Push interaction with partners down to many staff levels. Owades, Wilson, and Ann Hayes Lee, who came on as Calyx's vice-president of marketing in June 1989, aren't the only ones who nurture the alliances: for instance, Laura Goodman, the company's operations manager, spends about a day a week visiting growers. "Spreading the interaction with partners through a company is very important," says Owades. "At our company it's very, very important. The chain gets solidified at so many other places."
Make sure everyone gets credit. Owades has received repeated coverage in everything from the flower trade publications to the New York Times. In all her interviews she talks about Federal Express and the growers and how much they are all partners. Says flower grower Peter Barr: "Ruth is working to promote flowers, and we appreciate that. As a result, she has the top priority for getting our flowers if we're running short."
Make sure the CEO has time to maintain the relationships. Taking care of her alliances is probably Owades's primary task as chief executive. "I do some of the finance things, like communications with the investors and establishing the banking relationship. But I consider those relationships my job." She talks to each of her growers at least weekly and with both the regional Fed Ex manager and her Memphis contact monthly or so, at minimum. Owades keeps in touch with them by phone, fax, and, less frequently now, visits.
* * *
In the time since the business and the relationships on which it's based took their first steps forward, Calyx & Corolla has grown steadily. In 1989 it consisted of a core of 8 staff people, supplemented by part-timers who helped answer the phones during the busy seasons.
Today 25 people work for the company full-time, and up to 100 are added during the business's peaks. A bank of operators occupies an airy room downstairs from the main office space overlooking San Francisco. On one wall is a chalkboard listing the day's flower specials. Samples of all the vases and Calyx's dried-flower products ring the ceiling.
Twenty-five growers now work as Calyx's partners. Federal Express uses 18-wheel trailers to service the business, loading the brown flower boxes bearing Calyx logos and Fed Ex shipping labels via conveyer belt directly into waiting airplanes. On the busiest days some growers fill half a dozen trucks -- booked in advance -- with packages.
Calyx has had competitors: they've come and gone. One project, funded by a venture-capital group, lasted about a year. When the business shut down, Calyx bought its mailing list. Harry & David, a fruit-and-gift-catalog company, came out with a flower catalog in 1991, then left the market. A lot of mail-order catalogs, say Owades, dabble in one or two flower items, "but when flowers get attention, I think that just makes us look more the expert."
Because of its alliances, Calyx & Corolla has moved past the start-up stage sooner than most new companies do. In 1992 the company exceeded its goal of breaking even, posting profits greater than 5% on sales of $10 million. The average order in 1992 was $65.
In the summer of 1990 Owades raised another $1 million from her original investors. She is debating whether to take the company public or seek additional private financing or other relationships to obtain the cash to keep Calyx growing. While acknowledging that it remains a challenge to get potential new customers to catch on to the idea, Owades is still confident, she says, that Calyx & Corolla can eventually be a $100-million business. Her partners, so far, concur.
REMAKING THE CUT FLOWERS BUSINESS
Flowers are normally a week old or more when bought, whether purchased at a store or ordered by phone (in which case retailers are directed to make deliveries from their stock). Calyx & Corolla cut out three middlemen and, with the help of Federal Express, connected growers directly with customers. Customers call Calyx headquarters and order from a picture in the calyx catalog; Calyx transmits the order to growers by computer link, and customers receive flowers that are up to nine days fresher.
THE TWENTY-EIGHT STEPS
Here is the process by which Ruth Owades conceived the idea for Calyx & Corolla and developed the strategic alliances that enable it to exist
1. Contemplate alone
2. Brainstorm with others
3. Research the idea and the industry
4. Research the needs of potential partners
5. Evaluate yourself from your potential partners' perspective
6. Think about financing
7. Consider legal protection for the idea
8. Write a plan
9. Start recruiting a management team
10. Find advisers to poke holes in the concept
11. Decide which kind of partner to talk to first
12. Check out particular partner prospects
13. Determine the criteria for a partner
14. Spill the beans to a potential partner
15. Evaluate other potential partners
16. Figure out whom to contact first at potential partners
17. Wend your way through the corporate structure
18. Negotiate
19. Impress potential investors
20. Train your partners' employees
21. Solicit suggestions, especially from your partners in their areas of expertise
22. Expect -- and deal with -- problems
23. Sever ties with a partner if you have to
24. Recognize that some things are hard to control
25. Do ongoing training
26. Push interaction with partners down to many staff levels
27. Make sure everyone gets credit
28. Make sure the CEO has time to maintain the relationships
