Government Experiences

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Governors Management Improvement Program

One of the first real projects or programs I was engaged in was called the Government Management Improvement Program or GMIP, a private/public sector effort to ensure that New Jersey State Government was best organized and spent its taxpayer’s money well. This was a key first term initiative of Governor Thomas Kean and ultimately helped the state make some significant changes. 

The program involved setting up an organization to manage the study of over 20 departments and agencies; both in terms of work/organization/expenditures and in terms of programs. Science Management Corporation [SMC] was tasked with a computer-based assessment of the hours spent and span of control for all workers in the departments studied. Braxton Associates, later acquired by Touché Ross was tasked to determine the strategic value of the programs delivered by the departments studied, the longer-term value of the programs and the relative priority of the programs in the total scope of expenditures made by the State. The Organizational Effectiveness Group from AT&T provided support for a variety of specific Departments, especially the Department of Education and its relationship with other stakeholders, e.g. local school systems, the State Board of Education.

The work was funded by roughly $3.5M raised from companies like Johnson and Johnson, Merck, Foster Wheeler, AT&T, etc. They each contributed on average $100,000 to $200,000 in funding and 3 – 5 executives to participate in the study. A team of private company executives and leadership of the State department under study was created and facilitated by the consultants in their study. So, each team associated with the Department being studied went through two exercises, one with SMC and the other with Braxton. The work took 18 months to complete and resulted in many changes.

Although there was much complaining and bi-partisan bickering about the effort it had several major benefits:

One, all involved had a better appreciation for what is involved in running a governmental department/agency and in many cases, relationships developed whereby the private executives continued to work with the departments helping them over time. 

Two, the state government leadership had the opportunity to experience consulting capabilities they had never experienced before and did make them question much of what they were doing. 

And finally, tangible changes were made as a result of the recommendations resulting in less future costs and better organizations.

Alabama Management Improvement Program

The success of the Governor’s Management Program created an opportunity for me in Alabama following the election of Governor Guy Hunt. Robin Swift, one of the key leaders of Alabama’s government sponsored a program very similar to the program in New Jersey. In this case I was retained as the leader and worked in concert with Dr. Byron Chew a very respected faculty member at Birmingham Southern University. Together with leaders of the private sector in Alabama, we raised $2.5M and hired Ernst and Young to assist in the study. The format was similar in format, whereby we studied both the organization of the individual organizations as well as the expenditures. And, like in NJ, teams of private sector leaders and members of the leadership of the governmental departments worked with Ernst and Young to complete the assessment. Recommendations were developed and provided to the Governor who then executed on those he could through executive action and requested the help of the legislature for those that required changes in laws and appropriations. As I recall, we saved the state of Alabama over $80M through the effort as well as made lasting changes in the relationships between the public and private sectors, much like in New Jersey.

A Significant Change in NJ Government

One of the significant recommendations that came for the NJ Governor’s Management Improvement Program was the establishment of the NJ Office of Management and Budget within the Treasury Department. This new Office was responsible for the establishment of a new budgeting process that was more strategic in nature than the previous incremental budgeting process. This was mirrored after the work of each of the department study teams through the guidance of Braxton Associates. Each department developed a strategic plan that laid out the external conditions associated with each major program they administered as well as an assessment of their capabilities to deliver the programs they were responsible for as determined by the Legislature. The process required the departments/agencies to focus not just on the following year but also on the next 5 years thereby putting the program in the context of changing needs, technologies and other developments. The plan also included the definition of any capital spending that was required. Being one of the key architects of this new process and being the first to run the Division of Planning in the OMB was an incredible experience.Customers have questions, you have answers. Display the most frequently asked questions, so everybody benefits.

Developing and Managing the War Room

This was four-year adventure with a team of very talented leaders to save a legacy sporting goods company during the growth of category killer retailing. Herman’s as a mall-based retailer of sporting goods with a fair number of stores in fully enclosed malls and in strip malls. Herman’s at the time was losing sales to these new category killers [e.g. Sports Authority, Dicks, etc.] and we had to make some dramatic changes. While with Herman’s I served in many different roles; although one of the most interesting was the head of the “war room.” The “war room” was the central hub for managing the day-to-day performance of the business. It consisted of a daily accounting of success in each store with a variety of indicators like sales, labor hours, stock outs, inventory holdings, execution of merchandising requirements and implementation of promotional programs among many. Systems were developed to post these results daily and then calls were made where issues were evident to get attention to correcting issues and/or learn why success was happening in a store. These could be store leadership, staffing, replenishment, etc. The general approach was that if we could always create significantly more transparency, we could address issues faster and then implement programs that would improve execution across the business. We accomplished both and achieved comp store increases. Unfortunately, not enough to counter the loss in traffic to these category killers with cheaper stand-alone real estate, larger selection, cheaper prices and ultimately after 4 years the company did not survive. The War Room became a symbol in the business of the need to change and became an extremely valuable two-way communication vehicle. he challenges and opportunities were laid bare and as we addressed each, store execution rose as well as sales.

While at Herman’s, we did change the metrics for measuring store performance. We were one of the first to adopt traffic counting as a measure that could help us better understand store performance and what steps we could take to drive higher comp sales. We put simple counters in each store [260 stores at that time] and measured their traffic and conversion rates daily. Over the course of months, we developed standards for each type of store [mall, strip, stand-alone, city, etc.] and then used the conversion rate as the key metric. Given we were seeing declining traffic, in order to better measure sales, conversion rate became a new measure of store management effectiveness. This was also tied to other systems, e.g. store payroll management to ensure that we had appropriate staffing levels at the right time, etc. Store managers were incented to improve their conversion rates and we found success in adding conversion rate measurement to the business. This was one of the first opportunities I really had to exploit technology to change the very nature of a business. The use of software and hardware to report on new measures that allowed us to target behavior, challenges and opportunities in the stores was exciting and had a meaningful impact on the business. I had hoped to add more at the time and with today’s cameras and analytics wonder what else we could have done.

