Tag: Mark Hanna

Is Mark Hanna the Tom Brady of CSR?

Posted on by Drew Neisser

Mark Hanna, CMO at Richline Group, is a diehard New England Patriots fan and like all of his brethren is in a good mood as the Pats rack up more post season victories. I try not to hold this kind of fanaticism or misplaced loyalty against Mark — I mean you can’t really blame a guy for where they were born, right?  And in a genuine display of largesse given that my football loyalties lay elsewhere, I even went so far as to feature his thoughts on “Retooling” in my recent released book!

Mark’s passion for the Pats is almost matched by his passion for Corporate Social Responsibility, a subject about which we have no disagreement. As you will see in our conversation below, Mark has quarterbacked a number of “winning” initiatives for Richline, which if you don’t know is one of the largest makers of jewelry in the world and a highly successful Berkshire Hathaway-owned company. Does this make him the Tom Brady of CSR?  Well The CMO Club thought so at their annual awards last year.  Read on and you can decide for yourself.

Drew: How do you define Corporate Social Responsibility?

In summary, it is a socially responsible company’s efforts that go beyond what may be required by regulators or environmental protection and based on the conscious contribution to promote positive social and environmental change. The standard answer of leaving a better world than we have now works perfectly for me.

Drew: Can you provide a short recap of your CSR initiatives in 2015?

Our efforts are diverse and each a journey toward improvement but a few highlights are:

  1. The installation (started 2013) of over 180,000 square feet of solar panels which fully power our major Albuquerque facility and supply a surplus for the State of New Mexico. This equates to a four acre roof treated with energy conserving coating that reflects 80% of heat and UV rays.
  2. Additional energy saving initiatives through utilization, in our facilities here and abroad, of efficient lighting and generators plus measured traffic management.
  3. Numerous initiatives for the elimination of conflict region gold while funding and assisting artisanal mining through legal supply chains of custody and the elimination of hazardous mercury in the process.
  4. Board membership and directional influence on the industry’s largest proponent of responsible supply chains, the Responsible Jewelry Council.
  5. Lead company in the industry in the conservation efforts for Wildlife and Biodiversity through the elimination in all jewelry plus industry and consumer education.
  6. Various philanthropic support starting with Chair of Jewelers for Children.

Drew: How do measure the success of these programs? (Please provide specific results if you can.)

We truly believe in Return on Responsibility…so much so that we influenced the Berkshire Hathaway Sustainability Summit to adopt this as the 2015 meeting theme. It is important that we act as leaders because it’s incredibly meaningful to our industry position and reputation value. The “return on responsibility” from such involvement exceeds that of pretty much anything else we could promote for our Brand…. It’s that significant. We chose to pursue a “Return on Responsibility” model that both holds our firm to a clear “glass house” discipline and communicates our trustworthy journey to true corporate responsibility.

Drew: Building a business case for CSR initiatives can be tricky. What were the keys to gaining management support?

I believe sustainability initiatives have to be driven from the top and integrated into the culture….they must become a way of doing business, require the participation of all company resources and are not just one-off operations’ projects. As keepers of the firm’s reputation and in a world demanding trust and authenticity, it is a necessary strategic goal. We should be committed to showing that an investment in sustainability is an investment in our Brand. Employee advocacy will follow and add to the value..

Drew: There are an unlimited number of options when it comes to CSR. How did you narrow the list down?  

We set strategic goals for our Sustainability/CSR initiatives:

  • Insuring our ability to meet current and future environmental requirements
  • Reduction of energy use (also an economic win)
  • Responsible supply chain management to strengthen our B2B partner and supplier relationships
  • Cradle to cradle processes including advanced recycling capabilities
  • Community support and satisfaction to enhance local and national government relations
  • Enactment and dissemination to all associates and stakeholders of a “best practices” Code of Conduct
  • Employee attraction, motivation, innovation, retention and productivity

Drew: When it comes to sharing your company’s CSR initiatives is there a fine line between letting the world know about it and overplaying the contribution?  Where do you sit on this spectrum from letting the good action speak for itself and broadcasting it from the treetops? 

We are very conservative here. Our strategy has been to celebrate our Richline Responsible program leadership and accomplishments only to the trade and B2B…no consumer programs or promotion at this point.

Drew: Looking ahead to 2016, what is the single biggest challenge that you’d like to overcome? 

Sticking with the Responsibility theme, I believe in the future of transparency as a requirement by the upcoming generations of consumers. Therefore, in 2016 my challenge is to expand our true chain of custody supply documentation to a significant mass for the creation of a brand based on such transparency.

CMO Insights: Customer-Centricity

Posted on by admin

About seven years ago, Mark Hanna and his team at Richline Group devised a unique strategy for improving their business model that called for thinking small in order to think big. In the interview below (arranged by the folks at The CMO Club), Hanna explains how his company went from a “one size fits all” product approach to having over 40 retailer-specific jewelry lines.  Though this approach meant a lot more work for the Richline marketing team, it fulfilled Hanna’s desire to dramatically reshape its relationship with its customers, an effort that has paid huge dividends both in terms of higher customer satisfaction and increased sales.  Hanna reminds us all that ultimately, the fundamental role of marketing is to build customer trust and without trust, there is no brand.

