Inflation is coming. It drives your costs up and results in lower profit margins unless you raise prices. But customers hate price increases and they hate having to pay more.
How can your company increase prices and upset your customers the least? Here are six methods to explore.
1. Cut variable costs.
Is there a way to reduce the costs of your product without significantly affecting your customers’ perception of the product? This is extremely common in the packaged food industry. What used to be 28 ounces of Prego spaghetti sauce is now 26 ounces. A package of Rolos used to have 11 chocolate caramel chews. Now there are 10. What looks like a half-gallon (64 oz.) of Breyer’s ice cream is now 48 ounces. Customers quickly recognize price increases, but they are slower to recognize reductions in product quantity, especially when the size of the packaging remains the same.
Look for something that costs you money that you can de-bundle from the purchase. Customers who want the de-bundled feature will pay extra for it, and it allows you to maintain or lower prices for customers who don’t use the de-bundled feature. At the worst, you’ve only raised prices on some of your customers.
A recent example is how some airlines have de-bundled checked luggage so they now charge customers for checking bags. Although many people saw this as a price increase, it would have been more readily accepted by their customers had they announced they were simultaneously lowering the prices of their flights for people who don’t check bags.
3. Introduce new products.
It’s possible to create a new but similar product with a slightly different feature set. Charge more for the new product and attempt to move as many customers as possible to the new product. Of course, this also means you need to build some added value into the new product.
4. Raise fees.
When gas prices hit $4 per gallon, many companies added a fuel surcharge to their bill. This extra fee isn’t looked at as a price increase, but rather just a way of passing some cost increases through. Now, four years later, some vendors have not removed this fuel surcharge even through fuel prices are back to normal. Many customers do not consider fees when making purchase decisions, so raising fees is preferable to simply raising prices.
5. Raise prices on select segments.
You’ve considered the first four options and they don’t completely solve your pricing issue, so you have to raise prices. Consider only raising prices on select customers. First, look to raise prices on your least preferred customers, those you wouldn’t be too upset to lose. These could be the ones who are expensive to service or are just a pain to deal with. They could also be the ones who negotiated the best deals, so they may not even be profitable after your costs increase. Then look to increase prices on new customers. The advantage here is that new customers don’t recognize price increases. They only see the new price. Do your best to hold prices level for your best existing customers.
6. Raise prices with a purpose.
If you’ve come to the conclusion that you have no choice but to actually increase prices, at least blame inflation. Customers may become very angry if they believe you’re raising prices to increase your profit at their expense; however, they are more accepting if they believe you are simply passing on costs. Apologize to your customers for your price increase, but explain how your costs are going up and that you have no choice. Look and act contrite. Do something nice for them, such as giving them a limited time coupon for a discount to the old price.
Mark Stiving is a pricing expert with a Ph.D. in marketing from U.C. Berkeley and more than 15 years of experience helping companies implement value-based pricing strategies to increase profits. A speaker, coach and consultant, Stiving has worked with esteemed companies such as Cisco, Procter & Gamble, Grimes Aerospace, Rogers Corp., as well as many small businesses and entrepreneurial ventures. Read more from Stiving on his blog at www.PragmaticPricing.com, and learn more at www.markstiving.com.
If you frequently watch the Home Shopping Network, then you probably recognize Tony Little. He’s that energetic fitness guy with a ponytail and baseball cap, standing next to some healthy product, talking to you about changing your life and saying, “You can do it!”
Maybe you were convinced, and maybe not. But for Little, “you can do it” is much more than another sales tagline used to sell exercise equipment. It’s a personal philosophy for success.
“I’ve just always felt that whenever you hit that roadblock, there are a zillion other ways around it,” says Little, founder, president and CEO of St. Petersburg, Fla.-based Health International Corp., which sells Tony Little-branded consumer lifestyle and fitness products. “I think that too many people quit too soon.”
Little’s own roadblocks have included everything from a handful of near fatal car accidents, to going completely broke, to last year, having an employee steal more than $600,000 from his company.
“That was probably one of the toughest areas for me, because I still had to carry on business,” he says. “I still had to make up the money that was gone.”
At the time, Little’s newborn twins, born prematurely, had also been hospitalized for medical reasons. With his children in a life-or-death situation and the business he’d built facing catastrophe, Little says he only got through it by believing in himself.
“You’ve got to come out fighting,” he says.
Today, Little’s twins are doing fine with occupational and physical therapy, and he has already made up much of the lost business. In fact, his company generated $100 million in revenue last year.
By overcoming personal and professional challenges time and again, Tony Little has become one of the most successful television sales people of all time, selling more than $3 billion worth of products to date. Here’s how he builds, grows and preserves his successful brand.
Pick the right opportunities
Little’s incredible sales track record stems first from his ability to identify profitable market and product opportunities that grow his brand.
“I have well over 45 million people that have brought Tony Little products, which I never really thought that would happen in my life,” he says. “I’ve been successful in the fact that the percentage of projects that I do have been winners.”
He says the first step in building a brand is clearly articulating your niche and purpose.
“You identify that there’s problem out there,” Little says. “You identify the fact that you know the solution.”
Growing your brand is then a matter of finding ways for that solution to extend to other products under your brand name. By focusing on the lifestyle market, for example, he has been able to expand his company to sell everything from shoes to food to pillows and even a personal care line.
“My brother calls me a living oxymoron,” Little says. “He says, ‘You started in fitness. You exercise people. You get them all jazzed up about fitness. Now you’re feeding them, putting them to sleep and they’re wearing your shoes the next day.’
“If you’ve been successful with the direction you’re going, then you just need to keep complementing that direction with other extensions.”
When you see an opportunity that fits within your brand’s niche, you want to make sure it’s something that you and your company can grasp and understand before you pursue it.
“The most important thing about selling a brand is not being overly technical with something and bringing it home so that everybody understands it,” Little says.
You have to be able to put yourself in the customer’s shoes. So do your research and make sure that the opportunity is within your knowledge comfort zone. If it is too complex, you may have trouble communicating it to customers or getting enthusiastic about it yourself. Little finds that the best sales results come from choosing opportunities that you can connect to and inspire your passion.
“Everything in your life is selling,” Little says. “It just comes back to the belief factor that you have in what you’re selling.
“I think I motivate a lot of people to feel better, look better, take charge of their lives and do things because I’m such a strong believer in what I do.”
While having enthusiasm alone doesn’t guarantee that every customer will jump on board, when you are selling something that you truly believe is positive versus negative or middle of the road, it’s infinitely easier to transfer that enthusiasm to customers.
“The more ammunition you go into war with, the better off you are,” Little says.
“I still believe that people love to get excited about something. So I have a large excitability about something if I truly believe in it. And it just translates. And that’s why I always say passion sells. Enthusiasm sells.”
Have a winning mindset
From the time he started in the sales world selling his own vitamin regimen, and later, helping grow a chain of pet food stores, Little has seen the power positivity and perseverance has in selling anything.
“No matter how much money you make, no matter what kind of education you have, no matter who you are in this world, you are always excited about someone who shows up in your office who has enthusiasm, passion and confidence,” Little says. “And so many people lack it.
“I’d never done television. I’d never sold pet supplies. I’d never sold vitamins. I never did infomercials. I just had the attitude.”
Little says that he’s no different than any other CEO when it comes to stressing about bills or an order not coming in on time. Yet he’s found that turning around any tough business situation often just starts with having a winning mindset.
“If you look at our economy now and how tough it is and how people get so beaten up and depressed so quickly, I think that it has to do with your mindset,” Little says.
He says that today’s business environment favors those who are prepared to think proactively and take the initiative to find something, figure out something or do something another way.
“If you’re sitting there waiting for people to bring you something, that’s a mistake,” Little says. “If you have an idea, follow it.
“You hear it every day with different people you work with. You ask them to do something, and they ask, ‘How do you do that?’ You just want them to go, ‘I’ll figure it out. Go ahead, Tony. Go away.’”
A winning mindset starts with eliminating attitudes such as fear and negativity that can inhibit your ability to make decisions and chase opportunities.
“The key to a successful company really is the person who is a decision-maker above anything else, because even if they are wrong with their decisions, their opportunities are at bat that much more,” Little says. “They are bound to get a home run.”
But understanding what good ideas and opportunities are out there isn’t enough if you don’t have the attitude to run with them.
“There are so many people that are going to say no, and it becomes a bit of a numbers game,” Little says. “If you take 99 no’s and you get one yes, the yes could make you a fortune or make your whole life.”
When Little first pitched his idea of selling a low-impact exercise video on HSN, the network had never sold an exercise video in its history. But after much persistence, he was able to track down the company’s owner, Bud Paxson, and convince him to try the idea.
“Bud looks at me and says, ‘So you are the guy that calls my company all the time,’” Little says. “I said ‘Yes sir.’ And he said, ‘Well, videos don’t sell.’ I made a bet that my videos would sell if they were presented a certain way.”
In the first airing, Little’s tapes sold out in four minutes. When Paxson called to order 1,000 more of the tapes, those sold out too.
“Certain people will get right up to a goal line and fail, whereas you really need to be the person who is going to bring it over the line,” Little says.
“There are actually a lot more opportunities out there. So many people are not realizing that the person who is going to get the job right now or the person that is going to be able to innovate on a product is someone who has an energy level and enthusiasm and a belief.”
Protect your reputation
Lastly, the strength of your brand is based on more than just your ability to choose the right products or get people to buy them. Because your brand name is synonymous with all aspects of your customer’s experience, everything from manufacturing quality, to shipping time, to how you handle a return affects how your customers feel about you and whether they’ll continue to buy your products.
