Blog: John Gongos

In August of 1991, during a visit with my grandmother in Ashland, Ohio, I mentioned that I was starting my own Marketing Research company. After explaining the field of marketing research to her and the basics about what we do, she still seemed confused with the entire concept and asked, "But what is your product?"  

She was having difficulty understanding the fact that we were not selling a tangible product, but rather knowledge and advice that help other companies make better decisions. I thought about that moment when reflecting on the transformation that Michigan is currently experiencing. 

Our nation has undergone a major shift from an industrial society to an information society. While 20 years ago the financial news was dominated by stories about GM, Proctor & Gamble, IBM and General Electric, today’s news is dominated by stories about Google, Apple, Second Life and MySpace.      

I believe Michigan has just woken up and recognized this trend, but is still behind the rest of the nation. While our state will never be transformed into another Silicone Valley, the mix of manufacturing jobs relative to information and services is finally shifting. The better the incentives that government leaders can develop to attract these types of companies, the sooner Michigan will catch up to the rest of the nation. 

Don’t Get Caught Up In the Money! 

Another piece of great advice my grandmother shared with me that day that I will never forget was "Don’t get too caught up with the money!" While she was a very religious woman and was actually giving me personal guidance, it turned out to be a lasting business lesson.  Many people start a business for the wrong reason, or even after starting for the right reason, and then get caught up in chasing profits.   

I started my business because of my love for marketing research and the belief that I could build a better company than the one I was currently working with.  Instead of giving into greed, my pursuit has always been to build a great company, trusting that if I succeeded that money would come.   

This truly does affect the way you make decisions. Short-term decisions that might increase profit may not be in sync with your long-term vision of building a great company. 

As a company grows, you are inevitably faced with many more monetary decisions – the financial management of a company becomes more complex. It is critical that you make good financial decisions to keep the business healthy or you will not be able to accomplish your long-term goals. But when every decision begins to be dominated by the short-term bottom line, it becomes impossible to maintain a strong focus on the path to your vision. 

The same philosophy applies directly to career choices for young people who are trying to build a path for their future. Following college graduation, several of my classmates took high-paying sales jobs, realizing that five years later they really don’t even enjoy sales.   

The best advice that I give to young people is to follow your passion and become great at what you love. If you do this, you will be successful in the long run, no matter what field…and you will have plenty of money because of it. 

In my first post, I discussed the importance of attracting young talent to Michigan companies, and today will address one of the keys to keeping top talent. The February 4^th issue of Fortune Magazine ranks Google and Quicken Loans as the #1 and #2 "Best Companies to Work For" which is quite an honor.  As I read some of the detailed stories about those companies and others identified in the Top 100, I noticed that many of them credit their strong company culture and their core values for much of their success.  

I learned a lot about core values and their effect on company culture several years ago while embarking on a Strategic Planning Process with Troy Shrock of The CEO Advantage. Troy utilizes many of the concepts developed by James Collins who is a renowned expert on "Building Company Vision". 

Company culture is driven primarily by their existing core values. The most interesting thing I learned, however, is that the majority of companies do not really know what their core values are.  This may sound hard to believe, but according to James Collins, there is a common misunderstanding of core values.   

There is a huge difference between deciding what you want your core values to be and discovering what your core values are.  In developing core values, most companies make the mistake of identifying what they want them to be, which can lead to stating values that are not in fact "core".  In these same companies, if you walk around and talk with employees, many of them cannot tell you what their company core values are. 

Mars Exercise 

To discover our core values at Gongos Research, the facilitator of our strategic planning meeting took us through a Mars Exercise that was challenging, yet fun.  First we were forced to choose four employees who best embodied who we are as a company. We were then told to imagine sending these four people to Mars to telecommute for the week, letting the Martians observe them working. Finally, we discussed the common characteristics that the Martians observed among the four people working on their planet. 

Basically, this exercise forces you to examine your people and yourselves, and "discover" what your company core values really are. Typically a company has only a small set (3-5) of true core values. 

In our case, it took hours of discussion, but we narrowed in on Pride, Passion, Intelligence and Humanism as the common denominators of our people on Mars.  While discussing and defining these core values in more detail, we noticed that we could rearrange our core values and create an acronym that everyone in our company would always remember! 

Humanistic
Intelligent
Passionate
Pride 

Living Your Core Values 

While we love our core values, it is not because we feel they are better than the core values of other companies, but rather because we truly know what is core to our people and our company. Now we can better target our recruiting, while attracting people with similar values knowing they will be successful in our environment. 

We also took the time to examine people who were struggling in our company and determine whether it was a bad fit for them — perhaps they had different core values. Ironically enough, a few people that subsequently left our company flourished with their next company, likely because it was a better alignment of core values. 

