The May 21, 2018 Wall Street Journal had a special section titled, “C-Suite Strategies.” I found the interview with Hain Celestial (organic foods and teas) founder and CEO Irwin Simon to be fascinating, with great lessons for businesses of all sizes.
Let’s start at the end, with something specific to my day-to-day business, and then move on to more general insights. Here’s the last paragraph of the article.
“There are a lot of benefits being a part of a bigger company. Being a $3 billion-plus public company, when you hit a bump in the road you feel it. If you are a $50 billion or $60 billion company, you don’t get those.”
Interesting, especially because I have a hard time convincing some people there’s more risk in a $3 million company versus a $15 million company versus a $50 million company. The owner (business seller) and their representatives often see how a company 100 times their size sold for some high multiple (of profit). If the owner of a multi-billion firm sees more risk in his compared to larger firms shouldn’t small business owners recognize this also?
Here are some other insights from the interview:
- Branding works– Simon said millennials like brand name products (like most of us), if the price is close. It’s why you and I need to constantly work on our brand, so we aren’t thrown into the commodity basket with commodity prices.
- Quality sells– people will pay more organic, but only 5-10% more. Don’t fixate on the 5-10% numbers, the bottom line is, in every business, quality sells. We pay more for quality cars versus, a basic car, quality clothes, shoes, sporting goods, etc.
- Beware of trends– in Hain Celestial’s world the trends include low or no fat, low carb, gluten free, etc. Simon said, “They better taste good.” Back to the quality theme again. Whatever you do better “taste” good. It’s where repeat business comes from.
- Build on your strengths– Hain has 11 products accounting for 93% of their sales. They’re building on these products, shedding underperformers. Like Jack Welch said at GE, let go of your bottom 10% of employees every year. Whether it’s people, products, services, etc., go with what is most profitable.
None of the above is new. We all have probably heard these insights many times and it’s interesting how these fundamentals cross industry lines. The same things I work on my advisory business are the same things a multi-billion-dollar food manufacturer works on. Like in sports, where the best professional athletes constantly work on their basic fundamentals, we should also.