Leadership doctrine and creating future leaders

“You are going to have to decide what type of leader you want to be.” This is one of the critical thoughts I use to open conversations with new team members striving toward a first management position.

This comment is usually met with a blank stare and comes across to most as jarring. Most want to climb the corporate ladder, as we typically call it, but few come at this first position with any grand vision for what type of manager they want to be.

I opened my career out of college by starting my own independent sales representative organization, thanks to a family friend who took a chance on me and gave me my first opportunity.

Later, I was blessed to move into the housewares industry with a company that had a corporate culture that genuinely valued people. While I didn’t always have inspiring managers guiding me, the overarching culture was rewarding, inspiring and inclusive. It made me feel as if I was part of something larger than myself. It motivated me to strive to be the best while teaching me teamwork with a group of co-workers I could always trust to have my back. 

This culture drove loyalty and longevity with staff that, over time, became personally invested. It created team members that I watched make incredible personal sacrifices for the greater good of the team and the organization.

Unknown to me, over time, this culture guided my personal views on what a manager should be and shaped my vision of a strong leader. 

From the early days of my career, I developed a list of essential traits, rules that guided me.

• Leaders eat last, wake every day and end every day, with the first and last thought being about the people in your charge. Management is a daunting task as you not only control their livelihood, you control the trajectory of their career, their family and all who are in their care. If every corporate decision you make does not consider this aspect of being a leader, find another career path. (Giving credit where due to inspirational leader Simon Sinek.)
• Bring your authentic self to work all the time, every day. You do you and be proud of who you are. (Giving credit where due, I acquired this trait from an incredible leader named Carla Harris.)
• Have the confidence to challenge leadership respectfully when you have an opinion.
• Have sufficient self-confidence to be challenged respectfully as a leader by subordinates while creating an environment that celebrates independent thought and gives voice to the overall organization.
• Develop empathy – the ability to understand and share the feelings of others. 
• Be willing shift your thinking and admit when you are wrong.
• Be willing to humbly apologize when you’ve made a personal mistake.
• Never treat others differently than how you want to be treated.
• Make the decision, high-pressure, low-pressure, no-pressure, make the decision, own it, and move forward with the consequences. 
• Be structured in your approach, creating accountability.
• Most importantly, be good to yourself and those around you, and treat all with equality and goodness.  

Don’t guide yourself by my principles; use them as an example for developing your list. Determine your foundation and then use it to establish what type of manager you want to be and constantly test and adjust your principles.

Late in my career, I worked for an organization that had a culture as opposed to my management style and principles as an organization could be. Leadership thrived on a churn them and burn them mentality. I was told you’re not going to make it here, but in time, I not only survived, I thrived and built a new business unit that surprised many while creating a subculture within my team that attracted talent from other company areas. Word spread, and human resource co-workers often shared talk expressing something was different in our team.

My closing point to use your priorities to steer clear of companies that don’t align with your principles. But, if you find yourself in hostile territory, remain faithful to you, your authentic self, and look to the future.

Corporate cultural fit vs. skills that check the box with a new team member

Throughout my 25 years as a manager, I’ve identified two key areas I often consider when hiring a new team member: do I hire for cultural fit, or do I hire because a potential new associate has the right experience. In a perfect world, you hire for both, the new candidate knocks it out of the park, and they check all the experience boxes with a personality that perfectly aligns with the current team. The transition is seamless.

But, more often than not, I find that most potential new candidates have some of the experience but not all and might be an excellent cultural fit. I have also seen potential new hires that nail the experience test but have personalities that only a mother could love.

Rarely do I find that perfect candidate, so what is a manager to do, and how do you navigate these treacherous waters? Each year companies invest countless millions in personnel, often without ever seeing a return on that investment. On average, most companies don’t see a total return on a new hire for up to 12 months.

It’s also worth noting that Pre-Covid labor statistics showed the 2020 average tenure trended toward three years or possibly less, making it even more essential to make the right decision up front on new hires.

Based on the factors defined, I have landed on advising clients and my team members to err on the side of culture. Positive corporate culture can create an enriching environment, and negative culture can make work-life unbearable. I’ve found employees need to be like-minded, share similar values, have common interests, and most importantly, share a genuine commitment to holding colleagues in high regard.

