C.E.O. Candidate Ken Sommerhof: Expert Advice from a C.E.O. Other C.E.O.
LaCie’s Chief Executive Officer, Ken Sommerhof, has been heading up the storage company since 2002. Today, he is the first C.E.O. to speak at the Entrepreneur’s Network Conference in Orlando, Florida. The company is the third largest maker of flash drives in the world, with its inventory consistently in excess of 30 million units a year.
Sommerhof says his success comes down to taking an objective view of your business, but also having strong emotional intelligence. To this end, he was a good student at Dartmouth, and says he regularly applies his campus perspective to management of LaCie.
The interview has been condensed and edited for clarity.
How do you lead in a world that is changing so rapidly?
I use my inside baseball for leadership – the leadership principles of having a clear view of the total business. And I take personal responsibility for everything we do as a company. I never let these three things separate me – revenue, production or cost, because I take them all with equal importance and I try to avoid doing things on a priority basis. That separates success.
What is your ‘read between the lines’ approach to allocating resources?
I develop a strategy, test it, and maintain that success. I’m comfortable with saying, ‘No’ if I don’t think I’ve done a good job of developing a strategy, but it’s not a part of my vocabulary that I check to see if something is a sure bet. I’m reluctant to say no to resources just because I don’t have the money.
What are the five things you always do to help you run a successful company?
I have a weekly meeting with the finance folks to make sure we are thinking strategically. I make sure our CRO (chief customer officer) is bringing things to our attention and he makes me aware of the key people in our company. I run an open process where I hear a variety of ideas and visions about what the business might be and which products are working well. I don’t stick to a single point of view. I get feedback from the field of what’s working and what’s not working. I have a very formalized decision cycle. I tell people to be a planning director for the company, to run the planning and planning process. Our top priority is making sure we are spending capital and marketing time on products that are driving the business. I challenge our leaders to have everything evaluated, because in years past, even though we were running a lean operation, every product that hit our shops didn’t pass some formula. My job is to be scrutinizing.
What principles have allowed you to grow a company that now makes the leading product in a particular market?
Our customers always set our vision. Our brands are 100 percent focused on what the customer thinks of our product. A major factor was being a 100 percent employee owned company. We’ve always been profitable. It’s more important than ever to be financially sound – we want to be in a position where we can tap our communities for community donations.
I take my own high level strategic vision and build it out. I look at our product lines as being like real estate – we have different dimensions. I looked at what the cloud-based storage people wanted. I think our move into security – we started out in floppy disks – was great. We started out in solid state storage in 2002. We integrated parallel flash chips – essentially switching to having more technology that could scale horizontally. You make sure you support your customers before you expand too fast. For instance, my personal computer has 12 gigs. It’s not viable to go to 64 gig machines or 400 gig machines. You got to start in pieces and fit in a space.
It’s an iterative process. We try to learn from the people out there in the industry and incorporate it into what we are doing to stay ahead of our competitors. If I see the company is moving too fast, I will say no to something we might be in the middle of doing. I just want to make sure that when we enter a new space, we are in it to win.
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