Charles “Chuck” Sanders, CEO and founder of Urban Lending Solutions, isn’t afraid to take chances when he sees an opportunity.
After a brief career in the National Football League, Sanders needed a job and started doing marketing for Pittsburgh real estate entrepreneur Robert Murphy Jr.’s golf course and semi-pro basketball team.
One day Sanders asked Murphy, “How do you get the money to buy basketball teams and golf courses?”
“I’m in the mortgage business,” Murphy replied.
“And I said, ‘That’s the business I want to get into,’” Sanders says.
So, he learned the real estate business working in operations and sales at Murphy’s company, ValuAmerica, becoming a nationally recognized vendor, recruiter and provider of real estate information, technology, products and services.
In 2000, he took everything he had learned from working for Murphy and started his own mortgage services company.
His confidence and make-it-work attitude have helped him succeed. For example, a few years in, Sanders found out through his connections that a particular bank in Georgia needed title and abstract work. So, he packed up his car and went down there, hitting courthouse after courthouse, hiring people.
“I came back to the bank and said, ‘Hey, look. I can provide property reports all throughout Georgia. I’ve got an abstractor in every county.’ And they gave me an opportunity, and it was our first big deal that launched us,” Sanders says.
Today, Urban Lending is a national company that generated $220 million in revenue in 2013 and employs about 2,400 permanent and temporary employees.
It’s about more than money for Sanders though, who says he got the bug to be an entrepreneur and just went for it.
“I think it’s the greatest thing in the world,” he says. “Sometimes it’s just your circumstances. I didn’t know what a mortgage was when I was in high school. I mean you know what a mortgage is, but I just needed a job and one thing lead to another. If you slow down every day and look around, you might see an opportunity.”
And it was that same ability to see opportunities that helped him take his company to the next level in the mid-2000s.
An educated guess for a new direction
At that time, nearly everyone was doing well with mortgage originations in the booming housing market. But large title companies started to do their own processing work. With great relationships with banks, this fierce competition from the title companies put the squeeze on middle companies like Urban Lending, which specialized in mortgage origination, Sanders says.
“It really forced us to say, ‘Hey, where are we going to go next for this company to survive?’” he says. “We had to change directions and go somewhere where they weren’t fishing.”
Sanders and his management team watched the market and took an educated guess that the housing portion was going to crash and there was going to be a lot of defaults. That lead Urban Lending to became one of the first companies to concentrate on loan modifications for banks.
“Nowadays, everybody hears about loan modifications,” Sanders says. “You hear it all the time — commercials, TV, people talk about it. But back in 2005/2006, it wasn’t a big product or a big service.”
You can’t be scared to change, to go where the business is, he says.
“Sometimes you’re making widgets, you’re making widgets, you’re making widgets — and you go, ‘You know what, we’re not winning here. So, we’d better figure out what to do with the tools we have,’” Sanders says.
“Sometimes you’ve got to take that bold move, and say, ‘You know what? While everybody is playing over here, we’re going to go play over there and be the best at that.’”
Staying flexible for the right people
With a new direction, it was time to invest in the right intellectual capital. Sanders went out and found some of the best people.
“I learned to just really find some experts,” he says, “and let them come in and work on solutions with the banks — to whiteboard things, tailor-making solutions for our customers.”
One of those hires was Jim Smith, a known expert in loan modifications. There was one slight hiccup; Smith’s deal-breaker was that he wouldn’t move from Colorado.
Sanders says his business is so centered on people, he agreed to be flexible.
An office focused on loan modifications was opened in Bloomfield, Colo., which grew rapidly, drawing from the great talent base in the area. Today, with two Colorado offices, Urban Lending employees more people in The Centennial State than in the original Pittsburgh office, which continues to focus on mortgage originations.
Having multiple offices in different states might seem like a challenge, Sanders says, because you’d like to be the team leader every day, going in and keeping the troops charged up. But the key to multiple locations is putting great people in charge.
“I think in this day and age, with technology, and the way people move around and the great communication they have, it’s not the barrier it was years ago — even five years ago,” he says.
In fact, Sanders is looking to expand further with Urban Lending by setting up a brick-and-mortar presence on the West Coast, where the company is starting to work with some major banks and lenders.
Managing your workforce based on customer needs
Balancing changing customer needs can be challenging — and exhilarating, which keeps the business fresh, Sanders says, but one of the biggest parts to being profitable is correctly managing your workforce.
For Urban Lending, there are certain outside forces at play, like how much banks are outsourcing mortgage work, and the market’s balance between mortgage origination and default.
“In a perfect world, you’d love to have products and services on both sides that are equally good, but it’s always a balancing act to kind of see what’s coming and be heavy on one side, or be known to be an expert and market leader on the default side or origination side,” he says.