Can you talk a bit about the structure of Richline and your role at the company?
We have four independent divisions or business units within our larger company. These include Richline Brands, Inverness Corporation, Rio Grande, and LeachGarner. There are synergies among them but they are very independent of each other and since I’m corporate, they all fall within my purview.

I’ve been CMO of Richline for 8 years and see myself as chief business catalyst, which means that I carry the marketing responsibilities for everything from outbound to services. I also carry the social responsibilities in terms of ecology and social responsibility issues and I have tremendous influence on our operations.

Does each division have its own marketing budget?
Each division has a marketing team, which reports to me, and each of those divisional Presidents develops their actual numbers for the division budgets. So each division has its own marketing mandate based on that division head’s objectives, as they each have very different markets, and I manage each of those four individual marketing departments.

Since you work in a more advisory capacity on the corporate level, how do you rationalize success? Since you’re not responsible for each of the four divisions from a line standpoint.
I think there are two ways to answer that. First, we’re a little textbook in terms of goals, strategies and tactics. And that’s done at the division level but those also roll up to the corporate level. At the corporate level, those goals and tactics are the collaboration among all the separate divisions. It’s about one group’s ability to greatly influence the direction of another group.  For example, our Brand Group has a good feel for the market and where it’s headed and informs our fabricated division in terms of what they should be making. Our division that works with the hobbyists, are all over the current trends and interpreting them in different ways, so there’s a big synergy among the divisions created by the consumer market. If you work back from the consumer to our divisions, they really do all influence each other very much. I personally manage the strategic planning process for each one of the divisions.

So that includes a lot of troubleshooting and making sure they set clear objectives, right? Do you also handle budgetary allocation among the divisions?
Yes, definitely on the objectives. And there are really two specifics that we run everything through: one is called “moats,” and the other used to be called collaborative benefits but I now refer to it “return on relationship,” in deference to Ted Rubin. The term “moats” I took from Warren Buffet, and it refers to services, products, and abilities that we own that no one else does. These are our corporate differentiations, our product differentiations, our service differentiations and it’s the single most important strategy we emphasize throughout the divisions, this creation and maintenance of moats.

What are some of your moats?
We’d really have to look at it division by division. But if we start at the fabrication level, their really strong moats are the ability to create precious metals in pretty much any format or any composition, strength, and consistency depending on the product. We have 100 variations of 14k gold, for instance, and our investment in tech is second to no one else’s. So the moat there, at the initial stage, is our precision and knowledge base.

How do you measure your own success as the corporate CMO?
This is where our discussion will get into talking about return on relationship, because all of my goals are based on the growth of our business and the growth of our profitability. My goal is that we become the biggest go-to company among retailers. It’s like life insurance – you’re investing premiums and they continue to appreciate. We see our investments in these and “return on relationships” as the same thing. Growth of business over time is really about how strong our relationships are, how strong the trust is. Improving that trust every year is my single most important goal.

Have there been any specific marketing initiatives that you can point to as having really helped build those relationships? 
In 2009 we identified our biggest weakness as not having control of the consumer touch points. We were pretty much a company presenting our wares to a buyer and had very little influence over how things were packaged, how things were displayed, how they were advertised. So from 2009 onwards, we made it our priority to gain that control. We identified 20 key customer touch points for each of our brands. And it became the single best focus that we ever made and the most important strategy we’ve developed over the last few years.

The first thing we did was look at our market, look at our customers, which are the major national jewelry chains, shopping networks, mass merchants and department stores. If we sell something to one of them, we can’t sell it to another. So the strategy became going from national label to private label and creating very specific multiple private labels within that category of products. In karat gold for example, we have 14 retailers carrying assortments of products within a reasonably small range of innovation all under different names. And what that did for us was take away channel conflict. It multiplied the marketing stress because we had to create everything from brand guides to color guides for 14 instead of one. But it absolutely shot our sales through the roof because we took away channel conflict and allowed each retailer to create their own margins and positioning.  It got us on this track of being very in control of this vast number of private label collections of which we now have 42.

How do you keep things straight and get down to who controls what between both of your marketing department and the marketing departments of the retailers? 
We’re very careful, and it’s all proprietary. Everything is done on a project basis together with the internal sales and product teams of the store we’re working with. Most of our customers have a single sales team associated with them. So we can keep it pretty straight. Collaboration, at all levels with the retailer, follow the same path.

How do you manage, since you’re dealing with four divisions and 42 different brands in retail, how do you set the big picture for these folks since you obviously can’t be involved in the day to day sales?
First, you come back to the word moat, and the idea of customized reality testing versus the differentiation that we’re providing. Secondly, it’s not all on the marketing department as each of those brands is associated with a retailer and that retailer has an internal team, a product development team, an operations team, a customer service team so that ultimately, we become the organizer of that team and the catalyst for that team to walk in the customer’s shoes. And there might be occasional conflicts but for the most part, everyone is focused and it’s a lot of work but the system seems to work quite well. At one point in time everyone is focused on one brand and one customer. We honestly have so few sales and marketing conflicts; we work side by side with the sales teams at these companies and it creates a bond, not an antagonism.

The world is about trust and transparency. At some point in time there’ll be a day where we can say, we’re Richline, these are all our brands and you can trust them. And to do that we need to be socially conscious, we have to be absolutely able to live in a glass house. That’s why improving customer trust has always been my single most important goal.