While many companies would be like a ship without its captain after the loss of its illustrious founder, Jess Jackson, the Jackson Family Enterprises had a very capable successor in Rick Tigner — one who would continue the family-owned winery group’s reputation and make mom and dad’s favorite chardonnay into the favorite of their millenial children too.
In April 2011, Jess Jackson died of cancer at the age of 81. He was an individual whose vision, perseverance and work ethic helped transform the wine industry.
He started the Kendall-Jackson wine business with the 1974 purchase of an 80-acre pear and walnut orchard in Lakeport, Calif., that he converted to a vineyard. Nearly 40 years later, Jackson Family Wines is among the world’s most successful family-owned winery groups, composed of more than 35 individual wineries.
Jackson Family Enterprises is the company that oversees Jackson Family Wines, its global sales organizations and the Kendall-Jackson brand. Tigner was named president of Jackson Family Enterprises a year before Jackson passed away. A 24-year veteran of the alcohol beverage industry, Tigner has held positions at Miller Brewing Co., Gallo, Louis M. Martini and nearly 20 years with Jackson Family Wines.
“When I first became in charge of Jackson Family Wines three years ago, one of my goals was to actually get one team, one dream,” Tigner says. “If I can get all 1,200 employees going in the same direction at the same time, how powerful would that be?”
The company, its 1,200 employees and its more than 30 brands of wine, was solely in Tigner’s hands, and it was now up to him to keep the operation flourishing.
“Our company mission is to be the best wine company in the world,” Tigner says.
Here’s how Rick Tigner is taking Jess Jackson’s legacy and moving Jackson Family Enterprises forward.
Connect with consumers
In any industry, it is extremely easy to be hands-off with consumers. In the wine industry, many vineyards deal with distributors or trade partners and aren’t very tight with the consumer. Tigner says that isn’t the case at Jackson Family Wines.
“Innovation comes in different forms and fashions,” he says. “In the wine business, what you get is a lot of what I call the ‘sea of sameness.’ You look at a wine magazine ad and you see a bottle and vineyard, but it can be anybody’s bottle and anybody’s vineyard. The question is how do you connect with a consumer in different ways?”
Last January, Tigner was featured on the TV show “Undercover Boss.” He saw this as a new way for a wine company, especially a family wine company, to go on television and tell people about who the business is as a family, as a company and how it produces its products. The blogosphere gave generally rave review about Tigner’s TV appearance.
“The one thing that we’re always very, very focused on is quality,” he says. “We want to make sure that consumers know that whether it’s the Kendall-Jackson brand or the La Crema brand, quality is one of the foundations of our organization.”
To tell its consumers about its products, Jackson Family Wines is putting more focus on social media. The company recently hired a digital marketing team to make sure it has a presence on Facebook, Twitter and YouTube.
“A lot of companies have pretty pictures,” Tigner says. “What we actually want is engaging content … versus the standard picture of a bottle in a Wine Spectator or Wine Enthusiast magazine.”
Being involved in social media is becoming increasingly important, but it isn’t enough to just have a Facebook page; you have to engage with your fans and potential customers.
“If you look at Facebook, a lot of brands have Facebook, but the question is do you listen to the people who are on your Facebook page?” he says. “Do you react to how they talk about you on Facebook? We listen, and we learn from that activity. These are our friends and family who actually went online and signed up on our Facebook page, because they’re looking for interaction.”
Tigner says this interaction can’t be boring or constantly the same old thing. You have to be looking for ways to keep your audience involved and engaged.
“The key for us in regard to capturing our consumer is actually listening to them,” he says. “We create content that they want to see on video or in photos. We’ve done a lot of recipes. A lot of people want to talk about food and wine pairings. We have spent hours and hours and hours putting together a recipe program for our website.”
Jackson Family Wines has a lot of pages on its website and on its social media because even if a consumer doesn’t go to them all, those pages are there and available to them. The same thing goes for YouTube.
“If you go to YouTube and capture that consumer and they see a training video or a wine education video or a food-and-wine program, the next time they go look at your YouTube, you better have new content,” he says. “It has to be ongoing engagement, intriguing and informative. If you don’t have that, then you’ll lose your consumer. Those are things we’ve done to continually engage the consumer.”
What this kind of engagement helps Jackson Family Wines do more than anything is reach a more diverse audience. Many of the company’s consumers are baby boomers and social media is helping the brand reach the younger generations.
“We want to keep the baby boomers like myself who’ve been drinking our brands for a long time,” Tigner says. “But we want to capture the millennials. Who is that 25- to 35-year-old out there who has disposable income to buy premium wine? We have to give them the messaging and the content.
“We’re going out and making it new and fresh for them so it’s not just their mom and dad’s favorite chardonnay, but it becomes their favorite chardonnay and then their favorite cabernet or pinot noir.”
Educate about your product
The wine industry can be very complex due to the sheer number of wine styles, brands and varietals that make each bottle different. For Jackson Family Wines, it is crucial that its staff and its business partners are knowledgeable about the company’s products.
“In our company, we have 1,200 employees,” Tigner says. “In our sales team, there are about 400. I would argue we have the best sales team in the world and the best fine wine team.”
Tigner makes this argument because the company has four master sommeliers on staff and nine more in training out of a total of 180 in the U.S., who help to educate the sales team.
“They educate our sales teams, our distributors and our internal staff,” Tigner says. “We want to make sure everyone who works for our company, whether in IT, marketing or finance, has knowledge about wine and a passion about wine.”
Transferring that knowledge outside of the company is the hard part. Jackson Family Wines has to work with its distributors, trade partners and, more recently, directly with consumers to educate them on the products.
“In this business, 20 years ago, manufacturers or wineries like us spent all our time selling our wine to distributors and educating our distributors who then sold to retail stores who then sold to consumers,” he says. “About 15 years ago, that was still important, but the next piece was actually us communicating with our trade partners.
“In the last five years, all that is still important, but now we’re talking directly to our consumer, whether it’s online, in our tasting rooms or our wine club program.”
One of the biggest things related to education that Tigner has to keep aligned is the messaging Jackson Family Wines spreads both internally and externally.
“We broke down our strategic initiatives into three simple buckets,” he says. “You want to keep it simple so everyone knows what the plan is. Our strategy is lands, brands and people. So that when people want to know what are we working on, you can break it down to land, brands and people, and then we have the initiatives below that.”
To aid in keeping this message aligned and helping to push the company forward, Tigner has implemented management meetings.
“In the last three years since I’ve been put in charge, I’ve had more senior management team meetings,” he says. “We really didn’t have those before.
“Every quarter, we bring in the top 50 managers of the company plus outside guests and visitors and we talk about lands, brands and people. We talk about the strategic initiatives. I want to make sure everything we put in place at the beginning of the process is still being worked on.”
While his management meetings are a new tradition, there are some things that Tigner wants to maintain, like the company’s culture.
“When I first took over being the president, we had a great training program, recruiting program and succession program,” he says. “I want to make sure we have that exact same culture. Culture doesn’t show up on a P&L, but culture is very, very important to the company.”
The culture is something Tigner wants to be identical whether it’s the IT, finance, marketing or production departments.
“I want to make sure all our employees are treated similar and fair throughout the entire organization,” he says. “I take it upon myself on a regular basis to check in with middle management, lower management, field workers and sales workers because I want to make sure everyone has the right communication and we’re all on the same page.
“I spend most of my time making sure the messaging of the organization runs wide and deep.”
Just like a generous pour of chardonnay. ?
How to reach: Jackson Family Wines, (707) 544-4000 or www.kj.com
Connect with your consumers using new channels of communication.
Keep your content engaging and new.
Educate internally and externally about your product or service.
Twenty years ago, Bert Jacobs and his younger brother, John, were looking for ways they could avoid getting typical jobs. Jacobs and his brother never agreed with the standard path for someone coming out of college. In fact, at that time, Jacobs was delivering pizzas and teaching people how to ski to earn a living. The brothers were looking for a unique path to live life how they wanted to live it.
“We wondered if we could create something that fit us better,” Bert Jacobs says.
That fit was The Life is good Co., an apparel and accessories company that spreads the power of optimism in its products and through its nonprofit organization, The Life is Good Playmakers.
Fast-forward to today and Life is good has 260 employees and saw 2012 revenue north of $100 million. Not bad for two brothers who wanted to maintain the fun in their lives.