Right now, Urban Lending is about 60 percent focused on the default and loan modification side. In order to stay fluid, however, the company uses temporary employees for certain customer projects, allowing it to scale up and down as needed — running the numbers to see when it makes sense.
Finding the right mix of permanent and temporary employees comes down to knowing your industry, Sanders says.
“Don’t be afraid to use temp services,” he says. “There are a lot of specialty temp services out here. We work with some that are specialized in the mortgage industry.
“It keeps us flexible. We can get teams and attack certain projects.” •
- Don’t be afraid to take a new business direction when necessary.
- Trust yourself to invest in the right intellectual capital.
- Being profitable means correctly managing your workforce.
The Sanders File:
Name: Charles “Chuck” Sanders
Title: CEO and founder
Company: Urban Lending Solutions
Education: Bachelor’s degree in marketing from Slippery Rock University of Pennsylvania.
What was your first job and what did you learn from it? Throughout high school, I worked for my father. He had a trucking company, Sanders Trucking, in Pittsburgh. That’s where I got my entrepreneurial spirit. I watched my dad be that guy in the community who provided the jobs. He was a giant of a man to me. I always wanted to be like my dad.
What is the best business advice you ever received? You’ve got to feel special about yourself. One time, Mr. Murphy [my mentor] told me, ‘You know, only 5 percent of the people in the world really get it.’ And he said, ‘Chuck, you’re one of those 5 percent.’ That really changed my whole life. Not to sound cocky or anything, but it made me confident to go out there and just go for it.
You have to have confidence in yourself. That doesn’t mean you’ve got to be the smartest, or the slickest or the most inventive, but you’ve just got to have an overriding confidence in yourself that you’re going to make it happen.
You played in the NFL for three years — two years with the Pittsburgh Steelers and one year with the San Diego Chargers. Do you use anything you learned playing professional football in your corporate career now? Absolutely. Football teaches you teamwork. It teaches you how to be around successful people and be articulate. I would go to all the meet-and-greets and be around the owners and all those things.
How to reach: Urban Lending Solutions, (412) 325-7046 or www.urban-ls.com.
Boris Weinstein, 82, is passionate about litter prevention. It’s been like a second career for him since his retirement, and he easily spends 2,000 hours a year on his anti-litter work. And like many leaders, business or otherwise, he’s been able to use his passion to inspire and motivate others.
Weinstein first dabbled in litter cleanup as a junior commando in World War II, gathering material for the war effort. Later, in his professional advertising career, he came up with the slogan for Mayor Pete Flaherty, “For Pete’s Sake,” which was used on waste containers.
When he retired and was walking his dog four times a day through his Shadyside neighborhood, he noticed the same litter in the same spot day-after-day.
“It became very apparent that my approach was wrong. I was thinking big, when I really should have been thinking small,” Weinstein says of the public service campaigns he had helped develop.
“I started just concentrating in my own community, and I blocked off an area of about 40 streets and for 16 days I kept a diary of sorts. I went out for an hour, an hour and a half every day — and lo and behold my area was cleaner.”
Weinstein created a plan for getting rid of litter, which he called Citizens Against Litter, where one person can make a difference, and people who care can pick up for people who litter and don’t care.
The nearby United Jewish Federation in Squirrel Hill noticed Weinstein’s efforts in Shadyside and asked for his help. This cleanup coalition, or Redd Up Coalition, which organized volunteers who picked up litter on a regular basis, grew to include Homewood, Point Breeze North and Point Breeze South.
A grass-roots network of leaders
A strategic thinker, Weinstein wanted to go citywide. So, in 2006, he put together a two-year effort to organize a network of leaders who could engage their own neighborhoods for volunteer cleanups.
He kept the movement going by staying in constant communication.
“My work with the network leaders — it’s a constant situation,” he says. “I’m in contact with them through email, through telephone, through my monthly newsletter.
“Through them we’re able to organize significant cleanups, and we’re able to get the volunteers out. And I think that this is what sends a message to people: That if Boris can do it, and Boris continues to do it and doesn’t let up, we also can get involved.”
Weinstein says when motivating and inspiring volunteers and residents, he’s found that the constant, consistent connection is key.
“The notes that I get from people, and I do get them regularly, say, ‘You’re an inspiration to me,’” he says. “I think I’m an inspiration to them because I’m always in their face. They appreciate that it’s on my mind, letting them know and reminding them when we’re having the campaigns.”
Controlling litter with a community effort
Today, Weinstein helps coordinate large-scale cleanups, called Redd Ups, twice a year for 200 to 250 communities in Pittsburgh, Allegheny County and surrounding areas, with around 15,000 volunteers per cleanup.
This year’s spring Redd Up, scheduled for April 25 to 27, falls around Earth Day.
The University of Pittsburgh partnered with the fall Redd Up, putting 3,300 students in more than 75 city neighborhoods, townships and boroughs in 2013.
