Leadership and initiative
Growing up, most of us heard these words of advice: “Take some initiative!” In the professional world, those more experienced than us may have shared similar wisdom: “There are those who watch things happen and there are those who make things happen.”
Get the universal message here? Action. Resourcefulness. Ingenuity. Make no mistake about it: Leaders need to take the initiative to get things done.
Part of taking the lead is not shying away from new ideas, which can make the difference between triumph and failure. The most successful leaders know how to speak out on fresh topics and trends that can inspire innovation and improvement. Strong leaders are not afraid to fail, either. They simply take the initiative to “test” a new idea and report back on what they learned, whether good or bad. Thomas Edison tested thousands of versions of his new light bulb before he found the one that really worked.
I have always encouraged my team to take the initiative to experiment with all kinds of new ideas. In retail, where I spent my career, testing new products is easy: Put a new sample product in a few stores. If it sells, add it to more stores; if it fails, mark it down, sell it out and move on. The more frequently you take the initiative, the more likely you will find success.
Initiative can take many different forms
Beyond product testing, people in top roles at companies must be willing to lead, rather than follow, in all aspects of business. One memorable example of this happened just after Tractor Supply went public in the 1990s. Rumors began to circulate that Walmart was going to enter the farm-store business. First there was chatter about one pilot store, but then the rumor grew to hundreds of stores. Needless to say this rattled our leadership team, stockholders and many of our suppliers.
We could have hunkered down, rolled back our big plans and prepared for the onslaught from the big kahuna. Instead, we did the opposite. A key partner and I decided to take the initiative to find out what Walmart really had planned.
I called Walmart CEO David Glass, and to my great surprise he answered his own phone and knew who I was. We talked for a few minutes before he invited us to Bentonville, Arkansas. Less than a week later we walked into the Walmart home office.
We spent about an hour with him discussing a wide range of retail topics and were impressed with his knowledge of our little niche business. He told us that Walmart would open one farm store experiment with the goal of identifying a few high-volume products that could be added to Sam’s Club stores.
One year later we bought the remnants of Walmart’s one and only “County Farms” store. Mr. Glass kept his word, and I don’t think they ever found those magic products for Sam’s Club. With that behind us, we could say with great pride that we took Walmart out of the farm store business.
Our proactive approach and the honest conversation with Mr. Glass gave us enough information and confidence to allay the fears of so many of our people. It gave us all we needed to push forward with growing our stores and continuing to develop our leadership teams.
Everyone has opportunities to be bold in business. Wherever you are in your leadership career, don’t stick your head in the sand. Instead, stick your neck out and take the initiative that can propel your career forward.
Joe Scarlett is the retired CEO of Tractor Supply Company. For more on leadership, visit joescarlett.com.
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Simpson touts 14% sales increase in Q2
Simpson Manufacturing Co. raked in a 14.4% net sales gain in the second quarter, which was largely thanks to the impact of acquisitions.
Net sales came in at $263.0 million, up 14.4% year-over-year. Roughly 45% of that increase was due to the impact of recently acquired businesses.
Consolidated gross profit of $123.5 million increased 11%, and net income was $28.2 million, up from $26.2 million last year.
"Our second quarter financial results, while fundamentally strong, reflect the various investments we have been making in our business, including the development of our truss software offering, growing our market share in Europe with the associated recent acquisitions and working to deepen our foothold in the concrete repair and protection space," commented Karen Colonias, President and Chief Executive Officer of Simpson Manufacturing Co., Inc.
"Beyond these initiatives, with an industry-leading position in the U.S. connector market, the wood construction products are core to our operations and we remain dedicated to continuing to grow our offering in the single and multi-family residential and commercial space."
"We continue to have a strong financial position which affords us the flexibility and capability to continue investing in our long-term strategy to increase shareholder value and to return capital to our valued shareholders," she concluded. "Despite maintaining an industry-leading gross profit margin and operating income margin, the investments we have been making in our strategic initiatives have yet to fully materialize and reflect the operating leverage and earnings power that Simpson Manufacturing strives to achieve. Over the coming quarters, we plan to provide additional metrics and targets to help our investors to better measure our success and progress on these initiatives."
Simpson's outlook is predicated on its uncertainty that the market price of steel will remain stable during the third quarter. Having said that, the company reiterated its outlook for gross profit margin in the range of 45% to 46% for the full year ending December 31, 2017.
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