John Kahl is fond of telling the story of how ShurTech Brands LLC’s iconic Duck® tape helped him lure a sales representative away from a competitor by making that competitor’s more affordable cost irrelevant.
“When the salesman left his organization, he said, ‘You guys were tough to beat. You did a masterful thing with that little yellow duck and branding duct tape with a K. Even though I was the cheapest guy on the block, I couldn’t knock you out,’” Kahl says.
The marketing coup was no accident.
“In a world where we’re becoming so transparent on price, there has to be a reason why you’ll drive past one location to go to another or why you will go online or to a physical store versus the other options that are available,” says Kahl, the company’s CEO. “We try to create those differences on behalf of our customers.”
ShurTech has plenty of chances to meet that goal with nearly 3,000 products in its line.
“Several hundred of them are Duck® tape, or Duck® tape related,” Kahl says. “But we have a broad offering of products that go well beyond that.
“But it’s most notable — particularly since the little yellow duck started on Duck® tape — for that product,” Kahl says.
Duck® is an umbrella brand that includes painting tapes, package sealing tapes and various DIY-type products, whether it is weather stripping to insulate homes or shelf liners.
While ShurTech doesn’t disclose financial data, Kahl says the company has a meaningful midmarket presence. ShurTech is a division of Shurtape Technologies LLC, headquartered in North Carolina. Since 1997, sales have quadrupled and Shurtape’s global presence is booming. Shurtape is operating in the U.S., Canada, Mexico, Peru, United Arab Emirates, Germany, the United Kingdom and China.
Manco T. Duck first appeared on packaging in 1984, and within four years, sales of the tape skyrocketed. Created by a former Disney artist, the character helped exemplify the corporate culture and commitment to be fun, imaginative and resourceful. That naturally led to tape of wildly different colors, cartoon characters, sports team logos — and even pink tape with a bubble gum scent.
That’s just one example of what a company can do to differentiate its product from its competitors, Kahl says.
To create those differences, ShurTech focuses on product, people and partners. Here’s how he makes it all stick together for ShurTech’s 1,200 employees in its B2C and B2B divisions.
New offerings project an advantage
When you have a strong product that you can count on to generate revenue, you feel great. But you can’t rely on that one product to support your sales forever. You need to diversify your offerings and even work to create a new and improved version of that successful product. Take advantage of the brand recognition and give the customer something even better.
“Financially, you ought to make a better return on new ideas than you can on old ideas,” Kahl says. “So there’s a for-profit reason for wanting to innovate in your company.”
Innovative, new products carry a larger profit margin than products that have been around for years. That’s what helps drive efforts to keep a product from being commoditized.
“Somebody could say, ‘Well, silver duct tape’s been around forever; that’s a commodity.’ Not in our eyes it’s not,” Kahl says. “That’s why it’s been turned into leopard patterns and Browns football team logos and all the different things we’re doing to make the product new, different, fresh and unique, even though it’s been in the market since 1950.
“When you develop new ideas, there is a financial return because it tends to carry a better margin because it’s new, and it hasn’t gone through its maturity cycle yet. Again, it gives us something more than the other guy.”
In a world where you’re trying to have something that somebody else doesn’t so that you can stand out, innovation becomes very important. Feedback from customers and suppliers is perhaps one of the greatest inspirations for innovation. Tech fairs for customers and suppliers are effective in generating ideas as well.
“They (exhibitors) will show us everything they’re capable of,” Kahl says. “We might be buying item A from them and not even know they have the capabilities of item B, C or D.
“With customers, it’s, ‘What else might we be able to serve you with?’”
Innovation also comes from a company’s R&D activities and the company’s connection to the marketplace.
“There are inventors who knock on our door, there are people who send us their product ideas, there are folks who have developed patented ideas and have no distribution infrastructure,” Kahl says. “We have an innovation and design group in the company, and they come to work every day with only one thought — ‘What can I do to create new?’”
Members of the innovation and design group are exclusively and completely untethered, thinking only about what’s new.
“They don’t worry about the line review with the customer, they don’t worry about marketing, branding, current products in the line, they don’t worry about whether we need to repackage a current item, or whether we’re shipping it on time.” Kahl says.
“They also go out looking in the external world. My vice president in that area travels to Europe and China; he goes to a lot of the major trade shows in the U.S., and he’s looking for technological ideas.”
