Tom Tedford, President and CEO of ACCO Brands, joins Matt to discuss the magic behind effectively managing brand acquisitions and leading a company with a complex product portfolio. ACCO Brands owns a variety of well known brands including MEAD, Five Star, Swingline and much more, doing business in over 100 countries. He also touches on how to keep up with technology and global challenges in your businesses. Learn more about ACCO brands on their website.
Tom Tedford 0:00
What makes my job so enjoyable is the challenges that it presents, the opportunities it presents for me to think about something new, to learn something new.
Matt Waller 0:11
Excellent, professionalism, innovation and collegiality. These are the values the Sam M Walton College of Business explores in education, business and the lives of people we meet every day. I'm Matt Walter, Dean of the Walton College, and welcome to the be epic podcast. I have with me today. Tom Tedford, who is the President and Chief Operations Officer of ACCO Brands. He's been with ACCO for 12 years. He graduated from the Walton College in business in 1993. Congratulations, Tom, on your your great success in your career. And thank you for being willing to share with us today really appreciate it.
Tom Tedford 0:56
Matt, it's my pleasure. It's a pleasure to be here.
Matt Waller 0:58
ACCO brands is home to some of the world's most iconic academic consumer and business products, including Mead, Swingline, and about 1000. More. That's a lot of products. You all own many brands, I know that you're also marketing products in over 100 countries, which increases the complexity of the challenge. But I know that since you've been with ACCO brands, you have been engaged in several acquisitions, m&a activity. And I'd love to hear about how you select companies, how you acquire them, how you integrate them, those kinds of things.
Tom Tedford 1:39
Yeah Matt, what a great question. And certainly, it's a part of our DNA here at ACCO Brands. As you mentioned, I've been with the company, roughly 12 years and in those 12 years, we've done eight acquisitions, some sizable and transformative, others were more tuck in acquisitions. But each play an important role to our business. As you mentioned, we are geographically diverse, we have many brands, we're a company that's over 100 years old. We do business in over 100 countries, our top 12 brands represent roughly 75% of our sales. And many of those brands have been acquired. And it's important to ensure that when we go down a path of acquisition or inquiry to a potential target, that it fits our strategic and our financial requirements. Both are equally as important. As we think about businesses, it's it's not just simply the financial results that that business yields. But we have to make sure it fits into our long term strategy. We also think very carefully about how it fits and how its culture is consistent and fits with our culture. While those challenges sound daunting, we've gotten quite good at it here at the company in 2020. We did one in the midst of the pandemic. We did our diligence. throughout the pandemic, we had our first management meeting in 2019, for example, right before the pandemic hit. So we did all of our diligence throughout the pandemic, we closed and integrated candidly during the pandemic, which was quite a challenge, but we're really pleased with our power a business, we acquired that in December of 2020. It enabled us to enter into a faster growing, more consumer centric category, which is console gaming accessories. So we sell controllers, we sell gaming headsets, cases, charging cases, etc. So really an exciting business and exciting time for ACCO Brands as we continue down this journey. It's not without challenges, as you mentioned. But we have a great track record of identifying good companies that fit both financially and strategically into the business and that are accretive to our company culture, all of which are important.
Matt Waller 4:00
When you think about if I remember correctly, you said 12 brands or 75% of sales?
Tom Tedford 4:06
Matt Waller 4:07
Which isn't surprising, in some ways. I mean, not very many companies necessarily have that kind of situation. But I can see, you know, when it comes to the kinds of products you carry, there are so many unique needs that consumers have. And I would think that would be part of what drives that need to carry a broad assortment of brands and SKUs.
Tom Tedford 4:34
Yeah, you mentioned the consumer and, you know, our brands serve a purpose, right? They they enable students to learn more efficiently, right? They enable productivity in your work environment. They clean the air and the air that you breathe inside, right. They serve a purpose and a lot of the work that our brand teams do starts with the consumer making sure that our brands are positioned appropriately with the consumer making sure that our innovation is serving the consumers that our brands are purposed to serve. Making sure that we are meeting unmet needs, making sure that our value is there, our brands typically hold the number one or number two market share position in the categories in which they compete in. And it's important that we lead the category, right we broaden the category for our customers to make sure that we are leading on topics that are important to the consumer, whether that's sustainability, social issues, product quality, product, durability, all of the above in some instances, right with 12 brands and all the consumers that they serve. It's a complex product portfolio. And it's a complex business to manage. But we have a terrific team, a very, very solid team. We've been recognized Matt externally here locally in the Chicago area. The tribune annually ranks its top 100 places to work. And for the second year in a row ACCO brands was a member of that top 100 Crain's Business Journal here in Chicago, recognizes the Chicago area's most innovative companies. This year, we were ranked number 20 on that important list. So we are very proud of the work that we do. Our teams are great. They're terrific, right? We are truly the home of great brands built by great people. And it shows in the work that we do. While all of this sounds extraordinarily complex, with a great team, we're able to execute it quite well.