“I’m out to prove that picking up litter can be done by people in the community, and it doesn’t have to cost money,” Weinstein says, who also spent a number of years as a member and chair of the Clean Pittsburgh Commission.
In February, he received the 2013 Iron Eyes Cody Award, the top volunteer honor of Keep America Beautiful, but he’s not done yet.
Along with continuing to coordinate Redd Ups, Weinstein has been advocating a one-year neighbor test to address what he calls the four causes of litter — every day litter, illegal dumpsites, open and overflowing waste containers, and unclean storefronts. He wants city departments to do a thorough job of enforcing existing ordinances, which he believes will help eliminate and control litter.
And he still enjoys being part of cleaning up Pittsburgh.
“I’m still excited when new communities respond to my solicitation. I’m surprised and excited when I get unsolicited dispatches from people who say they want to participate,” he says. “I can’t get out from under it. I don’t want to. Obviously, it’s in my blood and I just want to continue.” •
How to reach: Boris Weinstein and Citizens Against Litter, (412) 688-9120 or www.citizensagainstlitter.org
Stephan Liozu: Getting things done — Five tips to fostering urgency and discipline in your company’s executionWritten by Stephan Liozu
The difference between good companies and great companies is an ability to get things done and to execute religiously on promises. Having outstanding business models, being innovative and selling the best technologies isn’t enough. I see this time and time again when buying from businesses or consulting for them.
Being creative and getting things done is a powerful combination of skills and capabilities that you rarely see in leaders or organizations. When they possess that combination, they are usually unstoppable — like Netflix, Chipotle, Amazon, 3M, Grainger and ARDEX.
Most companies struggle with one of the two dimensions. That typically leads to the tolerance for mediocrity and a diluted customer experience despite having exciting offerings or business models.
So, what is behind this lack of attention to deliver excellence and execution? I would propose it is complacency with success and growth. Some organizations adopt the position that they are uniquely differentiated, provide great value, and that customers will come and buy anyway. That may work in the short term — until a competitor emerges and forces them to shape up.
If your organization lacks a sense of urgency and a discipline of execution, here are five tips:
1. Create a culture of accountability. There are different levels of accountability: individual, work groups, teams and organizational. Execution requires organizational accountability where silos are broken down and team members help each other accomplish greater outcomes. It requires collaboration, teamwork and solidarity built on a strong, shared vision.
2. Manage projects and tasks. Project management professionals can help keep projects on track and tasks accomplished. It’s surprising how project managers boost your ability to get things done. If you cannot afford a full-time PMP, get someone PMP certified as soon as you can for a great ROI.
3. Prioritize and simplify. Poor execution might be a symptom of too many priorities, projects or initiatives. If you want to give people the chance to get things done, make a point to work on what is essential.
4. Track and measure execution. You can only improve what you measure. Define the right execution-oriented key performance indicators and set up trackers. You can use software that specializes in project or task management, your current customer relationship management solution or Outlook.
5. Learn from failures and continuously improve. Reliable and mindful organizations pay attention to details and learn quickly from failures. Customer complaints, service breakdowns and product quality issues become opportunities to learn lessons. Celebrating successes are important, but learning from failures is critical.
Being differentiated and innovative are musts in today’s environment. However, success in strategy and business model innovation requires strong discipline, and a focus on execution is essential for survival. Organizations should pay equal attention to the creative and disruptive sides of their business models, as well as to excellence in execution of critical business model components. This is the difference between good and great. ●
Stephan Liozu is the founder of Value Innoruption Advisors. Stephan specializes in disruptive approaches in innovation, pricing and value management. He earned his doctorate in management from Case Western Reserve University.
Leslie W. Braksick: Preparing for your next season — Finding a new purpose beyond the corporate worldWritten by Leslie W. Braksick
When you are in the heat of the battle as a corporate executive, it’s hard to imagine what’s on the other side. Your life is consumed with phone calls, meetings, travel, dinners out, presentations, explanations, expense reports and budgets.
There are endless requests for your time and point of view. It is a relentlessly busy, all-consuming lifestyle.
The higher you are in your company, the more command it has over your non-work time and commitments. Add to that family obligations and you have a schedule that is long on appointments and short on time.
It is hard, if not impossible, for executives to commit to non-work leadership opportunities due to the unpredictability of their schedules. Even close friendships tend to have a work connection.
But as words such as “retirement” get used with increased frequency, executives can experience a real sense of anxiety as they imagine the implications. What will I do with all that time?
For many, the fears run deep. For all, thoughts/concerns about retirement are deeply personal. Who will I interact with? How will I stay mentally sharp? How will I stay “in the game” of business? What will the relationship with my spouse/children be like if I am home all the time?
After a lifetime of being part of something bigger, it’s painful to imagine a future without portfolio or primary affiliation. The natural orientation is about what will be left behind versus what you are moving toward.
