadium. A shirt that someone was wearing. Two people dancing to his music. I’m sure his staff worked very hard at this. Who knows, maybe some of it was staged, but it was well done and it made people feel special. Isn’t that the exact message we want our business to convey to our clients?
- Involve the past: During the evening, Urban highlighted and spoke about Waylon Jennings and The Beatles. He mentioned how much they helped him with his music and how much he respected them. In business, we should all be doing this with former leaders or influencers of our companies.
- Have fun: I’m not sure who had more fun, Urban or his audience. He was engaged with what he was doing the entire time he was on stage. Clearly, it was his goal to give everyone a memorable night, and his goal was accomplished.
Keith Urban is a great talent but probably a better showman and businessperson. His concert was an amazing night. He gave so much of himself during his performance. Every aspect of his show was about his fans and ensuring that he delivered a picture-perfect performance and experience.
I took away so much from his concert. I hope this piece enables every reader to take away at least one good idea or tidbit of information to help their business. <<
Merrill Dubrow is president and CEO of M/A/R/C Research, located in Dallas. The company is one of the top 25 market research companies in the U.S. Dubrow is a sought-after speaker and has been writing a blog for more than four years. He can be reached at email@example.com or at (972) 983-0416.
If everyone in your organization was as invested in and knowledgeable about your company’s strategies as you are, your team would be unstoppable, right?
But how do you get everyone from the vice president of sales to the front-line worker to embrace that concept? I would argue that a targeted communication strategy can help get you there.
Tailor your message
Know your audience. Be concise and talk about issues that matter most to that particular group.
For example, in the Moe’s business, our general managers don’t care how many franchise deals we’ve sold, although it’s important to us. And our investors don’t care about our quarterly promotions, although those are important to us also.
Why does your audience care about what you have to say, and what is the one thing you hope they walk away remembering?
Consider the mode
Some people like to learn by doing. Others like to learn by listening. When communicating, know what your audience prefers, and present accordingly.
For example, general managers work in a fast-paced environment and are on their feet all day. It’s difficult for them to sit still and watch a PowerPoint for hours, whereas the VP of sales is used to that style.
At Moe’s, we do annual regional meetings were we pay for our general managers to attend. We try to make this meeting interactive with roundtables, panels and frequent breaks to keep our audience’s attention.
The timeliness of the message and the workflow of the audience can help you determine the appropriate vehicle. We know our managers and crew members are working in the restaurant all day, so if we send an e-mail at noon, they most likely will not read it until late that night. So if it’s something that can’t wait, perhaps a phone call or text message would make more sense.
Determine the frequency
In order to cover all of our bases, we communicate with franchise partners and general managers weekly via e-mail, quarterly via a newsletter, annually via regional meetings and biannually via a worldwide conference. Clearly, we know it’s important for this group to be hearing from us constantly and in various formats.
I meet with my management team monthly because it’s important that group understand what is going on with all departments so they can report back to their teams. Our stakeholders hear from us quarterly because they are most interested in financial data and trends.
It’s important to develop a communication strategy in advance to ensure wide attendance and rich content. Let people mark their calendars a year in advance if possible to reiterate the importance of the meeting.
Remember when communicating to articulate your message in a way that is most appropriate for your audience. Just because you prefer a certain form of communication does not mean your audience feels the same.
Lastly, always measure your success. Our conferences and regional meetings are always followed by a survey soliciting feedback so we can learn how to be better. We also do an annual associate and franchise partner satisfaction survey to find areas of opportunity. <<
Paul Damico is president of Atlanta-based Moe’s Southwest Grill, a fast-casual restaurant franchise with more than 430 locations nationwide. Damico has been a leader in the food service industry for more than 20 years with companies such as SSP America, FoodBrand LLC and Host Marriott. He can be reached at pdamico@moes.
Early last summer, Half Price Books, Records, Magazines Inc.’s revenue started flattening out noticeably. Many of the Dallas-based chain’s 115 stores were recording lower-than-usual sales increases. Others stores were staring at a flat line, and a few stores were even seeing sales dip a bit.
Sharon Anderson Wright, the company’s president and CEO, says the overall slackening of Half Price Books’ sales — caused by the lackluster economy and the ascendancy of electronic media and online sellers like Amazon — was not quite on a scale that she considered alarming. But it was noticeable and problematic, and Wright knew that she and her leadership team would have to deal with it immediately.