Ultimately, our efforts gave rise to two major benefits: 

• Our success rate with new hires has dramatically increased.
• Our retention rate has improved as well (people enjoy working with other people who have similar values.)

There has been widespread discussion about Michigan companies turning to technology as a way to regain market leadership, hoping to eventually solve our economic woes. Advanced technology will not only bring new clients to our businesses, but will also attract the top young talent that I talked about in my first post. Young people entering the workforce have grown up with technology, are attracted to technology, and will many times judge the potential of a new job opportunity by how technologically savvy a firm is.  

Leveraging technology to gain competitive advantage has been a major focus in our company for the past six years and is one of our "Top Five" long-term goals. The most obvious benefit of leveraging technology is that it has allowed us to develop unique marketing research tools and services that are attractive to both our current clients and prospective new clients. 

Some of the new tools we have developed include:

• Online Research Communities
• Virtual Shopping (online model of store environment)
• Active Intercept (in-depth probing during Online Respondent Surveys)
• Virtual Focus Groups (online application of traditional focus groups using webcams)

In order to demonstrate our platform, test new features --and additionally, offer philanthropic research support to the SE Michigan community-- we created and funded an internal Online Community called Consumer Village.  It currently hosts over 12,000 consumers nationwide and over 1,200 Michiganders.  

I thought it would be interesting to throw a couple of questions about "living in Michigan" to our in-state community members to reflect on some of the hot topics in Michigan. 

Some of our results include: 

• Over 71 percent of the in-state members like (somewhat or very much) living in Michigan compared to only 17 percent that dislike living here (12 percent felt neutral). The most common things that people like about living in Michigan include:
  
• Being near family and friends
• Change of the seasons
• Plentiful lakes, rivers, and beaches
• Scenic nature and wildlife
• Outdoor activities such as hunting, fishing and hiking
• Watersports activities such as boating, swimming and canoeing

"I like Michigan because of the vast natural resources we have with the lakes, forests, and wetlands. I enjoy being outside in any season, even in the winter. It is wonderful to take a walk looking for little critter tracks or watch how the ice forms on the branches. Some of my best pictures were taken after a fresh snow and the sun glistening. In the summer our family enjoys boating on an inland lake." 

"Michigan offers its own unique synthesis of urban and rural cultures with most of the population concentrated in an east-west orientation from the Detroit metro area to Grand Rapids. In that zone is a combination of rust belt cities and Midwestern farms. North of that, Michigan quickly becomes more like Canada than Cleveland - scenic, wooded, and sparsely settled. That kind of diversity makse the Great Lakes State a great state. I never want for something to do."

Not surprisingly, the most common dislikes about living in Michigan centered around more current issues, such as the state of the economy, unemployment rate, housing market, and dependency on the automotive industry. 

A secondary theme emerged related to road conditions and construction in our state, and dealing with the winter conditions.

"What's wrong with Michigan is the job situation…with the auto industry causing a domino effect on all businesses. And if you are really small business (like the mom and pop stores) which I am one of, the economy means you are working for about $3/hour if you're lucky. And if you think it is possible to go out and get a "real" job that pays more, look around, there are none. Michigan is leading the way in the recession this country is in, and for the politicians and polling people who say we are not in a recession, let them live in Michigan!”

"The economy has been hit hard in Michigan - we have poor government leaders that seem to only be interested in lining their pockets instead of redirecting it to places that it could do some good to help the state. The auto industry has gotten greedy - unions and management have priced everything so high it allows the foreign imports to come in and take over the market. People are now leaving the state for better jobs. Students, my daughters included have left to be educated in another state and will not be back because of lack of employment. Yes we have considered moving - we cannot afford it because of the decline in house prices. We would love to stay - it depends on what happens within the next 2-3 years."

My biggest take-away from these insights is that the challenges Michigan is facing are temporary in nature (economy and job situation) and will someday be overcome. 

On the flip side, the most compelling reasons to live in Michigan (family, change of seasons, natural beauties, outdoor activities) are long-term blessings that cannot not be taken from us. 

The one question that I'm most frequently asked about our company has been: "How have you achieved this incredible growth and success in such a bad economy?" 

While I try to carefully explain different strategies that we have put into practice, such as strategic planning, leveraging technology and attracting top talent, I tend to forget the most important reason for our growth: our diversified client base.

The reason I tend to forget it is because we began implementing the strategy 16 years ago when we first started the company. Recognizing that being 100% dependent on automotive clients (which we were) was not a healthy long-term position, diversification became part of our business plan from Day 1. Sixteen years later, we have achieved over 30% growth each of the last two years (growing from $8.1 million in revenue to $13.2 million).

