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Chris Stevens, adjunct professor at the Mendoza College of Business at the University of Notre Dame, and developer of the Keurig Premium Coffee System, sat down and talked with Woodworking Network's Matt Mikus about leadership's critical role in a successful business, as well as the "Numbers That Matter."
Today on Woodworking Network, we're talking to one of the keynote speakers of the upcoming Cabinets and Closets Conference and Expo on April 11 through April 13 this year at the Schaumburge Renaissance Convention Center in Chicago. Chris Stevens is an Adjunct Professor at the Mendoza College of Business at the University of Notre Dame. He was also a founding member of the coffee brewing company Keurig.
Woodworking Network: Chris, thanks for joining me.
Chris Stevens: Hey Matt. Great to be with you this morning.
WN: First, I’d love to get a bit more on your background. I know everyone now days knows what Keurig is. Let’s talk a little bit more about your experience in general. Could you give us more about your background?
Stevens: Sure. First of all, I believe in dreams. I think Walt Disney said it best, if you can dream it, you can do it. And Mary Ann Radmacher said stand often in the company of dreamers, for they believe you can do impossible things. I know that the people in the woodworking business have their own dreams in terms of being profitable and providing an environment where their employees can be the best they can be.
And I had dreams growing up. Whether it’s to play basketball, which I had a chance to do in college, or to work for major corporations, which I did for Procter and Gamble and Anheuser-Busch. And then I met a couple of guys who had a dream of changing the coffee world one cup at a time 21 years ago. That was the beginning of Keurig.
WN: And now, after working for Keurig to become what it is today, you now are a professor over at University of Notre Dame. Tell us a little bit about what you help to teach there?
Stevens: Sure. So someone once said that you should have two careers in life. One that you have up to the age of 60, and one you have from 60 on. I took that advice literally. After being at Keurig for 17 years, and seeing it grow to a $5 billion enterprise, and it got to become a major corporation and stuff.
And I had gone to Notre Dame many years ago and had played basketball, and done some guest lecturing. So I decided I wanted to come back here and teach in the business school.
So be careful what you wish for, because now I teach 106 undergrads in one class, 20 in another class. And I teach one year M.B.As, two executive M.B.A programs, and I also teach what’s called ESTEEM, which is Engineering, Science and Technology Master’s Program.
Some people ask me, how do you like retirement? And I tell them, I’m not retired. I love it here at Notre Dame, it’s the number one undergraduate school in the country for four years in a row. It’s a wonderful environment, I can interact with students. And we do all live case challenges in our classes. So we have a chance to bring companies and non-profits in to try and help them realize their dreams.
WN: You’re going to be the keynote speaker at the upcoming Cabinet and Closet Conference and Expo in April. Give us a little bit of a hint of what you want to discuss there?
Stevens: Well I’m going to talk about dreams (laugh), definitely do that. But I also want to talk about how difficult it is to grow a business. And I want to talk about the numbers that matter. There’s a lot of numbers in business. There’s profit, and customer complaint numbers, and how many employees and how much you pay them. I’m going through some discussion on numbers that really matter in business.
But I really want to talk about entrepreneurship and leadership, and really helping the cabinet and closet makers to think about their organization as family. I’m sure many of them do and many of them probably are family businesses. Maya Angelo once said, “few are going to remember what you said, few are going to remember what you did. Everyone will remember how you made them feel.”
And if there’s anything that I’ve been able to enjoy in 40 plus years in business, it’s building organizations and being a part of organizations where we generally care about our employees and our customers. We listen to them and try to provide to them and satisfy their needs.
WN: The discussion on culture and creating the organization that you want. Do you feel that’s something that can be applied no matter the size of the business? Or does it have to be a certain size, like a small business, to make that organization work? Can it apply across different sizes of businesses?
Stevens: Absolutely. I think you can take a look at Fortune and Forbes magazine. They usually put out lists of companies in terms of most admired corporations and most admired businesses. You get companies like Google, and Toms Shoes, and Patagonia right at the top because they have a case that they believe in. And they take care of their employees.
Green Mountain Coffee Roasters, which was our parent company that bought us in 2006, committed 5% of their profits to corporate social responsibility initiatives like saving the rainforest and helping growers learn how to grow new crops. They also give their employees 52 hours of paid time off to go volunteer in the communities.
Whether you’re big or small, it’s a matter of having the right vision, the right dream, and the right communication with your employees.
WN: Then the leadership aspect, when it comes down to choosing the right kind of culture, how does the leadership fit in to building the successful culture that helps grow a successful business?
Stevens: It starts right at the top. I think we’ve seen instances and I’m sure many of the attendees have seen instances of coaches that have built winning traditions, and there are also coaches that don’t build winning traditions and don’t treat their players well. They have probably also seen businesses and business leaders come together. We’ve seen politicians in that genre. I think it’s a matter that it starts at the top.
