Since leaving an industry-leading company after 23 years to forge a new path in the housewares industry, three and a half years have passed, and my view of the industry has changed dramatically. This time has allowed me to challenge many of my previous perspectives while testing some hypotheses about how our industry is evolving in the never-ending chase to connect with our end consumers and continue the development of new products that ultimately motivate the marketplace to keep coming back.

I have come to believe there is an epidemic failure in our industry that starts with most companies not even really understanding what they do or why they do it or how to connect with the end consumer they claim to covet so preciously. It’s an imperfect understanding of the game, and our industry seems to be falling increasingly behind. You’ve probably heard part of that phrase from Simon Sinek’s Ted Talk, and the other part gives homage to a scene from the baseball movie Moneyball.

As I sat down to write this blog and put my thoughts into words, I had so many ideas, thoughts, speaker’s words, and movie clips rolling around in my head that I didn’t know where to start or how to organize the details of what I wanted to say other than opening the dialog of this article with a jarring comment that might entice the reader to read on. Based on my levied allegations, I also understand my words might offend a few in our industry. I will go on to say that challenging the status quo is what makes us better and, ultimately, what propels companies and industries forward.  

In a few words, our industry has grown complacent and tired.

Are our Industry Associations and Trade Shows evolving to keep up with how things are changing? I’m not so sure.

Many companies continue doing the same things they’ve done for 30 years and then wonder why nothing seems to change. I recently read a post on LinkedIn, I don’t know where to give proper credit, but the comment was, “The most expensive seven words ever used in the corporate world: “That’s the way we’ve always done it.” To quote an overused phrase, “The definition of insanity is doing the same thing repeatedly, expecting a different result or outcome.”

With what is happening in the US and global economies today and after two years of unprecedented Industry Growth and High-Fives all around, thanks to the Covid Pandemic, I believe the industry stands on the brink of one of the most significant shake-ups we have ever witnessed. I will speak specifically about the cookware industry as most of my career’s last 30 years have focused on this category. 

The industry’s major players are stagnating in their thought process of changing this handle or that body silhouette. They add a new color, or they do another licensing deal, adding another celebrity name to the endless list that already exists. In the end, the technology remains the same with a few minor adjustments, and the well-embedded mindset of “just spray some coating on another piece of aluminum and the consumer will come” continues to be the mantra that motivates the industry to carry on.  

As I write this, thoughts of the movie Jerry McGuire and the “Mission Statement” roll around in my mind. If you haven’t seen the movie, look up the mission statement clip on YouTube and the repercussions of putting such thoughts on paper. Am I bagging any future hope of a career in the industry I’ve come to love after close to 30 years? Maybe and probably, land with a resounding thud.  

Why is attempting to think differently viewed with such disdain? This is a question I’m not sure I’ll ever know the answer to, but it may lie in another movie clip from Moneyball, “The Boston Job Interview.” 

Thinking Differently: “It’s not just threatening a way of doing business, in their minds, it threatening the game, it’s threatening their livelihoods, it’s threatening their jobs, it’s threatening the way they do things, and every time that happens, whether it’s a government, or a way of doing business, or whatever it is, the people who are holding the reigns, or have their hand on the switch, they go batshit crazy.”

As I consult with companies, I have a questionnaire that I ask to be completed before our initial consultation and engagement. The first question I ask is often a bit off-putting, but when a company defines a strategic approach to entering the US market, I ask, what gives you the right to enter the US Market? This question is often followed with a blank stare and comments like, “we make a nice product” or “what do you mean?”

I respond by saying you are looking to enter a super fragmented industry segment, low tech, and the barriers of entry are low. Currently, industry data shows 30 brands make up the top 80% of the market, with another 30 brands commanding the remaining 20% with less than 1% share each and another 30 brands waiting in the wings trying to gain entry; then there’s you. So, I ask again, “what gives you the right to enter the US market?”

Sometimes my words are viewed as harsh, but I believe we have entered a time when everyone seems more concerned about hurt feelings than asking the tough questions. When millions of dollars are on the line in such business decisions, tough questions must be asked as it could mean the difference between a multimillion-dollar mistake or success. 
In today’s market, me too products no longer have a place, and companies and industry leaders must work harder to find their reason for existing.  

Is it a brand with history or heritage that commands 65% to 70% unaided consumer awareness? Is it a technology vetted through extensive consumer insights that genuinely solves a lingering problem? Maybe it’s not specific to the product you offer; it’s perhaps a problem resolution through your company’s structure that allows you to resolve global supply chain problems or meet extensive consumer needs through state-of-the-art dropship capabilities that sets an unprecedented industry standard in eCommerce.

No matter what makes you unique, different leadership thinking and innovation are the names of the game, and companies must strive to be the fastest, most agile, and most cost-effective.  

Consumers must be brought along on the product development journey with relentless rounds of insight testing for every phase of the product and every feature and benefit. Ensuring every aspect of the complete story adds value. If it doesn’t add value, it must be removed through reverse engineering, dialing in the cost value plan down to the penny. Product Innovation must be relentless, especially when business is challenging. I’ve never understood why most companies’ first reaction when business gets tough is to slow down or even cut investment in innovation, but that is currently happening across the industry.  

I view this as a failure to invest in the future while worrying about today’s stock price first. This is where the real opportunity presents itself to put competitors on their heels or, even better, in the rearview mirror.  

Our industry usually benefits from economic downturns as consumers refocus on the home. These are the times when merchants mostly look for newness and innovation. When things are going well, and business is good, what is the motivation to change? I believe the pandemic covered a lot of industry bad business sins and has exacerbated the situation leaving even more companies unprepared than usual for a business cycle downturn. 

Historically, I’ve seen as much as 45% of aggressive companies’ annual revenue driven by newness and innovation during challenging times. Make no mistake; 2023 is going to be an extremely difficult time.  

You probably sense a mix of passion, concern, and urgency in my words. All feelings I have for our industry. This industry is not just a job opportunity; it’s a lifestyle I’ve loved over a 30-year career. 

What is your plan for the next 12 to 24 months as an industry company or leader? Are you so wrapped up in excess inventory and eroding margins that you have taken your eye off the future?  

You’re probably thinking, what does this guy know? He doesn’t understand our situation. A natural reaction to simply write off a differing view. As previously mentioned, a way to write off a challenge to the status quo with a new way of thinking.

Over the last 30 years, I’ve worked with and built some of the biggest brands in the industry, I’ve faced margin and inventory challenges, and I’ve had to make the hard decisions to downsize workforces affecting livelihoods and careers. I’ve answered to Corporate Boards and Wall Street when things weren’t going as planned. 

The question now is, what will you or your organization do differently in these challenging times?  

If you are looking for a senior leadership executive or a business consultant to challenge the status quo, let’s talk and discuss what we might learn together.  

I wish you all much success and prosperity in finishing 2022 and beginning anew in 2023.

“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.

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.

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.

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
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.

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.