“You must keep the customer’s experience great and never lose sight that it’s the customer who made you a brand,” Little says.
Once Little did a show to sell a shoe product, but it turned out that some customers who bought the shoes had high insteps so the strap would not fit them. Instead of just accepting that there would be more returns, he called the manufacturer and asked them to create a Velcro extender so that customers could extend the shoes to fit. He shipped the extenders out immediately, and the result was twofold.
“One, it reduces returns and it helps the customer have something that they originally bought,” Little says. “So I was able to make these extenders for the shoes and get them off to the people who had an issue and then they were all happy. Then what was a problem became an asset for my company. I was able figure out that that’s a really good thing to be able to adjust shoes. Now all of my shoes are adjustable.”
Whenever he discovers a customer issue, Little takes swift action to let people know that he cares and is going to make the issue a priority.
“What I do is try to cut the product off immediately, try to revamp everything,” Little says. “Let your consumers know that you understand their concerns and you are working on it. That’s how you preserve your brand.”
If something gets screwed up, he knows that it’s still his name that the customer associates with the problem and subsequently, his brand’s reputation.
“It’s a lot more work for me because people are buying Tony Little in the respect of, ‘I believe that he’s already checked this out,’” Little says.
“If I have a consumer that’s not happy with something, the type of e-mail you’ll get from that consumer is basically, ‘This has to have been somebody else. Tony Little would never let me down like this.’”
That’s why Little uses a range of media channels to connect with customers and talk to them about their feedback.
“The common mistakes are usually in the way people market a product, not understanding their demographics and not understanding the people they are selling to,” Little says.
He still writes in all of his online guest books, answers customer e-mails and always responds to anyone who reaches out to him personally about a product.
Transparency with customers also gives you a more accurate picture of your customer satisfaction, so you can gain insights from the positive feedback as well as the negative.
“The majority of people that send in a review on the Internet on something normally are always going to skew to the negatives,” Little says.
“People we find who love a product or are satisfied with a product aren’t just all of a sudden sending you stuff. They don’t have the same emotion.”
Being responsive, approachable and showing consumers that you’re really thinking about how they use your products builds trust with them as well as with your own business partners. When your brand faces challenges and you need to make up lost ground, having that trust is an invaluable asset.
“Obviously there will be certain times that you just don’t agree…but in the long run no matter how negative a person is or what their experience has been ? as a person who built their business off of their brand – you try to always respect your customer,” Little says. “I don’t think I would be in business if it wasn’t for taking care of my customers.”
How to reach: Health International Corp., (727) 556-2959
1. Build your brand with products you understand and believe in
2. Develop a can-do mindset in decision-making
3. Be accountable for your customer’s experience
The Little File
founder and CEO
Health International Corp.
Born: Fremont, Ohio
What would your friends be surprised to find out about you?
That I’m a very quiet person, and that I love reading books — as many as I can get my hands on.
How do you regroup on a tough day?
I’ll give myself a self-motivational talk and put myself through a challenging workout. It never fails to energize me.
What is your favorite part of your job?
It’s important that I have fun when I work; I don’t like to get too serious. Even when I’m selling or presenting new opportunities, I like to be myself and have a good time. If you don’t enjoy what you’re doing for a living, you should find another line of work.
What is your favorite Tony Little product?
The Gazelle. The Gazelle was an exercise machine that has been used in more motion pictures than any other infomercial. I also used it on the Geico commercial, which was fun. It was over a billion in sales for just that one product. It was just fun and the amount of mail, the amount of letters and before and after pictures and stories — even to this day I probably get two or three a week. People just still love the product.
Whom do you admire in the business world?
I have great respect and admiration for people who are self-made. I’ve always looked up to Donald Trump as someone who is willing to speak his mind and create victories from adversity. I would also include Cornelius Vanderbilt. I just finished reading his biography, ‘The First Tycoon,’ and he really was an amazing man. He wasn’t particularly well-educated, but he wound up being one of the wealthiest people in American history. Then there’s Steve Jobs. So much has been said and written about him since his death, but I admired him most for never giving in to a challenge, no matter how tough it got. He never gave up on himself, and that’s a lesson for all of us.
When William Lambert looks back at his transition into his role as CEO, he remembers a time of uncertainty. He could tell that dark clouds were forming and a recessionary storm was approaching.
Lambert took the CEO role of Mine Safety Appliances Co., a nearly $1 billion global manufacturer of safety equipment that employs 5,200 people around the world, in 2008 and serves as president and CEO today. With a harsh economic environment ahead of the company, Lambert gathered his executive team and planned for how to carry the business forward without sacrificing its status as a leading safety equipment manufacturer.
“Just after I became CEO, I think the dark clouds had started to form and already were starting to impact our business, and by the end of 2008, had really impacted our business in a significant way,” Lambert says. “2009 was difficult. We were focused on the core areas of strength for MSA.”
The nearly 100-year-old company is no stranger to the ups and downs of economic cycles. Together with his leadership team, Lambert led a corporate strategy to push MSA forward focusing on strengths, the customer voice, and areas of growth in an effort to make the business stronger than before.
Here’s how Lambert carried MSA through the tough times by improving the core areas of the company.
Overhaul your corporate strategy
Whether you are facing good times or bad in your business, a focus on strategy is critically important for leading a successful company.
“We do a major look and overhaul of our corporate strategy just about every five years,” Lambert says. “We had made an update to the previous corporate strategy in 2006, and in 2008, we could begin to see the signs that things were about to get serious. It was about that time that we were coming due on a new corporate strategy, and there were some indications that there was a crisis coming and so we decided to accelerate a new corporate strategy.”
MSA brought in experts to help the board and the leadership team in the guided effort over a multimonth period. It could not have come at a better time.
“2009 was a very concerning time for everybody to batten down the hatches and make sure that your business could make the adjustments and weather the storm,” Lambert says. “I’m very pleased that this leadership team here at MSA did a great job of getting us through and the strategy helped to be that guide to help with some of those tough decisions we had to make.”
Those tough decisions revolved around the core areas of MSA — its line of safety products. Secondly, the company took a look at adjacent areas that could help continue to grow the business.
“Most businesses have a core that has been very successful in the past and where so much of your capabilities and strengths are centered,” he says. “Every business also needs to move into adjacent areas just outside the core. These adjacent areas tend to be derived from the core, but hopefully those adjacencies strengthen the core in some way.”
These adjacencies by definition and by the very nature of human behavior start to lead you into peripheries.
“It’s kind of an adjacent area, but it tends to be even further from the core,” he says. “You have to simply understand how you look at your business. Where’s the value really being generated? What creates value? Is it the core or is it in the adjacent area, which means the core is shifting to this new adjacent area? Generally the value is not being generated in the periphery. Generally it’s been my experience that the periphery actually destroys value. It can detract from the value generating capability of the company. It can distract management. It seems like a good idea, but when you really get down to it … these peripherals tend to not add value.”
How your business creates value is what keeps it moving forward, especially in the bad times. To add value or create new value you have to have a plan.
“Businesses need to have a plan,” Lambert says. “It’s not so much the plan, but it’s all the planning that goes into it. Dwight Eisenhower said that the plan is nothing. It’s the planning that’s everything. It’s the thinking through the various scenarios and understanding the business and what are the value drivers of the business. Where is value derived? Where is value created? Then it’s deciding what is the core that you want to build on for the future? Over time, that changes. Over time it has changed for MSA. At one time, mining was our core. The mining market today represents 10 to 12 percent of our total sales. The core of MSA has shifted somewhat from where we were at one point in our company’s journey. Our top three markets today are oil and gas, construction, and first responders. Mining is our fourth now.”
The company’s latest plan focused on its five leading lines of safety products and it would ultimately be the customers who would provide the new directions for improving them.
“There are five areas to our core and these are those areas of the business that generate the most value, create the most value, that get disproportionate resources and investments, and they get the most management attention,” he says. “That’s where we spend our time talking and debating and investing and that’s where we have market-leading positions.”
Find the voice of the customer
To strengthen the company’s core product areas, MSA went to its customers to understand where their needs were and how the company could meet them.
“At MSA, we have seven core values that we use to guide our efforts and to guide our behaviors,” Lambert says. “One of those core values is customer focus. Driving customer satisfaction is one of the most important things that we look to do, that we look to measure, especially in mature markets. In those kinds of mature markets, the way you gain share, the way you increase sales, is through innovation and product development efforts meeting unmet needs of the customers. Listen to the voice of the customer and then also drive customer satisfaction, measure customer satisfaction and measure customer loyalty and then make the adjustments in the factory or other areas where you service the customer.”
These “voice of the customer” activities must be embedded in your research and development teams, your product enhancement teams, your manufacturing and quality teams and even into your customer service center.
“We listen to the voice of the customer and then we track those issues and put improvement plans in place based on that which we’re being told,” he says. “The first step is you have to measure. You have to start to measure what your customers are saying. Do the customer satisfaction and loyalty surveys and find out what the drivers are behind those responses and how customers view you. Then you have to understand what the drivers of customer satisfaction are in your particular business or company.”
Driving a customer focus in your business starts with developing a culture that puts the customer at the forefront of your operations.
“The culture that we’re trying to create has to do with that core value of having a customer focus,” he says. “There are customer-focused initiatives throughout the organization. We all know that it’s one of the core values that we have here so that drives a culture of continuously monitoring and seeking to improve that customer experience.”
As with the creation of any company culture, it has to start at the top of the organization and be pushed throughout to be successful.
