At the recent Peter Drucker forum in Vienna, I was lucky enough to catch up with Rick Goings, CEO of the Tupperware Brands Corporation, a multi-brand, multi-category company. The company achieved great success by distinguishing itself through direct sales and its famous Tupperware parties. The company was founded just after the Second World War when it was all about ‘plastics’. During the 50s, 60s, 70s and early 80s Tupperware went through wonderful years until it hit a wall. But Goings is passionate about the company and since he joined Tupperware in 1992, its fortunes have revived. Today it employs 13 500 people and has revenues of $2.3 billion.
After Tupperware went through its difficult period, how did you set about rebuilding it?
I was recruited from AVON 20 years ago and was passionately drawn to Tupperware as a brand that people associate with and cared for. It took us 4 to 5 years to stabilise the company mainly by commoditising the product line and with elevation we had the advantage to upscale features and benefits.
In my opinion a low-cost supplier approach is not sustainable, differentiation is how you create sustainability.
Also with a sales force of nearly 3 million people around the world, we refreshed the entire company, changing how we sold, emphasising one on one presentations but in a differentiated manner. We further offered workshops in order to empower the people on the ground who drive our business and adapted our knowledge and strategy depending on the location and culture. For the past few years now Tupperware has experienced double digit dividends.
What are your core competences and your added value?
The old model on competitive advantage focused either on the brand or the channel. According to the consumers we talk to, our competitive advantage is both.
Tupperware is strongly linked to anecdotes and experiences and is a brand name that people love and respect.
In this sense 75% of the competitive advantage at Tupperware is channel and 25% brand name.
The Tupperware parties allow us to trump retailer’s value chains by eliminating the second highest cost in that chain – rent. We also leveraged relationship-selling and have no advertising costs. People prefer to believe people they know as opposed to movie stars. Therefore if somebody has a Tupperware party with 6 friends, they will sell the products but also could also have initiated up to 6 future parties. This system has been around for 50 years and will never run out of people.
Where are your big markets today?
Our number 1 country in the world is Indonesia, then Germany and then Mexico. The US is number 10 or 12. We have a profitable business in the US but it is not our primary attention. I realised there are two markets, the US and the UK, where the focus is on value for money. In countries like France we are doing well but in different market segments. The number one Tupperware product in France and Austria contains a resin equivalent to heat shields on space shuttles and costs 150 dollars. This is a high quality product. There simply is no demand for such expensive products in the UK or US.
What are your day to day challenges as a CEO?
The biggest challenge as a public company is the various constituencies with divergent shareholders. Most of my time I spend dealing with the 3 million organisations we have and the complexity of making sure the propositions we give them suit. I deal with products, selling methods, earning opportunities and the fundamentals of direct sales by training and motivating. We have a big team with big sales, for example there is a 37 year old woman in Borneo making 15 m in total sales this year in her town who net out in over a million per annum.
What are the challenges of running an International company in terms of strategy and on a people level what are the day to day challenges working with a diverse set of senior executives?
The importance of nationality is a 5/10, but when you have a purpose in the relationship it becomes a 9 or 10 / 10. The issue for most businesses in the US and Europe is that they do not think polynationally. They think that Europe is the centre of the world, yet it is not the future. For the first time in a long time there is a declining workforce in Europe and an immigrant population that has not been absorbed. This is obscene and can be seen as just as bad as the slavery issue was in the US.
In my opinion the entrepreneurial spirit must come back to Europe and governments must get out of the way and support it. The US is only 20 years behind in this regard but is on the same track. Obama is a community organiser, running a complex government by saying: “We only play to win and I set the agenda”. In my opinion this won’t work, you can only progress in society when you give and get and make it work for everybody.
The world economies are changing and a key word developing at the moment is respect. We can learn a lot form divers management teams which is exciting because when it’s all said and done it’s like an adventure. Those are the four words I would like to highlight: purpose, passion, respect and adventure.
What is your advice for young students just graduating?
The two main words are purpose and passion. You can also find purpose that pays well, but it will be difficult to succeed in your career if you don’t have a clear idea of what you want to achieve in your life and set about doing it passionately.