Scozzafava ready to roll
Ray Allegrezza -- Furniture Today, July 23, 2007
St. Louis — A little over a month ago, Ralph Scozzafava, a former executive with gum and candy maker Wrigley, joined Furniture Brands International as vice chairman and CEO-designate. To get a sense of who he is and where he sees FBI headed, Furniture/Today Editor-in-Chief Ray Allegrezza conducted an exclusive interview with Scozzafava.
What follows are major excerpts from that interview.
Furniture/Today: Tell me a bit about your professional history and how that will help you at FBI.
Scozzafava: Just about all of my background has been in consumer products. I've been with Johnson & Johnson, the Clorox Co., Campbell Soup and Wrigley. In each case, I came up through the sales function, which gave me a wonderful opportunity to work with retailers, wholesalers and distributors. I'm a retail animal and love that business.
Gradually, I got more involved in marketing, brand management and brand creations. Over time, I held general manager positions, which allowed me to also understand manufacturing, inventory and logistics. I've also had more than three years of global responsibilities. At Wrigley, for example, I managed a $5 billion business that involved 10,000 employees and spanned 180 countries.
The end result is that I learned how to understand consumer needs and how to translate those needs into great products. I also learned what it takes to motivate and energize an organization.
FT: As you've grown in your career, what kind of manager have you evolved into? How would you describe your management style?
Scozzafava: I guess I would describe myself as a person of the people. If I was a political candidate, I think I would be perceived as a grass-roots candidate.
FT: Why do you say that?
Scozzafava: Only because I started at the bottom and worked my way up, in part, by doing all the jobs you have to do along the way. I think people appreciate that.
FT: Before interviewing for your current position at FBI, how much did you know about the company or its brands?
Scozzafava: Speaking as a consumer, I knew that FBI had great brands and that was very powerful to me. In fact, if it had not been for the strength of those brands, I might not have taken the first step in the interview process. While I was aware of the brands, I was not clear on how they were different, which may be a tip-off of some of the work we have to do here.
FT: What did you learn about the home furnishings industry as you did your due diligence before accepting the position with FBI?
Scozzafava: The first thing, and this was a positive, was how big the industry is. When you are talking about an $80 billion business, that's a monster.
FT: What else?
Scozzafava: I guess I was somewhat surprised at how fragmented the industry is. Even though this industry has some very big retailers and suppliers, you don't have anybody that, for example, has a 30% share of the market.
I also like the fact that, in many ways, this business is similar to the industries I've been in.
Even so, the trap for me is that everything is not the same. In other words, I have to keep listening and learning and never make the mistake of going on autopilot.
FT: As you did your homework, what did you learn about Furniture Brands?
Scozzafava: I learned that FBI has great opportunities moving forward. Because it is a public company, much of what you hear on the news is centered on financials, corporate structure and the like. I got too much of that. What I learned is that this company is rich in good, smart, hardworking people with tremendous know-how.
FT: Some would say that FBI waited too long to aggressively begin sourcing offshore. What's your take?
Scozzafava: Having been on board for just a month, I honestly can't say. However, having seen this in other industries, I can't say that all the changes in sourcing and moving products offshore surprised me. What did surprise me was how rapidly it happened. You know, it's always easy to say a company or an industry waited too long to source offshore. I've heard that from people in the auto industry, consumer electronics and the like.
But keep in mind that you are always a lot smarter after you've seen the movie and know the ending. And by the same token, you never hear much about the guys that got taken out being the first ones to storm the beach.
I do know this: If you have good products, good brands and good people, you can always compete.
FT: What's your perception of the company now that you are on board?
Scozzafava: I had heard that they had some good people. But now that I am here, I can honestly say that everyone I've met, from Mickey Holliman on down, has been a quality act. And speaking of Mickey, I am fortunate to have him, one of the icons of the business, as a mentor.
FT: What do you see as FBI's major strengths, and how will you maximize them?
Scozzafava: We have great know-how. We know how to make great products. We have a committed team. We have strong brands and have the scale where we can bring resources to bear to grow the category.
FT: What about challenges?
Scozzafava: Ray, in my mind, some of the challenges feel much like opportunities. For example, it's easy to say we make great products that are relevant. However, a great product 10 years ago may not be a great product today or tomorrow. We have to be the best partners and the best solution-leaders in areas such as products, sales support, knowledge of consumers, logistics and so on. We have to bring all of that to them on a consistent basis.
FT: What role do you see FBI's branded stores playing in terms of the future success of the corporation?
Scozzafava: Honestly, it is too soon for me to have a firm opinion on that.
FT: At least on paper, our industry should be doing better than it is. Unemployment is relatively low, we've adjusted to the price of gas, and interest rates are not prohibitive. Why are we stuck in the mud?
Scozzafava: This may be a knee-jerk response, but I think as an industry, we need to do more marketing to the consumer. We are offering her great products at terrific values. We are in the lifestyle business.
Think about it: Someone may not bat an eye at spending $500 or more for a business suit, but balk at spending $1,200 for a bedroom suite. To me, that suggests an industry that needs to do a better job communicating to the consumer.
FT: What do we need to do to change that?
Scozzafava: Part of it involves a different way of thinking at retail. In my mind, the first question a true merchant asks is, "What can I sell this for?" However, too often, the first question many retailers ask is, "How much can I buy this for?"
Take a look at the iPod as a good example of how this can and should work. That device, because Apple has created the right perception, sells all over for $199 and up. And yet everyone knows it doesn't cost anywhere near that to produce.
FT: As someone with a great background in consumer goods, are we simply being out-marketed?
Scozzafava: Yes. Other industries, such as the auto and consumer electronics industries, are connecting emotionally with the consumer. They have done a great job of driving home the value of what they sell as well as creating a strong sense of urgency for those goods. They are good merchants that have been clever in creating demand. We can't just sell price. The real measure of growth is not just unit sales. It is also margin.
FT: What are your short-term goals?
Scozzafava: Personally, my short-term goal is to learn everything I can about the business from everybody I can.
For the company, I would say our short-term goals involve getting back to basics, focusing on great products, strengthening our supply chain, continuing to build strong partnerships and keeping the company energized.
FT: What about long-term objectives?
Scozzafava: FBI wants to be a player that helps the industry become healthy, in part, by helping create growth. A year from now I would love to be talking to you about how well the industry is doing.
FT: Last, but not least: If you could only change one thing about the industry, what would it be?
Scozzafava: I think as an industry, we are playing defense. You hear how tough it is out there, how the other team has the ball. I'd love for the industry to have the ball in its hands. Just playing defense is not fun, and it's not how you win. So, as an industry, I'd really love to see us on offense.