Matt Waller 6:43
That's great. Congratulations. You know, you mentioned console gaming accessories. And I'm not a gamer, so I don't know much about it. But my son in law likes these games a lot. And over the holidays, he brought over one of those VR headsets, you know, and we were playing golf and ping pong and all kinds of things. And it was it was really fun, you know. But I would think that and I could be wrong, because again, I don't know a lot about console gaming accessories. But I would think that that's it would probably leverage your competency and managing a wide assortment because I would imagine there's a wide assortment of console gaming accessories.
Tom Tedford 7:29
Yeah, you know, it's an interesting business, certainly one that we've learned more about over the last year, our business is actually quite efficient. We manage roughly 290 SKUs in the portfolio across all the different categories. So our sales per SKU, our turnover per SKU is actually quite high. And it is an interesting business because it requires partnerships that are unique to that category for us, right, we want to have licenses from our partners, Microsoft and Nintendo PlayStation, each of which we have licenses to sell with their endorsement, which is critically important. So while the SKU portfolio isn't particularly broad, it is different in terms of how we add value to the product. And that license or relationship is extraordinarily important. So it does kind of sound counterintuitive, in that we don't have a lot of skews that they haven't proliferated across the category, we've done a really good job of managing that. But it does require a different skill set for our business, one that we're learning, as we're integrating the business of Power A
Matt Waller 8:41
i would think and I don't know, but I would think that web three in the development of web three is going to probably drive even more products in that category be interesting to see.
Tom Tedford 8:54
Yeah, there's so many developments, technology developments that are happening every day that we pay close attention to, our most important metric that we track are consoles sold, right. And so as a new console is purchased, that is the time in which the consumer buys an accessory, an extra controller, a headset, for example. And so that's an important metric that we pay attention to obviously, that's outside of our control. But as new consoles are released, right, PlayStation five, for example, that's a great opportunity for us to grow our business as a result of that release as new gaming titles are released, great opportunities for us to attach product to those purchases. So it's a really interesting category. And we certainly are paying attention to disruptive technology. It's hard to predict exactly what's going to happen in the space. But there is a lot of interesting developments that we have our eye on.
Matt Waller 9:54
So you became president and chief operating officer effect of September 1 of 2021. And you have global responsibility, which sounds like a lot of responsibility since you operate in 100 countries. Would you talk a little bit about your transition your responsibilities, and even just the concept of managing 100 countries?
Tom Tedford 10:21
Yeah, another good question. Right. So that leadership transition has been a learning journey for me, we have a big business here in North America. I ran that for a number of years. And it had a lot of unique dynamics to it. And while those are fun to think about challenging to think about they are unique to North America, our businesses, is truly global. And when you think about the business cultures and other markets, the business dynamics and other markets, that customer concentration, the brands that we go to market with the language barriers, currency issues, there's a number of different challenges and opportunities to think about in this new role. All of those have been really interesting to me, I enjoy learning, I enjoy the challenge of learning. But I think finding those commonalities in our business and leveraging those are important. And we have a number of commonalities that we do leverage across the business, thinking about the consumer first, making sure that we have product on the shelf at the right time when the customer needs it, to sell to the consumer is critically important across the globe, our service levels to our customers are an opportunity for us managing the supply chain is an opportunity for us. So while the business is global, and my responsibility is certainly expanded, we have 6000 plus employees across the globe doing great work every day on behalf of our customers and consumers. And it's just a pleasure to learn more about the work that we do supporting each and candidly the successes that we've had across the business and celebrating those, there's many, many successes that we've had, that in this new role you get to see, you can leverage those learnings, you can apply those learnings in other markets. So we've just got a terrific business, a terrific team, and I'm enjoying this process. And we're starting to make some tweaks to things that we do not wholesale changes, but some tweaks to things we do. Both messaging, operational, strategic, as we kind of broaden my responsibility, we see opportunities and and we're excited about the the opportunity that that gives our employees, our customers, our consumers and our shareholders. We think all of those are equally important. And this role is giving me broader visibility to how we can influence them.
