William G. Gisel Jr. joined Rich Products Corp. 30 years ago. He has ascended the leadership ranks as the Buffalo-based family-owned business has blossomed into a $2.9 billion food products company.
Gisel, 59, named Rich's chief executive officer in 2006, has just implemented a new global organizational structure, with five regional business units, that reflects Rich's reach. Gisel talked about Rich's international expansion and its sales outlook:
>Q: How has Rich grown into the company it has become?
A: I think our strategy can really be looked at in two different dimensions. One is a really strong belief that emanates from [chairman] Bob Rich Jr. that we need to be a diversified company. He is a fundamental believer in the value of diversification.
That manifests itself in terms of our product line. We have a very broad range of product categories that we're involved in. Most people in Buffalo really don't have a full appreciation for how many different things we're involved in from a food standpoint. We're the largest shrimp processor in the country. We're the largest meatball processor in the country. Other meat products, value-added bakery, desserts, appetizers, and so forth.
The other part of it is the geographic diversification. And [Bob Rich Jr.] really was the primary impetus back in the '80s for us to push hard to develop our international business. And that was at a time when the U.S. markets were growing very rapidly and a lot of other food companies were figuring, "This is good, we'll just ride the wave here." And I think now we're in a wonderful position because we're very well entrenched in many of these emerging markets, whereas many other U.S. food companies have not taken step one.
>Q: How do you make inroads in a new country?
A: There are no shortcuts. Our strategy as a company is around customer intimacy. We talk about this global structure or a global company -- it's really a misnomer, because the real strength of our strategy and our business is being really good at the local level. And that doesn't mean we bring Buffalo-envisioned products to a bakery in Mumbai or Monterrey or Singapore. It means we have to understand the specific requirements they have in Mumbai, Monterrey or Singapore and have the capabilities to meet those specific requirements. The other thing that we think is a really important element of our model is, that we believe very strongly in foreign nationals playing large roles in our business in these places. We do not have a big [expatriate] population in the company. Most of the top tier and second tier and third tier leaders and managers in these companies are local nationals who have grown up and developed in our business.
>Q: Where do the Buffalo offices fit in?
A: Buffalo is our global headquarters and it is the epicenter. All of the major functional groups have a corporate functional presence here in Buffalo. So whether it's research and development, finance, human resources, information technology, operations, et cetera, what their role is in this model is one, to set standards and define what best practices look like in any functional area. And then provide support out to any of these regions, whether it's a U.S. region or across the world.
The third thing, and perhaps the most important new role they play is, to facilitate more collaboration across the regions. Because really the essence of this structure is to be able to help the local organizations do a better job supporting their local customers. If we don't do that, then this global stuff is just nice cocktail party talk.
>Q: Will you add more jobs at the headquarters?
A: We can see almost categorically that as we grow as a company, and as these regions and other countries grow, that we attract more professionals to Buffalo to help fulfill this role of support and facilitation and development. So we've had several hundred new positions over the last number of years coming into these corporate functional areas to help us to support the global growth of the business.
>Q: What is your outlook on sales?
A: We talk about the advantages of this multinational footprint that we have. But two-thirds of our business is still in the United States and Canada, and still a critical marketplace for us is between the U.S. and Canada. We are seeing signs of resurgence in some of the key markets that we operate in in the U.S. and Canada, which is encouraging. It's fragile and it's not huge, but it feels a little bit like, OK, we've reached bottom we're starting to see a little comeback, whether it be in the restaurants and the food service segment or in some of these other areas.
Europe is a big variable. If Europe has a major calamity, that's going to have an implication directly on the U.S. marketplace, it's going to affect our economy and therefore our business here. But it's also going to have an impact on Asia, because markets like China rely pretty heavily on Europe as a destination for their products, so it will affect growth there, too.
>Q: Rich sells products in 100 countries. How does the company manage its presence in so many places?
A: Really the question comes down to, how do we maintain this consistent competitiveness across such a broad basis? It really comes down to three factors.
The first one, which is largely underappreciated in many parts of industry, is the family ownership. It allows us to maintain a longer-term perspective on the business, which is really critical, because we're not in a position where we're twisting the business to achieve certain quarterly results. We're looking at the flow of the business, along with the [Rich family] shareholders, over a longer period of time, with an eye toward maintaining consistent growth and vitality and strength.
The second is a consistent clear strategy that is all about being really close to local customers. And so we know that that trumps everything else, that local response and support.
That [third] part of this is, we have a belief that organizational excellence is the only sustainable competitive advantage. We can develop interesting new products all day long, and we do, we can come up with new ideas and technologies. But over time those things can be matched, copied, what have you. No one can really match our organizational capabilities.