By Margaret Hansen
When a successful company starts to fail, its management can panic and become desperate, or they can do what these two CEO's did.
1. Play Well
What began in a master carpenter's workshop in the 1930s today makes an annual profit of more than $4 billion, has more than 9,000 employees worldwide, and still manufactures most of its parts (19 billion) in the founder's hometown of Billund, Denmark. Ole Kirk Christiansen's motto of "only the best is good enough" still lives on at LEGO, where the quality assurance rep's job is to make sure that every single piece is in every kit, so that no child is frustrated when they open the box.
"Customers are an avenue to the truth. And in today's world, a CEO needs every avenue to the truth that he or she can find."
- Jørgen Vig Knudstorp, CEO, LEGO Group
Like so many other companies, LEGO has had some tough times. They nearly went bankrupt from low sales in 2003 and 2004. Jørgen Vig Knudstorp was named as the new CEO and he was tasked with turning things around. Among his revolutionary changes, Vig Knudstorp taps into a large LEGO customer user group, lugnet.com, (adult volunteers that love LEGOs) for product development direction.
Here are some of his other ideas for the company's culture that align with the LEGO brand:
- Every toy must be a challenge to build
- Collaboration is a difficult but worthy process
- There are many solutions to the same problem
- Hire people who are pleasant to work with, have open minds and like to make friends
- You can live up to any great creativity that you have within you
- LEGO is a diverse mix of cultures, languages, and nationalities
2. The Aroma of Good Coffee
Not many companies can say that the aroma of their product is part of their brand, but Starbucks can. Its coffee bar experience and the luxurious emotions that go with it are powerful. When Starbucks took a tumble, its founder came back to set things right.
"I didn't come back to save the company; I hate that description. I came back to rekindle the emotion that built it."
- Howard Schultz, founder, chairman and CEO of Starbucks
Schultz bought and built a company that took care of even its part-time employees with full benefits (an employee retention plan), while providing an amazing coffee experience and a sense of community for its patrons like no other seen in the U.S. before that. Love it or hate it, the Starbucks coffee bar and barista experience took the country by storm.
Returning as CEO in 2008, after an eight year hiatus, Schultz had some serious work to do to get the company functioning again in a difficult economy. His transformation agenda included the painful closing (and subsequent layoffs) of 800 Starbucks retail stores. He refocused the company back to its original brand: one cup of coffee, one customer at a time, and he didn't cut the benefits plan. To invigorate his staff, he took 10,000 Starbucks managers to New Orleans for a week-long training and pep rally on the company's mission and purpose, while also volunteering with Katrina clean-up efforts.
Today, Starbucks has more than 30 million fans on Facebook (and counting), the Starbucks eGift cards allow easy buying and the $15 Starbucks iPhone app allows you to use your phone to purchase items at their stores.
Getting Back on Track
If sales aren't what they used to be at your company, don't despair. Try what these CEOs did:
- Focus on why the company was originally successful
- Use technology to your advantage