Matt Waller 12:58
Well, speaking of influencing, I'd like to know a little bit about your thoughts on leadership and strategic thinking, obviously, in your position, and many of your positions in your career leadership has been important. And so is strategy. Would you mind sharing a little bit of your thoughts around that?
Tom Tedford 13:15
Yeah, Matt, happy to. Leadership is is certainly an important element of what I do what we do in positions like I am in the company. It's nuanced, right? Leadership is nuanced. It's oftentimes finding alignment in a business is one of the most challenging things we as leaders have to do, finding that common purpose setting a vision that motivates our organization, making sure that our culture as a company is inclusive, that is considerate of all points of view, making sure that we have initiatives that embrace diversity and inclusion, making sure we have initiatives that organically grow sales that support our customers, right. Leadership is across many, many dimensions in a business. It's not simply just one thing. As we think about leadership here, we want to make sure that, you know, we are setting a compelling vision for our company for our employees, we are offering opportunities for advancement and development with our team, and we get the heart as well as the mind of our employees. And that's a challenge at times and has been particularly challenged throughout the pandemic. I worry I candidly stay up at night thinking about the impacts of the pandemic on our workforce and our team. You know, we have people working and they jobs and crazy hours and trying to balance all these requirements with their home life and managing their kids and managing you know all the dynamics that are at home while simultaneously trying to perform at work. And, you know, we worry about those things. We think about those things, we make sure that we are addressing those things. We get feedback, right. Another important element of leadership is getting feedback and making sure that we are adjusting our strategies and our our leadership messaging around the concerns of our employee base. We do an engagement survey that Korn Ferry assists us with and in that we measure engagement and enablement of our employee base and making sure that we're listening and addressing the challenges of the day to day work that our team struggles through making improvements, recognizing those challenges, is an element of leadership. So I know that's not a concise message. Leadership is a very complicated topic, if you allow it to be if you simplify it, right. If you get really clear about your vision, if you get really clear about your strategy, if you get really clear about the tactics that will deliver success, businesses thrive. And I think we've done that quite well.
Matt Waller 16:08
That's great, please share something about channel management, product line technology transitions, as well as trade wars and Pandemic related challenges. Anything you think would be interesting.
Tom Tedford 16:22
Well the environment that we compete in has certainly been dynamic. And I think the speed of change accelerated in 2017, when the 301 C tariffs were implemented here in the US, you know, that created massive disruptions in our supply chain and our cost basis. And we've had to respond accordingly, we have worked diligently to drive productivity in our supply chain and our manufacturing facilities. We've resourced product to non tariff countries, we've had to unfortunately, push through a number of price increases that reflect the reality of our cost basis. Since then, the pandemic then followed, which has been now going on its third calendar year, that has created a number of different challenges for our workforce, our factories, our partners, and now we've got supply chain disruptions, inflationary pressures, right, all of those things are true, the feedback that I would give you is respond quickly. You don't have to get it 100%. Right. In fact, you won't. The ability to respond quickly to the data that's presented to you and have trust in your team to make good business decisions is important. If you wait for that perfect moment, with the perfect data set to support your decisions, it will never happen. And we've done that quite well, we responded quickly to all these disruptions. And I think we've managed it very well, we put our employee safety at the forefront of the work that we do. Through the pandemic, we really proud and kept our factories in DC open. We've managed all the dynamics of masking, social distancing, all the disruptions with cluster breakouts of COVID, etc. We've done that very, very well. So you know, managing the disruptions in the macro environment, I would suggest just respond as quick as possible and don't get it 100% right. You never never will, get it as close to right as you can, and use that data set as quickly as possible. And then relative to managing the complex complexity of our brand portfolio, you break it down into each of the brands, and each brand serves a purpose for our business and each are important, not all are equal. And when we think about the brands that we categorize as drive brands, right, those tend to be the priority from an investment perspective. We measure the vitality of those brands, very carefully. Some of them are seasonal in nature, our five star business, right, we have to make sure that we are on shelf, when retailers are setting for back to school, we have to manage and we have to be on the forefront and lead the supply chain to ensure that our product is is there. You know, I once had a DMM at one of our customers tell me if five star doesn't win the season, I don't win the season. So that pressure that we feel to make sure that we're in stock and that our product is at the highest quality, it meets the needs of the consumer is of the utmost importance. So those 12 brands that I talked about, right? We make sure we're innovating, we make sure we're doing our research, we make sure that we're doing insight or we make sure that our brands are supported with the right investments, we make sure that our service levels on those brands are better than our competitors, right? All of those things working in harmony put us in a leadership position in the categories that we serve.
