When Michael Araten arrived at K’NEX Brands LP in 2006, he was tasked with outlining a vision for growth.
It sounds like your typical process, but as president and chief operating officer, Araten had to find a way to blend the culture and growth of the toy business with that of the company’s manufacturing arm, The Rodon Group. The two companies — one centered on sales, one on manufacturing — had never really outlined a joint vision before.
So to create a strategic plan that could move both companies forward while maintaining their separate agendas, Araten sought input from many of his 200 employees and from outside agencies. The keys to creating a successful plan were to carefully craft objectives and then monitor them to ensure that they really worked, Araten says.
“It’s about identifying what it is you need to grow and figuring out a plan of how to get it, then getting it,” he says.
Smart Business spoke with Araten about how to create and implement a successful strategic plan.
Listen before you act. The key first is to ask a lot of questions about what’s working, what’s not working and what everybody’s opinion is on why that is.
A key part of any CEO’s job is assessing the talent of the people they’ve got and then assess the information you’re getting and people’s opinions. Then you weigh the options based on what you think has the most credibility, so at least you have a sense of where you are.
Then you have to look at the marketplace that you’re playing in and decide what can you do to take more market share? I happen to come from a school of thought that either you grow or you die. You look at that second.
Then what we did was identified our core competencies. We defined a core competency as something we have that either we don’t want anyone else to have or it wouldn’t take a whole lot of time and money and investment for someone else to copy. After you identify your core competencies and say, based on your core competencies and the marketplace, what are the avenues open for growth, then the X factor is who you bring into the room for that process.
I know some people say once you get more than six people in a room, things start to break down. But I happen to believe a little bit more heads are better than one. You need all of your disciplines because if you don’t have that, someone’s not doing the checks and balances of keeping yourself honest in what you’re trying to accomplish.
We got involved people from every major discipline. Then we encouraged them, and they did share our findings with their groups on a departmental level. Then they came back and said, ‘We shared this at our team meetings last week, and we got some other things where they thought, yep, we agree with a lot of this, but here are some things we think you can focus on more or we think you missed.’ Ultimately, we probably got about 80 percent of the company involved in some way.
Ask yourself the right questions. The big three for me are: Do we believe what we’re doing is going to maximize our chances at success, and why? Do we have the resources, whether it’s time, people, capital, to go pursue what we think are the best options? And three, do the people have the skill levels to do what you need them to do?
And if not, how are you going to either train them or supplement them with other talent?
Get buy-in. What you have to do is find some quick successes that you can execute on and then show people. Nothing makes people believers like success.
It’s trying to find some quick wins and then reminding people that we got them. So if we set these goals, we can go get them, and here’s the goals that we’ve already achieved.
It’s constant communication because when you get mired, as people ultimately do in their day-to-day grind of whatever it is they’re focused on, they may feel like they’re not moving the ball forward. I think the CEO’s job is to remind them, ‘Here’s what we’ve done so far. Here’s the period of time we’ve done it in. Here’s where we’re headed. We’re not all the way there yet, but let’s understand that we’ve made progress along the way.’
Gauge whether the plan works. It’s about the bottom line. It’s about meeting the profitability goals. If the strategy is delivering to the bottom line, then it’s working.
Sometimes there’s a balance between delivering to the bottom line and, at least on our toy side, buying market shares. As long as you understand where that is going, then you’ve measured it appropriately.
Not everything pays back the month you invested it. You just have to acknowledge that going in. If you’re beyond that point in time, you need to investigate is it either the right strategy, or [are] the tactics that we used to support it the right ones?
I think that’s sometimes where companies fall astray. They say, ‘Well, I don’t see any returns yet; let’s move on to the next thing.’
I think you have to be disciplined, and say, ‘When did we think this would pay back? When did we think we would see these gains? Are we there yet? If we’re not there yet, let’s understand that.’
HOW TO REACH: K’NEX Brands LP, (215) 997-7722 or www.knex.com