A time for reflection
The renaissance happens, though, when the focus shifts away from a life constructed around productivity to one oriented around purpose. It is the opportunity to transition from a season of getting to one of giving. The possibilities are endless.
The often overlooked step in that transition, however, is the pause for intentional thought and discernment.
What have you always wished you had time to do? What activities over the past decades brought you the most joy?
Endless possibilities for giving back
Your gifts can find their way to places where you can make a real, meaningful difference in the lives and futures of other people.
If you are seeking another day job, there are companies who need seasoned talent in key roles. Nonprofit organizations are clamoring for people with strong leadership and organizational skills. Small and midsized boards prefer bright, pragmatic board members who have “been there and done that.”
And then there are the little and not-so-little people in your life — who have been waiting patiently (or not so patiently), hoping for more time with you, more opportunities to have you influence their lives and futures.
The possibilities of the next season are truly endless and there is no right answer. It begins, however, with pausing to discern where your next calling is. This transition isn’t one from fall to winter but rather spring to summer — and its wonder, promise and possibility unfolds in its own time frame, not according to a corporate calendar. •
Leslie W. Braksick, Ph.D. is a managing partner at My Next Season. After over two decades of helping senior executives on the “productivity” side of the equation, Leslie and her business partners have started My Next Season to help executives transition from careers oriented around productivity to lives anchored in purpose.
My entry into the oil and gas industry was not a traditional one — I started in the energy industry with food. My company, Amelia’s Elegant Catering, serves meals on-site to crews working on oil rigs and frac sites.
Growing in this business, I realized that the male-dominated energy industry was starting to include more and more women who needed a way to connect and promote each other in the industry.
I founded Young Professional Women in Energy and began working to create an organization that would empower, promote and encourage women at all levels and positions in the industry.
I am very passionate about mentorship and strive to help those around me, while continuing my own journey in energy — first with my catering company and later with the addition of my women’s protective clothing business.
Currently, the Young Professional Women in Energy’s network includes many wonderful women who are working to leave the industry better than they found it for future generations and to see an energy industry equally led by women and men.
When I made my entry into the industry, I wanted a mentor. Today, I have become a mentor myself, and truly love helping other women and promoting an atmosphere where women can share ideas and build each other up.
Entering the energy industry
Based on my own experience, my advice to women in, or looking to enter into, the energy industry is that there are no shortcuts. Things will be hard, but if you believe in yourself and are passionate about what you are doing, then it will happen.
Persistence plays a key role in our personal and professional success — start it, follow through with it and above all, own it. Nothing happens after one attempt.
I encourage all women to be themselves. While the energy industry is very much still a “good ol’ boy’s club,” it is not about changing yourself to fit in. It is about being yourself and proving your worth as a unique individual bringing something new to the table.
Collaborate for success
Aside from passion and persistence, I always encourage men and women to expand their network. Entrepreneurship is a lonely and short path if you choose to take it alone.
There are many groups and driven professionals willing and wanting to collaborate with other motivated individuals.
You should take advantage for two reasons: It immediately displays your value as a mentor and it helps expand your network. The old saying, “what goes around, comes around” truly does apply.
So, get out there, find like-minded individuals, put your ideas on paper and go for it. But always remember: You’re never too far along to ask for help. •
Amelia Roncone is the founder of Young Professional Women in Energy. Amelia is also the owner of Amelia’s Elegant Catering and Fire within Apparel, a clothing company specializing in fire resistant women’s clothing. She is the author of “Empower!: Women’s Stories of Breakthrough, Discovery and Triumph,” available on Amazon.com.
With the ongoing implementation of health care reform, many employer groups have missed the obligations set forth in the Employee Retirement Income Security Act of 1974 (ERISA).
“The federal government has started systematic audits of group health plans, primarily for compliance with health care reform. They will also include compliance for ERISA. A key provision requires plan participants to be provided with a Summary Plan Description (SPD),” says Chuck Whitford, a client advisor at JRG Advisors.
A SPD is a document that is provided to plan participants to explain the plan’s benefits, claims review procedures and participants’ rights. ERISA contains standards for distribution and the information that must be included.
Smart Business spoke with Whitford about what you should know about your SPD obligations.
What are big misconceptions about SPDs?
The two biggest misconceptions among employers are 1) only large employers are required to provide SPDs and 2) the benefit booklet issued by the insurance company fulfills the obligation to provide participants with a SPD. In fact, all group health plans subject to ERISA must provide participants with a SPD, regardless of size. Both insured and self-funded group plans must comply with ERISA’s SPD requirements.
The insurance company booklet will contain detailed information regarding the plan benefits and coverage. In many cases, however, the plan sponsor (typically the employer) will need to provide additional information not contained within the insurance booklet to comply with the SPD content requirements.
What are employers’ SPD responsibilities?