Our automotive business is still thriving (and actually growing), but currently represents only 25% of our total client mix. By aligning ourselves with major retail, service and consumer product clients like Best Buy, Hallmark, Dominos Pizza, U.S. Bank and Hershey’s, we are much more affected by the national economy than the Michigan economy.

While the concept of diversifying may not sound like a breakthrough idea, the ability to successfully achieve it is very difficult, and is an important part of our story. 

The first step in our diversification was having a good plan – being intentional with decision-making and understanding that every choice we make will impact our ability to broaden our client base. Obviously, the most challenging element of the plan was finding a way to attract non-automotive clients and having a strategy in place to grow them. 

Attracting non-automotive clients 

Our plan consisted of applying a "sought-after strategy," since each of us was a better market researcher than salesperson. There are many ways that you can become sought-after, but what worked for us was the following: 

• Conference presentations and speaking engagements
• Authoring "white papers" (an authoritative company reports) and other articles
• Press releases
• Innovative methodologies and technologies
• Maintaining loyal clients that hire us when transitioning to jobs with new companies

Ironically, one of the most effective ways for us to attract non-automotive clients was to leverage the same advanced technology and methodologies that we developed for automotive clients. Methods such as Voice of the Customer Research (popularized through the 1990’s with interviews, focus groups and surveys) and building online communities (more recently) became valuable tools and were unique offerings that we could provided to non-automotive clients.      

Growing non-automotive clients 

Our most difficult challenge was developing the courage to remove top-level talent from our largest account (an automotive company) and encouraging them to grow smaller, new non-automotive clients. It was a risky strategy but it ended up fueling much of our non-automotive growth.

It is fairly common for small companies to have their top-talent working on their largest and most important accounts. By reassigning key people, it certainly hurt our ability to compete for automotive business in the short-term. Looking back, it was a short-term sacrifice that was well worth it.   

Another integral part of our diversification plan was to engage in healthy conversations with automotive clients about the benefits to our company (and theirs) by broadening our horizons. The last thing we wanted them to believe was that we were trying to walk away from their business, or that they were not important to us. Instead, we stressed that diversification would make us a stronger, healthier company – one that will ultimately be a better research partner for them.

One of the common themes discussed in recent Metromode blogs is a concern about the number of talented young people leaving our state for better jobs. I want to reflect on my experience and observations in our company by addressing two myths that I have found, in fact, not to be true. 

Myth #1:  Young people do not want to stay in Michigan 

Based on my observation, most of the young people we interview for new positions would prefer to stay in Michigan, all else equal. 

The challenge is that for some students (graduating with average or below average qualifications), all else is not equal and it is tough to find good opportunities in many fields in Michigan. For the top students in our industry, however, all else is equal in that they have multiple opportunities here, as well as in other states if they so choose.   

Young people in Michigan are no different than young people in other states.  Many have grown up here, have a network of family and friends, and have learned to enjoy the many great things our state has to offer. Of the 12 offers that we have made in the past two years for entry-level positions, only one person has declined in order to take a position in another market. 

We have interviewed several of our new employees and I will share one opinion from a bright, young new employee who had many other options.

"I was born and raised a Michigander and left for 2 years to pursue my Masters from Georgetown in Washington, D.C., but nothing could keep me away.  Although I had multiple opportunities outside of Michigan (Chicago being one), I couldn’t imagine living anywhere else.  My outlook on life and attitude were defined by Michigan and the Midwest, and I am very proud of that."

A previous blogger here on Metromode made a very insightful comment, in that our best strategy to retain our young talent is keeping them "one by one." To accomplish this, we must provide career choices that are better than what they see from other companies in other states. We have found that many of the young graduates are looking for companies that are innovative, technology leaders, provide a fun culture, and have a respect for their work/life balance.    

Myth #2:  Top talent will not want to relocate to Michigan  

We have been in the fortunate position to have been growing rapidly the past two years, but with that came the difficulty in finding talent fast enough to support that growth. Historically, we only recruited in-state because we had this false notion that most people would not want to relocate to Michigan. Out of necessity, we have tested this theory and found that it is not the case, especially for young people who are beginning their careers. 

In many cases, we have been successful in hiring people who want to return to their roots and are looking for an opportunity in Michigan. In the past two years we hired a Marketing & PR Director and a Sr. Programmer from California, a Project Coordinator from the University of Georgia Masters program and a Sr. Project Coordinator from Georgetown. All of these people hoped to return to Michigan and we provided them with that opportunity. We have also hired a bright young woman from Germany, whose husband was transferred to Michigan by an automotive company. 

The most common situations where we find people who are not willing to relocate to Michigan is when they have strong roots elsewhere in terms of family, friends and their community, which is fully understandable. It is not a case of them avoiding Michigan, as much as not wanting to uproot their family. I believe this is another example of the inferiority complex that we have developed as Michiganders based on the negativity that currently surrounds us.