Jacobs serves as CEO, or chief executive optimist, while his brother John serves as chief creative optimist. The two started their company 19 years ago aided by a drawing of a smiling character named Jake, who has become more than just a logo on the T-shirts but a symbol of optimism and the driving force behind the company and its inspiring message.
“Jake is our hero here at Life is good, and we like to say that Jake has superpowers,” Jacobs says. “Those superpowers guide our decisions.”
Simplicity, gratitude and humor are just a few of the 10 superpowers in total that help shape how the company does business. In recent years, the Jacobs brothers have had to do some self-evaluation as leaders and plan more strategically to understand where to go next with their company and its message.
“We’re 19 years in business and we’re really less about being a clothing company and more about the clothing being a vehicle for an important message,” Jacobs says.
Here’s how Jacobs has overcome the growing pains of leading a small private company into a larger corporation.
Find your direction
Since early in Life is good’s existence, the company’s inspirational message has been both a strength and a challenge for Bert and John Jacobs.
“Our message is so clean and simple that it applies to a tremendous array of different things,” Jacobs says. “So we have a lot of choices, which is a great place to be for a business, but it can also keep you up at night thinking about what we should do and shouldn’t do.”
Jacobs remembers one instance when the company was just above $1 million and he got a call from a large liquor company wanting to purchase more than $6 million worth of T-shirts from Life is good.
“We could have had 600 percent growth, and it was really, really tempting, but it really didn’t have anything to do with the reason why we liked the brand, started the brand or the vision of the brand,” he says.
“There has always been that pressure, and when you’re given an opportunity to go and hit the gas, it’s real tempting to do it.”
That call was the late ’90s, but in recent years, Jacobs says it’s too dissimilar.
“There are always people bringing ideas and opportunities, and I think we have to look and say, ‘How do those opportunities line up with our mission? How do they line up with our vision and with what we’re trying to do with our lives?’” he says.
Knowing what move to make next is one of the biggest challenges in any business. The way to attack that challenge and consider it an asset is to know who you are and act like it.
“That’s how we define branding internally at Life is good,” he says. “The mission of our company is simple — to spread the power of optimism. If we’re going to make a business decision that drives revenue, that’s great. But if it drives revenue and it doesn’t spread the power of optimism, it’s not so great.”
These business decisions come back to the company’s inspirational leader — Jake and his superpowers.
“These superpowers have to start showing up in the deals we do,” Jacobs says. “A big driver of these decisions is knowing our brand. We had good gut instincts back in the early days. Today, we can really line it up against criteria, and it’s pretty easy to take a look and see whether it’s a fit or not.”
Decisions regarding company direction take a great deal of focus. You must consider all that is at stake and who will be impacted by the decisions.
“You need to get away from the details of the business and ask what you want to do with your life,” Jacobs says. “If someone is trying to make a decision about their business and they’re not looking at how that’s going to serve their life, then they’re not going to make the right decision, in my opinion.”
Once you answer that, you have to look at who the stakeholders are of the business and what they want to do.
“You have to start with the highest priorities and who owns that organization and what are they trying to do and where do they want it to be,” he says. “A big part of that is including your customer base in those stakeholders, because a business can’t continue, it can’t thrive, and it can’t grow or do new things without your customers. Then make a decision based on that.”
Regardless of what decision you ultimately make, you have to ensure that you go through a process to understand why you’re making that decision.
“There have been times with this business that we didn’t go through that process, and those are the times that it stings you,” Jacobs says. “We’re lucky that none of those times we did things that sank the ship and we can still live our dream. But if you don’t watch those things, you can lose your dream.”
Just as understanding the company’s direction in recent years has been a challenge, so too has having to let go of some of the leadership responsibility both Jacobs and his brother have had in the past.
“Like many small businesses — the people who started the business play a very critical role,” Bert Jacobs says. “You can sort of kid yourself at some point that nobody can do something better than you can.”
The Jacobs brothers began reading about the struggles that companies go through and the mistakes that leaders make. One thing they saw over and over was that leaders have a tendency to place blame on others for issues in the company, but they’re afraid to have a self-evaluation.
“That was a big step for us,” Bert Jacobs says. “What we did was we created a task force at Life is good and we asked them to critique my brother and I and our other four partners. It was sobering. They were really honest and really candid. There were many areas where we weren’t doing a great job.
“The task force and the criticisms forced us to put some structure in place to reorganize the whole company and align on all our major strategies.”
Going through that evaluation opened doors and enabled autonomy to Life is good and its top management and general managers of its different business units.
“When we clearly paint the vision of where we want to go and we get out of the way, they’re not as good as us, they’re better,” Jacobs says. “That decision has been a real revelation and a breakthrough that a lot of small business owners sometimes never make or make too late.”
For Jacobs, realizing that taking an extra day skiing up in Maine isn’t a bad thing every once in a while has helped him and the business grow.
“The business might be better off without me on a given day,” he says. “Maybe by being around we can get in the way of things. Instead, if we put people in place and we trust the job that they can do, then unexpected things can happen.
“I can point to spots through the years where we probably could have grown stronger, faster and smarter if we did a little less. When something is your baby, you hold it white-knuckled sometimes, and I think we have gotten over that and we’re enabling more things to start happening.” ?
How to reach: The Life is good Co., (617) 266-4160 or www.lifeisgood.com
When Jean-Paul Ebanga looks up at the sky, he thinks about the more than 3 million people who fly every day on airplanes powered by CFM International engines. In fact, every 2.4 seconds an airplane departs under the power of a CFM engine.
“That means our role today is far beyond delivering engines to the industry; it is also making sure people are traveling in a very safe way at a decent price,” says Ebanga, president and CEO of CFM International, a $15 billion aircraft engine manufacturer that is a joint venture between GE here in the U.S. and Snecma in France.
CFM — which gets its name from a combination of the two parent companies’ commercial engine designations, GE’s CF6 and Snecma’s M56 — combines the resources, engineering expertise and product support of these two engine manufacturers to build engines for narrow body aircrafts.
“Today, in the air transport industry, the narrow-body segment is the main segment of the industry,” Ebanga says. “Looking forward for the next 20 years, there will be a need for roughly 30,000 new airplanes; two-thirds of those will be narrow-body airplanes and CFM is currently leading this market segment.”
If being the industry leader in engine manufacturing wasn’t enough of a challenge, Ebanga also has the challenge of leading a joint venture company where compromise and collaboration is the key to success.
“If you are taking two parent companies with two different cultures and you try to blend them, this will generate some difficulties,” Ebanga says. “But the net result, because you have to find compromise, because you have to work between different cultures, will be more sound ideas and a much more efficient organization.”
Here’s how Ebanga utilizes both GE’s and Snecma’s resources to keep CFM the industry leader in narrow-body aircraft engine manufacturing.
Compromise and collaborate
While a majority of companies are focused on streamlining themselves, CFM has to take a different approach to its business. Its joint venture means CFM has to work to find compromise above all else in order to properly function at its best.
“The problem with the JV is because you have two different constituents, you have to make compromise,” Ebanga says. “There is no one voice saying this is the way and the rest of the team just follows without asking questions. In terms of leadership, it requires some things to be a little bit different than normal leadership.”
The existence of this additional challenge makes this kind of partnership too difficult for some leaders and companies. But Ebanga sees the glass as half-full.
“If you are able to find the sweet spot between the two company cultures and then work around these difficulties, you enable a new space of opportunities and strengths,” he says. “This is the essence of joint venture success.”
CFM has been known for a long time by its superb engine family, CFM56. Now the company is looking to release its next generation of engines called LEAP, for which compromise and collaboration will be key to its success.
“This new product will be designed based upon a very detailed and comprehensive market survey,” he says. “We spend more than three years asking the customer what they are looking for in the next 20 years and understanding in a granular way how the dynamics of the market can evolve, and then we define the product, which is the answer and the solution to that.”
When you have two companies, the reading of the market dynamics will be different because each company has a different way of operating and a different culture, so they will analyze all the signals in a different way.
“Maybe the solution has some things shared, but the two won’t be exactly the same,” Ebanga says. “The whole key is how you bridge the two approaches. How can GE or how Snecma can make the necessary compromise to accept that the other guys also have a great idea and how can you work together to bridge ideas that make a great product.”
The trick is being able to step back from what you believe is the ultimate answer and being able to compromise with other ideas from another company that also thinks they have an ultimate answer.
