A Discussion with Sun Capital Partners’ 

Bob Steelhammer

 

Boyden’s Leadership Series presents discussions with business and thought leaders from organizations across the globe. The series focuses on topical issues that offer executives, political leaders and the media insight into current trends in business and talent management in the global marketplace.

 

This issue features Bob Steelhammer, Vice President of Digital Commerce & Marketing for Sun Capital Partners. He discusses comparing the boom in digital commerce to Moore’s Law, why CMOs will once again become the CEOs of the future, driving passion in teams and winning, and his motto, “speed is everything.”

 

Link to Original Interview

 

Background

 

Mr. Steelhammer brings over 20 years of experience in digital marketing, e-commerce, operations, corporate strategy and strategic consulting to Sun. He is responsible for helping Sun’s portfolio companies achieve world-class results through their digital channels.

 

Prior to joining Sun, he founded the steelhammer group worldwide. The steelhammer group is a management consulting firm that helps companies maximize their returns on digital and e-commerce investments. The firm performed key strategy and operations work for firms such as TPG Capital, Petco, Vonage, Office Depot, Synchronoss Technologies, Nokia, Vodafone, Avaya and many others.

 

Previously, Mr. Steelhammer was Vice President of att.com and AT&T’s Chief Web Executive, responsible for growing the online business to over $4 billion in sales. He led the online marketing, advertising and support businesses along with technical development and operations organizations. In this role, he led the online marketing, technical development and launch of iconic products such as MyWireles on ATT.com – the first full online self-service telecommunications site. 

 

At AT&T, he worked directly with Apple to market and launch the first iTunes phones online, including the ROKR – the first iTunes phone, iTunes Razr – the first iTunes flip phone, iTunes Slvr and the iconic iPhone. Prior to the AT&T and Cingular Wireless merger, Mr. Steelhammer was Vice President of E-Commerce for Cingular Wireless. He led the team that built cingular.com’s customer experience into the most visited and successful telecommunications website in the US, responsible for $3 billion in sales.

 

Before joining Cingular Wireless he served as Motorola’s Global Director of e-Business, responsible for Motorola.com worldwide. Mr. Steelhammer started his career at IBM, where he spent nearly 20 years and held key leadership positions in digital marketing, usability and technology. At IBM he built a $2.3 billion B2B e-commerce business for IBM’s Technology Group.

 

He holds a Bachelor of Science in Applied Economics from The University of San Francisco in San Francisco, California and a Master’s Certificate in Project Management from The George Washington University in Washington, D.C. 

 

The Interview

 

Boyden: Sun Capital retained you as the firm’s first digital media expert to advise on digital media, marketing and e-commerce investments. You had a lot of options—what drew you to Sun Capital? 

 

Steelhammer: It really came down to three things: leadership, depth and breadth of the firm, and culture.  On the leadership front it was really connecting with the two founders, who are absolutely rock solid leaders in every sense of the word, both from a business perspective and personal perspective. 

The second thing is the depth and breadth of the firm, which affords the opportunity to be able to work across multiple industries and verticals. This includes helping retail and restaurant consumer businesses as well as business-to-business companies and bringing digital marketing and e-commerce concepts to underserved areas such as CPG and manufacturing businesses. 

Then finally culture – This is a private equity firm that has a soul, and a good soul.  Their model is different – they buy companies and fix companies, and this is where they are different – they grow companies.  

Sun also does a culture survey once a year and shares the feedback and the unedited results to the entire firm.  They take their commitment to the next level, where they require every company that they buy to go through this culture survey and report the numbers on what they are doing to drive their culture to a more positive place. The proven belief is that great cultures make great companies.

 

Boyden: Digital marketing and e-commerce are evolving rapidly. Can you equate this rapid change to the e-commerce version of  “Moore’s Law?”

 

Steelhammer: When you think about “Moore’s Law,” it’s every two years or even every 18 months now, the power of an integrated circuit doubles in performance.  I grew up and lived in Silicon Valley and this was and is the reality.  I like to joke around about this and I call it “Steelhammer’s Nail” instead of law, which is: “The number and speed of the techniques that digital marketers use to attract, keep, sell and service to digital customers will double every two years.” 

What’s great about digital marketing and e-commerce is that the space continues to change and it’s not just about who has the best technology but who can creatively use that technology.  Yes, absolutely, there is a corollary to Moore’s Law, and in some respects, I think it’s every bit as fast and maybe even faster.  Think about social media 24 months ago or 36 months ago.  Everybody was on MySpace and Facebook was the new kid on the block.  Now we see people evolving away from Facebook and moving onto Pinterest and Instagram.  