While ShurTech’s major competitor 3M spends about 6 percent (a sizable amount) of its budget on R&D, Kahl says ShurTech does not spend a corresponding amount to match.
“But it’s not an insignificant number,” he says. “We do it with a small but mighty team. Just because you spend a lot of money on innovation doesn’t mean you get innovation. It’s about the people, and the creativity, and the ‘a-ha’ moment.”
People: The right stuff, the right fit
Core values are a key component to any effective organization, and your own employees should be No. 1 on that list.
At ShurTech, “People make the difference” is the first of its five core values, with “Delighting our customers” as the fifth, serving as bookends to the middle three: open communication, imagination/innovation and striving for excellence.
“We are a for-profit organization so we talk a lot about striving for excellence in customer service in the financial returns for the business, in the returns for the people, bonuses and being able to offer the right benefit programs,” Kahl says.
While companies bemoan the shortage of highly skilled workers in the employment pool now, Kahl feels the proper mindset may outrank skills.
“We’re big believers that attitude makes all the difference,” he says. “We have a sign here that says, ‘Hire for attitude, we can train skills.’
“If you are not the right style of person, personality-wise, to fit our cultural organization, you’re going to struggle here. We’re a little quirky in some of the things that we do. We’re a very open organization, we hold people accountable, we’re a fairly highly functioning organization. But people will tell you it’s a fun place to work, and it has a family feel about it.”
The family aspect has even survived the years when the company was owned by the Henkel Group of Germany and was publicly traded.
“We maintained a family culture and feel through that entire 11-year period, and now we’re owned by a fifth-generation family in North Carolina, privately held again; that’s how we became ShurTech Brands,” Kahl says.
Kahl values the proper employee attitude and sees if it emerges, if it is not apparent at the beginning.
“If you have the right attitude, we can teach you how to sell Duck® tape, we can teach you how to make Duck® tape, we can teach you how to be a good salesperson or a good marketing person. But I can’t change who you are as an individual — that tends to get formed when you’re a child through parents, siblings and your environment.”
When you get the right people, and they fit together well, you can accomplish quite a bit with a small group. When employees feel they are part of the process, they’re not fighting against it.
Likewise, when the management style is one of decentralization and decision-making is handled at the lowest possible level that can be, it makes for empowerment and engagement.
“Don’t get me wrong,” Kahl says. “There are a lot of decisions to oversee to make sure we’re making the right ones, but I really want people to feel like they’re the CEOs of their areas.”
Kahl prefers his management team to meet with him when they express a need for help, and no more.
“If it is every week that I have to review what people are up to, I don’t think that empowers people; I think that looks over their shoulder,” he says.
Partners: Servant leadership is key
Partnerships often begin as a means to an end with a buyer and a seller.
“I like what you have to offer; I’m going to buy it from you,” Kahl says. “You’re my supplier and I’m your customer.”
It’s up to you to help it turn into something more fruitful for both sides.
You gradually build a rapport, and over time you help them build their business. You start providing services and capabilities that they weren’t getting from somebody else or if those capabilities are in alternate departments in the organization.
“For instance, when you’re doing your brand advertising, and you’re going to be on TV with your products or in the newspaper with your freestanding inserts, you need to coordinate with the marketing department of your key customers,” Kahl says.
It moves from a buyer and a salesman process into marketing discussions. You start building a relationship with your customer that leads to a partnership, as opposed to a transactional relationship.
“It may move into a logistics discussion where you’re working with your customer and you might say, ‘If you order this product in a pallet quantity as opposed to a case quantity, we could lower our overall cost, and we can share some of that with you,’” he says.
Partnerships can last many years, and the longer the better. Those that are more of just business relations may be shorter, but offer a foot in the door.
“The partnerships are the ones since the late ’70s and early ’80s; and we have other companies that we obtained their business this year, we have it for two or three years, and then we don’t,” Kahl says. “Our preference is the partnership, but in some cases you can’t build that because either that’s not how that customer wants to or they have a partnership with a competitor. We’re not alone in building partnerships and they can be difficult to break into.”
One of the first keys to building a relationship starts with the concept called servant leadership.
“It’s just to realize that we’re here to take care of them,” he says. “We talk about this among ourselves a lot — we take care of our customers, core value No. 5: Delight the customer.”
The frame of mind should be, “You’re my customer, and I need to look out for you.”