A new team member might have all the experience in the world and have all the tools to execute a job effectively. Still, if they don’t fit into the culture and become a dedicated and loyal team member, life will be a challenge, and most likely, the team won’t gel.

Assessing skills and ability to learn are relatively easy to determine. For me, the actual heavy lifting comes when considering a personality. Job candidates are always on their best behavior, and sometimes it isn’t easy to identify that during the interview process.

I find that multiple rounds of interviews and shopping a potential new hire around with other team members usually breaks down the barriers and often exposes the natural person in front of you.

I’ve seen great candidates check all the skills and experience boxes fail miserably due to personality and culture conflict. I’ve watched those with 70% of the skills and the ability make a successful transition and find incredible success because they are the perfect cultural fit.

Next time you are considering a new candidate, get to know them a bit, get a feel for their personality and start with culture before skills. Job skills can be learned, but culture and human nature are much more of a challenge to overcome.

Change the world

Thirty-one years ago, on January 28, 1986, we lost Challenger on takeoff. Sixteen years ago, on February 1, 2003, we lost Columbia.

Two of the saddest days in the history of our country, but rather than ponder the sadness and loss, I’d ask that we ponder what motivates great women and men to do incredible things and take mind-boggling risks and dream big?

Where does an individual get the courage to strap on a rocket and 15 mins after takeoff in Florida is somewhere over Italy flying 17,500 miles per hour.

John F Kennedy dared to dream of going to the moon:

“We choose to go to the moon…We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard; because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one we intend to win, and the others, too.”

Ronald Reagan dreamed of a new world from the Brandenburg Gate:

“General Secretary Gorbachev, if you seek peace, if you seek prosperity for the Soviet Union and Eastern Europe, if you seek liberalization, come here to this gate. Mr. Gorbachev, open this gate. Mr. Gorbachev…Mr. Gorbachev, tear down this wall!”

And with the most powerful words of all….last month we celebrated the birthday of Martin Luther King, Jr. who dared to dream of a new future for our country to be a beacon of hope that would change the world:

“I have a dream that one day every valley shall be exalted, and every hill and mountain shall be made low. The rough places will be plain and the crooked places will be made straight, and the glory of the Lord shall be revealed, and all flesh shall see it together.

This is our hope. This is the faith that I return with to the South with. With this faith, we will be able to hew out of the mountain of despair a stone of hope. With this faith, we will be able to transform the jangling discords of our nation into a beautiful symphony of brotherhood. With this faith, we will be able to work together, to pray together, to struggle together, to go to jail together, to stand up for freedom together, knowing that we will be free one day. And this will be the day. This will be the day when all of God’s children will be able to sing with new meaning, ‘My country ’tis of thee, sweet land of liberty, of thee I sing. Land where my father died, land of the pilgrim’s pride, from every mountainside, let freedom ring.’

And if America is to be a great nation, this must become true.
So let freedom ring from the prodigious hilltops of New Hampshire; let freedom ring from the mighty mountains of New York; let freedom ring from the heightening Alleghenies of Pennsylvania; let freedom ring from the snow-capped Rockies of Colorado; let freedom ring from the curvaceous slopes of California. But not only that. Let freedom ring from Stone Mountain of Georgia; let freedom ring from Lookout Mountain of Tennessee; let freedom ring from every hill and mole hill of Mississippi. From every mountainside, let freedom ring.

And when this happens, and when we allow freedom to ring, when we let it ring from every village and every hamlet, from every state and every city, we will be able to speed up that day when all of God’s children, black men and white men, Jews and Gentiles, Protestants and Catholics, will be able to join hands and sing in the words of the old Negro spiritual: ‘Free at last. Free at last. Thank God Almighty, we are free at last.’”

As I think about these great people this morning, I thank God for them and the gift they were to us all – to change the world –  and I realize we can all change the world big or small we all can make a difference and ultimately change the world.