“By bridging the two, you find out that some of what’s behind the idea of the other company you didn’t think about at first and vice versa,” Ebanga says. “At the end, the product you are putting on the market is far better than the one you could have done alone.”
Both GE and Snecma own their own technology. Snecma works on the front and back of the engine, while GE works on the middle of the engine. For LEAP, they both have been developing technologies for their respective parts of the engine, but the companies don’t unilaterally say, ‘Here’s our part of the engine.’ The other company has to accept and agree with the technology based on analysis. There are checks and balances that go into the process.
“Based on the other company’s remarks, you can improve your own part,” he says. “Snecma might make some comments about the core, which is the responsibility of GE and taking into account these remarks GE will improve its own part of the engine and vice versa. It’s a mutual cross-pollination.”
The level of compromise and collaboration that CFM has developed has been built up during more than 30 years and is now a major part of the joint venture’s culture.
“In our case, the different GE and Snecma leaders, over time, understood that CFM’s success is more important than their own success,” Ebanga says. “That is to say that if I’m trying to optimize my own interests rather than CFM’s interests, at the end of the day, I would lose the game.”
CFM and GE have been very successful at carrying out this approach even though the leaders have changed.
“One way to do that is we manage young leaders in the challenges of working in this strategic partnership environment,” he says. “If you are growing leaders in this environment, eventually when they are in the top spot, they will have the framework to deal with what makes up the success of this JV.”
A joint venture takes an investment in both people and process in order to make it work.
“In a strategic partnership, it is like being a couple — you could fall in love day one and it’s great for a couple of weeks, but if you are not investing in the relationship … it won’t be a great love story,” he says.
Plan for the future
One of the main challenges CFM has is that in the ’70s it was just a start-up company. Now it has become the leader of the aircraft engine industry, and in order to remain in that position, Ebanga and the company must be forward-thinking.
CFM has several matters it needs to focus on for the future of the company. No. 1 is executing on current commitments.
“This is a big deal because we are currently developing a new engine family called LEAP, and the start of this new program has been very successful,” Ebanga says. “We are the sole power plant for the next generation of Boeing 737 MAX aircraft, one of the two engine makers of the Airbus A320 aircraft, and we are the sole power plant of the new Chinese COMAC C919 aircraft.”
Beyond making LEAP the next engine of preference, CFM also has to ensure that whatever changes the market goes through in a decade or two from now the company will be able to adapt and reinvent itself to stay in the leading position.
“When you are in this top-dog phase, it’s difficult,” he says. “It’s about working on a short-term basis and, at the same time, articulating a strategy to change the way we are running to make sure we will still have the appropriate fit 10 years from now.”
Planning for what the future has in store is not an easy task. You need to address the situation in a very humble way.
“You are already overwhelmed by the shop-time challenges and to find time and perspective to think about the long-term is rather difficult,” Ebanga says. “Being humble helps you to engage in this journey. Along the way, you will have a lot of reasons to give up for a while and stick with the short-term. I think this is a recipe for failure. You need to stay humble on one end but also stay engaged and not let things go away.”
You also need to understand your market but not in the way you understand your market for your short-term objective.
“When you are looking at the market on a short-term basis, it is to make sure you have the appropriate marketing and value proposition to get yourself up and make your numbers,” he says. “When you are looking at the long-term perspective, it’s really the ability to elaborate scenarios about the change in your industry.” ?
How to reach: CFM International, (513) 563-4180 or www.cfmaeroengines.com
Drive compromise and collaboration for best results.
Be able to reinvent your business to adapt to your market.
Develop plans for how the future of your market may unfold.
The Ebanga File
President and CEO
Born: Paris, France
Education: Graduated from École Nationale Supérieure d'Électricité et de Mécanique (ENSEM), France with a degree in engineering
What was your very first job, and what did you take away from that experience?
I was the leader of the photo club in high school. A lesson I learned from that time is that you can have some great ideas and be very fast in your head, but you have to have the ability to bring people up to speed. This is a great example of how a real organization works.
What got you into aviation?
It was the beauty and the exceptional achievement that this industry is all about. When I was in high school, I had two dreams—the first one was to be an architect and the second was to be an engineer to design great things. To imagine that I could generate some great things to enable this kind of achievement was absolutely fascinating for me. So I chose the engineering path and it still gives me great satisfaction. An aircraft engine is an absolutely amazing piece of technology, but also a piece of art.
Who is someone that you admire in business?
My first thought was the leaders and initial creators of Intel. Not only was this company able to start from nothing as CFM did and became the leading company in the microchip/microprocessor business. Initially they were the leader in the memory business and then they reached a point where they had to reinvent themselves. The reason Intel is the great company they are today is because they were able to reinvent themselves in the absolutely right way. So I admire this generation of Intel leaders.
Roger Andelin believes in the power of storytelling — so much that even an e-commerce business composed of people from the impersonal sales and technology fields can benefit from the skills of a good storyteller.
Andelin had served as the CIO of Internet retailer Buy.com for six years before leaving to take the same position with The Washington Post, one of the most famous and influential newspapers in the country. It was during his stint with the newspaper that Andelin, an executive with a commerce and technology background, discovered how to take good storytelling and apply it in the world of commerce.
“I became a lot more aware of the power of storytelling and the power that can have in a business, especially on the commerce side,” Andelin says. “Commerce was missing that.”
When the opportunity arose for Andelin to return to what had, in the interim, been renamed Rakuten Buy.com, he felt he could utilize the sum total of his experience as an executive, splicing together his e-commerce background with a newfound knowledge and appreciation of storytelling to open new doors for the company.
“When I sat down for the first time and heard about our chairman’s vision, it resonated through and through,” Andelin says. “The idea was [that] we want to give merchants a voice in our marketplace. Let’s connect our merchants with their customers; let’s bring a new shopping experience to the table.
“It was very different from the typical model in our space, which is you come in and search for a product, put it in your cart and check out. It really brought back a lot of the nostalgia in the commerce business, which was missing on the Internet and electronic side. We had a chance to bring that back to the whole process.”
After accepting the president’s role at Rakuten Buy.com — which was rebranded as Rakuten.com Shopping in January — Andelin set out to tell the story of the company’s new vision and how it would be realized. He wanted to get every executive, manager and associate in the Rakuten system to believe in the vision and to feel motivated to carry out the plans that would make the vision a reality.
Define your drivers
Any retail business — whether in the e-commerce space or reliant on a bricks-and-mortar network of stores — will always be driven by the numbers. The number of customers you can get to your site or store will convert to a number of sales, which will convert to a number of repeat customers.
But to realize the new vision for Rakuten.com Shopping, Andelin needed to promote something else. He needed to promote loyalty. It’s something that can’t be directly quantified on a balance sheet, but Andelin realized, soon after he took over, that it would be an essential ingredient in the success of the vision. It would be, in short, a primary driver of the business moving forward.
“The business really boils down to the number of visitors that come to our site and our conversion rate to how many of those visitors buy from us and what the average value of that order is,” Andelin says. “So once you look at those drivers, those KPIs [key performance indicators], you look into it and see what is it that drives that component. Traffic, or visits, are driven a lot by advertising but also by loyalty.”
As such, Andelin wanted his team at Rakuten.com Shopping to focus on driving customer loyalty and merchant loyalty. Since the staff at the company is, in large part, composed of people with technology backgrounds, it was a different concept.
“What happens is that technology departments often get focused on a feature,” Andelin says. “They’ve been asked to deliver A, B and C, and at the end of the day, they deliver that, but it doesn’t always yield the business value that was expected. So by shifting the emphasis away from the actual feature we’re delivering and getting the teams focused on delivering business value, it fundamentally shifts the whole project pattern in a very meaningful way.”
Andelin and his team began to implement initiatives, such as a reward points program, as a formalized way of building merchant and customer loyalty. But he also wanted to see his team deliver value in more fundamental forms.
“One of our objectives, for instance, is to increase the voice of our merchants online, to help them connect more with their customer base,” he says. “That is one of the main things that is going to separate us in a meaningful way from our competition. That technology stepping in and facilitating that communication is something that would be pretty unique for a merchant.”
Give people a voice
You can craft a well-thought-out vision that aims the company toward new heights of prosperity, but none of it will matter if you can’t achieve buy-in from everyone in your company.
