The Chinese word for change or problem has two parts, says Robert Kamerschen, chairman and CEO of ADVO-System, the nation’s largest direct mail marketing company.
The top character in the word means great danger or risk, he explains as he points to the framed bold letters on his office wall. The lower one means opportunity.
Robert Kamerschen, better known as “Kam,” has made a career of turning risk and danger into opportunity. Since he was hired to turn ADVO around in 1988 by the board of directors of E.M. Warburg Pincus, he has boosted ADVO’s revenues by 11 percent to $655 million in 1990 in the face of an extremely sluggish advertising environment.
ADVO-System, located in Windsor, CT, was established in 1929 as a private hand-delivery service, and has endured economic recession, wars, and postal rate increases, but never all three simultaneously, until this year.
Proving that a successful strategy is a flexible process of “dynamic self-assessment and bold initiative,” Kam has taken the company from a net loss of $4.1 million to net income of $16.4 million.
Because it was a challenging turnaround situation, stresses Kam, consistently “clear and compelling communication” became even more important because the employees at ADVO suffered from what he calls the FUD factor: fear, uncertainty, and doubt, which exists in most struggling companies.
Addressing the problem, Kam, who prefers to address his employees as “associates,” created a videotape in which he outlined his ten business convictions. Communication, which leads directly to improved productivity, or getting more yield from employees in the same amount of time, is appropriately enough at the top of the list.
“For example, we measure operations productivity in labor hours per 1,000 pieces produced. That measurement shows that our labor force is 40 percent more effective today than it was three years ago. Why? Weren’t these people three years ago working hard? Presumably they were, but they weren’t working smart. Obviously, we were not getting maximum yield out of our associates’ time.”
“Now ADVO distributes about 18 billion advertising pieces a year to over 52 million homes each week.
Leadership, he asserts, is primarily psychological, an experience he has learned through successful execution of his management style.
“I submit to you,” says Robert Kamerschen, leaning forward in his chair, “if you elevate expectations, people will rise to the occasion. If you expect nothing, you’re apt to get nothing. As Napolean said, a leader is a dealer in hope.”