WHEN STEVEN LITTLE was a junior account executive for Foote, Cone and Belding Advertising in Chicago, Frito-Lay was the major account.
Little learned a lot from that Frito-Lay account.
“If you take a bunch of people who eat chips — heavy users, heavy buyers — and put them in a focus group and ask them two questions, you get the same answers every time,” Little said. “‘Do you like your chips with heavy salt, medium salt, or light salt?’ They will say light every time. ‘Do you like your chips with heavy oil, medium, or light?’ They will say light every time.
“But if you put a chip in their mouth, they will pick the saltiest and oiliest chip as their favorite every time. Which is probably why Lay's is the No 1 brand in the world, and has the highest oil and salt content on the market.”
What does it all mean? In his presentation, “Real-World Growth Strategies: The Future of Opportunity for the Trailer Manufacturing Industry,” he said we are conditioned to believe “the customer is always right.” He said that's true in a customer-service environment. But when the focus is new-product development or growth initiatives — things that take an organization to a higher level — the customer is “rarely right.”
“You and I know the customer better than they know themselves,” he said. “Your customers cannot anticipate what you can do to get your organization to another level.”
Over the past 15 years, Little has been president of three fast-growth companies, and all three were manufacturing companies with fewer than 150 employees. FAME Inc and Erb Industries Inc achieved profitable growth rates of over 500% during his tenure.
He says that has given him the basis for The Seven Irrefutable Rules of Business Growth:
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Sense of Purpose.
“What does this mean? A reason for being, a reason for getting out of bed in the morning. And guess what? It's never about the money. Once you get past the fear of homelessness, it's never about the money. It's about having a distinct culture. They're unifying elements within an organization.
“Mythologies, lore, and legends surround the foundation of a growth organization. Here's an analogy: I have a 14-year-old boy. Tyler can give you a synopsis of how my wife and I met and leading up to his birth five years later. But there's no resemblance to what actually happened. And that's OK, because it's a unifying element. It makes him feel like part of the team. He wasn't even born yet, and he's part of the foundation story.”
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Outstanding market intelligence.
“Not marketing, but market intelligence. This is an organization's ability to do two different things: recognize and adapt. Growth companies see the macro views. They see the big picture. Companies of your size and type become internally focused, operationally focused. Big business is the opposite. There's too much external focus — great marketing research, great ideas of the big macro trends happening in the marketplace, the left hand doesn't know what the right hand is doing. The answer is balance. Intelligence vehicles are looking for ways to make yourself wiser.”
He said we should read 50 magazines a month — 25 from the world we know (trade, vendor, and customer publications, hobbies, community) and 25 from a world we know nothing about (whether it's Latin Business Today or Young Miss.) He said he invariably gets e-mails after his presentations from 10 audience members who disagree, but he stressed that “convergence of thinking is the highest form of learning. Twenty minutes in the morning and 20 minutes at night. I promise you it'll make you wiser.”
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Effective growth planning.
“Written down, it's well communicated throughout the organization and regularly updated. Document specific action steps to achieve expressed goals. Usually, three to five years is all you can handle. You're going to take your objectives and line them up with your resources. Twelve percent of small and medium-sized businesses have a written plan that is well communicated and regularly updated. Among Inc 500 businesses, it was 82% last year.”
He said it's much easier to write a 50-page document, but he recommended “pithy planning” — a maximum of 15 pages, with five pages being even better.
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Customer-driven processes.
“Define the core processes of your business from a customer's or prospect's perspective.”
He said there are 10 Ts of customer acquisition and retention. The two most important are tailoring and time bombs.
Tailoring: “Customerizing what you do. Mass customization is now mass customerization.”
Time bombs: “Time is of the essence. We can only be three things: faster, cheaper, or better. Faster is first for a reason. In this country we think faster is better, and we pay more for it. We have the highest service level in the world. Start looking for ways to do time bombs. It's a way to separate, to make more money, to grow. Create time internally so the entire organization understands the importance.”
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Power of technology.
“We shape tools, and our tools shape us. And I'm not talking about software and hardware. We still live in an information age. Don't let the dotcom bust and hype and disillusionment of hardware/software over the last 30 years dissuade you from being fully vested in how important information technology is to your organization. Efficiency equals cost reduction. And at the same time, technology creates value.”
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Best and brightest.
“Hire the best people, and then you grow. You don't grow — and then look to see if you can afford new people. Listen to customers and exceed their expectations. You can't do this without good people. (The important thing) isn't trailers. It's not metal. It's not processes. To be the leader of a growth organization, you are in the HR business.”
He said human nature dictates that when a company grows to reach 80-100 employees, dissension starts to creep in. “Your job is to find the best and brightest and keep them happy even when you're growing. Because employee retention leads to growth. Every study — from Harvard Business Review to my own personal experience — shows me that there's a direct correlation. The better I am at retaining employees, the more customers I retain.”
He said an executive should be slower to hire (the process of filling a position should take six to eight months) and quicker to fire.
“You should know in the first two weeks if a person is going to make it or not. Don't let it fester for two years. That's not good for anyone — my company, employees or me. It's not good for the individual who isn't performing. They deserve to be in a job they can be proud of and excel at.”
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Seeing the future.
“What it means to be a human being is fundamentally shifting right before our very eyes.” He cited “waves of creative destruction,” the theory espoused by Austrian economist Joseph Schumpeter in the 1930s to explain the idea that innovation and entrepreneurship drive “uneven” economic growth. “Capitalism by its very nature has a yin and a yang — a good and a bad of creative destruction,” Little said. “The thing different from the ‘30s is that the rate of destruction and creation has dramatically increased. The size of the waves has dramatically increased.”
He said the typical NATM company's customers are “changing right now faster than ever before. What they buy, when they buy, why they buy, and who they buy from. Who is your customer? Defining it is critical. What you offer is going to change. I can see the day when there's going to be a cute, quaint story of how you used to make horse trailers and now you move electronic equipment.”
He said trailer makers will need to utilize smart materials and direct selling while being more concerned about compliance and fabrication issues.
“You're going to have an increasing awareness of sustainability and usability — the ability of the components you're using to be used over and over again,” he said. “That's not my political view. It's reality. It's a done deal. You're going to make smarter trailers.”