Realizing the Value of Customers

This company became the first time that I truly was put in a leadership role becoming the CEO 6 months into the assignment and was given the challenge to improve the profitability of the Company. Located just outside of Clifton NJ, I joined a team of individuals challenged with taking a $100M consumer electronics accessories company making about $4M annually into a much more profitable company. Leadership of the business was replaced by our team and we completed a quick assessment of the company’s challenges and capabilities, putting together an aggressive restructuring plan. One of the key shortcomings was the inability of the Company to grow is revenues given its failure to understand and address the needs of its customers, largely retailers like Walmart, Kmart and Lowes. My job was to change that and to do so I adopted these customers as mine; spending considerable time understanding what they wanted from a distributor of extremely high margins products. As I recall, for Walmart our products generated 60% of the profitability in the consumer electronics department although the revenues were less than 20% of total revenues. This was a multi-billion-dollar business for Walmart. Involving selling cables, universal remote controls, headphones, TV antenna, splitters, etc. The accessories and peripherals were high margin products when compared to TVs, stereo systems, boom boxes, etc. This effort was at the outset of Walmart assigning category captains [i.e. assigning a vendor responsibility for helping them manage a product category] and Gemini was granted category captain status for multiple categories. With just Walmart we grew our business over 5 years from ~$25M annually to $150M annually through dedicating a team to managing their inventory, managing pricing, creating and implementing new merchandising programs, introducing promotions, etc. We did so as though we owned the entire consumer electronics accessories business of Walmart. In doing this we gained new categories as well as drove organic sales for Walmart. We duplicated this approach as much as we could with other retailers, particularly Target who asked us to help manage their headphone business. Putting ourselves in the shoes of our customers, understanding their needs and being a “real partner” paid huge dividends as Gemini grew to over $250M and became significantly more profitable [~12%], ultimately being purchased by Philips, our largest licensor. This was an invaluable lesson and my focus on being customer centric has followed me in each business leadership role I have taken.

Building The Security Business

While at Linear [later named Nortek Security & Control] I had the good fortune to lead many acquisitions, the most significant being the acquisition of 2GIG from Vivint/Blackstone in 2013. 2GIG was already a customer and it was believed that the acquisition would cement both a relationship with Vivint and a path to revenue growth given the dynamics confronted by Vivint owning 2GIG and supplying not only its own products but in many cases the same products to competitors. Linear [Nortek] paid $135M for the company and obtained a 5-year supply agreement with Vivint and the 2GIG product line. Over the course of five years, that transaction increased Linear’s sales on average 25% annually allowing the company to grow from ~$120M to over ~$300M [excluding other business combinations]. Why did this work so well? Three reasons; [1] we kept the sales organization in place and without the conflict of Vivint selling its competitors, the salesforces was no longer encumbered by that objection, [2] we got close to the customer and delivered what they expected meaning we always had the product in stock, had a fair price and dealt with problems transparently and expeditiously, and [3] we maintained the quality of the product making improvement each year that kept us in tune with competitive market requirements. In the end, we had the lowest cost over the lifetime of use of our products and had solid mutually respectful, trusting relationships. As I have found so many times, it’s that focus on customers, being fair and open with them that helps build sales and ultimately success. These relationships are not transactional based but instead are partnerships where we each can appreciate the needs of the other and act on that understanding.

Helping Leaders Better Plan 

While working in the new OMB I had the good pleasure to meet Glenn Tecker, a consultant to not-for-profit associations. He had developed a simple strategy development process that he facilitated for the leadership of not-for-profit associations. Given my experiences with developing a government-oriented process, picking up the nuances for using it in the not-for-profit world was relatively easy. I just had to learn the context; meaning what was similar and different in the not-for-profit world. I did so and together with Glenn developed a 2-day program that I ran on behalf of Glenn’s organization for over 15 not-for-profits that included Caribbean hotel associations, conservation associations and others. Each 2-day program consisted of a disciplined SWOT analysis, the development of a clear mission with specific goal, definition of strategies to deliver on the mission and then definition of specific action plans. Frequently later I was called back to the association to review the plan and its execution with leadership. What was exciting for me about these projects was in a short-term we took a disciplined process and with the organization’s leadership gained a significant understanding of their challenges and opportunities and had a plan in place to deal with them all. It was learning for the association board and leadership, forcing them to confront each other’s views and perspectives. This effort created transparency, collaboration and ultimately action.

Helping Organizations Self-Assess  

Again, working with Glenn Tecker and using my knowledge gained through working with the AT&T Organizational Effectiveness Group I developed an assessment tool for determining the effectiveness of an association and its management. This effort resulted in a guide that was published by ASAE that allowed the leadership to ask itself a whole series of questions about its organization, its management, its staffing, its work processes, etc. The underlying theoretical basis was David Nadler’s “Congruence Model of Organizational Effectiveness.” As the basis, we developed key questions about the relationships among the elements of the association and how well those elements fit with each other. So, for example, the leadership had questions to answer relative the key work processes and whether the association had the right skills among the staff administering those processes and did the association ensure that the staff was trained appropriately. This was a very interesting exercise because I was able to apply theoretical concepts in a tool that could be used by anyone; in this case tailored to not-for-profit associations. As I grow as a leader and advisor, I always go back to the concepts I have learned and see if they apply to bring order to the process of addressing challenges and pursuing opportunities.