Employers are responsible for providing a SPD within 120 days of starting a group health plan; within 90 days of enrollment for new participants; within 30 days of a participant’s request for a SPD; every five years if material modifications are made during that period; and every 10 years if no changes have occurred.
The plan sponsor also must provide a SPD to the Department of Labor within 30 days of the request. Failure to do so can result in a civil penalty of up to $110 per day for each day such failure continues, subject to a maximum penalty of $1,100 per request. Multiple requests for the same or similar documents are considered separate requests.
A companion document, a Summary of Material Modifications, must be provided within 210 days after the close of the plan year in which a change was adopted. If benefits or services are materially reduced, participants must be provided notice within 60 days from adoption.
In addition to the SPD, the Affordable Care Act requires plan administrators and issuers to provide a Summary of Benefits and Coverage 60 days in advance of any change in plan terms or coverage that takes place mid-plan year.
The plan administrator is required to provide the SPD to participants in a manner reasonably calculated to ensure actual receipt of material by the participant.
Employers may deliver the document by hand or send it by U.S. mail. First class is preferred, but second or third class is acceptable if return and forwarding postage is guaranteed and address correction is requested. If the SPD is sent electronically, it must follow the Department of Labor’s safe harbor provision applicable to the electronic delivery of SPDs.
How can employers streamline their efforts?
For the sake of simplicity, rather than having a separate SPD for each benefit offered, an employer can combine all ERISA-covered benefits under a single document that includes the SPD. It can function as both the plan document and the SPD.
Rather than being another paperwork burden, use this document to streamline compliance efforts. Besides the required plan provisions, there are many administrative functions that are not required to be in the plan document, such as filing creditable coverage certifications and distributing various notices. When the government audits, it asks the employer to prove it met all additional requirements, such as showing the notices or certifications and producing evidence they were provided as required.
It makes sense for employers to review what and how they communicate ERISA-required information to plan participants. You will want all documents in order when the Department of Labor comes calling. ●
Insights Employee Benefits is brought to you by JRG Advisors
Abuse of alcohol and drugs in the workplace is a reality that employers cannot afford to overlook. According to a 2008 study by the Substance Abuse and Mental Health Services Administration, more than 70 percent of the admitted drug and alcohol abusers in the country are employed, and a majority of those are full-time employees.
The costs to an employer can come in different forms. A study by the National Institute on Drug Abuse found that drug-using employees are 2.5 times more likely to have absences of eight days or more, three times more likely to be late for work and five times more likely to file a workers’ compensation claim.
“Alcohol and drug abuse on the job can cost employers money in many ways. Some of the ways are easily visible, such as higher health care premiums. Other ways are more covert, such as absenteeism, accidents and theft,” says Jan Nedin, MBA, MSEd, RCC, a senior account manager at LifeSolutions, UPMC Insurance Services Division.
Smart Business spoke with Nedin about how to address alcohol and drug abuse at your organization.
What’s the first step to proactively approaching this problem?
Employers must develop a substance abuse policy. It should include:
- A requirement that all employees report to work and remain free of alcohol, mood-altering drugs and other intoxicants.
- Acknowledgement that the company recognizes alcoholism and drug abuse as illnesses that are major potential problems regarding health, safety, security and productivity.
- A statement indicating that behavior and performance problems related to alcohol and drug abuse should be identified early and dealt with constructively via professional evaluation and treatment.
- A clear statement that chemically influenced behavior and/or performance will not be tolerated and could result in discharge.
How can an employee assistance program (EAP) help?
An EAP is a confidential consultation, assessment and referral service available to employees and supervisors to deal with recognition and treatment of substance abuse problems, as well as other personal problems that may be affecting an employee’s performance. It is an extremely valuable tool in dealing effectively with these problems.
What roles do supervisors play?
Supervisors need to know the company policies and procedures, monitor employees’ performance and behavior, and document performance problems. It is not a supervisor’s job to diagnose drug or alcohol problems — that should be left to the professionals. An EAP consultant can train supervisors on when to refer drug abuse and alcohol matters to the EAP for assessment.
What else is important to remember?
Design appropriate health plan coverage. Efforts to help the employee will be much more challenging unless health plan coverage is in place that allows employees to get treatment as needed.
Consider pre-employment and random drug screening. This is not the answer, but rather a tool that must be utilized wisely and cautiously. Pre-employment screening can weed out undesirable applicants so you have less of this problem to deal with after hiring.
If unionized, involve the union. When unions are present, they must be involved for the program to be effective.
Secure good legal counsel. Be sure to have policies and procedures reviewed and approved by a good labor relations attorney prior to implementation.
Don’t make it a witch hunt. Turning a program into a concentrated search for substance abusers may be counterproductive. Place your emphasis on recognizing and helping those who exhibit problems.