“It’s no secret that factors like the economy, electronic media, online sales — all of these things have been killing off a lot of the bookstores,” Wright says. “In the past our company has been pretty recession-proof, but this has been the worst economy we’ve seen in recent history. And when you couple that with the increases in online sales and electronic media, it’s been tough. So we’ve been having to work with that.”
For virtually all of its 40-year existence and through a number of tough economic periods, Half Price Books has experienced consistent, stable growth. The company derives the lion’s share of its revenue from used merchandise — books, magazines, music, video — which it buys and resells. Dealing in used merchandise has always been a recipe for steady success, irrespective of the economy’s up and downs.
“Normally, we sail above everyone in recessions,” Wright says. “We skate over the top of it, because everyone comes to us. We sell a good product at a good value, and we get incredible buys when people need to either make some extra cash or downsize or move. And we sell a lot of stuff when people are trying to reinvent themselves, or when they aren’t going to work every day so they have a little more time to read a book or watch a movie.
“Actually, we still are sailing above everyone, for the most part,” she says. “It’s just at a lower overall level. Our sales are flat, where we had been having 7 to 10 percent increases every year.”
The danger signs started cropping up in June 2011.
“We were doing fine until the beginning of this past fiscal year — a year ago in June,” Wright says. “That’s when we realized that sales were starting to go flat. The stores just weren’t doing as well as they’d always done. We’d always had increases in comparable stores, but now we were seeing that some of them were flat and some of them were down.
“The overall decrease was not drastic,” she says. “We were still making a profit, but it wasn’t as comfortable as it had been in the past. I wouldn’t say we were worried, but it was enough to get our attention. We had been fortunate to roll along and not have to worry about a thing for many years. But now we saw that it was time to look at some stuff and make some changes.”
The change-making started in earnest at Half Price Books’ semiannual management meeting last fall. Wright asked everyone attending — upper management, regional managers, district managers — to come to the meeting armed with ideas to counteract the company’s sales slowdown.
“At our meeting in October, we broke up into groups and put challenges before the groups,” Wright says. “We had asked everyone to come prepared with ideas for ways to improve their stores, their buying, everything. We spent three days hashing it over, and we came away with things that we are going to try, and with different groups that are going to try to fix different areas. We’re using the expertise of the people that are actually doing the job, to pay attention and see what’s broken or what can be improved on.”
Among Half Price Books’ new initiatives is a program to bar code all of the books on its stores’ shelves and computerize its inventory chainwide. This program, which is being rolled out over several years, has been implemented in about 30 HPB stores so far, and Wright says the company plans to install it in about 35 more stores by the end of this year. The bar-coding and computerization of inventory provides a dual benefit: It enables HPB to search for and find items for customers chainwide, and it allows the company to sell its merchandise online, both on its own website and on other booksellers’ sites.
“Once we’re bar-coded, then we can shelf-scan, and we’re listing the books on our own website, HPB Marketplace, as well as sites like Amazon, Half.com and Alibris,” Wright says. “This enables us to sell anywhere we don’t have a brick-and-mortar store. So we’re selling simultaneously off the shelf and online.
“And with 115 stores, we have probably the best variety and buying power of anybody, as far as what we’re able to get and sell,” she says. “So this is a pretty big deal.”
In addition, HPB is using the new online sales conduit to sell its own excess inventory. Previously the company had sold its excess books in bulk to smaller online-only resellers for a pittance. Now, by selling the books itself, HPB is making a better profit on them.
“We’ve always bought way more books than we could sell,” Wright says. “Some of the excess books we donate, but with most of our excess books, our practice has been to sell them in bulk to other book dealers. But we’ve come to realize that that’s ridiculous, because we’re cleaning the product, packaging it, getting it all neat and tidy, and then selling it to them basically for nothing. And then they turn around and list it online and compete against us.
“So we’ve started selling these books online ourselves,” she says. “My opinion is that if these other companies can sell them online, then we ought to be able to sell them online. And in doing this, we’re drying up those sites’ main source for good, cheap inventory. I think that’s going to work in our favor.”
Half Price Books is also starting to become more active in buying and selling educational textbooks.
“We’re focusing a lot more on the textbook market,” Wright says. “Before, we didn’t really think we could complete with [college bookstore operator] Nebraska Book Co. We brought in a gentleman who has a background in buying and selling textbooks, and he’s working with our stores on databases to help us determine what textbooks are being used at the different universities. We’re even going to experiment with a sort of reverse-bookmobile — a ‘buymobile’ that will go to university towns and buy books from students.”
