The Leading Edge - Summer 2010 - 7

COVER

The	redesign	didn’t	stop	with	the	round	 bread.	It	went	to	the	heart	of	the	Schlotzsky’s	 name,	more	specifically	the	“lotz,”	to	launch	a	 new	corporate	philosophy	and	culture	to	 support	to	the	new	identity. “Is	it	‘lotz’	better?”	is	the	question	asked	for	 everything	now,	Roddy	says.	“We	use	it	as	a	 filter	and	put	everything	through	it	that	we	do. “If	it’s	not	‘lotz	better’	than	what	we	currently	 have,	then	we	don’t	put	it	on	the	menu,”	he	says.	 The	“lotz	better”	question	extends	beyond	the	 menu	to	decisions	involving	franchise	locations,	 new	hires,	service,	cleanliness	and	more.	For	 example,	Schlotzsky’s	asked	itself	how	it	could	 make	the	diner’s	experience	better	and	found	the	 answer	was	bringing	the	food	to	the	table	rather	 than	asking	customers	to	wait	at	the	counter. “‘Lotz	better’	is	what	we	do—it’s	made	us	a	 completely	different	brand,”	Roddy	says.	“It’s	a	 true	brand	position.	We	can	hold	this	position	 in	the	mind	of	the	customer.”

Generational transformation
Glideaway	grew	out	of	a	family’s	retail	furniture	 business	that	began	in	the	1920s.	In	its	heyday	 the	family	operated	40	furniture	stores	in	 southern	Illinois. Small-town	life	and	tough	competition	led	 the	family	to	yearn	for	bigger	city	life	and	a	new	 business	model.	So	the	furniture	stores	began	to	 close	and	the	family	moved	to	St.	Louis	in	the	 1960s	to	reinvent	the	business	based	on	a	new	 invention	of	Grandpa	Fredman—a	steel,	slatless	 bed	rail	that	revolutionized	the	industry	by	 bringing	uniformity	where	once	every	frame	 was	built	differently. That	reinvention	worked	well	until	about	 five	years	ago.	The	frame	business	wasn’t	as	 strong	as	CEO	Carmi	Fredman	and	his	family	 wanted.	So	they	took	a	chance	on	the	 recommendation	of	Fredman’s	cousin,	Ron	 Redman,	who	joined	the	company	about	12	 years	ago.	A	lifelong	salesman	and	a	well-read	 person,	Redman	pushed	for	Glideaway	to	get	 into	the	mattress	business,	specifically	the	 memory	foam	mattress	business	that	he	saw	 becoming	a	larger	percentage	of	the	industry. “Because	he	was	out	in	the	field	and	saw	the	 popularity,	it	was	a	no	brainer	to	him,”	Fredman	
THE LEADING EDGE

says.	“To	get	our	board,	our	family	members,	to	 do	this	was	harder	than	he	thought	it	would	be.” Fredman	had	to	become	convinced	first;	 then	he	worked	with	Redman	to	convince	the	 board	after	many	hours	of	discussion.	The	 board	approved	dipping	Glideaway’s	toes	in	the	 memory	foam	mattress	business.	They	agreed	 to	spend	$60,000	for	inventory.	Today,	success	 means	the	company	has	invested	millions	in	 the	memory	foam	mattress	industry. Although	mattresses	and	bed	rails	fall	in	the	 same	industry,	selling	mattresses	requires	a	 different	model	than	selling	bed	frames.	Most	 retailers	typically	sell	one	line	of	rolled	steel	 bed	frames	but	dozens,	if	not	hundreds,	of	 mattress	types.	Glideaway’s	sales	representatives	 had	worked	for	10,	20	and	30	years	selling	 frames	and	rails,	so	they	were	hesitant	to	add	 mattresses	to	the	mix. Glideaway	recognized	synergies	too	because	 the	company	could	sell	to	the	same	clients.	It	 knew	that	the	sales	experience	took	more		 time	and	doubled	its	sales	force,	hiring	new	 representatives	with	mattress-selling	experience. “If	you	can	sell	mattresses,	you	can	sell	bed	 frames,	but	the	opposite	isn’t	always	true,”	 Fredman	says.	 Mattresses	now	make	up	20	percent	of	 Glideaway’s	business,	he	says.	The	company	 sees	its	future	in	mattresses,	even	inner	spring	 mattresses	that	make	up	90	percent	of	the	 mattress	industry.	However,	expanding	to	 innerspring	mattresses	will	require	a	change	to	 the	existing	model	that	imports	all	the	 mattresses	for	Glideaway.	Unlike	foam	 mattresses,	inner	spring	mattresses	cannot	be	 rolled	and	compressed	to	ship	cost-effectively	 across	the	ocean.	They	need	to	be	manufactured	 closer	to	the	customers	so	Glideaway	would	 need	to	manufacture	them	in	the	United	States.

generation	operates	differently	but	must	work	 together	for	the	future,	Fredman	says.	 In	his	grandfather’s	generation,	his	 grandfather	was	the	top	executive	and	made	 the	decisions.	That	immigrant	generation	also	 worked	hard	and	believed	they	needed	to	do	 everything.	Fredman’s	generation	understands	 the	value	of	hiring	well	so	they	can	delegate	 some	responsibilities. Older	generations	also	hesitate	to	reinvent,	 while	the	younger	generation	tends	to	have	a	 million	ideas	and	sometimes	wants	to	shoot	 from	the	hip.	“I’m	trying	to	bridge	that	gap	and	 find	the	best	way	to	operate,”	Fredman	says.	 “Nowadays	(decisions	are)	a	lot	more	by	 consensus.	We	talk	each	other	into	it.	It	usually	 works.”

Problem = new business
Years	ago,	Tara	Abraham	found	her	“invention”	 when	she	was	a	merchant	for	Bath	&	Body	 Works.	“I	struggled	to	find	a	company	that	could	 successfully	deliver	the	quality	and	consistency	 we	needed	in	the	production	of	our	gift	sets,”	she	 says.	“It	was	then	I	had	an	‘aha’	moment.	I	felt	 that	if	Bath	&	Body	Works	needed	a	quality	 contract	packager	to	assemble	gift	sets,	I	was	the	 best	person	to	start	that	business.” So,	15	years	ago,	Abraham	created	Accel	Inc.	 and	serves	as	its	chairman	and	co-CEO	today.	 Since	then,	the	global	company	has	grown	 most	years,	packaging	and	delivering	consumer	 products	based	largely	on	its	expertise	and	flair	 in	beauty	and	bath	supplies.	It’s	expanded	from	 1,200	square	feet	to	580,000	square	feet. Accel’s	competitive	value,	Abraham	says,	lies	 in	its	ability	to	produce	an	end	product	that	 exceeds	clients’	expectations.	Its	engineers	 design	processes	that	maximize	cost	efficiencies	 in	packaging	materials,	labor	and	equipment	 use.	“Most	contract	packagers	rely	on	their	 clients’	‘spec’	sheets	to	design	the	production	 flow.	We	house	that	internally	as	no	one	knows	
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Differing styles
Glideaway	remains	a	family	owned	business	 with	multiple	generations	involved	and	that	 can	be	a	challenge	to	reinvention	because	every	

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The Leading Edge - Summer 2010

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