I’ve got some recommendations for the attendees, relative to some people that I admire. Books that have been written that are some really strong guideposts to help you build your own organization the way that you really want it to be.
WN: From your experience when you have the range from being at one of the established companies like Anheuser-Busch, to being with more of a start up with Keurig, with a fresh, new ideas and getting a project off the ground. How does the leadership change?
Stevens: I’ve read a quote once, it served me well over 30 years ago when I became president of an Anheuser-Busch distributorship at the age of 28. I ended up going into this restaurant and they had one of these motivational chalkboards that they changed the quote every day. And I read this and it stuck with me.
It said ‘A great leader doesn’t build a business. A great leader builds an organization. For it is the organization that builds the business.’
So we were four of us that had a dream of Keurig. We had all done successful things with major companies and major organizations. We wanted to build something.
The key to success for an entrepreneur is one of two things. Either fill a need or create a want. We don’t need $3.50 Starbucks lattes. But we want them, we want to be a part of that kind of environment for those people who drink coffee. And there had been no innovation for the coffee industry in a long time. We were able to offer variety, freshness, convenience, and improve productivity.
So being able to satisfy a need that exists, or to really create a want out there is the key to success for an entrepreneur, and then you got to build the organization and the team to make that happen.
WN: So then it’s really knowing what someone may want in the situation and building it. Well for Keurig, it was that want, that people want good coffee, and they’re willing to find ways to make it work in the comfort of their own home.
Stevens: Yea, it was all about variety, freshness, convenience, there was no waste, no clean-up, no hassle.
We had a fundamental question. Why do we brew coffee a pot at a time, when we drink it a cup at a time? You make a 64 ounce or 32 ounce glass bowl of coffee, it sits and cooks, the coffee starts to evaporate, it gets nasty. If you go to a five star restaurant and you have a wonderful meal, you can have whatever kind of wine you want, but when it comes time for the coffee, it was regular or decaf.
So we were able to inject variety, freshness, and convenience. And it was at a time when Starbucks was blossoming, and Dunkin Donuts pivoted from present donut maker to “America runs on Dunkin,” and focusing on coffee. We thought we could help satisfy the needs of the growing community that wanted better coffee, fresher coffee, and their own choice of coffee.
WN: I think people often see Keurig as this thing that came out of nowhere, but like you said, this is not something that was an overnight success, this took a lot of time. Could you tell us a little bit about that?
Stevens: Oh it did. The original guy that came up with the idea started with the idea in 1991-92 and started tinkering. He was an engineer and very capable designer and he loved coffee. He saw the kind of challenges in the business and the industry. So he started building a single cup machine. He recruited a college roommate who did well in business, and then they recruited a guy who had experience in the espresso equipment importing business, and they recruited me based on my background on consumer products.
So the four of us sat down and we designed it. Actually the original brewer and packaging, we had to junk. We had to write them off and start fresh. It was a lovely idea, but they were not designed to be manufacturable. So you gotta know when to hold them and when to fold them. We had a million dollars and 11 months to redesign everything or else we were going to shut it down.
So there’s a lot of stories I’ll be able to tell the attendees, but success is not a straight line. There are a lot of curves and hiccups in the road. Dolly Parton once said, to enjoy the beauty of the rainbow, sometimes you gotta put up with a little bit of rain.
Any entrepreneur, any company has got to be able to handle adversity and handle it well.
WN: When it comes to talking to entrepreneurs, and you mentioned earlier that success isn’t a straight line. But as an entrepreneur, when it comes to taking on a new opportunity or developing a new product. All that responsibility and the chance of failure rests on them. What kind of advice do you give someone who’s looking to become an entrepreneur, but that fear of failure might loom over them.
Stevens: Fear is not a bad thing. We all have our own fears and stuff. But when it becomes crippling, then you know that entrepreneurship is not right for you. So some people operate much better in a secure, safe environment. And some people operate better as being an inventors, developers and entrepreneur.
I think we’re all different, and that’s why this world works. At least as well as it does, and our country does. The nice thing about our country is that you have the opportunity, if you have an idea and a dream, you have a chance to make it happen. Sure there are regulations and laws and things of that nature. But there’s all kinds of different ways to build a market. I think the real key thing for any entrepreneur is, you better really leverage analytics and data to help you realize your dreams. You can’t just develop something just because you’ve got the ability to do it. You’ve got to be able to satisfy a need of consumers or businesses, or it creates such a demand or want that people have to have it.
WN: Speaking of analytics, I’d love to talk to you about another aspect that you’ll be talking about at the expo, which is key numbers. Things that a business owner may want to keep in mind when they’re running their operation. What are some examples or things that a business owner needs to keep in mind now a days.
Stevens: You need to monitor every thing. We had some challenges with different equipment when we put it out in the field. Any start-up is going to have some challenges. I’ve got over 20 different companies that I’m invested in and help support. I only to invest in things I’m willing to sell myself. So it’s not just a Keurig experience. I’ve had that experience with high tech companies, consumer products, you name it. Sports companies, children’s books.
