Study Different Models: Interview with Business Strategist Thomas Michael Hogg

I recently went one on one with Thomas Michael Hogg, author of Profitable Growth Strategy. Thomas has been an advisor to PepsiCo, Adidas, Daimler, Campbell’s Soup, Johnson Controls, Bulkmatic, among other multinational companies, SMEs and nonprofit organizations.

Adam: Thanks again for taking the time to share your advice. First things first, though, I am sure readers would love to learn more about you. How did you get here? What experiences, failures, setbacks or challenges have been most instrumental to your growth?

Thomas: Growth is a roller-coaster at some point but trying to serve others with passion and making the people around you more successful should be our goals in the first place. Enjoying this journey meant, for me, living and working in several countries like Germany, Switzerland, the US, Mexico, and Poland. Most important for me were having demanding and wise mentors such as my former boss Guenter Pfau at Adidas, who stays, until today, by my side for key decision making. The challenge to learn new languages and cultures gives you a different perspective and point of view. At the end of the day, striving for quality and delivering value to others in an ethical way are decisive ingredients for a constant high-performance. Furthermore, thinking like an athlete strengthens your mindset. But as a matter of fact you need to set your priorities not only in your professional life. First and foremost, you need to be a good person, husband, father, and friend. People will and want to connect with you not because of your CV. They connect with you when they know how you think and what you worry about. As my former professor Andrew Isaac's from Berkeley Haas School of Business says: "You are what you worry about."

Adam: What are the key takeaways from your book? What would you like all readers to understand?

Thomas: There are different business models out there. It is very interesting to see the agility of the Chinese companies and actually, in Germany, we admire the US companies for their outstanding marketing capabilities. My book is about the German business model that focuses more on quality, innovation, and niches. Highest quality and functional innovation draws a natural demand for your products and services. This is why there are more than 1500 German companies which lead their market. There is no other country in the world with more market leaders in different industries and sectors. Strategy focus and healthy finances are two more ingredientes of the German way of doing business. Because of this, many German companies are withstanding the current crisis better than their international counterparts. As a company owner or CEO, you need to invest time in designing a strategy roadmap on how to lead and stay relevant in your niche. Many decision makers are trapped in daily business and incoming operative problems, mails, social media and non-strategic tasks. Therefore, we defined a 7-step profitable growth framework including areas of ''Focus, Quality, Niche, Innovation, Export, Finance, and Strategy Plan.''

Adam: What have you found to be the key steps to turning a business around?

Thomas: Focus, focus, focus. As a matter of fact, the current crisis demands more assertive and proper decision making than ever before. I always include the 8020 principle in all strategy courses I give as a key part to plan a successful year in order to deliver more customer and employee value and to receive more profitable growth for the company. The 8020 principle indicates a natural law that comes true for business. 20% of your products, customers, and employees are responsible for 80% of sales. Especially in a crisis, you need to focus on your key clients, prospects, team members and products/services. Your "top" selling assets have to be leveraged to achieve financial results. Companies that focus are oftentimes much more successful than businesses that try to sell too many products to too many customers segments. Distraction kills your business. Try to be good or best at one thing.

Adam: What are the key steps to growing and scaling a business?

Thomas: I would say that your product / service portfolio and your geographical footprint is key. Business owners and directors need to understand the value ladder. The value ladder indicates that you need several products at different price points. From some free trials to get to know your value proposition to high-priced and holistic solutions. Your offers are designed distinctively for attracting new clients and retaining key customers. Besides, you need to plan to export your offer. Also think about eCommerce. Leave your country or hometown to replicate your business at other places and add value in many geographies. Launch your business in key cities. But most importantly, and oftentimes completely neglected, is to focus first on your core business. You need to define, first and foremost, how to defend and strengthen your core business where you had profitable growth the last 3 to 5 years. There is almost always a growth potential to be more efficient and agile on what you are doing. Of course, the ramp up of your company comes, then, with adding new products and markets to your current business. This is where sound strategic planning comes into place. Many decision makers are more occupied and preoccupied with daily operative issues than with 8020 growth strategy definitions or execution. So, core business planning needs to come first. Then you go ahead and design your portfolio and market penetration strategy.

Adam: What are your best tips applicable to entrepreneurs, executives and civic leaders?

Thomas: Set goals and remind the majority of your employees about them while you reward those who achieved them on a quarterly basis basis. Talking about business, I mean profit and sales goals. Focus on high-gross margin projects, products, services and customers. As CEO, be the number 1 sales guy in the company that inspires customers to buy your products or services. Hire and retain the best sales people in the industry. Develop benchmark sales & marketing channels embracing digital marketing. Have strong partners and allies that help you sell and provide an excellent service. Measure and communicate performance indicators.