Build a solid foundation
Wright attributes Half Price Books’ long track record of stable growth to the company’s founding principles, which haven’t changed since co-founders Pat Anderson — Wright’s mother — and Ken Gjemre opened HPB’s first store 40 years ago in a converted laundromat in Dallas.
“Our company has always been different all the way around,” Wright says. “We were founded by a war hero/peace activist/gray panther and a psychologist, and they started the store as a place where individuals and their values would be respected. It was based on the concepts of treating people fairly, providing a good value for the customer, not throwing things away and being good for the environment. Those are our founding principles, and they still hold true 40 years later. So any decision I make, and any decision the people around me make, is based on those basic founding principles.
“We have 3,000 people, and every day we give them a register full of money and say, basically, ‘Buy anything printed or recorded except yesterday’s newspaper, treat the customer right, pay the right amount, price it at the right amount, and put it out and sell it.’ And that has grown from — you know, originally we had eight-track tapes and 78’s, and now we have MP3 players and video games and consoles. We let our people experiment and try new things. If it somehow relates to something we think our customers would want or be interested in, then we’ll give it a try and see what happens.
“Each person that works here gets to think and be exposed to new information all day, every day. They’re basically entrepreneurs. They’re making it up as they go along, and if they come up with a good idea, then we’ll take it and spread it around.
“It’s built on trust, and we promote from within. So that’s why we’re a little different than a lot of businesses. On the other hand, I think it’s becoming more popular for companies to treat their people like that now. It’s kind of a Montessori approach to business.”
Pay attention to details
A couple other initiatives Half Price Books is undertaking could be said to fall under the category of running a tighter ship: sharpening the look of its stores, and making everyone more accountable for what they do, from managers to sellers.
“When you run a place like this, you have to look at the store closely,” Wright says. “The appearance of your store is hugely important. After our management meeting, I told the managers to go back and look at their stores with a fresh eye. How does it look to the people coming in? Because it can get a little doggy once in a while, a little dusty and dirty. And you can’t tolerate that. So we’re working hard to make our stores more inviting and friendly.
“You have to hold your store managers accountable for store appearance and store performance and all that kind of stuff,” she says. “At the same time, I’m definitely not a dictatorial leader. I’m more of a ‘Why not, let’s try it, let’s see how it goes’ type leader.
“The other thing you absolutely cannot tolerate in your stores is surly employees. In any business, there are always a few people around that might not be pulling their weight. We’ve become less tolerant of people who are unwilling to pitch in and do their part, because the other people really work hard. If they’re not going to enjoy what they do and do their job right, then let them go try to work for somebody else.”
In the end, despite the tough competition and the market-share inroads being made by online-only retailers, Wright says Half Price Books remains committed to the brick-and-mortar store concept.
“If we didn’t have the stores, then we wouldn’t have all of the great people that work for us, and we like providing something for our communities,” Wright says. “We feel that there are always going to be people that like not only a physical book, but they like a physical bookstore. The store is a place for people to come and hang out, and they bring in their books, and we get some incredible inventory from them. If we didn’t have brick and mortar, we’d be like those companies that are trying to buy bulk from us. Eventually you wouldn’t have anything to sell but a bunch of castoff excess inventory.”
Wright says Half Price Books’ new initiatives are working: Store sales are inching back up.
“For a while, we were looking at a situation where ‘flat’ was the new ‘up,’” she says. “Now we’re getting back to where ‘up’ is ‘up.’ It’s a good place to be.” <<
HOW TO REACH: Half Price Books, Records, Magazines Inc., (800) 883-2114, www.hpb.com
THE WRIGHT FILE
Name: Sharon Anderson Wright
Title: President and CEO
Company: Half Price Books, Records, Magazines Inc.
Education: Richland College, Dallas — studied art, anthropology, archaeology, photography, history
What were some of your earliest work experiences?
The first real job I had was at a grocery store called Foodland. I started working there when I was 15. Before that I had worked for my dad, filling orders for paint and stuff like that. He was a cuckoo clock salesman. But my first real job was as grocery store checker, and I loved it. My second job was as a trophy engraver and builder. I worked in a trophy shop. I engraved trophies and drill-pressed marble.
What’s a lesson you learned from those early jobs that you carry with you?
The importance of customer service. I always loved working the front counter. At a place like a grocery store, you relate to the person that’s in front of you, you take care of what’s going on right in front of you, and you just do that the best you can. I love talking to people, and in the grocery store we had constant lines, so you’re working directly with the people, and you’re constantly interacting with them and relating to them. I still try to use that approach every day.
