For Tom Stemberg, calculated risk-taking is one ingredient of business success he's always willing to use.
One might even call it a staple.
Stemberg is the founder and CEO of Staples, the Office Superstore, which in 12 years, grew from a single retail outlet near Boston to more than 720 stores worldwide. He is also author of the book, Staples For Success.
Stemberg took one of his first risks when he launched the office superstore concept. After reading the book, Megatrends 2000, by John Naisbitt which foresaw the boom in small business and home offices, Stemberg was correct in his prediction of a growing demand for deeply discounted office supplies, equipment, furniture and services. So, Stemberg applied the training and knowledge he gained while working in the supermarket industry to the marketing of office products. He interviewed small-business owners to find out what they use in their work, then modeled his store on the supermarket concept, offering a wide selection of products at discounted prices.
"My skill set was not food, it was running high-volume, low-cost retailing operations," he said. "It could be a box of copy paper as much as it could be a box of Tide. Effectively, I traded one for the other."
The strategy worked; the proof is in the number of copycat competitors that have sprung up in the last decade.
Stemberg's next risk was his idea for the store's name. He was unhappy with what it was originally called, "Eight and a Half by Eleven," and was trying to think of something else while driving from Hartford to Boston. He let his mind run through the store's products and landed on "Staples."
"It just sort of rolled off my lips," he said.
But the name had its drawbacks. During the company's early years when it was trying to sell the office superstore concept to a public used to buying supplies in small stationary or office supply stores, officials had the additional task of trying to brand the name Staples. But now that so many competitors have incorporated the word "office" into their title, Staples has the advantage of standing out as unique.
"When we came to a new town we had to explain what Staples the Office Superstore was. It was an educational process and it was relatively challenging to get people to try it for the first time," Stemberg said. "It was not as advantageous in the early years, but I think in the long term, it was a very smart thing to do."
Now, with Staples so well established in the marketplace, one of Stemberg's most visible risks has been the company's advertising campaign. The retailers hired a firm known for its amusing, slightly offbeat commercials. Their work has resulted in such memorable spots as the one depicting an overly-gleeful father taking his children back-to-school shopping while the song, "The Most Wondeful Time of the Year," plays; and a more recent one featuring a young stock clerk who erupts into a spastic leap of joy when his boss tells him prices have been slashed and he must affix new tags to the merchandise he just finished pricing.
"You want your people to be willing to take risks ... I'm talking about thoughtful, calculated risks and not to worry about the consequences of failure," Stemberg said. "Our people were willing to take the risk and it worked."