“The creation of a customer-focused culture is difficult,” Lambert says. “There has to be a tone at the top of the organization that emphasizes it, that expects it, that highlights it, that makes it one of the core values you have as an organization. Then you talk about it. You talk to the associates about the customer experience and measure the customer experience and customer satisfaction results and then you can communicate those to the work force. Then you get the work force engaged by setting up teams that address certain issues and problems and begin to solve some of these customer experiences. You get your engineers out in the field living with customers or users and observe how your product performs in the field. Or talk to distributors about their experience when the product arrives on their shipping dock. Pretty soon, the culture begins to develop a momentum of it’s own within the organization. You make it a part of the everyday dialogue and the every-week dialogue.”
Put your plan in motion
Lambert and the folks at MSA had the foresight to develop the company’s new plan before the economy really took a fall. As the environment grew worse, Lambert began to do the things outlined in the corporate strategy.
“When we put our corporate strategy together back in 2008, the elements of our strategy focused on the core of MSA,” Lambert says. “That was one big element or pillar of our strategy. The second pillar was a focus on the emerging markets. The emerging markets of middle Eurasia, Latin America, Southeast Asia and China, those four areas are where we saw great growth potential for the future. Double-digit growth potential, adding head count, adding employment, increased activities going on in those core industries of ours like oil and gas, construction, fire service first responders and mining. So that was the second pillar of our approach to put programs and initiatives in place that focused on the emerging markets area. The third pillar was called Project Magellan, which was to have the organization best enabled for this emerging market growth.”
MSA found the new markets it saw the greatest potential in and then began to invest in developing initiatives to grow its operations and in some cases shrink its operations around the world where necessary.
“If we were to really grow the way we thought we could grow in China, we needed to have a new facility, a new investment, a new plant, and a new R&D center in China,” he says. “We also opened a new plant in Mexico. We expanded our San Paulo, Brazil, plant. At the same time, there were certain parts of the organization that we needed to shrink. We no longer needed the same kind of footprint in the company because that wasn’t the area of focus or the area of the core that we wanted to emphasize.”
MSA had a Berlin plant where it manufactured protective suits. Protective suits were a peripheral product and weren’t in the core, so the company moved away from and deemphasized that part of the business and that product line.
“As you go through this exercise of looking at your portfolio and looking at what you really want to focus on for growth in the future and where that is going to be coming from, then you start to make those kinds of choices to shrink this part of a factory or your footprint in this part of the world, because you’re increasing your footprint in this other area of the world,” Lambert says. “Those are the capital allocation decisions and resource decisions that we were making. Project Magellan was really about understanding our footprint and where our focus was and where the best places for us to put our resources were. It involved more than just manufacturing, it involved all aspects of our business.”
The decisions to become leaner and more efficient and find the markets you can grow and prosper in have to always be going through the minds of business leaders.
“You need to go through an assessment of the attractiveness of that market, the growth potential, the profitability potential, and the competitive rivalry that exists in that area,” he says. “There’s got to be a relatively thorough process of understanding and measuring all of that and then you chart out your course to say, ‘Here are my critical success factors. Here’s what we need to do better than those others to achieve this success.’ Then establish for yourself some mileposts. Here’s what we expect to do by six months into it. Here’s what we expect by the end of year one. Here’s where we ought to be 18 months from now, two years from now, three years from now, four years from now. Here’s how we get to that vision of future success.”
HOW TO REACH: Mine Safety Appliances Co., (800) 672-2222 or www.msanet.com
Lead a corporate strategy every few years to keep your company agile.
Understand customer needs and develop a customer-focused culture.
Discover areas of growth and areas you can shrink to improve operations.
The Lambert File
President and CEO
Mine Safety Appliances Co.
Education: Attended Penn State University and received a degree in mechanical engineering. Received a master’s degree in industrial administration from Carnegie Mellon University
What was your very first job and what did you learn from that experience?
I was a paper boy and I delivered the Pittsburgh Press and the Pittsburgh Post Gazette. I learned a strong sense of commitment. It was something that other people depended on. They depended on reading that newspaper every morning or every evening, so I had to be dependable and reliable. It didn’t matter if it was snowy, icy, rainy or a real hot summer afternoon day … I had to deliver those newspapers because my customers depended on me. It instilled a strong work ethic and sensitivity to customer satisfaction.
What is the best business advice you’ve ever received?
Sometimes it’s not about being the smartest, but it’s about working the hardest and being the most committed to the mission that drives success. The other advice that I’ve received over time is that it’s also about the emotional intelligence that you have as a leader and how you influence people and how you lead people emotionally, not just intellectually.
What would you say is one of the most important products or innovations today in the safety field?
The ALTAIR 5X incorporates what we call XCell Sensors and these sensors are absolutely changing the market for portable gas detection instruments — total cost of ownership, reliability, durability and response times. These XCell Sensors are one of the most dramatic and important innovations to come along in the safety industry in a long time.
If you could do something dangerous one time without consequence, what would you do?
I would sky dive. I think the freefall would be exhilarating. That’s only because I would be guaranteed there wouldn’t be an unfavorable outcome.
Over the past few years, John Foster’s clients have not been embracing the conventional approach to the way his company does business, and its sales and backlog have been dropping below forecasts because of it.
Foster, president and CEO of Coutinho & Ferrostaal Inc. North America, a division of Coutinho & Ferrostaal, one of the largest independent steel trading companies in the world, had to make a choice when the recession hit in 2008. The company could wait to see what became of the economy and its customer’s reactions to it, or it could adapt to the changes and position itself for the foreseeable future.
No matter what the decision, the more than $500 million division could no longer survive doing business as usual. Foster chose to shake things up to regain confidence and trust from the business’s customers.
“My focus and challenge has been on re-engineering the mindset of a well seasoned but cognitively well entrenched team of professionals and a back-to-back trading philosophy,” Foster says. “Moreover, set the challenge to go beyond what has been the tried and true commercial formula of the steel trading business for literally decades and now embrace the already re-engineered mindset of our customer base that has changed significantly over the past 10 years.”
Coutinho & Ferrostaal had to switch from being a principal in a global steel transaction to becoming more of a value-added service partner for its customers.
Here’s how Foster took on the challenge of embracing a re-engineered mindset of the company’s customers in order to survive.
Shake up your comfort zone
In today’s business environment, it would be a tough task to find many businesses or industries that haven’t had to change critical ways in which they operate because of new market dynamics. The steel trading industry is no exception.
“The fundamental reasons such change was necessary are found in the fact that the traditional landscape of the trading model, although not obsolete by any means, had changed, and if new avenues of value and commerce were not found, embraced and expanded upon, our company would not only not grow, but fall badly behind the curve of creative innovation that our trade partners have come to expect from our organization,” Foster says. “This meant initiating some monumental change to meet some monumental challenges and where business as usual was not going to cut it.”
The needs of Coutinho & Ferrostaal’s clients have been changing since the explosion of the internet and were altered again when the Great Recession hit. Foster had to help his team understand that their customer’s financial and risk management needs had changed dramatically.
“With the advent of the Internet into our business as well as the proliferation of mass information media start-ups, our customers, vendors and most importantly our competitors knew most of what was happening in the globalized steel world the same moment we did,” Foster says. “The other important and more recent change dynamic that needed to be addressed was the dramatic alteration in how our customers and supply partners evaluated risk and coped with financial stress in light of the varying degrees of corporate trauma that ensued since mid-2008.”
This loss of a particular competitive advantage forced Foster and his employees to bring other value to the daily transaction equation. As is the case with many crisis situations, opportunities can be found. The challenge here was to take the team out of its comfort zone of traditional business and start listening much more closely to trade partners who were no longer interested in going offshore for steel, but rather turning to domestic supply.
“After all those years of having the ball in your hand for the customers needs and then almost overnight they said, ‘I’m not going to buy your futures anymore … I’d rather buy from you, but you have to have it here for me,’” Foster says. “So right there was a pretty big sea change in how we do our business, going from two-, three- or four-month futures to a just-in-time type of approach.”
To get his team on the same page, Foster had to sit down and lay out the situation in order to understand where to go.
“We sat down with the rest of our department heads and asked, ‘How are we going to manage this? How are we going to meet these needs? These are things we haven’t done before. What are our risk guidelines?’” Foster says. “As a global company, we literally had to redo our risk guidelines. If you’re too conservative, you’re not going to survive. We had to use our professional expertise and change our risk guidelines to align ourselves with customer needs.”
In situations like these, you can never communicate too much.
“You just really need to explain it to them in very clear terms,” he says. “This is what we’re going to need to do to get back to where we were. By just putting up simple pictures, you really impress upon people. I like to get the group together and say, ‘Here’s where our performance has been the last three years. Here’s the event that happened. This is the effect it had upon us. These are our forecasts and we’re having trouble getting there because what worked for all these past years is not working.’
It was really quite a revelation to bring everybody into the mix and say, ‘This is the challenge we have and this is what we’re being told to do. How can you help do it?’ It’s just listening and communicating it to the entire corporation.”
The changes in the steel trading market were happening quickly and Foster and his team had to do everything they could to keep up and find out what the company could do to meet the new needs.
“Budgets were revamped and cost-cutting measures were initiated,” Foster says. “Because of the speed of the market retraction however, we found ourselves being in more of a reactive mode than a proactive one. This was when we readily saw the need to pool the brain trust of our key leaders from the financial, logistics and commercial sectors of our company and turn ourselves into a more proactive direction and highlight as many creative options as we could to generate positive business.”
These options primarily revolved around financial services and expanded risk-management models. However, they quickly recognized a key element was missing.
“That element was feedback from our many trade partners as to what they now need to meet their own particular set of challenges,” he says. “It was here that our own change model began to form. Moreover, it saw us moving from that initiating principal role to a better listening and more value rich service partner in our thinking.”
