Spirit of Invention
14 April 2008 Martin E Franklin
Martin E Franklin, CEO of Jarden Corporation, explains how the focus on innovation keeps the company ahead of the competition.
Martin E Franklin is chairman and CEO of Jarden Corporation. Franklin has been CEO since 2001 and helped build the company into a global consumer products powerhouse with more that $4.7bn in sales in 2007 and 25,000 employees worldwide.
How does Jarden maintain a competitive edge?
Above all else, we focus on consumers. We create new products that make peoples’ lives easier, more convenient and enjoyable. Our brand portfolio contains some of the most well-known names in the consumer, home and outdoor areas, which gives us a significant competitive advantage. We also have a robust distribution network and partnerships with a huge variety of retailers.
We have a very entrepreneurial culture, and we have a structure that provides discipline and a foundation without taking away entrepreneurial spirit. Our most important assets are our employees, and it is through their dedication that we are able to grow our advantage in the market.
We follow an internal programme known as ‘Jarden DNA’, an operating philosophy that has guided our development over the years. This programme incorporates measured risk taking, the use of proven financial and management processes and a commitment to integrity that keeps us ahead in the market.
How important is the strengthening of working relationships with existing retailers, and how is this best achieved?
We enjoy strong relationships with our retail partners. Understanding retailers’ needs and the needs of their customers requires an attuned sensibility. Having open and productive relationships with the retail channel is critical to this understanding.
We often work with our retailers to develop products they tell us are in demand. For example, working with retailers, we developed a new line of plastic cutlery under the Diamond brand called Renew Dinnerware, which is made of 100% recycled plastic. The new line uses 10% less plastic but is just as strong as the original range.
Where do you see the company three years from now?
Since 2001, our objective has been to build a world-class consumer products company in niche markets with brands that are the market leaders in their segments. We’ve grown to a size where Jarden is starting to be a recognised name. As I look ahead, I want us to continue building on the success we’ve had by developing new products that meet the changing needs of consumers, while delivering strong performance to our shareholders.
We’ve set an aggressive new three-year adjusted earnings per share goal that we are all working to achieve through new product development, creative marketing and branding strategies, efficient business management and a singular focus on the consumer.
We also plan to build on Jarden’s commitments to the community in which it operates. For example, our Wounded Warrior employee recruitment programme actively seeks qualified war veterans for positions in the company. We want to make Jarden a more environmentally friendly company by reducing product packaging, using recycled materials and introducing more efficient distribution processes.
We have challenged our businesses and suppliers to adopt greener practices.
What is the secret to dominating niche markets?
We know what our consumers want, and our brands are the best in their categories. We introduce hundreds of new products each year, many of which are in ‘mature’ categories, yet we constantly innovate and create better solutions that help people enjoy their lives. We’ve amassed a portfolio of brands that are market leaders in virtually all of our product categories. Consumers around the world have known and trusted them for generations.
We focus on maintaining and building this trust in our brands, and have increased investment in our consumer brands significantly over the past two years. While we do not promote the Jarden name directly, we ensure that it resonates with our retail partners as standing for quality products and brands, outstanding operational execution and creativity.
What are the challenges in developing a new brand today?
We are in a very challenging economic climate at the moment, but we’ve purposely designed our business to weather downturns, by making sure that we only own the market leaders in the categories we’re in. The majority of our brands are staples that are part of peoples’ everyday lives. They are iconic names that consumers have trusted for more than 100 years.
Jarden has had to integrate some new acquisitions recently. How did it approach this task?
Our acquisition strategy is to find strong, well-run consumer product companies with world-class brands and strong management teams. We look for companies that have leading market positions that can benefit from the efficiencies and scale that come with being part of the Jarden family. They must also have growth potential and be accretive for our business.
Our largest and most recent acquisition, leading outdoor business K2 Inc, is an excellent example of such a company. Many K2 brands fit extremely well with Jarden’s portfolio, particularly in the camping and fishing areas. At the same time, K2’s well-known sports-oriented brands, such as Rawlings baseball gloves, Market ski bindings and Volkl skis, expand our reach into new, yet complimentary businesses. The culture and operations of K2 also fit very well with Jarden’s Outdoor Solutions business.
How important is teamwork and the decision-making process at Jarden?
Our business is built around an entrepreneurial culture based on a team-driven approach that fosters and rewards creativity, contribution and collaboration. Effective teamwork is the cornerstone of our business. We must all focus on bringing the best products to market for our customers. With 25,000 employees, it’s essential that people work together as teams. As far as decision-making is concerned, Jarden encourages controlled risk-taking. This is the only way our business will truly grow.
How fundamental is innovation to your corporate strategy?
Jarden is well known for its longstanding tradition of product innovation, and it is an integral part of our corporate strategy. It has helped us achieve our main corporate objective of building a world-class consumer products company. Innovation allows us to introduce new products that provide our consumers with the experience and value that they associate with us.
How can CEOs best foster innovation?
Fostering innovation requires creativity, passion and an entrepreneurial spirit that inspires others. CEOs of growing companies such as Jarden have a responsibility to foster this mindset in their organisations. Employees want to know their contribution is making a difference, and this recognition must come from the CEO’s office and permeate the organisation. Consumer products are our lifeblood, so being passionate about the brands, the products and their features is critical to ensuring we continue to innovate.