The company's goals for this year include selling $3 million worth of additional products into existing accounts. "If you just sit down and pound out commodities, you can watch your gross margins disappear," says Corbo. "Goal setting works. By keeping these goals visible and focusing on them, we force ourselves to make the innovation happen."
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PepsiCo Inc.: Recruitment and Hiring
Kahl feels a kinship with many of the companies he watches. Just as Domino's has to fight Pizza Hut, he must constantly outmaneuver 3M, his corporate nemesis. But the scrappiest of underdogs, as far as he's concerned, is PepsiCo.
Owing to his careful reading of books and annual reports (he even bought stock in PepsiCo and knows someone who knows someone on its board) Kahl can recite the company's every parry in its match against Coke, going back to 1939. He argues that Pepsi's success rests largely on one skill: its ability to optimize the talents of young people.
There was a time, in 1982, when Kahl believed that to grow, Manco needed to hire big-company veterans. "We brought them in from number one companies," he recalls, "and we found out that they had been motivated by fear and coercion. They were teaching our people the wrong methods." Salespeople, for instance, routinely irritated dealers by overloading them with inventory -- a tactic that became clear only as retailers and brokers began computerizing. And many salespeople did just about anything to bring business in, creating what were essentially kickback schemes that exploited loopholes in Manco's systems. "They'd screw their own company to make a deal," says Kahl. It was only when son John joined up, in 1985, that those shenanigans came to light.
Inspired by Pepsi, Jack Kahl found a better way. There, he learned, an $800-million division could be in the hands of a 24-year-old. He set up internship and recruitment programs with colleges. Manco now has a well-defined fast track. It's not unusual for a fresh recruit to be taken to a trade show, then invited to dine with a big-name buyer. "You have to bring people there to experience it," says Corbo. "You teach them and be a role model for them so they can grow into their roles." One young salesman -- with only six months under his belt -- recently went along on a visit to K mart, an important customer.
There exists, among the best and brightest junior staff members, a coveted invitation: one to sit in on an executive committee meeting. Kahl trusts them to stay mum about such matters as prospective acquisitions. He may even ask them to make a presentation to the group, outlining a new benefits plan or dissecting a competitor's product. "They get to improve on their speaking skills," he says. "The secret is to give young people an opportunity to grow."
The fast-trackers apparently repay the favor. "They constantly challenge us," says Corbo. "We have to go out and get enough new accounts, find enough new opportunities, and come up with enough new products to keep them from getting bored."
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Jack Kahl is leaning against the doorjamb of Tom Corbo's office, his head lowered in thought. Son Bill rests against the opposite wall while John fidgets in a chair. Corbo broods over a yellow pad. No one seems to notice when Sam Walton, complete with trademark cap, walks by.
It's not really Walton, of course. But employees have dressed up for Halloween: there are at least two Draculas and a dour-looking frog. One employee decided to become Walton for the day, having heard so much about this particular role model.
Just now, though, another big company is dominating the thoughts of Manco's managers. A valuable bit of information has come in from the sales staff: a major discount chain is changing its home-improvement department. The Kahls and Corbo are busy dissecting. Why would the chain make that move? The do-it-yourself stores are eroding margins, someone suggests. Someone else thinks other chains may soon follow suit. "Well," says Jack Kahl, lifting his head, "we'll have to figure out what this means."
That, as he sees it, is Manco's main business: collecting information and making sense of it. Forget whether the duct tape sticks or not; if it didn't, competitors would long ago have drowned the Manco Duck. In an era of overcapacity -- not just in retailing, of course, but in industries such as trucking and car making -- and fickle consumer habits, a company must pin its survival on such intangibles as a knowledgeable and motivated work force. Finding and trying ideas keeps everyone connected and committed. "We just keep learning from one another," says Kahl.
Manco has even incorporated its quest for ideas into a marketing image. For the past two years, Kahl has been producing "Duck Tales," a newsletter he sends to 8,000 people. In it, Kahl -- using the voice of the Manco Duck -- relays information about retailing and about business philosophy in general. He talks about trends he's picked up in Fortune or by reading books or by attending the speeches of big-time CEOs. He never mentions duct tape. Similarly, Kahl sends books to customers: Sam Walton, for one, has received The Next Economy and What They Don't Teach You at Harvard Business School, among others. "It creates business because people want to be associated with somebody who is doing something other than just peddling," says Randall Root, president of the publishing company that helps Kahl edit the newsletter. "People are drowning in promotion but starved for perspective."
And Kahl's perspective is ever widening: these days he's interested in learning from the technological leaps of Toys "R" Us and The Limited; he wants to know more about how the retailer The Body Shop uses education in its point-of-purchase materials; he's intrigued by Ralph Lauren's singular approach to merchandising. Following this group of role models may help Manco achieve Kahl's latest goal. He aims to build a $1-billion business within the next decade.
Should Manco hit that figure, Kahl may find himself starved for useful role models. Whom would he look to for ideas about running such an enterprise? "I'll study the same people that all the big guys study," he says. "When the