It’s something that Andelin acknowledged early in his tenure, and it’s why he embraced the role of storyteller from his first day on the job. Employees can hear about the vision, they can learn the drivers, but until they see tangible ways that the vision will lead to a better, more profitable company — and by extension, more earning potential and job stability at their level — they won’t completely buy in.
“Alignment can be challenging,” Andelin says. “But I have found the best way to do it is to very clearly articulate the problem or very clearly articulate the vision and then explain why the solution we’re all working toward will resolve that.
“You start to get individuals to understand the vision or the problem by articulating it very clearly. They see it and recognize what you are doing and why you’re doing it. People generally get that. It’s when the communication isn’t there that the team starts to falter and lose the passion for what they’re doing.”
In order to tell a story, you need a means of communication. Authors have books, journalists have mass media and directors have the cinema. At Rakuten.com Shopping, Andelin has, among other things, weekly “asakai” meetings that utilize technology to bring together people from Rakuten’s U.S. operations and beyond.
During the weekly meetings, senior management reinforces the vision and values of the organization to employees throughout Rakuten’s footprint. The meetings are another way Andelin is using technology for storytelling.
“What we say at the weekly asakai meetings goes all the way down to daily huddles, where each department will get together and talk about their departmental issues,” Andelin says. “The thing to remember is the teams you are leading have to get it. The business leader has to be open enough and accessible enough, to the point where if the team has questions, they feel able to ask those questions.
“If they have concerns, they have to get those concerns out on the table and walk through them.
“One of the most powerful ways to reach consensus is not by reducing the conversation but by increasing it. It is through conversation that leaders and managers are able to convey the vision and get individuals to come on board with the direction of the organization. Communication is absolutely key.”
Show your wins
Every story has a beginning, middle and end. In Rakuten.com Shopping’s case, the story is still in progress. If you don’t have final results to show your people, you need to show them progress and trends. Keeping employees in the loop is another essential way to bring them on board with your vision. You have to demonstrate the wins you are tallying and the progress you are making toward realizing your vision.
“As an example, we ran one of our summer sales at the end of August, right after I started,” Andelin says. “We measured the sale based on year-over-year performance — so, how we did on these days versus the same days the prior year? That event ended up giving us a fairly sizeable increase in our number of orders, in visitors coming to the site, all of the key metrics that we’re looking at. Those wins really help focus the team.”
If you’re going to tell a story that it’s going to serve as a motivator for your people, the story has to inspire. That doesn’t mean your people have to leave the meeting or conference call ready to climb Mount Everest, but it does mean that they leave as believers in what the company is doing.
“It’s a fairly basic idea that winning is contagious,” Andelin says. “It builds confidence; it helps you to solidify a repeatable process. It shows us what we need to do to drive sales during a particular event. If we get really good and learn those things, we can repeat it, and we can grow our business to improve step-by-step, by improving those processes. Everybody gets excited, and it really becomes a companywide initiative, because everybody has a little piece of it. So when you start to achieve your vision, everybody feels good.”
How to reach: Rakuten.com Shopping,
(949) 389-2000 or www.rakuten.com
The Andelin file
What is the best business lesson you’ve learned? You want to take accountability for when things don’t go smoothly and perfect. At the end of the day, if you screwed up, take responsibility for it, figure out what happened and move forward. That is one of the most relieving principles in business. It’s a liberating principle for all leaders, as opposed to passing blame and making excuses.
What traits or skills are essential for a leader? Having a vision and being able to communicate it on both an individual and group level. Leaders have to be approachable, accept criticism and be able to defend their positions with logical, rational arguments backed by data and facts. Authoritarian leadership doesn’t fly nowadays. You have to win the minds of intelligent people who are used to thinking for themselves, are well-educated and have fabulous opinions.
What is your definition of success? There is a sense of irony around it, because as soon as you start to define success, you limit yourself. If you define success as you see it, you just cut yourself off from other areas where you could be a success. You have to kind of know success when you see it, just like knowing what art is, or knowing what sounds good in music. So many things drive success, to define it is almost impossible.
Tell a great story.
Communicate it to your people.
Show evidence of success.
A merger or acquisition is a sensitive process for all parties involved. Misinformation can abound, egos can be bruised, and business relationships can be damaged. One major cause of problems for companies entering a merger or acquisition is rumors and misconceptions that are allowed to run rampant through all levels of employees and stakeholders, as well as communities surrounding the businesses.
Employees, customers, vendors, community members and other key audiences hold specific interests in every company. To facilitate a smooth transition, companies must provide clear and concise information about the merger or acquisition to all stakeholders.
Implementing a transparent communications program ensures that all interested parties understand exactly how the deal will affect them. Without transparency, stakeholders begin to lose confidence. Flawless response time and a defined communication strategy are crucial to effectively ease any concerns.
Precise planning and messaging
Companies must prepare to beat fast-paced rumors months ahead of a merger or acquisition becoming imminent — especially with the speed information travels in today’s tech-savvy world.
Nothing is worse than having your employees find out about a major change in their company from an outside acquaintance. Why didn’t anyone at work inform them? Will they lose their jobs? These concerns should be addressed long before the rumor mill kicks into action. This takes proactive planning.
Initiating a proactive strategy will uncover communication considerations impacted by a merger or acquisition such as employee, key customer, investor, vendor and media announcement strategies, the company name, updating or merging of websites, and a host of other things.
“Key messages” that contain useful and comprehensive information should be prepared well ahead of time, with planned face-to-face meetings with those most affected by the deal, a detailed implementation timeline, and a plan for 11th-hour changes are essential to create a smooth transition process.
When announcing a merger or acquisition, it is imperative to provide accurate information and to avoid making promises that cannot be kept. If management takes the time to discuss the deal’s benefits and drawbacks, employees are more likely to respond positively instead of resisting change.
Employees expect straightforward and honest information about what the deal means for them. Anticipate questions that may arise and have a solid answer for each. Regular updates should be communicated through management, question-and-answer sessions, staff meetings and company news vehicles. The announcement to your staff must be a top priority — even ahead of key clients. But if planned properly, the announcement can hit all stakeholders within a matter of moments.
You may want to meet with key clients in person. A global announcement can be distributed via email within minutes of a staff announcement to not only clients but also other interested parties. A personal letter can always follow. But don’t stop there. Be sure to reinforce the benefits of the merger in all communication going forward.
Vendors will also be concerned about how the transaction will affect contracts, tax and credit information. A post-announcement letter can address these concerns and include any changes to important information.
Print and electronic media outlets are powerful tools and should be used accordingly. One designated spokesperson should be available at all times to speak to reporters. Communicating with key media outlets during a merger or acquisition offers a means for publicizing a company’s name change and launching new market and/or services announcements.
The perfect mix for internal and external communication plans involves implementing communications quickly, utilizing all available communication routes and delivering consistent, clear and accurate messages. Companies that make communications plans a priority during a merger or acquisition will emerge from the process as an organization that stakeholders, employees and the media can trust. ?
Kelly Borth is CEO and chief strategy officer for Greencrest, a 22-year-old brand development, strategic marketing and digital media firm that turns market players into market leaders. Borth has received numerous honors for her business and community leadership. She serves on several local advisory boards and is one of 30 certified brand strategists in the United States. Reach her at (614) 885-7921, email@example.com, @brandpro or for more information, visit www.greencrest.com.
Five dollars a share.
That was the new reality when Michael Barry became chairman, president and CEO of Quaker Chemical Corp. in 2008. The manufacturer of specialty industrial chemicals, which trades on the New York Stock Exchange, had a stock worth $30 a share just several months before.
Then the economy’s bubble burst, and almost as quickly as a lightning strike can fell a tree, Barry was left staring at the shattered remnants of his company’s once-healthy stock.
Five dollars a share. And the end of the free fall was nowhere in sight.
“We went from making money to losing money, almost immediately,” Barry says. “And nobody knew how bad this would get. Nobody had perfect visibility about how long this was going to last.”
With less than a year on the job, Barry was immediately thrust into the crisis of a career.
“We had to take some really dramatic action,” he says. “We pulled together our senior management team, trying to get everyone involved at the senior-management level, helping us to make some of the important decisions we would need to make.”
Barry and his leadership team made the decisions that many leaders made in that time frame: They slashed the global workforce of Quaker Chemical, eliminating between 10 and 20 percent, depending on the region.