Matt Waller 20:07
Would you mind sharing a story from your time at the University of Arkansas?
Tom Tedford 20:12
The memories are distant now, when you said 1993. It's it's a bit alarming to think it's been that long. So Matt, I have many fond memories of my time in Fayetteville. I grew up in Arkansas. I was born in Little Rock. I was raised in Northwest Arkansas, a lot has changed obviously since then. But I think one of the things that I I struggled with early in my time in college was, what do I want to do? And I would imagine a number of students today are asking that very same question. What do I want to do? I started out as a biology major at the University of Arkansas, I didn't start out on the business track. And I had that moment where I really was struggling, this is probably not the career path that makes the most sense for me. And the University helped me get to the business college through consultation with my advisor, through consultation with people that I respected and trusted. They pointed me towards business as a degree, my advisor, candidly said, something that I think about frequently is, once you make that decision, figure out the path to get out as quickly as possible. I don't know that that was great advice at the time, but I listened to it. And I embraced not only the challenge of going into the college of business as a junior and trying to get out quickly. But also that learning journey, I just had so many terrific professors in so many terrific courses that I still think about today. And the second thing that I would tell you is the relationships that I have developed, or that I developed while at the university, I still speak to many former students at the University of Arkansas, who are friends and colleagues to this day, I work with some, you know, being a Razorback is a lifelong designation. And, you know, I go to industry events, and I see people and somehow, the University of Arkansas will come up. And we recognize that we both graduated from there. And it's just a great icebreaker and a great conversation starter. So, so many fond memories of my time there and so appreciative of my time there. You know, I look back and how fortunate I am and how many people have been involved to get me to the place that I am both personally and professionally. And I attribute many of that to the relationships and the people that I met during my time at the University of Arkansas.
Matt Waller 22:52
That's, that's inspiring. Thank you for sharing that. Tom, what advice do you have for students that are currently in the Walton College,
Tom Tedford 23:01
There are a couple things that that I would share with with students that I think about frequently. I've referenced it actually in our conversation today. And that's the, the the journey of learning. I would challenge the students just as I challenged myself is learn something new every day. What makes my job so enjoyable is the challenges it presents the opportunities it presents, for me to think about something new to learn something new, I would challenge your students to embrace that. It is just such a valuable life skill to have, learn something new every day. I really think that that would be a benefit to a young me, you know, 30 plus years ago hearing that right?
Matt Waller 23:52
That's so true. You know, it never ends. There's so many new things all the time, new ideas, new technologies, new laws and regulations, you've got to constantly be learning. Absolutely. So that was a great one. What's the other one?
Tom Tedford 24:12
Invest in relationships, your journey to success is going to be dependent on so many people over the duration of your career. And it's important to have people invest time in you early in your career. Get to know you get to know your capabilities. Get to know you as a person get to know you. As a business leader. It's so important to invest in relationships and you don't have to stay in contact with those people every single day for the rest of your life. But you want people in your network when you have a unique challenge or a unique opportunity that you can pick up the phone or drop them a note, have a cup of coffee, talk about the challenge, there just invaluable, right? I've learned so much from my network over my career, I would challenge them to do that. And the last thing I would suggest is, you can learn from failure, just as you can learn from success. So many things that I've learned over my career have either been experiences that I failed in, or watching others in a challenging environment, not necessarily handle it the best way, by always observe and always learn, and invest in relationships. That would be my, my feedback to students today.
Matt Waller 25:37
Well, I think that's really good advice. And I hope our students implement those ideas is, you know, I meet with lots of alumni. And I meet with lots of successful alumni. And I think that they implement those three things. It's very common across these people. But it's so hard to know when you're 18 or 22, you know, so thank you for sharing that with our students. I appreciate it. And, Tom, thank you for I know you've got a million things going on. So I appreciate you sacrificing some time to help our students. I really appreciate that.
Tom Tedford 26:17
Matt, my pleasure. And congratulations to the good work. You and your team are doing. It's really impressive. We are very proud of you and the Walton School of Business and wish you the best of success moving forward.
Matt Waller 26:29
On behalf of the Sam M Walton College of Business. I want to thank everyone for spending time with us for another engaging conversation. You can subscribe by going to your favorite podcast service and searching be epic. Be EP I C