Do you have an overriding business philosophy that you use to guide you?
The golden rule: Don’t expect or do anything to people that you wouldn’t want for yourself. Treat everybody equally. And listen to people. Respect them and respect what they bring to your company.
How do you define success in your business?
Being able to provide a good place for people to work and to provide something for the community that they need, and being able to be happy and feel good about what you do every day.
What’s the best advice anyone ever gave you?
Don’t go to bed mad. My mom taught me that.
So many companies treat human resources as an afterthought, or it’s only part of a staff member’s role. For example, the secretary has HR in addition to other duties.
The No. 1 priority
HR should be the No. 1 priority. A great culture can lead to great success (and higher profits).
Why is it that when a company needs to reduce staff, generally, the first place it makes a cut is within the HR department?
In my view, HR is the single most important department in your company and is a direct reflection of how you value your employees.
If your company has a part-time HR person, that tells me a lot about how you are going to treat your employees and their concerns. HR is a full-time job and an integral part of your team.
How you manage your people is a top priority. Not only should HR be the last to go, HR absolutely should be represented at the executive level.
Employees spend an incredible amount of time and emotion working to gain your approval. Whether they were deprived of it by their parents or need approval to bolster their adult confidence, it’s a powerful force in the workplace.
As a leader, you should tap into this.
Recognize the importance your approval plays with your team: a few lines of praise in an e-mail; recognition for a job well done in a meeting; personal thanks for extra time on a project. It doesn’t have to be big. In fact, the simpler and more low-key, the better.
Do offer approval. Give it often.
The best places to work really do thrive on creativity, energy and a well-defined structure. You need all to keep a business grounded and sharp. It keeps the workplace balanced.
Hire creative people and make them part of top management. Encourage continuous improvement from everyone. (One large improvement is easy to copy; lots of little things make copying next to impossible.) Insist on short, five-minute daily huddles to promote effective communication, ideas, and employee accountability.
Every company’s culture is a mixture of differing attitudes, beliefs, backgrounds and behaviors. But it is your internal communication that speaks most clearly about your organization’s true social culture.
How does your internal communication stack up? Think about how management gets important and casual information to employees.
• Is one-on-one discussion encouraged?
• Is internal communication casual or highly structured?
• Is most communication e-mail-driven?
• Are employees a part of the conversation, or “told” what to do?
• What‘s the typical location for company meetings?
• Are employees free to relax at company-sponsored events?
Observe the attitudes
Don’t tolerate bad attitudes. If a person isn’t happy, help them find it at another company.
A recent study at Baylor University published in the Journal of Organizational Behavior found that working with chronically rude, mean or bullying colleagues has far-reaching consequences. The study showed that this type of stress and tension often followed the employee home, causing unhappiness with a spouse or family and can even travel to the spouse’s workplace.
Bullying and mean-spirited behavior simply does not belong in the workplace. Whose job is it to make sure it doesn’t occur? Whoever is at the top. Leadership trickles down.
Make sure your leadership includes clear communication about behaviors that won’t be tolerated. Always live and breathe your workplace values.
Mistakes are OK
Allow staff to make mistakes. It’s how they learn.
“It was my idea, so I’ll ride it out until it works.” Recognize a little of yourself in there?
Thing is, there’s nothing better than making a mistake. It’s a great way to find a better way. To re-tool. To create understanding. To show your team you know when to say when, and head in a better direction.
It’s when you don’t realize your mistake — maybe letting your ego get in the way — that you lose. It’s the people that keep making the same mistakes that are the idiots.
Move forward. And eat a little humble pie in the process. It keeps you in shape.
Finally, and most importantly, give frequent performance reviews and schedule yearly wage reviews for everyone. Separate the wage reviews from performance reviews. If their performance doesn’t warrant an increase, tell them. Honesty is better than not letting them know.
David Harding is president and CEO of HardingPoorman Group, a locally owned and operated graphic communications firm in Indianapolis consisting of several integrated companies all under one roof. The company has been voted as one of the “Best Places to Work” in Indiana by the Indiana Chamber of Commerce. Harding can be reached at firstname.lastname@example.org. For more information, go to www.hardingpoorman.com
For more than 25 years, Ernst & Young has celebrated the entrepreneurial spirit of men and women pursuing innovation and entrepreneurial excellence in their businesses, their teams and their communities.
The blood, sweat and passion they’ve poured into their businesses and the triumphs they’ve achieved stand as a testament to the role they play as visionaries, leaders and innovators. Ernst & Young founded the Entrepreneur Of The Year Program to recognize this passion for excellence and to build an influential and innovative community of peers.
