The Power of Collaboration
By Joe Skorupa
Experts debate whether the shift to the digital economy currently taking place is a revolution or an evolution. A revolution implies swift transformation accompanied by disruption. Evolution implies a slower, more orderly process.
However, the assumption underlying each is a sense of profound transformation, which in retailing is caused by the consumerization of technology that is opening up new paths for consumers to make purchases. One of the consequences of this new normal is a feeling among retailers that the balance of power has shifted in the shoppers’ direction, and therefore the revolution (or evolution) is forcing retailers to play a catch-up game to fast-moving developments.
It is the job of C-level business leaders to judge the pace of the transformation and make smart adjustments so that their organizations stay ahead of the curve, even while knowing there is risk associated with whatever decisions are made.
If a retailer adopts a course of rapid change to match a revolutionary pace, then the disruption in the marketplace could spread to the organization and cripple established business practices. If a retailer adopts a course of measured change to match an evolutionary pace, then the risk rises for getting overwhelmed by marketplace forces that are moving at a much faster speed.
Stuart Mathis has been president of The UPS Store franchise network for the last 10 years, a rare length of time for the head of a large retail organization, and this provides him with a unique perspective on the transformation currently taking place in the marketplace. This is especially true regarding one of the hallmarks of the transformation: the dramatic tilt in power toward the consumer. When power-sharing becomes central to success such business concepts as relevance, engagement and collaboration become more important than ever.
As the world’s largest franchisor of retail shipping, postal, printing and business service centers, with nearly 4,700 independently owned locations in the U.S., Puerto Rico and Canada, The UPS Store has always understood the importance of collaboration.
Skin in the Game
“Our business is franchising and there are many advantages to operating this way,” says Mathis. “We have owner operators who have skin in the game and they are highly motivated to succeed, but clearly we don’t have the same level of control that non-franchise operators have. The key to successful management of our business is understanding franchisees and what motivates them. For example, one thing I have come to realize is they are not true entrepreneurs but they are entrepreneurial. This means that while they are self-motivated and agile enough to adapt to new opportunities they also appreciate the value of being involved with a proven system of operations and a proven brand name.”
In some ways, the individual owner operators of The UPS Store, which is franchised by Mail Boxes Etc. Inc., the corporate name of The UPS Store division that is a wholly owned subsidiary of United Parcel Service (UPS), are in a position analogous to what omni-channel consumers have achieved through the use of smartphones, tablets and online services. This position is characterized by independence that goes beyond the norms of what many think of as the traditional retail model.
“Clearly, we have expectations for our franchisees,” says Mathis. “For example, we are in the process of focusing on our print profit center and we expect to expand it, to grow it into a bigger revenue stream than it has been in the past. Well, the first thing we do is show the franchisees what’s in it for them. We show them why print center business is good for them. One way we do this is to engage franchise influencers, because if the message comes from a peer within the franchisee group it can be more influential than a message from an executive in a corporate suit. They really are open to new ideas but they also want someone to provide them with good leadership, especially if the message is understood in terms of growing revenue for the store and making more money for the franchisee.”
The UPS Store business model under Mathis is based on four key profit centers, which are: retail shipping, postal services, printing, and business services for the small offices/home offices (SOHO) market as well as corporate road warriors and consumers.
To maximize performance from The UPS Store business model, Mathis has created a growth strategy built on four pillars: 1. Expanding the franchise network into non-traditional locations (such as large hotels, universities and military bases), 2. Growing print and graphic solutions, 3. Increasing corporate retail account solutions that leverage The UPS Store’s huge footprint, and 4. Becoming a small business gateway by providing convenient services to small business customers.
To get The UPS Store franchisees to buy into the strategic vision for print services and then act on it to grow their businesses, Mathis decided the best approach was to develop a training and education program to support the initiative, an effort that began last year.
The UPS Store University
While “paper on glass printing is dying,” according to Mathis, there is a huge demand for a wide range of printing services delivered through digital sources such as the Internet, thumb drives, laptops, and smartphones.