But when we talk about leadership it isn't only about making profit. Customers and stakeholders appreciate seeing socially responsible and eco-friendly companies. Tesla is a great example when it comes to transforming an industry and fostering a more sustainable mobility and transport. Many global and German car brands have already launched electric models. For instance, the Audi e-tron vehicles.

Adam: What do you believe are the defining qualities of an effective leader? How can leaders and
aspiring leaders take their leadership skills to the next level?

Thomas: The most successful leaders nowadays are discussing, incorporating, and agreeing on the following four concepts:
- Profitable growth
- Employee benefits
- Customer satisfaction and retention
- Social and green responsibility

Leadership has to be holistic. Be a good listener and hire people who are better than you for certain tasks. Give trust and trust in accountability. Empower your employees and give them freedom to achieve their goals but at the same time be close to them mentoring them at some crucial moments along the way. For me, it's all about mindset. I remember when I worked for Adidas. It was amazing to experience such a performance and people-centered leadership culture. At Adidas they define leadership just like athletes do. You need an environment that motivates, inspires and empowers you and others to perform on the highest level. And, of course, you need to prepare yourself. Improvisation is a "No-Go". So, you need to develop soft skills and industry expertise to become a leader. Apart from preparation, communication is, in my eyes, still the most important asset you need to get to the next level, or if you want to in the Champions league, like we say in Europe.

Adam: What is your best advice on building, leading and managing teams?

Thomas: A high-performance team is built upon a common culture and values that enable performance on a joint mission. As a team, defining values is really game-changing. We have done many workshops where we invite a large part of the company to provide input on the company's principles on how to act among each other, with clients, and towards suppliers. Values such as effectiveness, teamwork and accountability are as important as honesty, frugality, and commitment. Applying and holding onto defined values will inspire and boost your team to achieve even very aspirational visions.

Not only do you need to establish a motivational vision or reach. You also need to communicate clear financial sales and profit goals. In order to achieve high profitable growth you have to set these achievable goals, but at the same time define a high market reach. This is called the “business vision” in terms of impact, people and company size. Agree with your team on when you will surpass a certain sales milestone and how many profitable markets you have to enter. At the end of the day, a team needs a playbook. As a leader you are responsible for engaging and pushing everyone to reach their potential.

Adam: What are your best tips on the topics of sales, marketing and branding?

Thomas: Be aware of trends and the voice of the customer. Trends such as digital marketing, eCommerce, funnel hacking, big data, social selling, corporate influencers, and new salesforce tools are important. But you need to listen to your customers and prospects as well. Carry out market research with the mission of improving your value proposition. We also recommend that our clients identify the most effective lead generation channels and to calculate the customer acquisition cost. You need to know how much it costs you to acquire a customer to compare it with your customer lifetime value. As long as it costs less to acquire a new customer than what you can earn with them, you can increase this marketing investment. Good budgeting to invest, capture, and save money systematically is literally underestimated in many startups and new business units. A plan and periodical report to see where the marketing money is going is equally as important as a constant return on investment and margin analysis.

Adam: What is the single best piece of advice you have ever received?

Thomas: Hire people that are better than you.

15 years ago one of my mentors at Adidas asked me to join him in his office and to close the door behind me. He said: "Look, all these new people I just hired are better than me." After he made that comment, I couldn't help but wonder why he was still the director of the marketing department. He explained to me that his job was to hire the best experts for trade marketing, branding, category management, merchandising, etc. This was really one of the smartest takeaways for my future career and for my own company.

Adam: Is there anything else you would like to share?

Thomas: Yes, we should study different business models and try to take what's best for our company and market. I would take the marketing practices of the American business model, the German value-adding quality approach, and the manufacturing capacities of Chinese companies. The day to day of a business owner, CEO or top manager, is now becoming more and more demanding. Delivering constantly to stakeholders or achieving a yearly budget is highly complex, especially in times of crisis. You have to regain and repeat success. You have to outperform over and over again. Without being relevant in the global or local value chains your business becomes obsolete faster than at any time before. Markets are consolidating and only the most agile and holistic business models can withstand current digital and financial disruptions. These are really challenging and unprecedented times.


Adam Mendler is the CEO of The Veloz Group, where he co-founded and oversees ventures across a wide variety of industries. Adam is also the creator and host of the business and leadership podcast Thirty Minute Mentors, where he goes one on one with America's most successful people - Fortune 500 CEOs, founders of household name companies, Hall of Fame and Olympic gold medal winning athletes, political and military leaders - for intimate half-hour conversations each week. Adam has written extensively on leadership, management, entrepreneurship, marketing and sales, having authored over 70 articles published in major media outlets including Forbes, Inc. and HuffPost, and has conducted more than 500 one on one interviews with America’s top leaders through his collective media projects. A top leadership speaker, Adam draws upon his insights building and leading businesses and interviewing hundreds of America's top leaders as a top keynote speaker to businesses, universities and non-profit organizations.

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