 

Boyden: What do you think will surprise people in 18 months or two years in the e-commerce space?

 

Steelhammer: The evolution of the space from a pure online focus to a customer-centric focus. Everybody is now calling it “omni-channel”.  Whatever you want to call it, it’s that bringing together of the customer experience, not from the retailer standpoint but from the consumer standpoint.  

The consumers are choosing where and how they want to engage with you and your brand.  It’s about when and how a customer identifies their buying patterns, and what we’re seeing is people do all their research online and then make a conscious choice – “Do I buy online on Amazon or do I go into the brick and mortar retail store because I want to look at, touch and feel the product and buy it immediately?”  

The surprising part is that voice is hard to hear.  I think most retailers are very late to the party.  Even retailers that you hold up in high esteem, like Apple, I think are late to the party in merging the online experience to customer service.  I think Nordstrom might be a little bit closer.  But I always think of how fast the space is evolving, and I think the growth is going to take a lot of people by surprise.

 

Boyden: Companies’ marketing budgets are increasingly shifting toward digital marketing operations. Will CMOs who can master the digital space increasingly become candidates for CEO, and how will this compare to past eras when sales/marketing was a path to the top?

 

Steelhammer: I am going to take that question and maybe alter it a little bit.  I think there are two things happening with the CMO position.  I think the first one is that the CMO and CIO positions are becoming closer tied because to be great at digital marketing you not only have to be a good marketer, but also understand the digital marketing tools and space. In addition, you must understand the technology that supports it.  That’s a huge change from the past.  

You are seeing more technical CMOs than you have in the past, rather than purely marketing-skill based ones.  To answer your question about the path to CEO, I think you will see more and more of that because e-commerce increasingly reports up through CMOs or via its own channel and directly to the CEO. Those digital leaders bring every bit of experience to the table that a sales background does.  You’re going to see more and more CMOs and digital marketing gurus named as the CEO.  

 

Boyden: What about social media channels revolutionizing consumer marketing? Will certain sectors of the social media “bubble” finally burst and what sectors will break out as even more critical?

 

Steelhammer: I really don’t believe that the social media bubble will burst.  But I think the game evolves and changes rapidly.  Just look at the brief history of social media today and remember the early rock star, MySpace.  Where are they today?  Most migrated off that onto Facebook.  And now you are seeing a migration of millennials off of Facebook, because their mom and dad are on there, and onto things like Instagram, SnapChat and Pinterest.  

I think you will see social media end up being really two things – first, it will be a brand positioning or brand awareness tool. But more importantly, social media is going to be the place where you can listen to your customers in interesting ways and see what they are saying about your brand. That leads to the next logical piece where social media becomes the de facto brand ambassador.

 

Boyden: Nearly everyone is well versed in e-retail, but how is e-commerce playing out in other sectors such as the industrial space and professional services?

 

Steelhammer: When you think about social media, you have to have a brand in order to leverage it. I think social media is a place to plant a brand flag and say, “This is what our company is, and this is what it’s about.”  

You have to have at least a Twitter presence and a Facebook presence.  I think on the B2B front, it becomes more important to have a presence on social media venues like LinkedIn, not just for hiring purposes but to describe what the company is about and build discussion forums, which are very active on LinkedIn and can almost be thought of as blogs, with user-generated content and talk about comparative companies or industries and discuss the different problems being faced by them and suggest solutions.

 

Boyden: How do you manage to set aside time to use social media on the personal front?

 

Steelhammer: I struggle with that.  Depending on the day and the content of my calendar, it can sometimes only be done at the very beginning or the very end of the day.  There are certain things that move so quickly like Twitter that you could spend all day looking at it and playing catch up.  There are a couple of social media avenues that I focus on.  I focus on LinkedIn.  I focus our brands on Facebook, more for customer support and from a branding perspective, and a little bit of Twitter as well. 

 

Boyden: In your “SoMoLo” presentation last year, one of your points was that after coming to a site, visitors always “leave.” (SoMoLo is “Social, Local, Mobile”).  What’s the important factor in leaving with impact?

 

Steelhammer: My premise is that customers, in the past, did four things when they visited a website – they learned, they bought, they self-served and then they left.  What we are seeing differently over the past 18 months is an additional fifth thing, where customers are also sharing information about how their experience was, what it was, where it was, and all of this is happening in real time.  