We have gathered here and in 25 other cities in the U.S. to welcome the men and women who are regional finalists into our entrepreneurial Hall of Fame and to toast their commitment to succeed. We applaud them for launching their companies, opening new markets and fueling job growth.
So let’s celebrate their achievements, their perseverance and their tireless pursuit of business excellence.
Kim E. Letch is a partner and program director for Entrepreneur Of The Year, Orange County.
John Belli is the office managing partner for Ernst & Young, Orange County.
Finalists and Honorees
• Mike Morhaime, Blizzard Entertainment (Winner)
• Jonathan Ord, DealerSocket Inc. (Finalist)
• Jim McCluney, Emulex (Finalist)
Life Sciences & Public Service
• Joe Kiani, Masimo Corp. (Winner)
• Charles Dunlop, Ambry Genetics (Finalist)
• Dan Merkle, Lexipol LLC (Finalist)
• Andy Fathollahi, Incipio Technologies (Winner)
• Jeff Walker, Super D (Finalist)
• Bill Duehring, Felt Bicycles (Finalist)
Real Estate & Hospitality
• Gary Jabara, Mobilitie LLC (Winner)
• David Kim, Jerome Fink, The Bascom Group (Finalist)
• Alessandro Pirozzi, Cucina Alessa (Finalist)
• John Raymont, Kurion Inc. (Winner)
• Mike Manclark, Leading Edge Aviation Services (Finalist)
• Heidi Golledge, CyberCoders (Finalist)
Paul Fox is a man who dreams big and has aspirations for his firm to achieve great things. The president and CEO of Skylight Financial Group, a 120-employee financial planning firm, plans to expand across Ohio and be a household name in the state within 20 years.
Fox takes a step-by-step approach to achieve those goals and has been driving steady growth for the last five years.
“I don’t look at challenges from the outside, I look at challenges from the inside,” Fox says. “I knew in the first five years I wanted to double the size of the organization in terms of people and revenue and we’ve done that. Starting off these next five years, we’re going to double it again.”
Smart Business spoke to Fox about how he sets his vision and accomplishes goals one step at a time.
What are the first things you need to do when developing a vision?
You have to start with something very vague that’s way far out. It has to be far enough out where you can’t create detail. You just create a picture that says, ‘This is what we want to look like way down the road.’ Since you have no idea how to get there today, you have to break it down into five-year increments. If you accomplish what you need to accomplish in each of those five year increments, you’ll get to where you need to be in 20 years. That’s very idealistic, but it’s something you have a passion for, you believe in it and you have commitment behind it.
How do you make a five-year plan work?
From the five year plan of attack it’s easy to break it down year by year. By the end of this year where do I want to be? In one year I want to be here toward the five year goal. In two years I should be here, three years here, four years here, and by the fifth year, you’ve hit the five-year objective.
Now you’re there in five years and you have to build another five-year plan and then within it, one-year increments, so that after 10 years, you’re halfway up the stairs to get to the long-term objective of the vision. You do that very systematically so you know that you’re working on the right things to get to where you need to get to.
What are common mistakes you see others make when creating a vision?
Most people in businesses today work on their next-year plan of attack in October, November or December. I’ve found that doesn’t really work, because by the time I had my plan ready to go for the following year, it was already the following year. By the time I implemented and got started on my plan for the following year, it was halfway through the year. Now what I do is from January through June, I write down ideas when things pop into my head. In June, I start planning out specifically what we’re going to do the following year and I do that June through August. In September, I start building out next year and by mid-October or early-November I start implementing the follow year’s initiatives so that by January everything is up and running.
What are the keys to making every step of a vision successful?
The leader of the firm has to have a very clear vision and an absolute passion about getting there no matter what. They have to be fully committed to it and take responsibility to get there and believe that outside influences don’t impact that. The second part is can the leader impart that same feeling and same awareness of the vision to the upper management team and build an upper management team that believes it. That has to be passed down through management to all the people in sales and throughout the organization. If everyone has that same feeling and same drive then you know you’ll get there.
You’re always going to make mistakes, but that’s OK because mistakes are good. Most people think mistakes are bad because it’s failure, but mistakes are a good thing because that means you’ve learned something and therefore you’re going to grow. Embrace the failure. Don’t keep failing the same way, have different levels of failure and you’ll continue to grow once you fix it.
HOW TO REACH: Skylight Financial Group, (216) 621-5680 or www.skylightfinancialgroup.com