If Foster wanted to find out what direction to go in, he would need to go directly to customers for the answers.
“We went back to these customers and said, ‘Look, you have concerns about inventory management, we can help you do that. You want just-in-time inventory, we can help you do that.’” Foster says. “We have stepped in the middle of domestic suppliers and our customer base, which has never happened in the history of our business, and it’s just a new dynamic.”
It is crucial that you get input from both customers and employees when looking for a new direction.
“I would emphasize stepping back in times of such crisis and reminding yourself of the ever-important need to listen to the boots-on-the-ground team members while mandating the need for them to do the same with their customers and trade partners,” Foster says. “It is only through keen listening that the seeds of expanded thinking and creativity are found.”
Such listening skills must also be encouraged throughout the organization.
“No discipline of the organization can be comfortable with business as usual,” he says. “Even such stoic departments as accounting and human resources need to be given the nod that it is OK to embrace change and question what has been company policy and standards. This is one of the other keys to our implementing change initiatives—not only keen listening skills to understand what needs to be done, but encouraging a corporate culture that feels both comfortable as well as empowered to implement those changes that are viewed as positive directions for the company.”
Now that it had been established the company would need to more of a strategic partner for its customers, Foster had to get complete buy-in for the new direction.
“Buy-in can be said to be grounded in mutual respect and trust for each other’s expertise and shared vision for the company,” he says. “This is a dynamic that is not built overnight, but over years of team building and shared goal setting, albeit not always in full agreement. It is this team and shared information approach that helped us create an ‘OK, let’s try it’ attitude that gets the change mode moving. The need for a change is most fundamentally driven by both the short and long-term dynamics of the market place in which you participate day in and day out. Subsequently, the need for change simply becomes a logical business decision.”
Foster had to broadcast this new market fundamental in a clear, logical and business professional fashion to get an “all hands on deck” environment to be embraced.
“The buy-in was actually a little bit easier than I would have guessed because of the dynamics,” he says. “The rapid pace of the problem before us got people looking for answers. The environment was a fertile one for this type of change. By very logically and professionally putting out the downside versus upside and risk versus reward, it got there.”
It’s that focus on communication that will aid any business leader in changing directions and getting his company onboard.
“You have to get more than your usual team of players together in the same room,” Foster says. “Be careful not to insulate yourself from all levels of the company. I think there are some CEOs that aren’t very comfortable getting outside their own office and they tell their next-in-line lieutenants, ‘Here’s the deal.’ Those lieutenants take it to managers and those managers take it to their people. Things can get lost in translation. You have to put yourself out there as the leader across the whole scope of the company. If it’s a manufacturing company, get out on the floor. Talk to the workers and the guys on the machines. That’s what’s going to impress and engender change more quickly because you’re showing respect for the entire organization.”
Improve upon your success
Once you have found the new direction for your company and you see success, you have to continue to look for ways to meet customer needs.
“So far, I am quite pleased with our initiative results,” Foster says. “As could be expected, some divisions were more receptive to change than others. Change and further market conditions adaption is a constant, particularly in light of the recent Great Recession leaving a mark whose ramifications could be expected to last several more years going forward. At the same time, I am a firm believer that adversity is a catalyst for opportunity. I can say with confidence that our company has made great strides in changing the traditional way of conducting our business to one that absolutely expanded upon our inherent commercial skill sets and financial assets.”
The changes made have allowed the company to outperform its market and meet goals by breaking the molds of its traditional comfort levels.
“What we see now is the need to build upon our new orientation to change acceptance and get deeper into our customers and vendors hierarchy of needs while plying our well-honed and fundamental skill sets into related but new sectors of our industry,” he says. “In other words, apply what we know has worked well further up and down the industry’s commercial chain.”
HOW TO REACH: Coutinho & Ferrostaal Inc. North America, (281) 999-9995 or www.coutinhoferrostaal.com
- Test your company’s comfort zone areas so not to become complacent
- React to market and customer needs by listening and communicating
- Continue to improve upon the value your company can add
The Foster File
President and CEO
Coutinho & Ferrostaal Inc. North America
Education: Studied business and economics at Marietta College and got an MBA from the University of Colorado in association with the University of San Francisco.
What was your very first job, and what did that experience teach you?
I mowed lawns in the summer and shoveled snow in the winter. If you wanted to have some money for fun, you had to work for it.
What was the scariest part about the change initiatives at CFI?
That they might not work. Anytime you go into uncharted territory, you have that certain trepidation of, ‘Is this going to work?’ Is the team going to support it? Which I didn’t have much concern about, but the real concern was on the customer side because they were in more of a panic than we were. I was mostly concerned with would the marketplace accept the value-added service initiatives that we were bringing to their table.
What is the best business advice that you’ve ever received?
Be as open and honest with your business partners as you can, because most business is built on trust and that’s the only way you’re going to build the trust you need to bridge the most difficult times. Everybody can be friends in good times, but it’s the bad times that really test your trust and relationships.
What is your favorite thing about the steel trading business?
I just love to see the steel in a building that we sold or on the foundation of a truck trailer driving down the road. To see a ship unloading our imported steel and loading our exported steel because that is an important dynamic in our industry.
What is your favorite business trip location?
Brazil. They are excellent steel people and they know how to work hard and play hard, which is one of my philosophies.
Nick Vehr, founder and president of Vehr Communications LLC, a public relations firm, doesn’t mind uncertainty.
Everyone has been enduring it for the past few years, and for Vehr and its 18 employees, that uncertainty has brought out the best in the business.
“Our company is young and I started it at the front end of the worst recession in many lifetimes,” Vehr says. “It’s an extremely scary time to be out there with a business and even more to be investing in that business and growing that business.”
While it’s a scary business environment, it will be those who work hardest and deliver the best results that will survive.
Smart Business spoke to Vehr about how he is growing his company despite tough times.
How do you deal with uncertainty?
You put your head down and work harder because you can’t control it. You can’t spend all of your time worrying about it; you have to spend time with every client you have and fight aggressively for every client you can get. That’s the only way I know how to deal with the uncertainty that’s out there. Fortunately for us, we’ve been able to grow with cash flow and we didn’t have a huge overhead to feed when the economy went bad and companies started pulling back.
What have been some of the key factors of the company’s success?
Somehow you have to strike a balance between keeping your eye on the big picture and sweating every little detail of the way you run your business, and I think that’s especially true with small businesses. You just have to be very careful in your hiring. You have to be selective in your clients and you have to work harder than the next guy. That’s the key, because there is a direct-line correlation between working hard and winning. You’ve got to be smart. You’ve got to be transparent, honest and open with clients when you give them advice, even if it’s advice they don’t want to hear. All of those things in our business are a given. The variable that spells the difference between winning and losing is, ‘How much are you willing to put into it?’
How do you plan your hiring?
This is a great time to be hiring. There is a whole lot of talent that’s out there and the trick is not trying to pick up good talent dirt cheap because in the long run you’ll lose that talent, because they’ll know you weren’t truly committed to them. We try to be very deliberate, intentionally slow and careful, and on my side when I make the decision to make the hire, I try to calibrate the best I can on a couple of different points. A disaster for us is somebody who we invest all that time and energy in, we pay them a salary for a year, they start developing a relationship with clients, and then they leave. That’s a significant lose of investment on the business side of things.
The scary thing and the challenging thing is you have to hire out in front of the work. People with whom we work, they want to know who they are going to talk to and work with on a daily basis. I can’t as CEO make the sale and then hand it off to a person who’s completely unknown to who I made the sale to. Our people are our product. It’s their brains and their skills and their experience that people are buying. For anybody who’s hiring, the hardest thing to calibrate is, ‘How do I hire out in front?’ You’ve just got to get great people, work hard and the business will come and they will end up adding value to the bottom line of your company.
How have you attracted clients in such a tough economic time?
I hope we don’t do anything differently in good economic times than we do in challenging economic times. For a successful relationship with a client, we have to commit ourselves to that relationship. That means open communication. That means thinking out ahead of the client and what their needs are and being proactive in suggesting strategic approaches and ideas. The best way to make sure a relationship works is to commit yourself to being an active partner in the relationship. It’s a lot of touch and communication. We want to become a strategic partner with our clients. We want to be at the table for the great opportunities and the tough challenges and be able to advise our clients appropriately.
HOW TO REACH: Vehr Communications LLC, (513) 381-8347 or www.vehrcommunications.com
Ralf Drews doesn’t fit the profile of your typical company president or CEO. He doesn’t have a background in marketing or finance or sales or operations. He is an engineer and has spent many years working hands on developing new products. A day on the job for Drews doesn’t involve looking over spreadsheets or contemplating sales figures; it involves being out in the field at an oil pipeline or under the street in a sewage canal because that is where his customers work.
While Drews may not be concerned with sales figures and operating numbers, he does know product development and innovation, which is what drives his company forward. Drews is president and CEO of Draeger Safety Inc., a $1 billion manufacturer of gas detection equipment, air quality monitors, masks, and other safety and emergency products, and employs 400 people here in the U.S. and 3,800 worldwide.
Since joining Draeger more than 20 years ago, Drews’ product development leadership and innovative outlook has been responsible for 90 percent of the company’s product portfolio today.
“What innovation needs is people who can challenge each other,” Drews says. “Conflict must be wanted. New things must be wanted. Change must be seen as something positive, and if you generally have a good change DNA or change culture within your company, innovation is not an enemy but will support that.”
Drews’ drive and attention to innovation has helped create an environment that makes Draeger Safety’s products category leaders.
“The question always is when you come up with innovations, will there be customers who appreciate what you invented and come up with?” Drews says.
