Episode 286: Sales Leadership at Scale with Steve Cuthbert, CRO SanMar

Thanks for joining us today, my friend.

I'm glad to be here.

Your background, as I mentioned in the intro of VP sales for North Face and Polartech is fascinating. I mean, where do you see strong comparisons to like North Face and Sanmar?

I think probably the biggest similarity between the two companies would be the passion that each of them have different passion but certainly rises to the top. You know, at the North Face there was a passion for protecting the outdoors and protecting the environment and bringing great product to the marketplace and being the global brand that it is. And that was kind of your North Star on a daily basis. And the folks that were there were passionate about that. That was their background. They just loved it, loved that day in and day out. And then you shift over to Samur and the passion is there to do, to do good in the world and to, you know, protect the environment and all those things. But it's also about doing good by our customers and doing good by our internal customers and our team and our team members, the communities that we manufacture in and making sure that we're being good partners to them and providing sustainable living in an environment that they can be in. So they're, they're. The passion is different, but it's certainly the, the strength of it is very similar between the two companies, for sure.

Yeah, yeah. With over 2 billion in sales. I mean, you in your role, Steve, you're leading one of the most successful sales teams in North America. I mean, what do you think? I'm really curious because you're talking to an audience of entrepreneurs. You're talking audience of entrepreneurs who are running businesses of all sizes. They might be running $50 million companies, they might be running $5 million companies, but as far as the distributor side, and of course there's 30% of the audience is suppliers too. What do you think are the most important for a sales leader at your scale to, to understand about sales growth? In other words, how do you think about sales? I know it's a very broad question.

It's a good question. And it's a little different than maybe what I'm used to being on the retail side. And that is, you know, for us here at SAMR and me as leader, it, this might sound weird in saying it, but the priority for us is not the sales that we receive. Now that doesn't mean as a salesperson, you don't want to go out and grow the business and have good revenue. I mean, that's understood. But we can't do that unless our customers are successful and their sales are successful. So for sales growth for us as a team is about the services that we provide to the customers and how we can support them in their business. Because we could have a campaign, we want to go sell more T shirts in a month, but if we don't provide them with the tools and the service and the inventory and the customer support and all those things, and it's really a fruitless exercise. And so for us, it's all about what can we do to service the customer from all aspects of the company. And if we, if we do that, we believe and understand and know that the sales will come. And so for us, it's not about waking up and saying, hey, we need to sell more T shirts today. It's more about how do we. How do we support our customers so they can be successful in their job? And it was, it's a, it was a certainly departure from my past experience because we were selling the retail and showing up, trying to understand how our brand would show up and trying to drive retail sales. It's just a different way of thinking. We're here. It is about how can we support our customers and making sure that they're. They're getting what they need for us so that they can be successful.

Has that been the biggest distinction between your previous life in predominantly retail and then working through a client partner like a distributor or printer of some kind? That's the biggest distinction.

We're one step removed. We're one further step removed from the end customer. And it's, it's there that we really need to. Where we identify as. We really need to support the distributor, the distributor needs to. Will be successful with their customers and who the end consumer is. But for us, we need to make sure that our consumer or our customer, that distributor has what they need to go out and be successful. Yeah, they're the ones out hunting the business with their customers. And we need to make sure that we're providing all the tools that we possibly can for them to be successful.

Yeah. Does that mean there's like a split between. Your sales team then has to understand who their customer's customer is on one hand, and then on the other hand, they also just have to make sure they're providing the right tools to the distributors to go sell, since you're. So you're selling through these channels.

Yeah, the. I think one of the luxuries or benefits that we have with our sales team is that long, deep relationships. For the most part, we have new customers come in or new salespeople that come in obviously, but for the most part we have a sales team that has long, deep relationships within their territory in the marketplace. And that alignment that's there, it's not so much they have to now know, they already almost know what the customers need, what those distributors need. Each distributor has a different need from one another. And so I'm so proud to be able to lead a team that has such deep relationships and the impact that they can have on our customers. Because yes, it is important that they understand what the distributor needs to be in front of their customer. Sometimes we join them on those end user sales calls, depending on what it is, but for the most part is like, hey, what do you have going on? What do you need and how can we support you in that effort?

