Taking on the World

Tupperware CEO Rick Goings runs a billion-dollar company whose familiar products and brand have worldwide recognition. His formula for winning over the world market is straightforward: Understand your global market, and utilize every potential channel to distribute your product on an international scale.
Taking on the World

One of the challenges businesses and business schools face today is how to craft a global outlook—and a global marketing strategy. One company that has successfully achieved a worldwide presence is Tupperware Corporation of Orlando, Florida, which does $1.2 billion in sales annually in more than 100 countries. For Tupperware chairman Rick Goings, CEO of the company since 1997, exploiting distribution channels is one of the most important components of a global marketing plan.

Goings, who will also be a keynote speaker at AACSB International’s 2002 Annual Meeting in Chicago, has strong convictions about the qualities today’s executives need to become leaders of international corporations. In a recent interview, he also offered perspectives on what business schools can do to produce those kinds of leaders.

In the U.S., for example, many executives have had limited exposure to other cultures and languages because of the massive size and resources of this country. But if we want to build global managers, we’ve got to think more strategically about their career paths very early on.

How can today’s managers be better prepared to become global business leaders? What kinds of experiences should they seek and what kind of training should they undertake?
Global leaders need global exposure and experience. In the U.S., for example, many executives have had limited exposure to other cultures and languages because of the massive size and resources of this country. But if we want to build global managers, we’ve got to think more strategically about their career paths very early on.

Often I recommend starting junior executives on career paths that give them international exposure.Many start out in the internal audit department, where the staff is away from the home office about 70 percent of the time. Their internal audit assignments typically require them to be out of the office for two or three weeks consecutively. These young executives are usually in their mid-20s, and often they’re not married—which can sometimes help to make it a more manageable lifestyle. After they’ve worked in internal audit for a couple of years, we transfer them into one of the business units. At that point, we can move them into different roles and start giving them cross-functional exposure. That’s just one path—they can get international experience and exposure through marketing and sales departments just as well.

It’s the same kind of training that the great entertainers experience, whether they’re rock stars or stand-up comics. Country music singer Garth Brooks performed in quite a few bars and truck stops along the way, where people sometimes threw beer cans at him; but now he’s at Carnegie Hall. It’s the same kind of thing in business. The lesson is to give people key experiences when they’re junior.

How can business schools better prepare students to become global leaders?
Business schools must create environments that make their students attractive to companies. This puts the burden on business schools to create many more experiences for their students—through practicums, for example. That’s where the whole approach might need to be rethought. Let’s say that there’s a typical two-year business school program. Maybe one-third of that time should be spent on some practicum. The first third should be spent getting students to understand strategy, the financial levers, what competitive advantage is all about. Then, bam! Put them into an eight-month practicum where 70 percent of their time is spent working. Then for the last eight months, put them back into the business school environment.

I still believe that most business schools aren’t doing it right. I know everybody’s experimenting with executive programs and weekend programs. Well, fine—it’s about time! What’s really needed, though, is exposure to global experiences.

You’ve mentioned that you expect a shift in the global centers of the world, although you anticipate that New York will still be one of them. What other parts of the world should business school leaders be watching?
Just because of the population base, I think we’ll see more happening in the Far East. I think Shanghai and Hong Kong will be playing more dominant roles. Three of the new companies we’ve opened are in China, Indonesia, and India; those three countries hold 47 percent of the world’s population. You look at those countries and say, “Things are going to shift.”

I also think we’ll see a resurgence of European global centers. My belief is that the focus is more likely to be London, rather than Paris, Brussels, or Frankfurt.

Business schools today emphasize the importance of global positioning. What’s the best way for a business to take its product into an international market?
At Tupperware, we determine our approach to a particular market by going in with people from the area. For example, a European is the head of our European business. When we launched our business in Poland, we took people from our German office who were, in fact, Polish. It was easy to say to them, “OK, how do we adapt and adopt here in Poland?” We’re always dealing from an inside-out approach with regard to local knowledge of culture. It’s one of our competitive advantages.

You’ve said that one of the keys to global success in business is understanding channels of distribution. Can you talk about how distribution channels must be complementary?
It used to be that everything was focused on the product. Now, there are so many channels of distribution that companies not only must focus on their products, but also on their channel strategies. They have to control their channels and have multiple channels.

For example, about a third of the population in the U.S. likes to go to Tupperware parties. Other people like to buy over Amazon.com. We know that the average Amazon.com customer makes $100,000 a year. That’s not the person who usually goes to a home party. We’ve decided to attack channels and have them co-exist so that consumers of all groups have access to our products. It could be two percent here and four percent there, but all of a sudden that’s a big number.

Technology allows me to keep more plates spinning in a broader area and still have a life.

You’ve added other distribution channels, such as the Home Shopping Network and Internet sales. How have you made these distribution channels complement the efforts of your home-based salespeople, instead of offering them competition?
How you solve the channel conflict is one of the major things business school faculty are talking about now. You take care of channel conflict by sharing.

For every one of our distribution channels, we made our sales force our partners. If a customer calls the Home Shopping Network and places an order, guess what? Part of the commission is split between all our distributors. They say, “Man, that’s a new income source.” Every time we come up with a new approach, they know they’re our partners in that approach.

In the movie “The Fugitive,” the character played by Tommy Lee Jones is tracking down Harrison Ford’s character for killing his wife. In one scene, Harrison turns to Tommy Lee and says, “You don’t understand! I didn’t kill my wife!” And Tommy Lee says, “I don’t care.” We had to create a strategy so that whether the consumer decided to buy a product on the Home Shopping Network, on the Internet, at a kiosk in a mall, or at a Tupperware party, our local distributor in Kansas City would say, “I don’t care—just so she buys it.” And we did that by giving that distributor a piece of the action no matter how the product is sold.

In the management education field, technology has changed the way courses are designed and delivered. How has technology changed the working life of the global executive?
I’m sitting here with voice mail and e-mail right beside me, a Blackberry on my body, and teleconferencing capabilities on my desk. These are incredible enablers. Technology allows me to keep more plates spinning in a broader area and still have a life. Tomorrow I’m playing in a golf tournament. I know that if something critical happens while I’m out of the office, my Blackberry will buzz.

The Internet and other forms of technology have destroyed most of the barriers to international business, which is the good news. The bad news is that now any business can enter the global market. What should business schools teach about how to stay internationally competitive today?
It used to be that to have a competitive advantage, you had to be a low-cost supplier, you had to have a product differentiation, or you had to be the only one in the market. Now, there are more and more competitors who also understand low cost and product differentiation. And these competitors are present—they’ve showed up. In the past, a lot of companies used to win by forfeit because they were the only game in town. Today’s corporations, however, have to deal with a whole new set of dynamics. They have to have a 360-degree view of the whole market.