You need to monitor and manage everything. In our case, if there’s a brew failure, what was the reason for the brew failure? Did the brewer time out? Did it leak? And to be able to manage everything about your business, the numbers don’t lie. That includes expenses and profits, and costs and capital. There’s all kinds of things you can manage.
To be effective and successful in the business world today, you’ve got to monitor every aspect of your business. And it can change. The amount of data that’s created and exchanged among mankind according to Mark Zuckerberg will double every twelve to 18 months. And as we become more and more sophisticated with the data and IT and analytics. We need to keep up with that.
WN: Well if this is true, and the data and analytics is going to keep growing, how do you keep monitoring everything, when the number of hours in a day won’t grow?
Stevens: You have to pick and choose, and lead. Amazon.com, which is over $100 billion business, over 40 percent of their business come for algorithms. From suggestive selling. If you buy a pair boots on Amazon, you get a pop up suggesting socks for that. You get pop-ups for trips to Colorado for hiking. That isn’t the way it used to be 5 years ago. As data continues to mature, and our ability to leverage it continues to mature, we need to have infrastructures to allow us to capture that and leverage it.
A book I think everyone should read is by the CEO of SAP. His name is Bill McDermott. It’s called Winner’s Dream. It’s on Amazon and in book stores. It reads more like an incredible novel than anything else. He started as a blue collar kid in Long Island, and worked in three jobs when he was 14. Now he’s CEO of the largest data company, I think in the world. He had a great line. He said, I.T. used to support the business. Today, I.T. is the business. And the only companies that are going to succeed are able to get close to the customers, capture the information that’s important to customers, and produce products and services that are of high quality. And that can only be done by only looking at every aspect of the business.
But his life and his story, and his commitment to the customer, to the employees, to his family, it’s an example that we can all learn from.
WN: The business world is increasingly developing online. Do you think there are some buisinesses that don’t realize the potential that’s out there when it comes to connecting to your customers online? Because they think, 'we’re just a brick and mortar situation, that’s just the way we are.'
Stevens: Well I‘m sure that there are many retailers that felt that way. And you see many retailers that are closing their doors today. Walmart closed 269 stores last year. Kmart is in massive store closings, J.C. Penny. And you see many stores like Blockbuster Video and others that were all bricks and mortar stores that got replaced by technology. And by online. People can have an experience online that can save them so much time and frequently money, because Amazon’s prices are so aggressive.
But if you can provide an environment, and there are many great new retailers, like Ulta for women’s cosmetics, and there are all kinds of boutiques, like Francesca’s and fashion stores. If you provide an environment where people want to be a part of it and feel comfortable in it. You satisfy a need that that consumer have. Bricks and Mortar stores are not gone forever. You just have to be able to create the kind of environment that people want to be able to shop at.
WN: Is there anything you want to tell people before they come to this expo, that you think they want to keep in mind as they explore this expo or come to the keynote address?
Stevens: I have such an admiration for the furniture industry and cabinet industry and closet industry. I don’t have the ability to do what they do. I so admire when I see perfect seams and corners and molding. I think it’s amazing what they do. So I’m really thrilled to have the chance to come and share my thoughts with the folks who attend the convention.
I had a chance to visit one of ACSP Closet Association member companies, go through the shop and see firsthand the things they made of all kinds of sizes and shapes. I really just want to come and share what I’ve learned in 40 plus years of business, and hope that there’s a couple nuggets that people will be able to take away that are helpful to them.
WN: Mind if I ask you what you found to be interesting on that visit with one of the member companies of the expo? Like a takeaway that you found interesting?
Stevens: I was really struck by - and I asked the question - about how many times do you change machinery because technology changes, and they said all the time. They had just installed a couple brand new pieces of equipment. So while there is old fashion ways of doing things, there are new fashion ways to be as productive as we could be.
So I was also struck by the family environment that was created. You can tell that they cared about the employees. The place was bright, there were motivational signs all around the place. And I could see pictures from the company picnics. They provided the kind of environment that I would certainly want to be a part of if I was to get into the business.
NW: That kind of wraps up our discussion, talking about the importance of the organization that really helps create success.
Stevens: And my goal, when I have a chance to chat with attendees, I have three goals in speaking: I want to educate, provide you with a few pieces of information or ideas that you might be able to use.
I hope to be able to inspire you, and talk about some great stories of employees who’ve done great things. I’m going to talk about the numbers, but I’m also going to talk about doing everything you can to provide an environment that is conducive to growth.
And I also hope to have some fun doing it. The mind can only absorb what the rear end can endure.
Your chance to hear Chris Stevens comes live April 11 at cabinets and closets 2017 in Schamburg, Illinois. You can still register now. And if you use the code Stevens75 when you register online at cabinetsandclosetsexpo.com, you can save $75 off the regular registration. www.cabinetsandclosetsexpo.com
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