Once your business reaches a certain size, dozens of issues require your undivided attention. But if you can boil them down to just two simple objectives and get these right, everything else usually takes care of itself.
This was one of the first things I learned at Triumph. The companys history is well known. Having produced its first motorcycle in 1902, Triumph became a British icon, its bikes later immortalised by stars such as Steve McQueen, Marlon Brando and Elvis Presley.
But by the early 1980s, the British motorcycle industry was decimated by the emerging Japanese brands. Triumph was rescued by businessman John Bloor, who developed a new range of models produced in a state-of-the art assembly plant in Hinckley, Leicestershire. However, production stopped suddenly in 2002 after the facility was destroyed by fire.
As a consequence, John brought in McKinsey & Co to take a look at the business which is how I became involved. We worked with John and the team for six months and devised a strategy with five important areas of improvement. But we concluded only two were essential: products and retail experience. These would drive the business, as they were a consumers main interaction with the brand.
Normally, as a consultant, Id have then stepped away. But when John asked me to join Triumph full-time, I saw it as a fantastic opportunity to help implement the plan.
Deciding what to focus on is one thing but deciding what not to do is just as important. We made some tough early decisions, terminating a number of motorcycles that werent working hard enough for the brand. If you ask your sales team, they generally want as many new products as possible. If you ask the factory, they want just one ideally black.
Product management must love killing products as much as they love launching new ones. Thats rarely the case in any business. You need to get the right balance. Dont let customers mistake your shop for a museum.
In the 1960s and 1970s there was a perception that Triumph bikes leaked oil and had other quality issues. So we knew if we wanted to take on the Japanese we had to beat them at their own game and make top quality bikes while differentiating on design and brand positioning.
We also implemented a customer satisfaction index with two stages one on purchase and the next, 13 months later, after the first service. This CSI score became a guide for the way wed compensate retailers, sales staff and managers, giving them an incentive to improve levels of customer satisfaction.
A CSI, measured correctly, is an all-encompassing measure of how the entire organisation performs. Its a worthwhile investment as it’s far more expensive acquiring new customers than retaining existing ones. And happy customers not only buy more products from you but also tell their friends to do the same. Around 70 per cent of our customers would trade in their Triumph for a new model every three years.
With our two main objectives still driving the business, we turned to the Japanese and US markets themselves both wildly different and complex, each with their own huge domestic manufacturers. The challenge was to tweak our approach in each territory but remain true to our values.
Japanese consumers are demanding in terms of what they expect from a brand. But once hooked, theyre extremely loyal. Their homes are clean and minimalist so your stores must reflect this mindset. And they think nothing of spending more on a watch or handbag than they do on rent in most countries it’s the other way round.
One project that worked really well was collaborating with Paul Smith on a limited edition range of bikes, as well as clothing and jewellery. Linking up helped us spread the word much faster in Japan, though we wouldnt have pinned our flag to any brand. Triumph and Paul Smith have a lot in common both are privately owned, originate from the Midlands and have a distinctive heritage. We balance heritage and innovation. It was a perfect fit.
While the Japanese went for our classic bikes, the Americans preferred our touring models. Here we had to find our position in a market where the biggest player, Harley Davidson, shared many of our strengths. But we built some great bikes and started laying the foundations for an enduring business.
Theres an animation on YouTube charting the growth of Walmart from its launch in Arkansas in 1962. Whats fascinating is how the business spread within such a tight radius of its first store for at least a decade and didnt truly conquer America for another 30 years.
When growing at home or overseas, it’s worth remembering just how long it takes to be an overnight success.
Extracted from ‘Going Global: 30 Years 30 Insights’ by Piper, the leading specialist investor in consumer brands. For more information or to order a copy, visit Piper’s website.
About Tue Mantoni
Tue Mantoni began his career as a consultant at McKinsey & Co. In 2002, he joined Triumph as sales and marketing director and became CEO four years later. During his leadership, the company more than doubled its turnover to 300m, increasing its market share to 15 per cent in Britain and five per cent worldwide. In 2011, Danish-born Mantoni became CEO of luxury audio specialist Bang & Olufsen.