Yeah, speaking of sanmar's integration with commonsku is so critical for our future, not just for our community, but also the entire digital transformation. What it means as an incredible wave of innovation for the industry at large. And how do you see Common SKU and sanmar? The Common SKU and Sanmar integration enabling better and stronger sales for San Mar specifically?

Yeah, so maybe I would go back to my previous comment and again, it's about us providing services to our customer that make it easier tools for them so that it can be more successful. And so we obviously see the Common SKU and the SAMR integration as part of that. So you know, before somebody would have to go to Common sku, they would do it, they would do a, a presentation and would get ready and then they would have an order and they have to back out of an order, go into samr whoever, however they were integrated with SAMR previously and place that order. That's inefficient. And so the more efficiencies that we can build for our customers, that obviously is something we want to do. And so clearly there is an ease of working through the customer or the distributors already in the CommonSCU platform. Why create a step where they now need to exit and go orders from somewhere else? And so for us, that ease of doing business is something that we look for those solutions all the time. And this is just one, a perfect example of that.

The EPO integration will present new opportunities for us to innovate faster. And just like you said, both, both Sanmar, the alleviation for Sanmar in terms of probably OPS burden and the speed that a distributor then can free up time to go focus on other things. From a sales perspective, what's the biggest challenge in OPER opportunity ahead as we look at EPO Integration specifically?

That's a good question. I don't know if I have seen challenges right now. I think the challenge that we identified was that, you know, we were causing another step for our, our common customer to go through that didn't, wasn't as efficient as it possibly could. So the opportunity for us is, you know, common SKU and Sam are working closer together to take that barrier or that step away to allow them to free up opportunities for them. Listen, the more that they can be out selling or engaging with their customer and less time on the back office things, that's where the secret sauce is. And so when you can take that noise out of that process, allow them to be out in front of their customers, that's where we all succeed in that kind of scenario.

Yeah. And for distributors, that puts the joy back in the business for sure. That's the thing we hear a lot. Let's talk a little bit about supply chain and inventory because I've heard from other leaders in our industry that inventory is a big challenge this year, meaning post Covid, many suppliers are sitting on a ton of inventory. And that ties up capital and could have downstream effects. Does an oversaturation of inventory pose a challenge for you and your team or even distributors downstream?

So it's a, it's a, it's an interesting situation I think, that we're in. So when you look back 51, 52 years ago, when Marty Lot started the company, he built the company based on having inventory to service our customers. It's a very unique model. It's one that was foreign to coming in from, you know, a retail side where you're trying to push inventory away. This is an, this is a scenario where, hey, we want inventory in house so we can service our customers. And we know that over the last couple of years we fell short to where this, on what our expectations are to service our customers because we didn't have the inventory to service their needs. And so we've spent a lot of time in the last, like everybody else, 18, 24 months driving that inventory back up to a level that we're, that we're, that we're pleased with. There are categories or areas, Bobby, that were more heavy than others where there are still some areas that we're a little short on that we're trying to catch up to. Yeah, we probably have more than we would normally have. But one of the things that we looked at, we went into 20, 23, one of the goals that we had as a company, and, you know, not knowing what 2023, from a macroeconomic perspective, present is going to present to us was to prepare for any rebound that might come in 2024. And so we knew 2023 would be rebuilding. We knew that it may cause for some elevated inventory levels for us. It was something that we were expecting and forecasting and so.

Yeah.

Is it, Is it uncomfortable?

No.

Would we like to be less sure? But at the same time, we're excited to be able to support our customers when we do believe, um, the business will recover to the levels everybody expects it will.

Yeah. And that's a great perspective. Going back to Marty's original vision, having inventory available, I know as a distributor, and we were spending around a quarter million with San Mar a year. And that reliability was just so solid. And it's a great perspective because it's like, this is a good problem to

have if we got that kind of problem. It is. I mean, it presents challenges on the other, on the, on the financial side that we're working through. But at the end of the day, you know, Bobby, there were many cases over, and this isn't just for us. It happened in the industry, but there were a lot of cases where you'd have a distributor that would go out and they would sell something and then they would come back and they place the order and the inventory would be gone.

