Building a Great Team
My leadership plan is to collaborate with the best brains in the business. We have an unbelievably strong senior management team including vendor management and process, product development and business development,
sales and marketing, and finance and accounting—and they play an integral role in running the company.
I try to focus on my strengths and allow our executive managers to do the same. Developing our people is a top priority. We focus on celebrating wins and avoid finger-pointing on our losses.
In order to create an environment that attracts and retains top talent, I spend a lot of time researching what can be done from a human resources perspective to make our employees’ lives better. We offer a very enjoyable office environment that includes Ping-Pong tables and pinball machines that employees use in their spare time. Every month we take a day to play arcade games and air hockey; we recently had an employee talent show as well. Beyond the fun office environment, we’ve increased benefits tremendously over the past five years. We offer competitive benefits and our employees have a role within a rising, international company with tremendous growth opportunities. Our entrepreneurial spirit allows employees to be involved in all aspects of the business.
Competing in a Global Market
…from a global standpoint our business model has changed rapidly in the last three to four years. Five years ago we identified that we needed to go international because of the dwindling number of U.S. retailers. In order to become less dependent on those remaining U.S. retailers, we felt it was critical to expand our distribution.
Fortunately, we were able to leverage our U.S. volume and economies to go international and get better pricing for the smaller markets we were moving into—the United Kingdom, other European countries, Mexico, Canada, and Australia. We are much more competitive than some of the smaller competitors in those markets, so this proved to be a big opportunity for us. We also applied our strengths in other areas such as information technology and customer service to help us succeed.
We deal with an increasing number of multinational retailers, such as Wal-Mart, Mothercare, and Toys-R-Us. Fortunately we are able to work with them in a global consistent manner in terms of servicing their business needs, including product development, information technology, consumer services, and so on. These large retailers also want to leverage their U.S. volume to make their smaller markets more competitive; and they want to get the best prices possible. In essence, we help these larger retailers achieve their goals to be much more competitive in their overseas ventures.
Maintaining a “Start Up” Mindset—Even as the Company Grows
One of the secrets of our company’s success is that we retain a “start-up” mindset even though we are a big business. We are open to innovation, reward fresh thinking, and look to keep work fun. This philosophy has paid off in a big way in terms of the partnerships and products we have been able to create. For instance, we have a licensing partnership from The Disney Company to design, manufacture, and market toys for the Baby Einstein™ brand. Some of our newest introductions include the Baby Einstein Musical Motion Activity Jumper and the Color Kaleidoscope. Not what you traditionally picture when you hear “jumper,” the Musical Motion Activity Jumper is an entertainer with a rotating seat and jumper all in one. The Color Kaleidoscope features dancing lights, melodies, and spoken color names in three languages that reward baby’s curiosity through three stages of discovery as baby grows.
In order to reinvent ourselves over the past few years, we needed to create an “all hands on deck” mentality. Our goal was to create an international business, which has been growing at the rate of 100 percent a year. Since we are new in many of our markets, we have to meet the challenge of training new people and engaging in product testing and design in new countries and cultures. Since requirements vary by country, the greatest challenge is the multiple testing. It is hard to design products toward a common standard when country requirements vary. We must ensure that our products meet worldwide standards as well as market-by-market testing standards. The international side of our organization has what is similar to a ‘90s dot.com mentality, in that we are a very young, high energy organization that would like to reinvent this entire industry, from product design to manufacturing processes and account management.
Keeping your edge in a fast paced industry
Constant analysis of the competition and predicting what their next moves will be are key to maintaining success in this industry, as well as developing a deep understanding of retail dynamics. Therefore, it is important to keep your edge. I read a lot while traveling in order to keep up to speed on what is going on in the industry. I am always looking for new ideas and when I read an article, I always ask myself how the information it contains applies to Kids II and can help us stay relevant.
I love talking to other CEOs and executives in order to seek information about challenges I am facing. Bouncing ideas off of friends and colleagues in a relaxed atmosphere is a great way to get feedback and serves as a continuous learning process. What you know today quite possibly may not be true tomorrow, so it is important to maintain a constant flow of information.
When you travel to different markets and get in front of the customers you come to understand the problems faced by different retailers in different countries—and you need to consider how you can help retailers solve these problems. If we find something that works in one market, we try to standardize it and suggest it to other markets, because quite possibly those solutions are worldwide. Retailers are often very eager to hear about successful merchandising practices in other markets and how Kids II can serve them and hopefully make them more successful. Therefore, staying connected on the customer front in terms of serving their needs is vital; making our customers successful adds revenue for us.
Why intellectual property is so important in the toy industry
Overall, IP—patents, trademarks, and brands—are some of our company’s greatest assets. The better you develop these assets, the more valuable they become, just like our staff.
We have invested heavily in product development and brands over the last five years. In the past our focus was on low tech products. Our product line included a lot of sewn items such as bedding; obviously, our competition was great and there was not a lot of room for innovation. Today we are focusing heavily on electronics, plastics, and other higher ticket items; we are going into very mature categories and completely redefining them, increasing the need for IP protection.
We now spend a great deal on product and consumer research that includes ethnographic studies, in home testing, focus groups and online studies. We also tap into our Generation Mom network—an extensive product advisory group made up of hundreds of parents from around the world. The group provides product feedback, ideas, advice, and observations from their own playrooms, regarding fun (and not fun) activities for young children—and parents. These days, when we decide to launch a product it is because we have determined, through research, that it is a product that the consumer wants and needs. Thanks to this research, the effectiveness of our product launches has improved tremendously. We have launched eighty new items this year and less than four are struggling; this is a success ratio we have never had before. |