“It’s like going to a great restaurant — when that server falls all over you with service, it feels completely different than the person who comes to get your order, makes sure your check is there on time, and just kind of fulfills the obligation of getting you in and out of the location,” Kahl says.
If you are just thinking about yourselves and whether you can squeeze another dime out of something, or how you can squeeze another nickel out of something, it’s not the right frame of mind.
“That doesn’t mean you can say yes to everything your customers ask, because sometimes they ask for more than you’re capable of providing. A good servant leader would communicate with that customer and say, ‘We can’t do that and here’s why. But here’s what we can do. Is this enough?’”
Kahl says ShurTech is not interested in gouging a partner in this process.
“We’re interested in making a fair return for the effort that we’re putting in,” he says. “We talk with our customers along those lines.
“Where a part of our business model is not to have as much profit as we can make, it’s to have a fair profit to allow us to reinvest in our business, to stay competitive to make sure you as our trade partner are getting value out of the relationship, financially, and — and this is a big ‘and’ — to make sure that the consumer is getting a reasonable deal for what they need to do. If our painting tape or our Duck® tape costs $10 a roll, it wouldn’t deliver as much satisfaction as it does costing you guys $5 or $6 a roll for what it provides.
“There’s a value equation there for the consumer, for the trade buyer, or for the trade retailer and for us. And when we do that well, everybody makes a fair share, and it works.”
How to reach: ShurTech Brands LLC, www.shurtech.com or (440) 937-7000
Takeaways:
- Product: New offerings an advantage just because they are new.
- People: Find the right stuff but also the right attitude.
- Partners: Servant leadership is key to developing partnerships.
The Kahl File
Name: John Kahl
Title: CEO
Company: ShurTech Brands
Born: Cleveland
Education: I’m a St. Edward High School graduate, class of 1981, and then Ohio Wesleyan University. I graduated with an economics degree with a management concentration.
What was your first job and what did you learn from it?
I worked for a food broker that represented our company to learn the sales side of the game. I learned the harder you work the luckier you get. You know, there might be an example of somebody out there that hit the lottery in some way, but, really, hard work is what is going to make a difference in your progression long term.
What is the best business advice you ever received?
As I progressed in my career, Jack Shewmaker, who was a former executive at Wal-Mart, joined our board. What he taught me was as an executive, and as a leader in the organization, it’s not your job to be at ground zero every day on every problem. He said it’s your job to fly at 40,000 feet, and then when you see a problem, you have to parachute down, stay on the ground until the problem is fixed, and then get back up where you belong. Otherwise, the company won’t have the rudder that it needs at the top of the organization. That was very sound advice.
Who do you admire in business?
My father, Jack Kahl, our founder, whom I learned under for the first 20 years of my business career, and Jack Shewmaker. And then, of course, Cliff Cantwell; he was more of a sales influence early in my life relative to urgency, follow-up, details and relationship.
What is your definition of business success?
It’s a triangle … my customer, my partners and the shareholders. At any given time, one of those constituents is pulling on my perfect triangle and trying to get out of balance. This balance is what I work on every day. It’s trying to create a fair position for all three constituents.
What’s your favorite Duck® tape?
I’m a traditionalist from a standpoint of I really like the silver — we call it the silver rock. That’s the bedrock of the company. When it comes to the patterns, designs, and the colors, I’m a huge fan of the licensed product we’ve done with the NFL.
Jack Shewmaker’s suggested tips to take in developing a partnership
The late Jack Shewmaker, who helped guide Wal-Mart’s explosive growth, was on the ShurTech board of directors for seven years. His tips to developing a partnership are displayed in the ShurTech building lobby on Just Imagine Drive in Avon as an inspiration to employees and visitors as well.
Supplier approach
- Assign key team members.
- Seek audience with retailer counterparts.
- Do homework on industry and technology.
- Be prepared to solve problems.
- Offer new ideas.
- Do the long-range planning.
- Commit plans to writing.
- Set goals and follow-up.
- Maintain multilevel contact.
Retailer approach
- Identify 2,250 suppliers.
- Collect all data on suppliers.
- Conduct internal buyer/group meetings.
- Address power zones.
- Involve support functions.
- Redefine buyers’ roles.
- Identify all problems.
- Contact suppliers senior personnel.
- Assign support team.
- Schedule meetings.
- At meetings — discuss problems/opportunities.
- Do long-range planning.
- Assign responsibilities.
- Follow-up and review.