They cut the company’s 401(k) program, eliminated all bonuses and tried to spread an even coating of adversity throughout the entire organization.
Along the way, Barry acted as a guiding hand for his reeling team, keeping them as informed as possible, every step of the way.
“We communicated all the steps we had to take and did it continuously,” he says. “Maybe people weren’t happy with the news, but they felt we treated them fairly. They felt we did a good job of keeping them informed.”
Don’t clam up
In a time of crisis, your instinctual reaction might be to perform damage control on your company’s reputation. While you should take steps to salvage your company’s good name, if your methods of reinforcing your company’s reputation extend to sugarcoating, half-truths and other opaque messages, you’ll end up creating more harm than good —particularly if that’s your communication strategy with your own employees.
It’s difficult to swallow your pride and tell your people that you don’t have all the answers, to admit that the future is uncertain, but it’s a necessary step in maintaining long-term trust with your people.
Barry realized that early on and made it a point to maintain a frank, honest and ongoing dialogue with his team. It’s something that has continued throughout Barry’s tenure.
“Making communication a dialogue is, admittedly, something we have struggled with,” Barry says. “What we have done is, during our meetings, myself or my direct reports are talking, and we try to get people engaged and involved with the conversations. We turn it into a town-hall type of meeting. That concept evolved, and then we started bringing together smaller groups of people, including the people who report to my direct reports — so a couple of layers down in the organization.”
The people on that level then bring the messages from those meetings to their own teams, and facilitate dialogue within their area of the company.
“In a smaller group with their manager, your people might feel more comfortable asking questions,” he says. “So we try to give all those managers talking points and answers to frequently asked questions.
“With those kinds of sessions happening all around the globe, we’ll gather the questions people have been asking to see if there are any underlying themes — something everybody is asking, but we’re not doing a good enough job of telling them. But you need to keep that dialogue going, make those meetings a two-way street.”
When enduring hardship, particularly on a global level, culture becomes an increasingly important topic to address as the storm clouds gather. When your business is in survival mode, you might find yourself focused on the financial steps you need to take in order to guarantee your company is still operating at the end of the month or end of the year.
But neglecting to focus on your core values, mission and vision for the future — even if that vision is years away from realization — can have damaging effects to morale, employee confidence and, by extension, your company’s ability to keep its talent pool intact.
“We have spent a lot of time on culture,” Barry says. “We communicate it frequently because it is such a critical aspect of how we operate, how we feel, how we collaborate. You have to consistently reinforce what you are as a company, and we’re a very collaborative company. It’s a key to our business model.
“So during that time period when we were going through the worst of the recession, we talked about it a lot. We even put it on our computer screensavers, highlighting messages that reinforced the core values of the company.”
But messaging on your values and culture is like a booster shot. The real dosage of medicine comes from your actions.
“If you don’t live the culture, people will figure that out pretty quickly,” Barry says. “If you have people in the organization who don’t live the culture and you don’t take steps to correct that, it becomes a problem. A large piece of this is the ability of you and your leadership team to walk the talk.”
Add to the momentum
Though some of them were unpleasant to endure, the initial steps that Barry and his leadership team took in late 2008 and early 2009 helped Quaker Chemical to not only weather the worst of the recession but to quickly emerge from its down cycle in an aggressive growth mode.
Within six months, the company had started to grow again. After employing a workforce of about 1,300 in mid-2008 and dropping below 1,200 after the rounds of cutbacks, Quaker Chemical now employs about 1,600. Net sales for 2011 topped $683 million, an increase of more than $139 million from 2010.
Whether your recovery takes six months or six years, you need to show your people the progress that the company is making. Victories and milestones, however small, can help increase employee confidence. During the recession, you played not to lose. The victories your company gets on the rebound can change that mentality. You want to play to win.
“I think people saw our progress mainly through our performance,” Barry says. “We’re a public company, so they saw right away that we went from losing money to breaking even and that we did it in the span of a quarter.
“Then after breaking even, we started making money, and in each subsequent quarter, we started making more money. That was the biggest encouragement we could have given them, because it gave everyone in the company evidence that we were doing the right things and taking the right steps. People started to feel more secure in their positions.”
As you begin to see daylight, you can use opportunity to take stock of where your company is and what your growth strategy should be as you move forward. Throughout 2010, as Quaker Chemical began to add momentum to its rebound, Barry and his team continually analyzed the company’s strategic position and where it needed to be in order to continue to prosper in the future.
“We used it as a period of time to step back and look at our whole business strategically,” Barry says. “We did a very large strategic planning exercise. We evaluated the markets we are in, as well as adjacent markets we should think about entering, all with an eye toward taking our business to a different level.
“It was a process that involved a number of our associates, certainly on our senior management team but also a good number of people from our middle management. It allowed them to have an impact on how we were going to move the company forward.”
It comes back to the atmosphere of collaboration that Barry tries to perpetuate. Collaboration is a major component of engagement, which is a major component in companywide momentum and long-term success. It’s also an effective way to spread best practices throughout your company’s footprint.
“That is a key aspect of our company that we used to help us as we moved forward,” Barry says. “We have people all over the world, in every industrialized country, and we are working very collaboratively to help each other out. That is critical for your success.
“If we have a person in China who is having an issue with one of our steel customers, that person can rely on others within the company. They can tell another person through various company avenues that they’ve been having an issue with a customer.
“You want to develop a nonpolitical culture, where you are focused on doing the right thing and doing the ethical thing, where you’re not consumed with who gets the credit and who gets the blame.”
How to reach: Quaker Chemical Corp.,
(610) 832-4000 or www.quakerchem.com
The Barry File
Name: Michael Barry
Title: Chairman, president and CEO
Company: Quaker Chemical Corp.
Education: B.S. in chemical engineering, Drexel University; M.B.A., Wharton School of the University of Pennsylvania
What is the best business lesson you’ve learned?
You need to get buy-in whenever you are making a significant change in a company — whether in strategy, direction or anything else. You need to get buy-in from senior management and any other key people who are influential in the organization. There are two reasons for that. One, you need to get your best thinkers involved in any major change. Two, you need to get buy-in from the people who will make the change happen and instill the change in the organization.
What traits or skills are essential for a leader?
You need to be able to listen. You need to be able to make a decision and stick with it. You need to create a vision and a strategic direction for the organization. Part of that is establishing appropriate goals and holding people accountable to that, and creating the right culture for what you’re trying to achieve. You also need to be able to get the right people in the right places, and let them do their jobs, because it’s not about you, it’s about the people in the organization.
What is your definition of success?
It’s achieving your goals, be they business or life goals. Establishing a goal, and then achieving it, is success to me.
Communicate during a crisis.
Create a dialogue with employees.
Use your wins to generate momentum.
R-E-S-P-E-C-T? Find out what it means to you
Move over, Aretha Franklin. While she did popularize the word “respect” in her chart-topping single in 1967, respect has been a fundamental building block for successful companies for decades, well before Aretha arrived on the scene.
Respect does not come with age; it is earned. In my humble opinion, there is no management tool more important or powerful than respect itself.
Businesses fundamentally exist to make money, but the currency that is traded inside every organization is respect.
Walk through any office today and listen to the conversations, from the boardroom to the watercooler. What will you find? Probably elements of both respect and disrespect. If you command respect, people listen attentively when you talk and follow your direction. It can be seen in both body language and facial expressions. On the other hand, if you don’t command respect, you will quickly become the focus of ill-timed conversation.
Having said that, here are eight irrefutable and effective building blocks for you to earn (and keep) respect.
1. Be real. People will not respect you if you are not natural. Our workforce is smart — they have the ability to detect those who are “faking it.” There’s no stronger foundation for earning respect than being, well, you.
2. Be interested. People like to be listened to. When people realize they are being heard, they’ll open up and tell you what is important to them about their jobs, their concerns and goals within the organization. It pays to listen.
3. Be a safe harbor. Workplaces are hotbeds for gossip. Create an environment of openness and confidentiality. When people realize you can safely be told anything within the confines of your relationship, you’ll become the one person everyone seeks out when they really need some perspective, advice and direction.
4. Be helpful. People respect those who contribute. Being a contributor means making it your primary goal to help others achieve their goals. Remember, it is important to pay it forward and work with others within your organization to help their dreams be realized.
5. Be creative. People respect innovation. The “same old, same old” mentality left us years ago. By being creative and coming up with new, fresh ideas will motivate the workforce and results will speak for themselves.