S. Darrin Johnston is a C Suite Management Executive in the housewares industry.

State of the housewares industry

Over the last several years, the housewares industry has been in a significant state of change, creating opportunities for some and sending others running for cover. The continued retail consolidation, bankruptcy, and the overwhelming shift in the business to online sales have required supplies to rethink all aspects of their business. I’ll talk about E-commerce and the industry in more detail, from a later perspective.

Young, millennial consumers are also significantly changing the historic path to purchase requiring companies to find new avenues of reaching end consumers. Suppliers can’t rely on the retailers to tell their stories any longer. In many cases, the retailer battle to balance overhead for E-commerce and brick and mortar sales has significantly deteriorated the consumer experience at the point of sale. The shift this year has had an extreme impact on the industry with the Cookware Manufacturers Association reporting shipments for its membership down (-12.5%) through August. Metal Bakeware down (-19.6%), Kitchenware down (-18.8%) and total membership shipments down (-14.6%). “CMA August 2018 Metrics Report.”

Historically, during periods of retail consolidation, 1+1 never fully equals 2. The meaning of this, the business is never fully recovered in another key retailer. Key competitors often see their market share grow by 1% to 3% but the business is never fully recovered.

I have talked often with many of our key customers and explained that we have never operated in a dynamic industry that sees 10% or 15% growth in a given year like the tech industry. No one camps out or waits in line for the next big cookware introduction like we often see when new iPhones are released. The industry does not experience organic 5% to 10% growth due to market expansion. If we are up 1% to 3% or down (-1% to -3%) that is a normal year in our industry.

We also tend to see our industry perform better when the overall economy is a bit more challenged. We believe this historic trend is driven by consumers focus on home when disposable income is a bit harder to come by. The super-hot economy we find ourselves in currently creates more noise and competition from other factors competing for the consumer’s disposable dollar. When disposable income is more plentiful, consumers eat out more, the go on vacation, they buy cars, they buy new furniture and remodel their homes. Stay tuned to for a future post where we will tackle just what those unique opportunities look like and how to use them to capture market share and growth in these tumultuous but exciting days.

No matter, competitors in the housewares industry are left to grind it out year over year, locked in market share battles. If significant growth is going to come, companies must find new ways to take market share. I believe the current market presents many unique opportunities to capture that market share and grow.

S. Darrin Johnston is a C Suite Management Executive in the housewares industry.

Market share and growth

In a previous post, we tackled the state of the housewares industry which sparked some thoughts on challenges in the marketplace and potential sources for future growth.

I stated the current market, while challenging, presented many unique opportunities for growth. As the housewares industry continues to be impacted by retail consolidation and online growth, we will continue to see companies forced out of a comfort zone.

There are many companies that have one or two key skills that have translated into success in the industry, but very few have the complete package. Some have great supply chain capabilities, some have great marketing and sales resources, some have incredible product development processes, and some have great brands and product offerings.

This sets the stage for an environment ripe for mergers and acquisitions, joint ventures, licensing and even distribution agreements. Companies must look to leverage strengths to create new revenue streams while working to firm up weaknesses and minimize risk from outside competitors.  Companies that can successfully accomplish this over the next several years will firmly position themselves ahead of the curve.

Mergers and acquisitions
M&A offers companies quick opportunities for growth in a number of areas.  Companies can use M&A for expansion of market share by acquiring competitors or use it to gain entry into new areas of targeted expansion.  In today’s hyper-charged marketplace, M&A can actually offer companies a more cost-effective way to capture their business goals and objectives quickly versus building new from the ground up resources.

Beyond market share, M&A can also assist companies with assets and resources that may be limiting their ability to grow. As discussed previously, often, few companies have a total package of strength-driving resources. M&A can offer companies the ability to acquire assets in very specific areas that help round out capabilities thus creating additional infrastructure strength.

Joint ventures
JVs offer a more palatable option for companies that need resources, often cash, without relinquishing control. JVs work best when two companies, more evenly matched, can blend with different strengths but similar goals. An example might be when a company with a great product but limitations in sales and marketing connects with another company with solid resources in sales and marketing. Both companies may not want to relinquish control, so they pool funds and start another company, bringing together the best parts from both entities. Joint ventures can also be a great catalyst for a longer term M&A opportunity.

