In my new book “On the Brink: A Fresh Lens to Take Your Business to New Heights,” I share a story about a client, Laclede Chain, that was “on the brink.” Stuck or stalled, however you describe it, Laclede had grown and captured market share but then reached a position in the market where it had to rethink its business model.
Despite the fact that the post-recession market recovery is now entering its eighth year, we at SAMC are getting calls from across the U.S. and Canada from companies that are once again facing that “stall point.” They rebounded well from the 2008 Great Recession but aren’t quite sure why, and now are watching sales slow, clients defect to other companies, and buying processes change. Once again, like Laclede, they have to reinvent their businesses. And once again, they aren’t quite sure how.
Can Corporate Anthropology Help Reinvent a Company?
I’d like to share with you Jim Riley’s story of how he reinvented Laclede Chain because he was able to see possibilities all around him by using the methods and tools of corporate anthropology—namely, how to step away and look at your business with fresh eyes.
issourin 2001, Riley had been part of a group which purchased Laclede Chain Manufacturing Company in St. Louis, Missouri, a 150-year old company that had started as a blacksmith shop making hardware for westbound wagon trains but that was now focused on snow tires. As its new president and CEO, Riley first grew Laclede’s market share and then its margins. By 2008, Laclede was an industry leader, with approximately $30 million in revenue.
Around that time, two big problems beset Laclede. First, the Great Recession—like thousands of other companies, it was hit hard by the global downturn. In addition, its business was dependent on snow, as most of its revenue came from the sales of snow chain for cars and trucks.
I met Jim in 2009 when he came to one of my Vistage “Change Matters” workshops. (The Chair of Jim’s Vistage group, Allen Hauge, and I work together to help group members understand strategy.) In that workshop, I focused on helping leaders “see with new eyes” and take concrete steps toward building their businesses. I like to remind my audiences that in evolution, it is not the smartest or the strongest that survive but the most adaptive. These are changing times that need new adaptations.
Riley took this message to heart, and it didn’t take long for him to see Laclede with those new eyes and reassess what needed to be done. He realized that Laclede was very good at selling snow chains but in order for the company to keep growing, it would need to find new kinds of customers and innovate new products.
Seeking an Innovative Business Idea
After my workshop, Riley was on a mission! Inspired by “seeing with new eyes,” he went back to his leadership team, ready to take a real, hard look at Laclede’s corporate culture. The result? He and his team made a few key changes that turned the whole business around:
- Asking Hard Questions: First, Riley started asking tough questions. In his own words, “We really had to figure out where else we could start selling chain.” He asked:
- “What can we do to grow?”
- “How do we open up sales?”
- “How can we sell more chain, maybe not just snow chains?”
- “What are our customers asking for that we aren’t selling?”
- Listening for Opportunity: Riley knew that customers were asking for things form his service team that Laclede didn’t currently deliver. He realized that those could be the kinds of customer needs that could be vital to the company’s growth. He started listening in on customer service calls and realized that his operators were turning away potential buyers simply because they were asking for products that weren’t Laclede’s core business. Riley asked, What was stopping Laclede from making those things? Why not help customers find the things they wanted instead of turning them away? What about asking Laclede’s employees what they were seeing as unmet needs?
This is something I see a lot in companies that have stalled. Once a company has started telling its story in a certain way, they put all of their energy into making it come true. This is great, until the story isn’t working anymore and it comes time to create a new story. Where do those ideas come from? Often, right from their customers.
- Intentional Change: How a change process is designed and managed is crucial to the success or failure of organizational change. Riley focused on one of the keys to making change work—basing it on delegation and decentralization. The more employees are on board with the changes and actively part of making them happen, the more successful and sustainable those changes tend to be. This means having employees throughout the company take initiative and take risks, and it means executive leaders must create and maintain a sense of trust and value.
- Bold, Curious Leadership: Laclede’s leader recognized early on that change in his business must come from change in the culture. Instead of a culture of hierarchy and status quo, Riley shifted the power to make decisions and try new things into the hands of his employees. Five years later, Laclede employs more than 50 people making bird cages (a far cry from snow tire chain!). He encouraged his people to collaborate, help each other and work as a team. This in turn changed the tone and culture of Laclede and ultimately, the future of the company.
These kinds of applied anthropological techniques focus on organizational and culture change that can really happen when a strong leader makes a bold change, stays curious, and empowers the employees around him. In 2010, Riley, one of his partners and a private equity group took the next step and actually bought Laclede Chain. Guess what happened next? In 2011, business jumped another 40%.
Are you seeing examples of this kind of leadership and culture shift in your company or in companies around you? Please comment and let me know!
Want to read more? Check out 10 of our favorite blogs on the subject:
10 Great Blue Ocean Blogs
From Observation to Innovation
Andi Simon Ph.D
Corporate Anthropologist | President
Simon Associates Management Consultants
Author: “On the Brink: A Fresh Lens to Take Your Business to New Heights”