Do not concentrate solely on drugs. Alcohol, which is also a drug, can be just as serious a problem, if not more so, and all should be equally addressed. ●
LifeSolutions is part of the integrated partner companies of the UPMC Insurance Services Division, which offer a full range of insurance programs and products. The partner companies include UPMC Health Plan, UPMC WorkPartners, UPMC for You (Medical Assistance), Askesis Development Group, Community Care Behavioral Health and E-Benefits.
Insights Health Care is brought to you by UPMC Health Plan
Greg Booth protects and diversifies Zippo’s billion-dollar brand so it’s no match for the competitionWritten by Jayne Gest
After more than 10 years as president and CEO of Zippo Manufacturing Co., Greg Booth is still amazed by the product’s brand recognition.
In many places, there’s 90 percent brand awareness. When Japanese consumers were asked to name top American brands, their first responses were Coke, McDonald’s, Nike and Zippo.
“Prior to coming to work at Zippo, I worked for two large companies — a $2 billion and a $10 billion corporation — and on a regular and ongoing basis we worked hard to build our brand and increase brand awareness, and so forth,” Booth says. “And we were very successful in the category. But to get to the level of brand awareness that Zippo enjoys, that is Herculean at best.
“In the oil industry, if we had 25, 30, 35 percent brand awareness in a market, we were thrilled, and just wouldn’t think of spending the next umpteen-million to get to a level of 60 or 70 percent.”
Two of Zippo’s biggest challenges, however, stem from its name recognition — maintaining a strong presence in more than 160 countries while trying to diversify into new products.
Here’s how Booth and Zippo’s employees — 610 at Zippo and 300 at W.R. Case and Sons Cutlery Co. — are keeping the 82-year-old company growing today.
Protecting the brand
Hard work, determination and luck brought global success, and now Booth says the company’s No. 1 challenge is maintaining or protecting its brand.
“And I find it unfortunate, quite frankly, that we have to spend the time, the money and the energy we do just to protect something we already own,” Booth says.
“But trademark owners recognize that if you don’t aggressively protect your brand, you always stand a chance of losing it or having it diluted by others using all or a portion of your name.”
Booth, and owner George B. Duke, grandson of Zippo’s founder, fight an ongoing battle to protect Zippo’s name and shape. It’s something that comes across Booth’s desk weekly.
“Counterfeiters and knock-off artists build products that resemble ours and sell them either with our brand name on them, pure counterfeits, or sell them using as much of our trade dress as they possibly can to pass it off as a Zippo lighter,” Booth says.
The company employs people who spend nearly all of their time surfing the Web for trademark infringers. It also spends time lobbying in China and Washington, D.C.
Luckily, the fight has become easier, Booth says. China, now part of the World Trade Organization, is developing its own brands, thus getting a better feel for the plight of trademark owners.
Along with trademark registrations, Zippo has shape registration in about 60 countries. Booth says shape registration is difficult to obtain because other lighter manufacturers block them, saying that they make that shape, too.
“The brand is what’s worth all the money, not the metal we bend and the lighters we make. It’s Zippo — the trademark is worth who knows how much. We say the billion-dollar trademark. But that’s what you have to protect, and protect aggressively — and sometimes your hair gets grayer as a result of those kinds of battles,” he says.
Zippo’s business has grown nearly 60 percent in the past 10 years. More than 90 percent of its business is still lighters and fuel, even though tobacco-related products are declining.
Part of that is because of global sales — nearly 60 percent of Zippo’s sales are offshore. Zippo has only been in China since 1993, but that market is already about 40 percent the size of its U.S. market.
The other factor is becoming more of a lifestyle product.
When creating products in your brand family or category, or even when creating a new brand, Booth says you need to stay relevant with whoever your target audience may be.
When Booth first became CEO, the average age of a lighter buyer was 44 or 45 and rising, giving them an identity problem with younger generations.
“Most brands want to at least influence young people or people early in their lives so they continue to buy the brand later in life,” Booth says.
A 21-year-old who buys a pocket lighter now may purchase a candle lighter at 45.
But if you want to be relevant to a younger target audience, the execution is critical, he says. You want to talk to them how they want to be spoken to, socializing with them where they live, which today is via social media.
“We talk to them all the time,” Booth says. “We tell them what we’re doing, where we’re going, why we’re doing it.
“You want to be in their face electronically. You want to be involved with something that means something to them, something they enjoy.
“So, we’re involved in music — Live Nation for example,” he says. “We’ll sponsor 100 to 150 concerts around the country each year, and we have the Zippo booth and the Zippo people and everybody there, so the fans know who is sponsoring it.”
Another strategy is being conscious of what makes a lighter worth collecting. Several years ago, Zippo went to the Art Institute of Pittsburgh and asked students to create art to put on lighters. It was so successful Zippo now sponsors contests for student artists to create relevant art for products.
All that effort has paid-off. Today, the average age of a lighter buyer is in their mid-30s.
