MIAMI BEACH, Fla. – Yesterday, NACS Chairman Rahim Budwhani warmly welcomed retailer attendees and supplier partners to the NACS Leadership Forum, and he expressed his excitement about this year’s topic: using design thinking to solve strategic business challenges.
He was soon joined by Julie Jackowski, legal counsel for Casey’s General Stores—and Leadership Forum event moderator—who introduced opening speaker Steve DeSutter, former president of Stripes LLC, with roughly 400 stores in Texas, New Mexico and Oklahoma.
DeSutter is the current CEO of Focus Brands, an Atlanta-based franchisor and operator of more than 4,500 locations under the brand names Carvel, Cinnabon, Schlotzsky’s, Moe’s Southwest Grill, Auntie Anne’s, McAlister’s Deli and Seattle’s Best Coffee. His presentation topic— “Knowing Now What I Didn't Know Then”—compared what he’s learned in his new role at the helm of a larger, more food-focused and competitive channel, with his time in the convenience channel.
“I see a lot of shifting patterns around me,” DeSutter said. “And what I am going to talk about today is based on my experiences. I’m working in a very different model today than the c-store model, but we are both sharing the same consumer.”
DeSutter talked about how he had come from a family-run chain with Stripes, where fresh food was the anchor and business was a success. Yet when he started his new job he realized that he had been so busy watching categories and fuel pricing and driving same store sales with promotions that he never had a chance to look up and think more strategically and more long-term.
The marketplace is changing at tremendous speed. He referenced Moore’s law, an observation that the number of transistors per square inch on integrated circuits had doubled every year since their invention. The law predicts that this trend will continue into the foreseeable future. Consumer patterns are shifting just as rapidly, DeSutter said, and he realized that FOCUS Brands needed a more competitive operating model to stay nimble and relevant. That includes:
- To cultivate the ability to shift quickly with their offerings, image and direction
- To develop in-house market intelligence to help them “see around corners”
- To leap ahead with consumer-facing digital solutions
- To overhaul their brand-building skills
- To become scalable
- To become organizationally effective through learning and best practices systems
As a result, DeSutter, with the help of consultants, rethought the company’s business model in three steps: strategic review, design thinking and activation. It sounds easy as 1-2-3, he said, but in fact it was a major investment of time and money.
The company had to think hard about where they played and how they won—what were they really good at? He referenced Nike and Reebok, two successful tennis shoe companies many years ago, yet one remained a shoe company and was bought by Adidas (Reebok), while the other, Nike, envisioned itself as a lifestyle company and today is a wildly successful business with a repeatable pattern to keep them going over the long-term.
DeSutter also encouraged folks to wave the magic wand and think about what you would do if you could change everything, which he admitted is hard to do. “Most of you are focused on the finances, and your brain will start with, ‘That costs a lot of money or we’d get poor ROI on that.’” But it’s an important exercise to go through, he said.
FOCUS also looked to extend its strategic horizon, targeting customers they wanted to attract three to five years out, and they built an advisory platform to challenge their thinking and looked outside the business for fresh ideas.
“Is your brand the corners you have or simply an image?” DeSutter asked the crowd, stating that consumer relationships and their emotional connection with your brand is going to matter more and more in the future. For example, at a time when consumers are asking for gluten- and sugar-free, Cinnabon continues to thrive. The passion for that brand is clear, DeSutter said, when you look at consumers’ social media posts that use words like love, want, desire—even foodporn. “Leading brands in the industry have been building a relationship with their customers.”
You also need to “build muscle in your business and find out what customers think of you— become an outside-in-looker all the time,” DeSutter advised. Also consider what you are willing to suck at. He admitted it’s a very difficult thing to do but you only have so many resources, so spend it against the things that matter the most to your business.
It takes a long time to get to activation, DeSutter said, but it’s crucial to invest the time to bring everyone with you. To help with activation, he identified what he called “A positions” in his organization: people who are positioned deliberately to affect strategy and ultimately generate results associated with that strategy. He uses these A-positioned staff to guide the company and generate influence.
New office space also created a collegial environment for action, and it was also good for attracting dynamic talent to the company. The office even includes a large Instagram wall—removable stickers of actual Instagram posts from customers sharing their love for the company’s brands, reminding staff at all times who they are serving.
To sum up “what I know now,” DeSutter advised:
- Look over the horizon to envision bigger ideas.
- Consumers should be at the center of what you do, not SKU/category management.
- Look for leaps, not incremental movement, on digital and social platforms.
- Build muscle for continuous change.
- Enable your organization to do its best.
The NACS Leadership Forum continues today with presentations on design thinking, transcendent trends in convenience, and afternoon breakout groups where attendees will put what they learned about design thinking into action, solving some of today’s c-store challenges.