6. Be a risk-taker. Associates gravitate to those who take chances — and are willing to look at life through a different set of lenses. They do not accept traditional thinking. Be willing to take chances. Remember: Failure is a way we all learn.
7. Be spontaneous. Use your position to create an environment of fun within your organization. Introduce special events and do so without warning. Consider, for example, an Aloha Day after several weeks of dreary weather or hire a massage therapist after a busy business season. Let your mind wander here.
8. Be respectful of other people’s time. There is nothing more valuable in today’s business world than time. You can make more money, but you can’t make more time. One of my favorite mottos that I follow is, “Be brief, be blunt, be gone.” And I live by it.
Remember again, respect does not come with a job title or age; it is earned. Make it a central part of your personal business strategy. The results will speak for themselves.
G. A. Taylor Fernley is president and CEO of Fernley & Fernley, an association management company providing professional management services to non-profit organizations since 1886. He can be reached at firstname.lastname@example.org, or for more information, visit www.fernley.com.
Every company has its baby photos. Monoprice Inc. is no exception.
A decade ago, the Internet electronics retailer was a small start-up. The company’s owners wore many hats, dictating almost every aspect of the company’s culture, strategy, systems and processes.
That was then. The “now” for Monoprice is the company that CEO Ajay Kumar has fronted for the last two years. It’s a $121 million player in its space, growing at a rate of 25 to 30 percent every year. With rapid growth and a workforce of 250, Kumar can’t possibly dictate every angle and nuance of the company’s day-to-day operations.
“When you start a small company and grow it, you can manage every aspect of it,” Kumar says. “You can be hands-on, making every decision, involving yourself in every detail.
“But now, we have to have all the appropriate controls in place to manage the company. We have to have the right organization, accountability, reports, metrics, all that stuff, so that it’s not just the top person running the whole thing. You need the structure and controls in place to make it all work.”
By the time Kumar took over, the CEO’s role had evolved into a global-view position. Instead of laboring in the trenches, Monoprice needed its CEO to define a vision, work with his leadership team to put goals and processes in place to achieve the vision, create metrics to measure progress against the goals, and build a team that could achieve and exceed the goals.
“My leadership style is that I am hands-on but not a micromanager,” Kumar says. “I want people who are capable of executing what I need done in each functional area. In addition to the goals and metrics, we need the right people in the right places throughout the organization.”
At its heart, Kumar’s biggest challenge has been to harness the ability to look ahead and anticipate what his company will need in the coming years.
Create a vision
Vision equals direction. Without a well-defined vision, a company is operating without a compass or a rudder. That’s a recipe for turning growth into stagnation and eventually into mere survival.
That’s why Kumar’s first job upon taking the CEO’s role was to define a vision and ensure that the vision and the reasoning behind it could be adequately explained to the Monoprice team.
“I was able to have a vision for the company coming in, since I had a lot of experience in this industry,” Kumar says. “I had a lot of experience in terms of sourcing products from Asia, getting products made rapidly. The consumer electronics business is something I’ve been in for a long time, so I had a good idea of what the vision needed to be for the type of company we are.”
Kumar’s vision was to produce products equal to or better than big-name brands in terms of quality and compete on price.
“We didn’t want to get into selling any product line if we didn’t feel we could generate at least a 30 to 70 percent advantage over the retail selling price,” he says. “That creates a certain amount of discipline as far as launching products. We don’t want to be randomly launching products.
“We want to launch products where we have a price advantage. The way we do that is we don’t sell other brands. A lot of Internet retailers are selling other brands. We don’t do that, so we are eliminating a whole layer of markup.”
By not carrying outside brands, Kumar and his team also attempted to make a statement about their belief in the quality of their products — a move made, in part, to bolster consumer confidence in the product lines.
“If we sell other brands, we’re, in effect, saying their brands are as good as ours, but they are much pricier, so why are we selling them?” Kumar says. “It’s like saying their products are a step up from ours. That is a key part of our vision: The products we make need to be as good as the famous brands. If the quality is the same but the price is lower, people aren’t going to go anywhere else.”
Related to that, Kumar incorporated a sense of focus into the vision. Monoprice would compete on price and quality but would also compete by becoming an expert retailer in a focused space, as opposed to carrying a broad spectrum of seemingly unrelated offerings.
“A lot of Internet retailers carry tons and tons of products that all seem kind of random,” he says. “It doesn’t feel like a portfolio.
“Our goal is to pick product lines that we want to be in. If we want to be in the Apple accessory area, we need to come up with the right mix of products in the portfolio. Not too many, not too few, because our goal is to become a destination for each product line that we want to be in.”
With the vision focused on those three factors, Kumar then had to roll it out to the company at large — complete with a compelling set of processes and incentives aimed at motivating people throughout the company.
Make them follow
To drive the entire company toward realization of the vision, Kumar had to give all 250 people a reason to get on board. He had to show everyone in the company how their performance related to the company’s ability to achieve its overarching goals and turn the vision into something concrete.
Kumar and his leadership team started by rolling out the vision with a companywide presentation, with an opportunity for dialogue and feedback. That planted the seed, but Kumar says the seed sprouted thanks, in large part, to the company’s bonus plan.
With a bonus plan anchored in corporate-level metrics, Kumar steered every person in the organization, regardless of department, toward the goals that would help Monoprice realize his vision.
“I think a bonus program is always tricky,” Kumar says. “Do you measure people based on department results or overall company results? Some companies go down one path and some go down the other.
“Early on, I decided our path should be aligned along one set of metrics at the corporate level. We decided to focus everyone on three metrics that drive our bonus program: sales, profit and cash flow. Some people in some functions might not be able to directly impact all three of those, but we wanted everyone thinking about all three.
“The thing I like about having the metrics at the corporate level is that everyone in the company is focused on the same thing. It’s the same bonus program whether you are a warehouse worker, customer service person, IT or even myself. It keeps everyone working in the same direction.”
The disadvantage to developing a bonus plan driven by corporate-level metrics is that some people in certain areas of the company might not feel a high level of urgency to meet the company’s goals.
To avoid coasting, Kumar and his team have devised department-level metrics. Since those metrics don’t directly impact the bonus program, Kumar relies on a culture of accountability to enforce them.
“They’re producing against those department-level metrics, they’re showing plan versus actual against those metrics, so there is a little bit of accountability and professionalism at stake when you’re executing on that plan in front of your peers,” Kumar says. “That, in and of itself, will drive a certain level of motivation.”
Find the talent
You can have a well-defined vision, and you can develop metrics and incentives that ensure people are working toward realizing that vision. But your people provide the momentum that will really power your company toward the goals you have set. Without competent employees, nothing gets done.
Kumar believes in attracting top-notch talent but not without first understanding the roles that he needs to fill. He wants talent, but he doesn’t want to simply stockpile talent for talent’s sake, without a plan for utilizing it.
“One of the key things before you go recruit people is making sure you have an understanding of what, exactly, you want from a particular role,” Kumar says. “Some folks may go out there and hire a generic person for a generic role. What I try to do is figure out exactly what I want to get from a particular role.”
Then, when you bring a candidate to the office for an interview, make sure your line of questioning aims to ascertain whether the candidate is a match for the criteria you have established.
“One of the things I like to do is get into the details of what they did at their past job and how they did it,” Kumar says. “When you look at resumes, sometimes it will say a person saved 30 percent or grew sales by $50 million, but you start digging, and they didn’t do it all themselves. They didn’t drive it. I’m looking for people who generated benefits at their previous jobs, and I want to know if they can do the same thing at this company.”
How to reach: Monoprice Inc., (877) 271-2592 or www.monoprice.com
The Kumar file
Name: Ajay Kumar
Company: Monoprice Inc.
What is the best business lesson you’ve learned?
I am a big believer that what you don’t work on is as important as what you do work on. It’s important to know when you should pass on an opportunity. In most companies, it is too easy to get bogged down on doing too many things. It is the nature of a high-performance person. You want to get things done, but you can’t do everything.
What traits or skills are essential for a business leader?
Having a vision that makes sense, creating a sense of buy-in, recruiting the right people, drive, performance, being a good two-way communicator, facilitating teamwork, and providing a coaching and mentoring approach to growth. One of the primary things people want to get out of a job is what they learn from their boss.
What is your definition of success?