Launching new products
When Booth saw the buying trends in the tobacco category 10 years ago, the company started working on developing new products.
The strength of the brand name, however, has worked against the company. Booth says the more mature the market, the more challenging it is.
“So, in our oldest market, the good ol’ U.S., it’s harder to diversify because when you say to consumers, ‘What would you think about buying a hand warmer from Zippo?’ sometimes the reaction is: ‘You mean the guys that make lighters? Why would I buy a hand warmer from those guys?’
“If we do the same thing in a less mature market like Japan or China, consumers far more easily grasp the concept and accept the new products because they haven’t been tied to Zippo, the cigarette lighter, for 80 years,” Booth says.
It’s also a challenge coming into channels already crowded with competition. Booth says you have to get retailers on board with putting the product on shelf space that already has velocity and profit.
To keep from stretching its brand into something it shouldn’t, Booth says Zippo does a mountain of consumer research.
“Research is a monumental first step. You have to find what your brand will support by way of a product,” he says. “I’m sure there are 20 different things that we could go out and try to do that wouldn’t be very successful. But if we stay in the flame category, and categories or products that are normally lifestyle-related, the research we’ve done tells us we should do reasonably well.”
Stretching the brand led to a misstep a few years ago, when Zippo bought an Italian leather purse company called Zippo — for the trademark.
Zippo, unsuccessfully, tried to run the business for five or six years. There was a lack of good management, and Zippo just didn’t know enough about women’s leather purses. Booth says they ultimately discovered that Zippo purses weren’t fashion at all, but rather purses that women carried to work.
But research is just the first step. It also takes the right sales force, the right channel of distribution, the right public relations and media, and the correct level of dollar support, while not trying to launch too many new products at once.
“You have to be committed, and I think the other thing you have to be — other than well-organized and smart — you have to be incredibly patient,” Booth says.
Even with the challenges, Booth is excited about growing into more of a lifestyle brand, launching products in the outdoor recreational camper and patio categories. Zippo is looking to add grills and stoves to hand warmers, fire starters and lanterns in the coming months.
“We do these new product development sessions and come up with these potential products for market. We have a potential portfolio of products that could take us out five or six years, but you can’t do it all at once,” he says. “So, we do a couple here and a couple there, because it’s a handful getting them launched, and they are pricey when you build them from scratch.
“Yes, there’s lots of excitement and lots of opportunity as we’re going in a lifestyle direction,” Booth says. “But thank heavens Zippo lighters continue to sell in phenomenal volumes.” ●
- Aggressively protect your brand so others don’t dilute it.
- Stay relevant with your target audience by relating to them.
- Research thoroughly before launching new products.
The Booth File:
Name: Greg Booth
Title: President and CEO
Company: Zippo Manufacturing Co.
Born: Bradford, Pa.
Education: Bachelor’s degree in biology and chemistry from the Indiana University of Pennsylvania.
What was your first job and what did you learn from it? I was a paperboy for the Bradford Era, way back when. I was probably 13, 14 or something like that. I had to walk about a mile and a half to pick up the papers and start the route, and the route took another hour or hour and 15 minutes. I did that before I went to school.
You have to get up and go do the paper route no matter how bad you feel, or how good or bad the weather is. You have a responsibility to deliver these papers — I think at the time I had about 110 customers. You just had to get up.
What is the best business advice you ever received? One thing I was either told or learned over the years is that no matter who you work for or around — no matter what you think of the individual — if you listen and pay attention, you’re probably going to learn something from everybody. I remember in one case, I learned what not to do.
If you pay attention and are open-minded, you can learn something every day from your environment or the people you work around.
Do you have a favorite Zippo lighter? It’s a pink lighter that I carry in my pocket all the time. It’s one of our pink powder-coated lighters that has a beautiful picture of my daughter on it, who I tragically lost in a car accident five years ago.
- The original Zippo windproof lighters cost $1.95. A similar lighter today retails for $15 to $16. The design has remained virtually unchanged.
- The Bradford factory produces 50,000 lighters a day.
- In 2012, Zippo produced its 500 millionth lighter.
- The original 1947 Zippo Car, customized for $25,000, traveled to all 48 states in the 1950s. When Zippo looked to restore the car prior to its 50th anniversary, however, it had disappeared without a trace. Despite a PR campaign asking “Have you seen this car?” Zippo had to buy a second Chrysler, customizing it to look exactly like the original.
- During World War II, Zippo dedicated all manufacturing to the U.S. military; this was a significant catalyst to establishing Zippo as an American icon.
- There are approximately 4 million Zippo collectors in the U.S. and 11 collectors clubs worldwide. The highest amount paid for a Zippo lighter was $37,000 for an original 1933 model.
- There are more than 288,000 Zippo-related videos on YouTube, and 600,000 fans on Facebook. More than 22 million people have downloaded the Zippo smartphone app.