Here’s how Drews utilizes best practices for high-level innovation to ensure customers want and need Draeger’s products.
Understand your arena
In the 20 years that Drews has been developing products at Draeger, the one thing he has come to find is that innovation doesn’t just happen. You have to understand who you want to innovate for.
“What I have learned in my time as R&D manager is … many people thought that ideas are just coming out of the blue,” Drews says. “You just need to watch and observe and all of a sudden you get a sign from the universe and a new idea or new invention is born. This may happen in smaller businesses … but I believe in more mature organizations you need more structure around innovation and how to create innovation, because I think innovation does not happen by accident. Process, people and culture are the three elements that have to be designed in a way that they come together and then innovation can happen.”
If innovation is a key component of your business and you want to build your company around it, you need to have a focus for it.
“What you need to understand first of all is your market,” he says. “The blue ocean approach is one approach (that) clearly supports the logic to understand which arena you want to play. What’s your customer and what’s not your customer? You really need to draw the line. The first and most important step, and for most companies the most difficult step, is clearly focus where you want to go.
“That’s probably one of the most difficult things to do for people, because if you do that you also automatically exclude other applications. But what that gives you is a very clear focus and by having that focus you have a very good chance and a high likelihood that you can come up with something great. Whenever you want to do everything with one product the likelihood is very, very high that you come up with an average product or even with a loser product because that’s simply impossible.”
As soon as you determine who you want to serve, you can start to truly understand the customer’s needs — even the ones they don’t know about.
“A truly powerful innovation approach is to find out what are the articulated, but even more importantly, the unarticulated needs from a customer standpoint,” he says. “There are articulated needs — every customer knows this is a problem, it has been a problem that’s not been solved. There are also unarticulated needs. That’s where the problems would potentially lead to the biggest wow factor or to the biggest innovation.”
The key question is how much more value does a solved problem provide for your customer if it were solved.
“Does it enhance productivity?” Drews says. “Does it reduce costs and how much cost would there be? How does it impact the cost of ownership? What is the concrete value? We always try to attach a dollar tag to it. The second aspect is how expensive would it be for you to solve this problem? What we look at is actually the value from the customer perspective and how much R&D money we have to apply to solve the problem. Those are the two key questions.”
In Draeger’s case, the product is the spearhead, so it’s important for the company to understand how to innovate products.
“The market has to be very structured, very clear, and then basically, we send out people who observe and interview customers to really find out what are the needs and what are the demands,” he says. “Hopefully, they are able to find some unarticulated demands and needs, which could potentially lead to innovation.”
Create a voice of the customer
To find those unarticulated needs of the customer you have to get out in the field and see firsthand how customers work and how they use your products. That is exactly how Drews developed his latest innovation, the X-zone 5000 gas detector.
“I went out into the field and watched some practices in oil and gas and also in sewage,” Drews says. “Instead of talking to people, drinking a cup of coffee and eating some cookies, you really get into the dirt. You really want to understand how the people are dealing with your equipment. I went into the pipelines and into parts of the Hamburg sewage canals and I talked to the workers; the people who spend 80 percent, 90 percent of their work life underneath the street. They don’t really know what they don’t know, but by observing them and by looking at them and asking very specific questions you will find out whether there is something to improve with your product.”
Drews interviewed the person responsible for monitoring a manhole while people were working in the sewage canal pipes. This guy had to constantly draw samples of air from the canal because it can be toxic or have combustible gases.
“This guy used a small gas detector, and I was asking him what could be improved with this product,” Drews says. “He said, ‘Oh, this product is perfectly fine; there’s nothing that you could improve.’ I asked, ‘Why do you have this cable drum?’ He said, ‘The reason is very simple. It has happened in the past that the gas detector gets kicked into the canal because people walking by didn’t see it. What we do now is we connect the gas detector to this small cable drum so people can see it.’ I also asked him what he does when it’s raining because he is just standing there next to the manhole. He said, ‘Yeah, that’s a problem. Whenever it’s raining, I cannot get into my truck because the visual alarm is not bright enough and the audible alarm is not loud enough.’”
By asking a few key questions and watching what this guy had to do, Drews realized there were several ways to greatly improve the gas detector by making alarms brighter and louder and the unit more visible.
“Some of those questions we asked did lead to the X-zone, so we were basically discovering a problem, which he could not really articulate, but he was aware of,” he says.
In addition to research in the field, it is beneficial to create a voice-of-the-customer group to look at customer touch points, needs, and ways you can innovate and create more value.
“I recommend that companies create and build their own dedicated voice-of-the-customer groups within their companies because this is something completely different to a regular product management job,” Drews says. “If you want to be a good voice-of-the-customer marketing person, you really need to have some psychological skills, you need the ability to look behind the scenes, you really need to have the passion for interviewing people, and you have to have a passion for going into the real life environment.”
A critical part of the VOC process is assessing your competitors.
“What’s a target competitor in that specific region, vertical and application?” he says. “What’s the strongest competitor? Where does the competitor’s product really excel? And how do you want to compete against that? You have to make a conscious decision to focus on the strongest competitor in your target arena.”
Once you have found the needs of your customer and areas that your competitors overlooked, you have to find out if customers like the product concept.
“What you do at the end of this voice-of-the-customer study is you pre-sell your product,” he says. “At this point in time you have not even created a product development team, you don’t even know whether you want to develop that product. What you can do with all the things you found out in the voice-of-the-customer process is prepare a sales pitch like you have that product already. You present the features and the benefits your product has in a very nice way. Then you look into the eyes of the customer and if you don’t see the sparkles in their eyes and if they don’t ask, ‘When can I have it?’ You might not have a winner.”
Have an innovative environment
When Drews presented his concept for the X-zone, customers lit up and saw the value in owning the product. The success of this whole process is due in large part to Draeger Safety’s innovative environment.
“I don’t believe you just put people in a room and make sure they have a lot of fun and then finally they come up with an idea,” he says. “They might come up with an idea, but not necessarily addressing the problem you want to solve.”
To produce innovation in a very structured way people have to be focused and work together as a team.
“They have to be smart,” he says. “They have to know their stuff and they should be coming from different cross-functional areas. They should be very open-minded in their discussions. You have to have quick thinkers and problem solvers.”
These sessions should not be one day or two days long. They should be short one- to three-hour sessions.
“Don’t give them too much time,” he says. “They have to be efficient because ideas come up fast or they don’t come up. You’d rather repeat that. After you have pulled the people together and you have not come to a solution, do it again the next day or later that same day, but don’t give people too much time to come up with high-level innovation.”
High-level innovation starts with the culture. An innovative culture needs a lot of contradiction and people who can challenge each other but who can also admit when others have a better idea.
“What it needs is a culture of conflict, which means I must try to disagree with someone as long as it is for the right reason, which is to fault this product or problem,” Drews says. “One of the sayings I’ve heard a long time ago is, ‘Conflict is a lever for innovation.’ I really truly believe in that because if you have a challenge coming from the production side and that contradicts with purchasing and that contradicts with what marketing wants or that contradicts with what R&D is able to do and there’s people in the room who can discuss that and can accept each other and are open for dialogue and they really truly respect the other people’s opinions, perspectives and needs, then as soon as you put all of that together with people who are problem solvers, who are open-minded, who are quick thinkers and are smart and really know their stuff … you really get things going within an hour or a few hours.”
To keep an innovative environment and process flowing smoothly and successfully, it has to be supported by the entire organization.
“Whenever you have the people in one room I just described, that is really, really powerful. That’s something I would describe as culture and of course that goes all the way up, not just on an engineering level, marketing or product management level, but this has to be supported by the top management because culture is really driven from the top down.”
Once you have all these innovation processes working together all that is left is getting customers to see the value in your product.
“All the things which we have come up with from the VOC approach before we started the product development are basically reflected in what the customer feedback is and that’s pretty cool,” Drews says. “That tells you that you have a very robust innovation process and no longer is the result of your R&D process the result of hope and no longer do you rely on very talented or genius product managers, but you can make it a very structured approach to innovation and this process is sustainable and reproducible. It really works if you do it well.”
HOW TO REACH: Draeger Safety Inc., (800) 858-1737 or www.draeger.com/US/en_US/
- Understand who and where you want to focus your innovation strategy towards
- Get into the field and observe and ask questions of your target customer
- Create a structured, creative and contradictive environment
The Drews File
President and CEO
Draeger Safety Inc.
Born: Hamburg, Germany
Education: Engineering degree from the University of Luebeck
What was your first job and what did you learn from that experience?
My very first job was when I joined Draeger in 1991. I became a mechanical engineer, and what that job taught me was that I gravitated pretty fast to a leadership role. I was promoted just eight months after I joined Draeger. I also learned that my passion was not to design all the details but actually create ideas.
Who is somebody that you admire in business?
One guy I think very highly of is Steve Jobs. What he brings to the table is an outstanding empathy for customers. His understanding of customers is very good and that together with a very good understanding of complexity management and an ability to bring great talent to his company makes him strong.
What is your favorite business book?
‘Good to Great,’ that’s the only management book that has been a role model for me or has given me great guidance.
What Draeger Safety innovation are you most proud of?
The X-zone, definitely. A lot of that product goes back to my personal ideas and one of the most important patents is owned by me. Also, it’s a product that was relatively strictly developed in accordance with our VOC approach. This is not something that was an accident. It is something which was thought through very thoroughly and validated at each stage.
Business for Stephen Webster was going well, but not well enough. The president and CEO of IT consulting and data center services firm, StratITsphere, needed something extra to give his company more business.