For me, it is setting goals and then achieving them. That might seem very metrics-oriented, but if you don’t achieve goals, it won’t be a fun place to work. People won’t feel like the company is successful. If you set goals and don’t make them happen, you don’t get that sense of accomplishment. People start to feel like you’re wishy-washy.
Develop a strong vision.
Create buy-in on the vision.
Hire the right people.
It wasn’t your typical corporate relocation when Cartridge World Inc. moved its North American headquarters from California to Illinois in 2011.
For starters, most of the employees who had worked at the Emeryville, Calif., headquarters were not making the trip to the new offices in Spring Grove, Ill.
“Institutional knowledge disappeared if it wasn’t retained in the system,” says William D. Swanson, CFO of the global ink and toner printer cartridge retailer and CEO of North American operations.
“Even then, it might be in the system, but it’s not in the minds, hearts and thoughts of the people coming on board. So that was interesting. It was one of the most difficult challenges to overcome when we came here.”
It was difficult, but it was a challenge that Swanson and the leadership team at Cartridge World felt needed to be tackled. The company had slumped during the recession and found itself struggling to get back on its game.
“We ended up in a situation where as a company, we had significantly more expenses than were sustainable based upon our revenue stream,” Swanson says. “So it was really taking a company that was stuck and creating negative cash flow and then creating positive cash flow and, more importantly, value for its constituents.”
Making the situation even more interesting for Swanson was the fact that he, too, was new to Cartridge World, which is owned by Wolseley Private Equity in Australia. He joined the company in May 2011 as global CFO and didn’t become North American CEO until July 2012.
So the task was rather daunting.
Swanson needed to get himself up to speed with what the company was all about while at the same time, he worked to integrate new employees into a new culture in its new home that would enable the company to generate better financial results. He also had to engage franchisees at the company’s 650 stores across North America. The company has about 2,275 store employees in North America and 50 corporate employees.
Fortunately, Swanson brought a lot of confidence to this seemingly difficult mission.
“If you have good, compelling arguments and a good, solid vision that people can buy in to and understand, you get people to move forward in that direction,” Swanson says.
Build your team
The move to Illinois wasn’t just about rejuvenating the business. It would put Cartridge World in a more central location with which to work with its franchisees since two-thirds of its U.S. locations were east of the Mississippi River. It would also provide closer proximity to the company’s technology partner.
But those are physical details. The act of building a new culture from the ground up that would help the company start growing again wasn’t going to be as easy.
“You don’t know what you don’t know,” Swanson says. “That can be a very difficult place if you’re going down fat, drunk and stupid and you don’t know where you’re going. Any road will take you there. You better get clarity and you better help the new team understand that clarity.”
Swanson looks for three things to help determine if someone can be a strong member of his team.
“First of all, I make sure everybody has a consistent view of what success looks like,” he says. “Where are we trying to go? What does success look like both tangibly and intangibly? Paint that picture. Create specific numbers and reinforce that. Ask them to repeat it so that I can gauge their understanding.”
The next is one-on-one time with the person talking about his or her place in the company.
“I have a formal one-on-one session with my direct reports on a weekly basis, but informally, we meet and chat in the morning or sometimes we’ll be here late,” Swanson says. “It really is making sure I can gauge how they view their responsibilities, the tasks they are working on and the judgment they are exercising as they make decisions and take action.”
Finally, Swanson wants to know what kind of initiative they have to get things done and make things happen.
“Some people might see opportunities and others wait for those opportunities to be pointed out to them,” Swanson says. “Some take action and some wait for action to be assigned. When we have a company where staff has been reduced by 50 percent, I need people who can take an initiative and exercise good judgment moving in the direction that we need to move in.”
The goal is exactly the opposite of creating drones who will follow his every word. He wants people who see success the way he does and have the desire and energy to achieve it. But he has no problem if they have a different way of making it happen.
“They are more likely to achieve success when they get to choose the path that they are going to go down, as long as it’s consistent with the vision, and I know they can exercise good judgment,” Swanson says. “If they try to go down my path, they are not going to completely understand it, and they’re probably never going to do it exactly like me, so I’m not going to be thrilled by it.”
As important as it was to get his leadership team on board with his plan, Swanson very much needed to have a good relationship with his franchisees if Cartridge World was to succeed.
The key to a good relationship with any group of people is to be respected.
“When you’re dealing with franchisees, what you have to know is a lot of them put up their life savings to be in this, and they’ve committed their financial resources to the success of the business,” Swanson says. “That has to be understood. They have to know that you respect them and what they’re doing and how they are going about it.”
You owe it to them to listen to what they have to say when they have opinions about how the business should be run.
“It doesn’t mean I’m going to agree with them,” Swanson says. “I may, I may not. If I disagree, I’ll present it in a way that maintains their esteem and doesn’t put them down but rather presents another issue. I like to think of it as though we’re all businesspeople around the table. The issue is on the table; it’s not with any of us around the table.”
When you establish that foundation of respect, you can then move more easily into addressing some of the things that may be holding your business back.
“If you see things that are happening in the business that aren’t consistent with what it is you as a business are trying to accomplish, then you have to say, ‘Why are we doing these things?’” Swanson says. “What might seem like a good idea in the short term because maybe you had some high-priced consultants or you had something that convinced you as a company that this is the direction you want to go in, maybe it just wasn’t a well-thought-out idea. Those things happen. They happen everywhere.”
When you jump right into a decision without gaining the understanding of what your people are seeing and experiencing and any other pertinent variables, you run the risk of making a big mistake.
“Stephen Covey said it in one of his seven habits,” Swanson says. “‘Seek first to understand before being understood.’ I’m not sure all leaders do that. It can be a struggle to not jump in and say, ‘No, do it this way.’ Now certainly, if you’re going off a cliff, you’re going to stop that from happening.”
Cartridge World was struggling, but it wasn’t going off any cliffs. So Swanson took the patient approach.
“It’s constantly learning and taking a look at what you did yesterday,” Swanson says. “What went well and what didn’t go well? What did we learn from it? How do we take yesterday’s or today’s experiences and use that to shape what we’re going to do tomorrow?”
One thing Swanson does not do as he is guiding the company is step on the toes of people who hold leadership positions at Cartridge World.
“I have an open door, and if anyone ever wants to talk to me, they’re always welcome to talk to me,” Swanson says. “But I’m not going to go around my leadership team if I don’t need to. I respect them and what they’re doing.”
The results of recent changes have begun to pay off. With a redefined sense of roles and responsibilities, the company is back on a growth trajectory. In 2012, it launched Cartridge World Express, a mobile business that offers more than 400 ink and toner products for every major brand of printer, copier, fax and postage machine. It also expands the company’s mission of recycling to keep printer cartridges out of landfills.
“You have to be firmly committed to the direction you’re going and why you’re going in this direction and you can’t be short on communicating the vision and direction and the reasons why decisions were made,” Swanson says. “That has served us well.” ?
How to reach: Cartridge World Inc., (815) 321-4400 or www.cartridgeworld.com
The Swanson File
Name: Bill Swanson,
Title: CEO, North America
Company: Cartridge World Inc.
Education: Bachelor’s degree, accounting and business administration; CPA, Augustana College, Rock Island, Ill. I’m also certified in cash management.
What was your very first job as a kid?
My first job was caddying. I went to the golf course and the caddy master said, ‘Well you’re a little too small. Why don’t you come back next year?’ I came back the next week. He said, ‘Weren’t you here before?’ I said, ‘Yeah, I was. You told me I was too short. But I think I can do it, and I’d like the opportunity to show you.’ So I did and I was able to caddy for a couple years before I turned 16 and could get a real job.
Who has been your biggest influence?
I was in public accounting and then I left and worked in private industry for three brothers for around 20 years. One of the brothers, Arnold Miller, was just fantastic. That’s where I developed the way I think about business, running a business and the values that I have that are very important to me.
Who would like to meet and why?
Warren Buffett or Sam Walton; both of them for their purity in running a business and saying, ‘What is it we’re trying to accomplish? Keep all the self-serving stuff out of the way.’ Both of them are very successful in understanding what it is they are trying to accomplish and then to be able to do it by focusing on the fundamentals that it takes to get done. Not on wishes, not chasing rainbows, but truly understanding the fundamentals of what it is you’re trying to do. Work utilizing those fundamentals. If you do that, good things will happen.