Yeah.

So all the work that they just created in front of their customer doesn't put them in a great light in front of their customer. And so the reliability was. Is such an important thing for us that. Yeah, we would rather be a little heavy, but be reliable to our customers.

Yeah.

And we know that we'll work through it.

Has the product category or SKU count changed dramatically this year or are you making big changes to it next year?

No, if. If anything, we're actually, we're adding styles. I think that goes to the rebound, to be honest with you. I mean.

Yeah.

You know, from a style perspective, in 2023, we.

We probably.

We probably added around 250 new styles to the line. Now SKUs will obviously grow dramatically from there, but from a style perspective, we have a fair amount that we can go out there and present to our customer. And new. And it's in all categories, our retail brands. It's in our own private label brands. And so we're really excited about the launches that we've had both in spring and then what we just launched for fall.

Wow, that's significant.

It is. It is, yes.

Have there been any surprises in the sales numbers this year in terms of either category, product leaders in terms of category or anything else that has surprised you year to date?

No, I would say that the basics business is certainly gaining strength again. I think over the previous years it was maybe it was. It fluctuated because of the lack of inventory. So we're really pleased to see that there retail brands has been. Has always been good for us and for. And you know we need to make sure that we continue to bring newness in that because I'll speak just from you know, experience if you know, if somebody had bought a North face product in 2022 and 2023, they may want something different in 2024. So our team is constantly looking for us to bring there so that there's another reason to buy. And so obviously we would like them to buy from us. And so for us it's just making sure we're bringing the variety the customer's expecting from Sanmar.

Yeah. You had such high respect going into Sanmar coming from North Face and Sanmar is a household name to everyone listening and Sanmar has received tons of accolades not only in the industry but outside of it. The Wall Street Journal recognized as a 2022 best managed company which I think that's the second year in a row alongside companies like Apple and Microsoft. What incredible honor.

Yeah.

What is it about Sanmar that you wish people knew that gets most often overlooked?

I think, I think you would be unique or what's. What's interesting is that we. Those accolades come and we might do a high five and we just move on. It's not something that we dwell on and I think that's probably what makes the secret sauce behind the company yet we're very proud of those things. We're very proud of the team and, and what we did and we celebrate internally but we don't take that so seriously that we don't. We try not to take the approach that we're pounding our chest and how great we are because I think once you get there you're in a dangerous territory. And so yeah we appreciate confirms everything that we believe in and we're trying to do internally and so that, that, that confirmation of what you're doing matters and it works. But at the same time it wasn't a goal that we became a Wall Street Journal award winner like it was. That wasn't. It happened. And I think if we try to aspire to do those things then more than likely that may. May not. You may not have the same result.

Yeah. Someone once told me that when those accolades come, it's more ratification of values than it is reaching for them. So that.

And that's clearly the case. We're very proud of him and we're not going to. I mean, we're certainly, you know, it definitely is recognized within the company, but it's not something that drives us every day.

Yeah. A lot of, you know, Steve, in your role, it's fascinating that you're managing such a large, complex sales organization. So I'm really curious about Steve and how you operate in the world because who your mentors are and how you think as a salesperson. So both your grandfathers served in the war, and they. They sound like such an influence on you, and I know you've been reading about that recently. How has their story impacted the way you think about life? What have you learned from their experience that has encouraged you?

Yeah, it's. It's in a. I. I'm certainly very proud of the path that my grandfathers took. They both fought war, World War II in the Pacific. And you know, as I look back, I mean, they were kids. They were 19, 20, 21 years old going in, into this. And. And I, at 19 and 20, could never fathom that being the environment that I would be in. And so I think just understanding the perseverance at a very young age, they didn't have a choice. They were thrown in this and they had to persevere. And it drove them, when they got out of the service, to be very successful, not college educated, but in both regards, took careers that became very successful. And. And I just shape them as being great humans. And so I think for me, what it tells me and that is it's okay to put yourself in a place where you're uncomfortable. I think that's how you grow as a person and what drives you each day. It's hard to do that. We live in a world of convenience and how do we make things easier for us on a daily basis. And sometimes you need to be reminded, humbly sometimes where it's not always easy and. And going through those challenges actually shapes you into a better person. So I guess what I've tried to understand or try to do is like, not be afraid or understand that, you know, hard things happen and how you grow is how you grind through those things and get to the other side.