- The Zippo lighter has been featured in more than 1,500 movies, stage plays and television shows.
Learn more about the Zippo Manufacturing Co. at:
How to reach: Zippo Manufacturing Co., (814) 368-2700 or www.zippo.com
Rocketing to success: 4moms' Rob Daley and Henry Thorne manage rapid growth while keeping the culture that got them thereWritten by Jayne Gest
In 2004, two friends — Henry Thorne, a world-leading roboticist, and Rob Daley, a successful businessman — discovered over lunch they shared a vision for the type of company they each wanted to build that would foster creativity, collaboration and loyalty.
Rather than working alone, the two teamed up to take advantage of their complimentary skills and backgrounds, with Thorne as CTO and Daley as CEO.
“We also knew there were only two ways to make it as an entrepreneur: create a new market or change an existing one,” Daley says. “With its steadily decreasing price, electronics were both cheap and powerful for the first time ever (known as Moore’s Law) and could be used as a change agent to completely redefine an industry.
“We decided to focus our efforts on the plumbing industry, a field that had not significantly changed since the introduction of copper pipes after World War II,” he says.
The two built a showerhead demo that used behind-the-scenes electronics to control the exact temperature of the water. Daley says they took the prototype to the Pittsburgh Home Show, expecting a wave of excitement from tech-savvy men.
That wasn’t the case.
“Elderly women living alone loved the product because it was a tool that could help them maintain their independence, and mothers wanted something similar for the bathtub so their children would be safe and comfortable while bathing,” Daley says.
“After researching both elder care and juvenile products, we determined the juvenile product industry presented the most appealing opportunity, and the spout cover — 4moms’ first product — was born.”
Officially established in 2006 under the parent company Thorley Industries LLC, 4moms has experienced rapid growth in recent years. Sales were close to $30 million in 2013, and are projected to hit $60 million and $100 million in each of the next two years.
Here’s how Daley and Thorne got their company off the ground and are now focusing on identifying the right people, partners and systems to scale the business as it grows.
Entering the market with solutions
Usually, in a static market, like the juvenile products industry, incumbents win, Daley says. But by effecting change, companies can successfully enter the market.
4moms was built on the philosophy that the future of robotics lies in taking abstract or expensive technology and making it practical for ordinary use.
It also gives the company an impetus for creative growth because parenting can always be just a little easier, and technology consistently gets faster, lighter and less expensive.
In the company’s first focus group of mothers, the group explored juvenile product pain points, providing valuable insight that led to product creation.
“People don’t buy products. They buy solutions, and robotics helps us provide those solutions,” Daley says.
One way to become more innovative with product development, in any industry, Daley says, is to first minimize the scope. Then, work hard to get the job done right, while continuing to improve it.
Along those lines, 4moms is introducing new products similar to existing, successful products. For example, in January, 4moms launched rockaRoo®, a baby swing that rocks like a rocking horse. It’s a companion product to the existing mamaRoo®, an infant seat with five motions that mimic a parent comforting his or her baby.
Later this year, the company also will launch a lightweight version of its popular origami® stroller.
Managing growth through the right culture
With success has come rapid growth. The company secured more than $40 million in strategic funding. It also projects 300 percent revenue growth over the next three years, driven by increased demand for current and new products.
In addition, the team is adding U.S. retailers and is poised to secure several more international partners. Current retail channels include more than 500 U.S. stores and distributors in more than 40 countries.
Daley says it’s important to make sure you have good people to handle the rapid growth.
“Culture is everything,” Thorne adds.
A focus on innovation, passion and people should help ensure the company doesn’t lose its way while undergoing exponential growth, Daley says.
By fostering creativity, collaboration and loyalty, while offering opportunities for growth and encouraging employees to develop their own ideas, he says you can create a successful company culture.
Some values they want to keep in mind:
- Never let fear of failure limit your creativity, and be open to change whenever good ideas present themselves.
- If you’re passionate about what you do, that will inspire passion in others.
- Treat people like they are your most important assets, because that’s what they are.
In addition, some specific ways that directly contribute to employee happiness and retention include company lunches, new employee retrospectives, leadership development, team member reviews, monthly team “Lunch & Learns” and more.
The company also put together an e-book called “Vision and Values,” which serves as a reminder to the team about what makes 4moms a great place to work.
“We have resisted putting words to things like our mission and our values and our culture. We’re either innovative or we’re not. We’re either a great place to work or we’re not. Anyone can write platitudes but writing them doesn’t make them true,” the introduction states. “However as we grow, it’s important that we don’t lose our way.”
Then, in the 68-page e-book, some of the 113 employees contributed in their own words what 4moms means to them.
“As founders and active leaders at 4moms, we are focused on building a great company that cares about more than just financial success,” Daley says. ●
How to reach: 4moms, (888) 614-6667 or www.4moms.com