The company, which has more than 50-employees, had strictly been a consulting company since it started and was explicitly focused on the Fortune 500 market.
“Our focus was kind of providing technology, strategy, architecture design and security assistance for those clientele,” Webster says. “Although the consulting business is a good business with high margins, it comes in waves or cycles. We looked hard over a year and decided we had to do something to diversify ourselves.”
Webster and his team decided to enter into the data center services market. The big driver for diversifying the company’s offerings was to get some business that had monthly recurring value.
Smart Business spoke to Webster about how he made the leap from IT consulting to data center services to help diversify StratITsphere.
Diversify to your strengths. We did not enter into this business lightly. We did a lot of research and a lot of market research. We looked at what market segment we wanted to address and the pros and cons and the risks of entering this business very closely. It was probably an 18-month process for us to decide to do this. Make sure you do all of your homework.
Anybody who is going to diversify has to look at what you’re doing in your business today and make sure if you’re going to diversify, you’re going to diversify into a business that you have competencies in and are complementary to your core business. This data center managed services business is very complementary to what we were doing already. We had lots of experience in the business, so it was a very good fit. I’m a firm believer of you can’t be all things to all people. You need to have a business that’s got a strong focus — both a market focus and a product focus if you’re going to be successful. We’ve seen some companies out there that want to diversify or want to do something different and they enter into a business that they really don’t have a lot of experience with, it’s not complementary to their core business and it becomes an albatross quickly.
Avoid mistakes. In our technology business, cloud computing is all the rage. Everybody wants to be a cloud provider. We want to be a cloud provider, but that business is a very new business and people are just trying to understand it. The market is very immature and product sets are very immature. Too many other businesses jump in when they see the hype and they see the promise of additional revenue and they jump in without understanding what all the real market dynamics are, what the drivers are, what the real potential for opportunity is.
You look at the hype in the cloud computing market; it’s supposed to be a $150 billion business by 2015. You can easily get wooed into thinking, ‘Wow, I’ve got to get some of that right now.’ It’s a hard trap to avoid. Being an early entrant into that market space isn’t necessarily the right thing to do.
That’s the strategy we’ve taken, which is a much more conservative strategy. Let some other people rush in and let’s see how the market is shaping up and we’ll learn from their mistakes and get in afterwards. Too many folks get tempted into jumping into something that looks like it’s going to really impact their business.
Understand what you want to accomplish. Everybody has to look at their business and decide, ‘What’s the real problem we’re trying to solve? Is it part of our business strategy that we want to diversify into a different business? Is our core business just not operating properly?’ Maybe you’re better off trying to re-engineer your core business?
Make sure you’ve taken a very hard look at your core business and you know your numbers inside and out. That will help lead you to what are we trying to do. The second thing to do is go to your customers. That was part of what drove us to our expansion into this business. We talked to our customers and we asked them, ‘If we went into this line of business, is that something you’d be interested in?’ Your customers are your most powerful tool. You need to be close to your customers and you need to understand what they’re looking for and what they want.
It’s a CEO’s job to be as close to your customers as you can. Talk to your peers. Talk to your mentors. Talk to other people in the industry to get a sense for what they’re doing. Don’t try and do it in a vacuum. I think too many CEOs these days are out there and think they have to make this decision on their own or else they’re not an effective CEO. Nothing could be further from the truth.
HOW TO REACH: StratITsphere, (888) 316-4191 or www.stratitsphere.com
Gary Kiedaisch is charged with leading one of the strongest consumer product brands in the country. The chairman and CEO of No. 1 cooler manufacturer Igloo Products Corp. understands that achieving the top spot didn’t happen overnight or by accident. It took Igloo’s industry awareness, brand building and unmatched innovation to keep the manufacturer atop the cooler industry.
The $250 million, 1,200-employee company originated the cooler category in 1947 and for more than 60 years it has held the No. 1 market share. Kiedaisch has helped excel Igloo’s brand and its products and has the ongoing challenge of keeping the company relevant and continuing its reputation as the top cooler manufacturer.
“We have, in my humble opinion, the best products in the category,” Kiedaisch says. “I don’t think anybody has a lineup of coolers like Igloo does. We live, eat, sleep and breathe coolers.”
While Kiedaisch can enjoy the comfort of leading a No. 1 market share company, he hasn’t been resting on his laurels. Here’s how Kiedaisch combines a strong brand with industry leading innovation to help grow Igloo Products Corp.
Build and advance your brand
Research shows that three in every four U.S. households own at least one Igloo cooler. Igloo has achieved this level of market penetration by being the best at what they do.
“We specialize in coolers,” Kiedaisch says. “Our two main competitors, Coleman and Rubbermaid, are generalists. The cooler business for them is a fraction of their whole. Coolers are our shirt, and with them, they are a sleeve on their jacket.”
Igloo’s ability to continually produce high-quality, durable cooler products is what helps drive the company’s reputation and relationships.
“We are delivering to our customers a truly great product that they need and we have good relationships with them,” he says. “What that shows is our branding and they’re going to then put our brand on the shelf front and center because retailers want to know what they’re buying and that consumers have confidence in it. That’s the first stamp in the marketplace.”
There’s a reason you don’t see a lot of marketing dollars for coolers and that is because the cooler itself is a billboard.
“Once you sell a cooler, it’s not going to get used only by one person one time and put away in a closet,” Kiedaisch says. “The first time it gets used it’s probably going to get used by at least three, maybe four, maybe five people. It’s going to be taken out repeated times and when it is taken out it is going to be the center of the party. You use it when you go to the beach or going to camp. I’ve got some contractors restoring a property in New Hampshire and at lunch time they’re all sitting around their Igloo coolers and its part of their daily life. They live with those products.”
The many uses of a cooler along with the quality and durability of each one of them have helped Igloo sell more than 20 million coolers a year, which exponentially builds the brand.
“You’ve got 20 million impressions going to the marketplace multiplied by two, three, four or five, utilized four or five times a year with a life cycle of how ever many years coolers go on and you just have a huge penetration in American households,” Kiedaisch says. “That’s why the brand is so well-known and recognized.”
To make your brand well-known and recognized you have to not only have a product that people want to use, but you have to associate your brand with things that your products are regularly used for.
“In sporting goods products there are many, many likes; for example skis,” Kiedaisch says. “You watch the Olympics and you see the skiers coming down and at the end of the race they pick up their skis and there’s a big billboard with the name of their ski right beside their head and that’s what’s commonly called sports marketing. I call it opinion-reader marketing and hundreds of thousands of consumer products companies use that strategy.
“It’s the same with car racing. I think it’s great that Chevrolet is on a NASCAR because that’s a Chevrolet engine and that’s a pretty tough piece of equipment. When you get a company’s brand on a NASCAR vehicle that has nothing to do with automotive or mechanical or engineering or doesn’t have a part in the vehicle, that’s just trying to get your name in front of the consumer demographic, but there is very little correlation between the two. It’s a very expensive and very indirect way to build a brand.”
Igloo tries to team up with events or activities that directly correlate with the use of its products.
“We sponsor the FLW Tournament, which is the biggest bass fishing tournament in the country,” he says. “We’re on television with bass fisherman and … they have to bring these fish in for weighing and they have to keep them alive, so they put them in an Igloo cooler. That’s similar to the NASCAR race where our equipment and gear is being used by the celebrity. That is direct cause and effect and the person choosing a cooler at the moment of decision is going to recall, ‘This is the one that’s used by all those FLW guys, I see on TV all the time.’”
Discover avenues to grow
In order to lead a consumer category for more than 60 years, you need more than a good product to continue that dominance. You need to have strong employees that can recognize the right business strategies.
“Anybody will say that the toughest leadership challenges are always getting the right people focused around the right business strategies and having them executed and implemented with precision,” Kiedaisch says. “The most important thing is to really surround yourself with experts in fields of the discipline that you do business in. If you’re in the consumer products business and you sell products through whatever it is that’s your specialty, you need people that understand the habits and behaviors of not only the end user but the retailer that you’re dealing with and how they interface with their consumers.”
Kiedaisch has been able to surround himself with people who are experts in the cooler industry and that expertise has led to growth for Igloo.
“Since 2008 we’ve grown this company significantly,” he says. “We’ve grown more than 20 percent and in the specialty channels outside of Walmart, we’ve grown close to 30 percent. It’s come from recognizing what we do and doing what we do better.”
Igloo’s strong brand and market dominance has led to penetration in 70 percent of American households in a category that has penetration in 90 percent of American households.
“You could argue the market is saturated and there’s no room for growth or you could argue that it’s a staple of life that the product that you make, almost every household needs one or two or three,” Kiedaisch says. “All you really need to do is bring them new reasons to buy one — compelling new reasons to buy a replacement or take new consumers. It’s a combination of sustaining what worked before and also bringing new innovation into the category to improve it.”
To continue to grow your company, your products and your brand you have to be in the right mind set. You can’t be turned away at the first sign of adversity.
“You have to make sure that you know your business and never, never, never give up,” he says. “If what you try today or this morning didn’t work quite as you wanted it to, take a look at it and see what went wrong or what assumption was incorrect and keep going until you get the result you think you want. That’s not to say you go until death. Sometimes certain strategies are wrong and you need to course correct. You only course correct when there is clear evidence that the direction that the group felt the company should be going is unquestionably proven to be wrong.”
When you are trying to be new and different and make a stand in an industry there are always people who will disagree.
“There are a lot of naysayers, especially when you’re trying to do something new and you’re trying to be great, that are going to want to slow down or dumb it down or maybe not chase that ring and then you settle,” Kiedaisch says. “The worst thing that I’ve ever seen other executives do is settle. That’s when you get companies that don’t have great performance in their products, great performance in their innovation, great performance in their financials, and they don’t have, in my opinion, motivated and happy executives and employees.”