Know what you’ve got.
Always show respect.
Never stop learning.
It would have been easy to hold off on salary raises just a little longer and wait for a clearer sign that the economy had turned a corner.
But Joe McKee and Keith Wolkoff were unwilling to wait. They believed that their employees had worked hard to help Paric Corp. through the recession, and they deserved to be recognized for it.
“The questions do get asked,” says Wolkoff, president at the 234-employee design-build firm. “Is it prudent? Or should we continue to invest in the business? We asked a lot of our people during the very difficult times. It’s just as important to reward those people when you’re starting to see a little more fluidity in the marketplace. It’s the right thing to do.”
The decision was based on the leadership team’s commitment over the past two years to a long-term view and a belief that you can’t let fear guide your decisions, says McKee, Paric’s CEO.
“When you have a crisis, you can circle the wagons or you can choose to move forward,” McKee says. “Most of the times I know when people have circled the wagons; it hasn’t really worked out well for them. Our attitude was to keep moving and be nimble and quick.”
Both leaders wanted to focus on the core things that Paric did well, believing that those skills would be desired by customers even in a tough economy. As they developed a strategy to maximize those qualities and began to see the potential become reality, it became an easy decision to reward the team.
“It was a very painful period in the industry,” Wolkoff says. “But as odd as it is to say, we’re a lot stronger for having gone through it.”
The numbers reflect that assessment. Paric’s revenue grew from $200 million in 2010 to $240 million in 2012. Here’s a look at how the company bounced back so strongly from the recession.
Recalibrate your position
The path to Paric’s better future began with a blunt assessment of what the recession had done to the economy.
“What many people try to do in that environment is to get up and ignore the reality of what’s happening around them, and they don’t speak frankly,” McKee says. “It’s a little bit like what happens when a dog senses your fear. You lose all credibility and bad things happen. So it starts by being brutally honest and by making tough decisions.”
McKee and Wolkoff didn’t hold back in talking about the difficulties the company was facing. They also talked about those opportunities that they believed they could take advantage of. The key is they talked and kept talking to their teams whether the news was good or bad.
“In the absence of us communicating what actions we were taking and how we were addressing the economy, people were going to come to their own conclusions,” Wolkoff says. “We just refused to allow that. We were meeting if not every six weeks, then every eight weeks to give everybody a debrief on, ‘Here’s where we’re headed, here’s what we see and here’s what we’re doing about it.’
“Maybe all the information wasn’t pleasant. But at least everybody knew what was going on. There wasn’t all that chatter that can just be counterproductive.”
The crux of the new plan was to focus on the strengths and stop doing the things that weren’t making the company any money.
“When you have limited resources, there are some things you’ve always done because that’s the way you did it,” McKee says. “You need to figure out what those things are and quit doing them. What do we need to work on to move the organization forward?”
Preconstruction services were going to be a big part of Paric’s offerings to customers. Another was going to be the core markets that the company worked in, such as historic renovation, urban development, senior living and interior construction.
“We don’t service everybody,” Wolkoff says. “We go where we can bring value to our customers. Even in bad times, that’s going to prevail.
“It took a little bit of reinforcing from leadership to say, ‘Let’s hunker down, let’s pick our spots, let’s be smart, and let’s continue to invest, and we’ll be fine when we come out the other end.’ Are you going to cover 10 opportunities with your limited resources or are you going to cover three opportunities and increase your hit rate?”
McKee says you go with the three.
“You get two out of those three versus focusing on 10 and you only get two,” McKee says.
Know who you are
In working through the plan and defining what set Paric apart from the competition, Wolkoff says the company’s leadership unearthed a problem that they felt needed to be addressed.
“We started to ask ourselves, how do we define our business as it looked at that point in time,” Wolkoff says. “While we all had great things to say about ourselves, none of us were telling the story exactly the same way. And it really caused us to question, ‘Well, if we’re having that much trouble defining who we are, what are our customers saying?’”
It was with that thought in mind that Paric’s leadership team set out to interview customers, vendors and employees. The goal was to hit on a theme that would accurately and clearly define what the company is all about.
“In everything we do, every opportunity we have to touch each other, at a meeting, even if it’s an outside social event, there needs to be a consistent theme in how we talk to each other,” Wolkoff says. “Every company meeting we have, it has to be the central talking point over and over again.”
After talking to people at all these levels, the theme they arrived at was “Experience Excellence.”
“It doesn’t mean we’re perfect, but we strive for perfection, and that’s the piece we hit on,” Wolkoff says. “At every station we touch, whether it’s a client, vendor or internal employee, we have to strive for that perfection and that excellence.”
When money is tight with customers, the key to making a sale can be the perceived extra value that the customers believe they are getting with your business.
“You could say on the one hand that a building project is a very daunting task,” Wolkoff says. “But it shouldn’t be. If you have the right partner, it should be something that is exciting. It’s changing your organization. So we have to make sure that everybody who touches it from our end makes it the most satisfying experience it can be.”
The goal was to take these words that could easily become a cliché or something that is forgotten soon after it is brought up and embed it into the company’s culture.
McKee compares it to a quote he remembers from retired Denver Broncos quarterback and NFL Hall of Famer John Elway.
“He said on a Super Bowl winning team, they hold each other accountable,” McKee says. “If the guy next to you wasn’t doing his job, the guy to the right of him would say, ‘You better get with it and do your job.’ The coaches weren’t telling him. The players were doing that. We work really hard to try to create that kind of culture with people to where it’s a real team environment.”
When you’re just trying to get a motto or slogan like that to sink in, you can just ask the question.
“With a younger person, you might say, ‘What have you done today to create experience excellence?’” McKee says. “They’ll look at you the first couple of times like you have two heads. But after a while, they’ll begin to understand what you’re getting at. It’s about that discipline to do it right every day.”
One of the things that Paric began during its battle through the recession and has continued to this day is a weekly senior leadership team meeting. It consists of five people: Wolkoff, McKee, the company’s CFO and the senior vice presidents of sales and operations.
“That’s the one meeting that doesn’t get moved off people’s calendars,” Wolkoff says. “It’s the most important meeting we have in a given week.”
The challenging of opinions and belief is not only accepted, it’s encouraged, says Wolkoff.
“There are five people sitting in that room and if one of the five is not voicing an opinion and challenging something, you need to consider, ‘Do they need to be in the room?’” he says. “We’ve been fortunate that there are five very strong leaders in the room.”
The idea isn’t to create tension but to make sure every angle is being explored so the company can make an informed decision. Once the meeting is over, the conflict, if there is any left, must stay in the room.
“Once we leave the room, we’re unified,” Wolkoff says.
McKee says the elimination of secrets and unspoken concerns is one of the keys to success in any business.
“If you’re going to lose, lose doing the things you think you need to do rather than getting to the end and thinking, ‘I wish I would have done that,’” McKee says. ?
How to reach: Paric Corp., (800) 500-4320 or www.paric.com
The McKee and Wolkoff Files
Joe McKee, CEO, Paric Corp.
Born: St. Louis
Education: Bachelor of science degree, civil and environmental engineering from Vanderbilt University; MBA, Washington University, St. Louis.
Did you think about becoming a CEO some day?
I always knew I wanted to build, so that much I knew. But I’ve succeeded well beyond my wildest dreams. I was the kid who designed the clubhouse and treehouse and built go-carts. That’s what I love doing, besides hunting.
Who has been your biggest influence?
It starts with good parents. My parents were absolutely amazing. After that, Rick Jordan helped me a great deal and the current chair of our board, Larry Young. They are both on our board and have been good mentors to me through the years.
Keith Wolkoff, president, Paric Corp.
Born: St. Charles, Mo.
Education: Bachelor’s degree in architecture, Washington University, St. Louis.
Did you think about becoming a company president some day?
No way; it was the furthest thing from my thoughts. I thought more in the now and whatever I was doing, I wanted to do it to the best of my ability. When I saw an opportunity, I had the mindset that I’d rather try and fail than not try at all. By some good luck and some hard work, I find myself where I am today.
Who has been your biggest influence?
Very early on I had an English teacher. Maybe my spelling wasn’t always the best, maybe my attention wasn’t always the best, but I was always a good writer, and I enjoyed it. That particular teacher focused on what I was good at and that empowered me to excel in other areas.
Don’t sugarcoat your problems.
Know what you stand for.
Keep looking to do it better.