When a customer is going to leave your website, it’s all about their experience.  You have to treat every customer interaction in a positive fashion, and that includes everything from all channels, from in store to online.  

It’s like Fred Smith (founder of FEDEX) and the “golden package.” That is you treat every package as if the entire FEDEX business depended on it.  I think you have to think about the digital experience and the physical experience just like FEDEX’s golden package. That’s a level of quality you have to demand from your people and from the experience you create for your customers. It’s got to be great.

 

Boyden: Fred Smith presented that concept in a business class and got a “C” grade, right?

 

Steelhammer: Well, he did.  Tom Peters actually used to include that reference in his speeches when he used to refer to FEDEX.  It’s an interesting one to note. I think the reason Fred got a “C” or a “D” was because everyone thought his was too expensive a concept to execute and that nobody would ever pay the level of revenue it would take to make that kind of customer service cost effective.  

Yet you look today at UPS, FEDEX and all the couriers out there and what you are going to see is that in the last two years free shipping has become “the new black.” In fact what you are going to see now is same day shipping becoming a norm very soon.  

 

Boyden: At Sun Capital you’re working with a myriad of portfolio companies across many verticals. What are the key priorities for your resource and time allocation, and what are the challenges? 

 

Steelhammer: In our portfolio all the companies are at different stages of evolution.  In our model, we buy, we fix, we grow and then we sell. Every one of our portfolio companies has everything from a people processing technology to different levels of sophistication.  We have a simple approach for resource and time allocation – it’s what one of the senior MDs calls the “swarmed ball” approach, where if a company needs help we apply the resource immediately, fix the immediate problem, and help them with some strategy. Then we move on to the next one.  

That’s the simple high-level solution but at the end of the day, most of my time is spent helping the retailers, CPG (consumer packaged goods) and restaurant companies in the portfolio.  We do spend time on the B2B guys and that’s mostly about brand presence, site redesigns, and building connections.  

 

Boyden: What have you enjoyed about working with your own firm – the steelhammer group – versus leadership roles with big organizations you’ve served including IBM, AT&T and now Sun Capital? 

 

Steelhammer: For me, it’s about the people and the clients that I am fortunate to get to work with.  The quality of the work is important and I’ve been insanely fortunate to work with some of the best brands and the best minds.  For instance, some of the things we did at Motorola, Cingular, and AT&T are pretty amazing.  But I think what I’ve enjoyed the most is the amount of change that has taken place in the e-commerce space when you think about internet e-commerce and digital marketing.  

It’s rare in history that you get to participate in something that so fundamentally changes the way people interact with brands and with companies across technology.  Finally, I think what really fires me up in the morning is helping companies find their way in this space. In our portfolio we have companies across the entire spectrum, from ones that are leading-edge when it comes to e-commerce and digital marketing to others that are just starting to adapt to it.  

 

Boyden: You worked directly with Apple to market and launch the first iTunes phones online, and also transformed Cingular Wireless’ customer experience by making it the most successful telecommunications website. What stands out in terms of milestone experiences? 

 

Steelhammer: If I have to crystallize all these learnings down, it comes down to my mantra that speed is everything.  It really is.  There is something to that first mover advantage that is huge.  I think next is that brand is king.  The things you do to help your brand be positive and strong in light of your current and potential customers are very important.  

I learned some of these lessons as a general manager and in senior executive positions.  A lot of people tend to be generalists, but I think one of the most important skills is being maniacal about the details.  That is something I learned working with Apple.  There is no detail in a digital presence that is too small to not make sure you think about why you are doing it.  That leads into the next one – the old adage that less is more.  That is really difficult to execute.  It’s very hard to be simple and still be relevant and effective. 

You also have to take into account all the factors that make up a brand when you create a customer experience.  And another key driving force is passion – passion will drive teams to do incredible things.  Going back to my experiences with AT&T and Cingular, at one time during the Cingular and AT&T merger, we were managing the merge of the wireless group (Cingular) with the wire line group, the broadband group and the entertainment group, all while merging three brands, Cingular, AT&T and Bell South.  We also had six months to rebrand the entire company into AT&T while also preparing for the first iPhone launch. 

What drove this integration seamlessly in a high velocity situation was people’s passion for their work. The people you work with in times like these can teach you incredible things about what is possible, and what you’re capable of. 