Mathis identified this trend as one of his four growth pillars, but while many franchisees had the equipment to handle digital print requests from customers, few had the sales and marketing skills to make the transition into becoming print and graphic consultants, which was necessary for the program to reach its potential.
“So, we developed a training program with Cal Poly to help us get where we wanted to go and then added this program to our training center in San Diego, which we call The UPS Store University,” says Mathis. “Now, area reps who have gone through the program are visiting each store to train them in the Cal Poly system, which includes a set of skills they need to grow the print center. These include skills in designing, finishing, binding and all things related to printing and graphics. Once franchisees are trained, they will be able to become effective sales and marketers of the print center. June of this year is when we are targeting to complete the training with all locations.”
The training program was created by Cal Poly through its Graphic Communication Institute (GrCI), which has a training lab with leading-edge print production technologies and facilities. It has expertise in training businesses and professionals in such vital printing elements as prepress, project management, software, quality control, marketing, sales, pricing and job estimating.
After the program was created and tested, it was introduced into The UPS Store University training facility where it has become a three-day, interactive workshop that can either be taken as a stand-alone course, say for existing franchisees or field reps, or as a component in the overall program for training new franchisees.
The goal of the new print services program at The UPS Store University is to train franchisees to produce print products and services that will consistently meet customer expectations using the types of equipment found in UPS Stores for everything from simple fliers, brochures and letterheads to more complex full-color booklets and customized calendars.
The Next Decade
After a decade as president of The UPS Store franchise network, Mathis is uniquely positioned to successfully adapt to two important trends that are currently transforming retailing: 1. a management approach that depends as heavily on bottom-up collaboration as top-down leadership, and 2. a transition away from a strict focus on established revenue streams to one that focuses more strongly on providing additional services through stores.
One of the keys to Mathis’ longevity as president at The UPS Store “is hiring the best people I can find who are better than I am at the jobs they do.”
Another is moving at the speed of customers, which not only refers to adapting to shifts in printing options or developing programs to support new profit centers, but also to such areas as social media, which Mathis describes as “almost like talking to or listening to customers in real time.”
Mathis has recently begun analyzing resources The UPS Store “puts against social media so that we can be responsive to our customers. I want to be sure we respond almost immediately and manage the process effectively. There are lots of opportunities to be proactive and engage customers through social media and I want to be sure we are being both reactive and proactive.”
There are many things the president of a company can delegate, and a good one delegates as many tasks as possible. But guiding an organization through the difficult times of the recent downturn and creating a multi-prong growth plan during a revolution (or is it an evolution?) is not one of them.
Mathis has learned how to harness forces with a vision of growth that includes both top-down and the bottom-up elements, a management approach that embodies the power of collaboration and aligns with marketplace forces currently taking shape in transformational times like these. RIS
The President’s Perspective
Stuart Mathis, president of The UPS Store, will be featured in the opening keynote session at the Retail Executive Summit on June 14 at the Del Mar Resort in Del Mar, California. Mathis will co-present with Gary Williams, founder and CEO of wRatings, a Wall Street financial research and analyst firm. The session is titled “President’s Perspective: Differentiation, Leadership & Value.” For information about how to attend the Retail Executive Summit go to www.risnews.com and click on the event tab.
About the UPS Store
The Mail Boxes Etc. concept was introduced in 1980 as an alternative to the post office and opened its first franchise in Carlsbad, California. The initial concept was to provide 24-hour postal boxes, but it was quickly expanded to include other postal and business services, such as mailing, packaging, shipping and faxing. It went public in 1986 with about 275 locations
In 2001, Mail Boxes Etc. was acquired by UPS, and in 2003 The UPS Store brand was created and more than 3,000 Mail Boxes Etc. locations in the United States converted to the new brand name. In 2007, it was named the Most Competitive Retailer by the National Retail Federation Foundation and Kanbay Research Institute (KRI).
Today there are nearly 4,700 independently owned locations in the U.S., Puerto Rico and Canada.