Innovate the industry
Kiedaisch and the employees at Igloo refuse to settle for anything less than their best. The company is always looking for the next innovation to keep its products relevant.
“It’s all about the quality and efficiency of the product,” Kiedaisch says. “It’s got to outperform anything else that’s out there in the marketplace and that’s what we’re constantly working on. If you’re not constantly reinventing your product there’s no reason to replace it, there’s no reason for somebody to be motivated to buy it, and you’re not going to have very good sales.”
Reinvention is what Igloo is great at. The company explores numerous avenues to make a good product even better.
“Take for example our soft-sided coolers,” he says. “The original soft-sided coolers are just square sewn together boxes with insulation in them and they were lunch boxes and they looked like that. What we’ve done is we’ve developed a series of bags, totes and across-shoulder messenger bags that are insulated and have fashion and design to them that women will carry to the office or men will carry to a boat that doesn’t look like it’s your lunch pail, yet it is.”
Igloo looks to other industries and product functions to get inspiration for its innovations.
“What we did was we studied the women’s handbag business and how women carry their daily accessory needs,” he says. “We look towards the luggage industry and we look toward the refrigeration industry to see what they’re doing. I don’t know who came out with wheels first, but I would bet that the luggage industry came out with wheels first and you can’t buy a piece of luggage today without a wheel on it.
“We’re in the food transportation and storage business. If you’re in that business you look at what other companies make products that move personal items by an individual and you can learn things from those people as to what you can do with your company.”
Igloo did something similar when designing its new rickshaw-inspired glide cooler. It took a page out of the Chinese lifestyle.
“We looked at the Chinese rickshaw and saw these frail people carting around two heavy people in a two-wheel wagon,” Kiedaisch says. “The art to it was the balance of the rickshaw and that the handle is set away from the wheels and acts as a lever. So we created a cooler that has a handle that extends out much like a rickshaw and you reduce the weight of lifting it by 50 percent and you also move yourself further away from the cooler so if you’re pulling it the cooler is far enough behind so it’s not bumping into your Achilles tendon.”
Kiedaisch doesn’t just look to similar industries or functions that could contribute to a cooler. He also watches how consumers utilize the products.
“We wander around a lot,” he says. “I’m often accused of being a chief product manager myself. We respect the fact of how the product plays. We watch how people use products. We look to related industries and how they manufacture products and what you can bring to the consumer in ways of better performance or better value and then we will incorporate it into the product. I probably on any given day of the week will see four or five innovative new things that the team will check and see if there is something we can do to incorporate that technology into our products.”
Innovation doesn’t stop at finding new ways for a product to be used it also applies to the ways you make a product.
“I’d challenge what technology ends up being used in the manufacturing or materials that are used in your products,” Kiedaisch says. “If Igloo didn’t do that we’d still be making metal fabricated coolers and they’d be horribly expensive.”
HOW TO REACH: Igloo Products Corp., (713) 584-6800 or www.igloocoolers.com
- Build your brand and align it with uses that directly correlate
- Use your brand and turn it into growth for your products
- Take what you do best and innovate to make it better
The Kiedaisch File
Born: Cambridge, Mass.
Education: Attended college for two years and was studying pre-law before joining the military.
Do you have a favorite Igloo product?
My 28-quart personal cooler that I use to travel to and from my boat with.
Who is somebody that you admire in business?
I admire Jack Welch and Steve Jobs. I say Jack Welch because when he ran General Electric, he had his hands on the ball. He had constant meetings with his employees and he was always motivating his employees and sharing where the company was and where it was going. I say Steve Jobs because he not only [ran the company] but he was the chief product development guy and he understood that the wellness of Apple Computers is as good as the last innovation you came up with and he drove that.
If you weren’t a CEO what job would you have?
If I were not running a company, I would be a lawyer of some sort because it is very similar to what I do. It’s getting the facts, preparation, presentation, cause and consequences, and it’s high stakes, winner takes all.
Cool facts about Igloo:
- Igloo is the No. 1 cooler brand in the world
- No. 1 market share in the U.S.
- No. 1 cooler brand used in the marine channel
- No. 1 cooler brand used on commercial worksites
- No. 1 brand recognized by consumers in the cooler category
- Igloo adds more new coolers to its line each year than any other cooler brand
- Playmate is the most recognized cooler product in the U.S.
- Almost three in every four U.S. households owns an Igloo cooler
- Igloo offers more than 500 different products
- Igloo coolers are sold through more than 15,000 outlets in the U.S. and around the world.
All Steve Shifman is hearing and reading today is how companies aren’t hiring, aren’t investing and aren’t growing. While that has certainly been the trend over the last couple of years with economic uncertainty still looming, Shifman has had the opposite challenge at Michelman Inc., a 250-employee global developer of water-based coatings for flexible film packaging, paperboard and other products.
“We’ve kind of bucked the economic trend during the downturn of the last few years,” says Shifman, president and CEO. “We continue to expand both here in Cincinnati and also around the world, and we’ve continued to hire.”
The company hasn’t been cutting costs or staying conservative to ride out the uncertainty. Instead, Shifman and his employees are embracing the position they are in and are hiring top-level talent and developing strategic plans to allow the company to keep growing for years to come so the organization can capitalize on its opportunities.
“It’s not growth for growth sake,” Shifman says. “Growth is important because we know that by doing that, we can continue to bring in the kinds of capabilities, skills and tools that will help our customers to win.”
Here’s how Shifman developed and led a strategic growth plan to allow Michelman to achieve its mission of helping its customers and continue to grow.
Formulate a direction
A strategic plan helps paint a picture for your organization of where you ultimately want to take the company. It provides a clear direction and strategy to get you there.
“We’ve made some decisions on the kinds of investments we’d like to make and what we’re prepared to do in order to grow the business a little bit more rapidly, particularly because we’re trying to find new solutions to help customers to win,” he says. “We started serving some of these industries and we recognized there’s more growth potential within these industries. There are more needs that need to be filled, let’s go invest around those industries so we can bring in new solutions and hire new people and build new facilities that will help us to serve those industries better.”
Shifman took this focus on customers and industries and made it the top priority for Michelman’s strategic plan.
“It’s very important to start with the customer in mind,” he says. “There are different ways you can organize a business. There are some businesses that organize around their production and they’re primarily manufacturers and some businesses are primarily around technology and those are right for them. In our case, our business begins and ends with our customers and we understand the markets and the industries we serve so well, so we start with those industries and with those customers and then we try and understand the kind of skills we need to serve the customers well — the kind of resources, assets, the kind of depth, the kind of distribution networks, etc.
“You have to understand who you’re serving. Understand what their needs are and help them to understand not only their needs today, but the needs they’re going to be facing over the next five or 10 years. Help them look around the corner to figure out where their businesses are going. Everything starts with the customer, starts with the industries and the markets that we serve and then we work closely with those industries and those customers to figure out where we think the future is going and then come up with our tactical plans to get there.”
In order to understand who you are serving you also need to understand the marketplace.
“We very much take an outside-in view of the marketplace,” Shifman says. “What I mean by that is we’ve organized our businesses around sets of customers in certain industries that have similar problems or similar challenges. That’s important to us, because instead of being a company that simply sells products, we’re a company that really focuses on industries that have needs and then we build solutions for those industries and then we build teams of people around these industries that have expertise. We work to hire people out of the industries that we serve. They understand the industries, they speak the language, they understand the challenges, and they can help us design solutions for those industries in a way we feel many of our competitors can’t.”
While there are many ways to put together a strategic plan and countless reasons for one, all those differences are moot unless you have smart people to help you.
“You have to get really smart people in the room to be part of the process,” Shifman says. “Plans created by one or two people off on high and handed down to the masses and say, ‘Here, go implement,’ tend to be less successful than those that are created by people who are actually going to be involved in executing, particularly in a business like ours where understanding the industries and understanding the customers is so critical. Also, have a grand vision. I believe in setting very large strategic goals for our company that challenge the company. If you really want to improve in something, set big goals. Don’t set them in the abstract. Set them because you know that by achieving these goals, you’ll continue to create a better place for your organization in the marketplace.”
A strategic plan or new direction will only be a success if you can build buy-in around it and gain support for what you hope to achieve. To do this, you must focus on communication.
“I’m a lucky guy, because I get to spend most of my time talking and communicating within the company and then also going out and seeing customers,” Shifman says. “It starts with me because the person in my seat in any organization has to be the one driving the grand vision. So it was incumbent upon me to have a big picture for where I thought we could take the company. We spent a lot of time as a team, first of all, making sure we’re all bought into this grand vision, because if the entire team is not bought in, then it’s probably not going to work. We work very closely together and we work very hard to make sure the team is completely aligned around it. Then it’s an awful lot of time spent with other members of the organization.”
Alignment is critical to the success of any strategic plan. To achieve that alignment you have to have the necessary communication tools.
“We do have some pretty well-tested communication tools that we use,” he says. “I spend a lot of time personally with our business units and business unit leaders visiting our facilities around the world and our people who are out in the field. It’s a lot of regular communication. It’s one-on-one communication. I write a letter to all of our employees every month that I send home, because I want their families to read it. We have lots of company-wide meetings and we have video conferencing systems. It’s just an ongoing communication process. It’s not a one-size-fits all and it’s not a once in a while, it’s constant. Can we do it better? Of course, there’s always a way to improve upon it, but I think it’s something we focus on a lot here and we make sure we are working hard to keep people aligned with what we are trying to accomplish.”