Licensing can be an incredibly strong way to leverage the power of a brand in the marketplace while minimizing upfront financial risk. Licensing can come in the form of celebrity licensing, brand licensing for new categories, sports licensing, and many others. Licensing offers a relatively low barrier of entry as the costs associated are buried in the “cost of goods” and are not required to be paid off until the product hits the market and begins selling. This allows companies to maximize significant brand awareness and marketing efforts allowing for immediate sales gratification versus longer-term brand building strategies that can take significant amounts of time and funding while also requiring upfront marketing costs that may not be proven or successful.

Distribution and sales agreement
As discussed earlier, often companies have one or two proficiencies but often not the whole package. Perhaps a company has a great product and brand but can’t gain entry to the marketplace without significant investments in sales, marketing, and distribution costs. In this case, it’s as simple as one company selling the other company products at an attractive margin and the secondary company takes control of the marketplace strategy. Involvement levels can vary but both companies end up winning with sales, revenue, and market share growth by leveraging the strongest attributes.

In today’s ever-changing marketplace, all options must be placed on the table and while these are just a few, they are some of the most common and most versatile options. No matter which option is best, I believe housewares companies today must consider them all.  

In my next post, I will begin to dissect each of these opportunities and dig a bit deeper into the pros and cons of each. I will cover what companies can do to minimize risk and maximize reward in each for future success.

S. Darrin Johnston is a C Suite Management Executive in the housewares industry.

Dissecting the E-commerce business

With the end of the year quickly approaching, this week brought a plethora of new data and analytics to determine just what happened during the ever-evolving holiday season.

Because of the time of year and while the information is fresh, I decided to depart from the dialog on Market Share and Growth discussed in my last update to discuss a new topic that is shaping the industry on a daily basis.

The marketplace experienced unprecedented growth in online sales. I will be eager to review the national numbers once the data is published – we witnessed unprecedented market share growth for Q4 as well as an overall year that set records beyond what we have seen since setting up drop ship capabilities more than a dozen years ago.

If you take nothing more than this single piece of information from this post, hear this: if your company is not currently building the required infrastructure to drive E-commerce, you are already well behind the curve and you will be obsolete in the next 24 months.

I view E-commerce as a three-tier approach that must be evenly and simultaneously managed – Pure Plan E-commerce, Drop Ship Fulfilment/Direct to Consumer Shipping and corporate-owned internal websites.

In today’s post, we will address Pure Play E-commerce with future discussions touching onDrop Ship and company-owned websites.

Pure Play E-commerce
Pure play is the term often used to describe customers like Amazon and Wayfair. While Amazon is often thought of as the evil empire these days, companies sitting on the sidelines, not willing to work with Amazon, are falling behind.  

The complexities of working with Amazon today require dedicated teams often with employees onsite in the Amazon offices. Today’s Amazon no longer requires salespeople, but rather business managers heavily engaged in day-to-day analytics focused on navigating the ever-changing tools, assets and algorithms focused on capturing and completing the sale to the end-consumer.

Savvy companies are learning how to manage this love-hate relationship to minimize pricing issues and long-term brand equity challenges.
Robust MAP (Minimum Advertised Price) policies can be very effective but they must have real consequences. As clearly defined by the Robinson-Patman Act, manufacturers cannot dictate selling prices to retailers but they can limit funding support if retailers chose to go outside normal competitive pricing suggestions.

As with all retailers, Amazon continues to grow more revenue-hungry than ever looking for suppliers to help fund everything from free shipping offers to margin shortfalls on SKU’s with pricing challenges.
Thanks to this change of strategy, Amazon seems to be more willing to work with suppliers to ensure they don’t lose these funds as they are greatly needed to support the selling asset base.

As the assets available become more costly, dedicated teams must constantly work to evolve the asset investment strategy to maximize ROI.  Amazon is maximizing these costs and is no longer the cheap date they were only a few years ago, thus the massive turnaround in profits witnessed by the market in the last two years.

In my next post, we will address the second tier of E-commerce, Drop Ship capabilities and the opportunities and challenges this channel of E-commerce will present.

S. Darrin Johnston is a C Suite Management Executive in the housewares industry.