Yeah. What do you enjoy doing when you're not working?

So I have certainly spent time with my family. I have a son who is a second year in college, and I have another one or another son who's a senior in high school. And so my wife and I can see the days with them becoming limited. And so we try to sponge up as much as that as we possibly can. From, from an activity standpoint, when I was with the North Face, you know, outdoors were. Were pretty key to our culture. And so I do a lot of skiing in the. In the winter time, and I do it with the family. I mean, it's a great life sport. I was fortunate to kind of get them in there early so the four of us could do it as a. As a family for the rest of our lives, which has been great. And I play a lot of golf in the summer, and so again with the kids and my wife, and so we have a really great time. It's. But getting outside and doing that, it's been. It's been a lot of fun.

I know North Face is obviously a big influence. Are there other brands or mentors that you follow that inspire you?

Yeah, it's an interesting question.

I don't.

I don't know if there is. Not that I kind of blow the wind in terms of brands that I follow or that I inspire me, because I think there are a lot of brands that are out there that we use in daily as from Apple to Google. I mean, just. Just the, the innovation that they continue to drive is certainly something that I, I don't. I certainly aware of for me and maybe because, you know, I just turned 50 and you know, you think about life and health and all those things, and I just think that physical, personal achievements that people do. I've just grown. Have it maybe a stronger appreciation as I've gotten older that man, it was. It's incredible what people can do nowadays. And the, and the envelopes that get pushed on a daily basis. I get inspiration from that. And it ranges from anywhere from I still follow all the athletes at the North Face to watching the US Open on TV last night, watching these folks play, it's just. It's an amazing thing to watch. And understanding the preparation and the dedication and the grind and the work, all the things that happen behind it, I think are really. That's inspirational. Inspirational to me, for sure. Yeah.

Well, speaking of Steve, I mean, you've. You've had a pretty amazing career and you're talking to an audience of entrepreneurs and salespeople. And as you look back on your own experience, how would you encourage a young salesperson today? You do this all the time, probably in your role. That. How as they consider growing their business, facing opportunities. If you had coffee with them just a few minutes to share a couple of important life lessons that you've learned along the way. What would those be?

I think the one of the biggest things that I've tried to do, and again, I'm not perfect at it, but you know, we were given two ears in one mouth for a reason and to really understand, you know, as salespeople, we are hunters by our nature. We want to go out and get after it and sell and do all those things. And sometimes it's about the sale versus maybe the experience. And I think what I found over the years is that when I spend more time understanding what a customer is going through versus coming through, hey, I have a mission to sell something to this person. I think ultimately you become more successful because of the understanding is where you find the opportunities. Yeah, we're goal driven and we want to go do certain things, but for me it is really about putting yourself out there and understanding what, what's going on and listening to your customer. The other thing I would say is, and that is learn how to be a good communicator. Spend some time in understanding, like writing, just the basic writing. We get away from it speaking. Go to a public speaking class, learn how to communicate. I think once you can do that, that is something that's really powerful. I was fortunate when I was in grad school that we focus a lot on that, on writing and presentations and it has really helped me in my career. And so that would be something I would, I would say, I mean, my son and I, we talk about what he wants to study and all those things and he's landed on communications. I said, listen, man, if you can, if you can write and you can speak and you can have connections with people, there's. Your world is somewhat open.

Right?

And, and so that's okay. And so, and he's a good writer and he's a good speaker, so it fits him. But that would be where I would tell people to maybe just pay attention. Couldn't agree more.

Steve, thanks for taking time out of your busy schedule right before the holiday to visit with us. I know it's probably been a crazy week as we head into fall and everything. And thanks on behalf of the Commons Q team for the amazing work that Sanmar has been doing along with our own development team. And thanks for being here today.

Thanks, Bobby. Appreciate it. Great talking with you. Take care of.