To aid in the communication efforts and provide total understanding of the tasks required by your employees, it helps to be transparent.
“One of the words that I try to live by is transparency,” he says. “I happen to believe that there are very, very few secrets within our business. We try to make our plans and our objectives and our results within our organization transparent, because it’s hard to hit a target you can’t see. If you make it transparent and you make people a part of the process and treat them like adults, they’re going to behave like adults and they’re going to be part of the process.”
It’s not enough to be transparent on one aspect of the plan or be transparent only for a little while. You have to make transparency and communication a big part of the strategic planning and buy-in process.
“It’s about transparency and it’s about rigorous, regular, constant, robust communication and dialogue,” he says. “Nothing is off limits to talk about, to debate, and to discuss within our organization. It may not be right for everybody, but within our organization, that really contributes to the culture of Michelman. It makes everybody feel as though they’re a part of the business, they’ve got a voice, they can assert an opinion. They’re not just told to do something. They understand why they’re being asked to do something. They have a chance to really debate and discuss that so that they know they’re a part of something bigger, they’re not just doing a job on a daily basis. It really is something that’s been baked into the DNA of our organization.”
Measure your plan
While a strategic plan begins with a vision for the company, a clear mission of what you’re trying to accomplish and the support of your organization, none of it will be beneficial if you don’t measure your plan on a regular basis to make sure you hit goals.
“We’ve got a lot of robust systems in-house that allow us to measure our business on a day-to-day basis, but we also have this high-level strategy map and balanced scorecard that tell us that we’re moving in a perfect strategic direction,” Shifman says. “Our strategy map is our high-level map of where we’re going strategically and we use a balanced scorecard. The balanced scorecard is not how we manage the business, but it helps us to know that we’re on our strategic path.”
The steps to measuring your strategic plan are to first, have a plan to measure and second, be sure to collaborate with others on your team.
“Many people just operate on a day-to-day basis and there’s probably no long-term plan of where they’re trying to take the business,” he says. “At Michelman, we have a very solid past and that past has helped to inform who we are today and we also have a very clear picture of where we’re trying to take the business. And that picture isn’t something that I keep to myself. It’s one that I have approved by my board. It’s one that my executive team is actively involved in helping to create. It’s one that we communicate actively and we share transparently.”
Once you have a plan and vision in place and buy-in from the company, you have to make sure you discuss and measure specific areas of the plan.
“Make sure you’re debating and checking that plan so it isn’t just something that you pull out of thin air, but something that you’ve actually imbedded and something that a team can buy in to,” Shifman says. “Measure yourself against the plan and be willing to adjust if things change. We have long-range plans, but it’s like talking about a battle plan — once the bullets start flying sometimes the plan gets tossed out the window. Our plan is not tossed out the window, but sometimes reality on the ground forces us to adjust our plan, so we need to remain flexible.”
Remaining flexible is exactly why you have to constantly measure your performance against your plan, otherwise if things change, your plan won’t be effective.
“Be willing to change that plan slightly if things that are happening dictate some needs to change the plan,” he says. “You have to also surround yourself with extremely good people, because it doesn’t matter how smart the person at the top is, it really comes down to the people on the team who are really helping to build the organization and execute the plans.”
No matter the reason for your strategic plan, always understand what you are trying to achieve.
“We need to continue to grow in order to continue to build the resource capabilities that our customers are demanding from us,” Shifman says. “With growth come the resources to be able to invest in new facilities, invest in new technologies, invest in new skills and new people.”
HOW TO REACH: Michelman Inc., (513) 793-7766 or www.michelman.com
The Shifman File
President and CEO
Born: Springfield, Ohio
Education: Graduated from the University of Colorado and received an MBA from Xavier University
What was your first job and what did you learn from that experience?
I worked on a beer delivery truck in Springfield, Ohio. I was a driver’s assistant. I wasn’t even old enough to buy beer, but I schlepped cases of beer off the truck into bars and restaurants. I realized just how hard people work. I also worked in a warehouse for these guys and there was zero training and one of my first days they tossed me the forklift keys and said, ‘Here, go move this pallet.’ We had guys regularly putting forks through the tops of trucks and you’d see pallets full of beer and wine falling off of the forklift. I realized that’s not the kind of work I wanted to do, and getting an education was going to be really important to me.
What is the best business advice you’ve ever received?
Surround yourself with really smart people. Recognize what your real strengths are and build a complementary team of people who have the skills and experiences that come together to create an organization.
What is your definition of success?
We define success at Michelman, first and foremost, by whether or not we are helping our customers to win. If we help our customers to win, then we have a right to win as an organization. Personally, I think success is adding value and giving back and being a part of something bigger. I’m a lucky guy. I have a chance to run what I think is an outstanding organization and I also have a chance to work actively in the community. I feel like I’m successful because I’ve got a beautiful wife, wonderful kids and a great family.
What are you looking forward to in your industry?
All I hear about and all I read about today is how people aren’t hiring and people aren’t investing and people aren’t growing and everyone is waiting for a signal from the government before they do anything. In our case, I couldn’t disagree more. Over the last number of years during a period of uncertainty, we continue to hire, we continue to invest and we continue to grow. I’m looking forward to the next few years because we plan to do a lot of the same. We’re on a rapid growth path, because we believe very much in the future of our business. I’m excited about our growth opportunities, because we’re not waiting for others to figure this thing out.
President Lisa Faller sees client loyalty as a direct reflection of her company’s commitment to going above and beyond for clients. Today, FKQ Advertising + Marketing’s client list includes numerous relationships that span decades.
“That speaks volumes about our focus on generating the client’s desired result,” says Faller, whose family founded the Clearwater-based firm in 1961. “You can do a really good job and you can deliver and please a lot of people, but at the end of the day, if you are not year over year making that happen, then your tenure is probably short lived.”
FKQ’s self-defining philosophy of “whatever it takes” is splashed all over the company’s website, and there’s a reason. On the client side, Faller says the company’s associates are relentless in pursuing and achieving every client’s success goals, which she adds are often fairly aggressive. The continuing challenge is not just recruiting candidates that have this drive, but maintaining a company culture where its 82 employees can pursue ambitious ideas and new ways of thinking.
“For our people, it’s about empowering everyone at FKQ to really control their own destinies by creating an environment where the best ideas always flourish,” she says.
One way is by using both large and small group environments to draw out people’s insights and opinions.
“When you are in a large group setting, some people may not feel as comfortable offering up what are no question great ideas to put into play and have everyone benefit from,” Faller says.
Offering a mix of communication channels for people to discuss ideas gives them the opportunity to share in either setting, encouraging more contributions and collaborations. This, on top of daily positive reinforcement of good work is what gives employees the confidence to deliver their top performance.
“That leads to facilitating the best thinking, because then people are confident and positive in terms of what they are able to do,” Faller says. “That helps them in being able to facilitate greater, bigger thinking on a consistent basis.”
Another way to further a results-oriented culture is by getting people to focus on positive outcomes. So as a mentor and motivator, Faller is always acting as the cheerleader for optimism and enthusiasm.
“You have to keep people feeling very good about not only what they are delivering to the client, but just being happy in general,” she says.
“It’s really a lot about a consistent focus on thinking positive, seeing the glass half full and never dwelling on uncontrollable negative influences.”
While clients provide the inspiration in keeping employees motivated about new opportunities and challenges to think through, Faller says a leader needs to provide the context in the vision to motivate the culture as whole.
“You’re identifying what the overall goals are, and then you have to make sure that you articulate that to all of your respective team members so that you have that unified commitment, and that focus and everybody collectively achieving those desired goals,” she says.
Faller also uses employee motivation efforts such as having FKQ-sponsored events or serving up special food offerings. The more mass appeal it has, the more effective it is.
“You need to be open to be making sure that whatever continues to please the masses is something that we focus on,” Faller says. “That keeps people in a charged up fashion to deliver for our brands.”
By solidifying this strong team spirit and unity, she supports a culture where people believe they can make anything happen. An example is when FKQ completed a billboard for McDonald’s McCafe espresso products in downtown Tampa, which had three-dimensional coffee cups and real steam coming off the board. The groundbreaking advertisement not only drove customers to McDonald’s, but was hailed in the industry as a best practice because of its environmentally friendly construction.
“We’re always about how can we resolve this or make this better,” Faller says.
“You have to have that universal spirit. If everybody understands that and every action is guided by that, it’s incredible what that total unity can make happen on behalf of the clients that we serve.”
How to reach: FKQ Advertising + Marketing, (727) 539-8800 or www.fkq.com
Finding rock stars
For companies with a long track record of exceeding clients’ expectations, the biggest challenge is often just finding more rock star talent to feed the growing machine. Lisa Faller, president of FKQ Advertising + Marketing, continues to use a twofold approach to recruit people who fit with the company’s brand character.
“Growing up in the business, I just saw how we had done it successfully for so long,” Faller says. “We just continued to evolve and grow upon what has worked well for this company and been able to infuse even new, younger viewpoints.”
First, the company uses its longtime referral program as a targeted means of recruiting.
“Who better to advocate our brand than those people who actually embody and live it each and every day?” she says.
“That often leads to greater retention because when birds of a feather flock together, not only do you get better candidates in the door, those are the people who typically have the long-term tenure, which is a trademark of FKQ.”
Secondly, the company works with the best HR professionals that it has come in contact with over the decades. These people specialize in the disciplines FKQ offers for employees, which creates a pipeline of new talent.
“We’re bringing in the best talent that keeps our FKQ fire burning, the juices flowing and that spark that fuels the energy that keeps this agency bursting at the seams throughout our 50-year tenure,” Faller says.