Wednesday, June 26, 2013

How we can develop better strategy by eating cornbread.

Cornbread.  Ain't nothin' wrong with that!

Many of you might have seen an article that was making the rounds on the internet a few months ago titled "7 Reasons This Muffin Mix Can Save America."  Go ahead and read it if you haven't yet.

How many of us can say that we had a complaint about a product?  And how many of us can say we actually spoke to the CEO of the company, not just some marketing or customer service intern saying that they'll pass the word on?  Cory Suter was not only able to see behind the curtain of Chelsea Milling Company (the parent company behind Jiffy Mix), but was able to bring about certain changes in the company.  Mind you, Cory Suter is not a marketing genius or a business marketing guru; he's just a simple blogger who wanted to voice his concerns with a company that he supported, and unexpectedly, they actually listened.

So you may ask what this has to do with strategy.  Fundamentally, strategy has everything to do with how successful [or unsuccessful] your business might be.  Several methodologies used by Jiffy helped them be very successful.  They chose not to dump money into marketing via advertising, or making flashy boxes to catch the eye of consumers in the supermarket aisles.  The packaging has more or less been the same since creation, and the mixes are adequately priced so that it can be consumed by the masses.  Much like how the Ford Motor Company wanted to make vehicles affordable for everyone, Jiffy tries to make good quality but cheap costing products that can be found in any home any given day of the week.

They've also decided that even with their 55% market share of all corn muffin mixes across the country, that they were going to stay in local, family-controlled ownership.  There are no stockholders to keep satisfied, but rather a CEO who cares about what goes out of the doors and onto the shelves of millions.  Creating this message and keeping it consistent is one way Chelsea Milling Co keeps their brand held in high regard.  They have roughly 350 employees, and CEO Howdy Holmes knows most of them by first name.  He makes sure that they are paid well (at an average salary of $47,000/year) and that in the same breath, his products don't cost an arm and a leg to purchase.  "Most Americans don't have two homes or much extra money to spend on things that aren't necessary," Holmes said.  "We provide high-quality ingredients at the best price to help as many customers as possible."

Chelsea also breaks the traditional trends of being strictly profit-driven.  Again, there are no shareholders to please, and considering that the original recipe for Jiffy Muffin and Corn Bread mixes came from Holmes' grandmother, he wants the level of quality to be there without worrying about how much money he'd see in his bottom line if he would just raise prices or lay off some staff.  This keeps morale and brand loyalty high for the company.

They also consider honesty a big part of their culture.  For example, on the front of their blueberry muffin mix packages, Jiffy claims that their product is "artificially flavored with imitation blueberries."  One of their competitors, Betty Crocker, has a premium blueberry muffin mix which costs twice as much and have their blueberries saturated in high fructose corn syrup and artificial flavors.  There are no labels signifying that you're not getting the real deal with Betty Crocker, but Jiffy doesn't hide it from the customer.  It's consistent with their core values of honesty and integrity, and it shows.

If you read further in the Suter post, you may see that others asked in the comments about Jiffy's use of GMOs, or genetically modified organisms.  GMOs in food means that genetic modification is used to modify the components in their products to make them survive in inclement climate regions or to stave off bugs or bacteria or serve as preservatives.  There has been a crusade to stop the sale of GMOs in grocery stores or to have them labeled up-front.  Holmes responded to the concerned customers and shown that for products such as his corn muffin mix, 88% of the corn brought into the US is GMO.  Only 12% is not GMO, which is why they haven't made the switch.  While you may choose to avoid eating Jiffy because they use GMOs and imitation material, many customers feel that this full disclosure and honesty is a good reason to support the company, and thus why they have found so much success over the years.

Friedrich Schock, the CEO of Schock Holdings, GmbH had a great quote in regards to success.  "Success means 'it follows' in Latin.  Success is something that follows, the natural result of behaving right - not the number one target in your life."  Mr. Holmes has certainly figured out a way to be successful, and it's in no small part thanks to the culture he has created with his company.  While his approach may not work for everyone and for every business, it's certainly an "idealistic" model that has proven to be sustainable through the bigger part of a century.  Focusing on creating happy customers and happy employees can indeed lead to success.

Sources:
1. Suter, Cory.  "7 Reasons This Muffin Mix Can Save America."  Web.  http://www.policymic.com/articles/30626/7-reasons-this-muffin-mix-can-save-america  March 2013.

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