 

Boyden: What’s been your biggest disappointment in your career and what did you change following that instance?

 

Steelhammer: You always have those.  I really have been fortunate to have the career path I’ve had. I will say though that I’m not done yet. I think the biggest disappointment, which is more of an overarching thing, is that I wasn’t more of a digital marketing and e-commerce evangelist very early on. 

First of all, digital marketing and e-commerce is the most measurable channel in almost any business.  It’s the most immediate, and in most cases the most efficient channel as well.  I think these opportunities were overlooked by a lot of senior executives early on.  The space was new and unproven, and people were a little skeptical.  

I could have moved faster and produced better bottom line results if I had been more proactive on selling the efficiency and the effectiveness of the channel.  I’ve started writing more, and I do a lot more speaking events and panel discussions. And at Sun, I publish a weekly digital marketing and e-commerce newsletter that goes out to the CMOs of the companies we own. 

 

Boyden: Most organizations today have taken steps to deepen or consolidate digital expertise, but with that comes challenges of integration. What managerial challenges have you faced here?

 

Steelhammer: I think we absolutely have faced challenges.  Very early on, there was this argument that the web should belong to IT, and this prevailed even into the late-90s.  That certainly evolved to it being a marketing channel, and then that evolved into a sales channel.  The challenge that exists is that many leaders want to lump all these things together without understanding the finer points of different levels in the organization.  It’s easy to lump them together but it’s critical to understand how they operate as separate entities below that.  

For example, to understand the tenets of digital marketing, things like paid search, natural search, onsite search, email marketing and affiliate marketing are just one part of it.  Think about that versus social media versus website operations versus using social media for PR.  

The way that you go about thinking about this problem is if you think from a customer’s point of view and say, “How are the customers going to interact with my brand?”  Today customers expect you to engage them in the “omni-channel” play.  They engage you wherever they want, in-store, online or even wholesale.  It’s easier to solve the problem of integration if you take an approach of a customer’s perspective. 

 

Boyden: How does your passion for racing influence your work ethic? 

 

Steelhammer: My passion is really for speed and motorsports: motorcycles, cars and airplanes.  

What that has taught me, both racing and flying airplanes, is how important things like attention to detail and precision are.  When you are on a track or if you are flying an airplane, attention to detail is everything, and precision is everything. 

The other thing is practice makes almost perfect.  If you are ever satisfied with perfect you are going to get hurt in one of those things.  Every flight you make and every time you get in the car, you learn something.  And the third thing is it’s important to have fun.  People like to get serious about business stuff but if you’re not having fun doing what you’re doing, you are in the wrong business.  

 

Boyden: What talent management skills have been critical in your career? And what’s your “secret sauce” in managing people?

 

Steelhammer: I’ve been very fortunate to have spent a lot of time at IBM early in my career.  There they teach people how to be leaders.  They are really good at that.  In your first management job they send you off to the management academy for a week to get you to realize that the job you are about to take on is very different from the job you had.  It’s the thing that took me the longest to grasp but has probably benefited me the most. 

“Type A” leaders think they know it all and they always have a point of view and they want to take action.  One of the things that’s important to learn is that we have to pause now and then, and listen, listen, listen, listen.  You listen to your customers.  You listen to your people.  You listen to the problems that are expressed.  

The other piece is, give people a clear vision with a set of goals and then get out of their way, but continue to expect what you expect.  And inspect what you expect.  There are a lot of skills in talent management, but I think listening, giving your people a clear vision and goal, holding them accountable, and then rewarding them for success are very important. 

 

Boyden: Your motto is “speed is everything,” but also well-known is “speed kills.” How do you discern when speed is primary versus prioritizing quality?

 

Steelhammer: The “speed is everything” motto doesn’t omit quality as part of the speed equation.  That’s what people forget.  People think speed is needed at all costs.  The model is really meant to get people to take action now.  It’s the old Nike moment, “Just Do It” rather than think about it and over study it.  That’s where people get lost in this space.  

I’d rather be first to market with a concept and be 95% right than get the extra 5% right and be 100% right, but be third or fourth or fifth to market.  Speed can kill, but inactivity will kill slowly.  Who wants to die slowly? 

 

We would like to thank Catherine Gray of Boyden Chicago for making this edition of Boyden’s Leadership Series possible.

 

The views and opinions expressed here do not necessarily represent the views of Boyden; only those of Mr. Steelhammer.