Interview with
Peter Neupert,
President and CEO,
Drugstore.com
W:
What are three ways that leadership in e-businesses differ from
leadership in traditional bricks and mortar businesses?
N:
Well, I’ve not ever really been in a bricks and mortar business
directly. It’s a little bit
harder for me to say. But I think
the key thing in e-commerce and internet at the moment is there’s no road map,
so you have to be willing to think outside of the box and use what your gut
tells you is the right decision. Go
with it and be incredibly diligent in measuring and making adjustments.
Time is the enemy, and you’re better off making a decision as best you
can and moving forward than waiting for more info.
You have to think like your competitor so that you’re the first one to
do it. I think one thing I can say
after viewing with my partner Rite Aide, is when you have a very distributed
workforce in hundreds of locations it’s very difficult to get a consistent
message and a consistent theme and it’s just a brand out there. Whereas in
internet e-commerce where I can get everybody in a room and change the website
or change the fulfillment or change the customer care, you can spin on a dime
much more quickly. That’s important.
W:
How do you lead in a fast growth environment?
N:
You have to say growth in two dimensions.
It’s not only growth in our customer or revenue base, it’s growth in
our employee base. We’ve doubled
our employees in the last couple of months.
What I focus on there is trying to be very clear about what our
priorities are, very clear about what the goals are, very clear about
communicating consistently, both to the people that I work with and for them
throughout the organization. The
hardest part is that you want to empower everybody to be able to make the right
decision at the right time and to do that in a world that’s constantly
changing requires a big emphasis on communication.
I do that through email and team company meetings.
W:
As a leader, what are your top three priorities, if possible in order of
importance and why?
N:
I think the top priority always has to be focused on “are we doing
everything we can to service the customer” and if we’re not doing a great
job servicing the customer everything else that we do will be for naught in the
long run. Very much a focus on our
web service, on all of the aspects of that to make sure we’re doing a great
job servicing our existing customers and our potential customers.
In order to accomplish that, you’ve got to have an ever expanding
organization. I’d say recruiting, hiring, focusing on “do I have the
right people in the right job, am I getting the right people into the
organization” is my number two priority.
And number three is raising capital.
We’re building a big business which means we’re investing a lot.
We’re constantly focused on raising capital.
W:
What tools do you find necessary or useful when seeking to motivate
individuals to follow your vision?
N:
You want to make sure the people you’re leading are the people you want
to have around you. So I focus a lot on getting people that are smart,
aggressive, willing to challenge ideas, willing to think outside of the box.
Those are the type of people that I hire.
Then I think the leadership challenge is a lot easier because you have
people who are motivated and aggressive and smart to start with.
Then I think you have to have a total amount of intellectual honesty.
I’m very direct. I’m
very focused on what are the facts and what are the solutions.
I don’t care about hierarchy and I don’t care about a lot of things.
What we want to do is get the best idea and you have to have that
throughout the organization where everybody’s part of solving the problem and
let the best ideas get out. You then communicate those successes. I find that to be the most important way to solve a problem.
Then the vision thing is again communication about what the dream is and
you have to think broadly about that. Ours
is fairly straightforward. We’re
just simply trying to revolutionize the way people shop for healthcare products
online and we’re constantly reinforcing that.
W:
At a higher level, how do you build a leadership team, or how have you
built your leadership team?
N:
The key thing is, at every position you want to have smart, talented
people. Everybody says that.
Not everybody is perfect, right? So
for our business we try to find complements to the overall piece.
If we’re particularly good in one area and weak in another, we’ll go
find the next person we want to add if we really want to deal with that
weakness, whether it’s creativity or a particular dimension to the business,
or what have you. It’s like
building a baseball team where you don’t want everybody to be the same.
You want to have a set of complimentary talents to achieve the overall
objective, and that’s how you build the team.
W:
How do you integrate new people into your organization?
N:
It’s very much sink or swim. This
is learn by doing. I have pretty
clear expectations when people come in, but often at the senior level it’s
make the job as you go and help determine what the problem is and what the
solutions are. At the senior level, it is very much an evolution as
opposed to “Oh, here’s the three day schedule of how you can learn about the
business.”
W:
How do you compensate your employees?
N:
Well, we’re in the game where there are a lot of opportunities, so we
pay reasonable cash salaries in our marketplace.
The real focus is on the long-term stock option compensation, and we have
a five-year vesting schedule. We’re
very focused on people being here for the long run.
This isn’t about a quick hit, this is about building a long-term
enterprise and we try to structure both our goals and our compensation to
correlate with that.
W:
What kind of culture exists at your company and how did you establish,
and why did you institute this particular type of culture?
N:
Our culture, I think, is always hard to describe.
My focus is very much on performance, on delivering the results, whether
you’re a customer care representative, a merchant, a developer, a marketing
person. It’s about delivering the
best results and meeting our objectives, and using everything in your
where-with-all to be able to accomplish those objectives, and if you’re in
trouble to ask for help. This tone
was there from the very beginning because I made that part of the principles of
the company, part of the values, which I try to reinforce on a regular basis
either in writing or in company meetings. Most importantly I hire people of
similar bias. I think that’s the
most important way to breed a culture is to inculcate it when you hire.
W:
What are the necessary individual qualities of a successful leader in the
Internet economy, and how have you yourself been able to develop and acquire
them?
N:
I think you have to be a little bit of everything in the Internet
economy. You have to be incredibly
smart to be able to figure out which things to do and which things not to do,
which partnerships to do, which places to invest your scarce resources.
You have to be an incredible champion and spokesperson for your company,
whether it’s to the press, to the employees, to investors, the customers. You have to be a leader.
You have to rally all of the resources around what you’re trying to
accomplish. And I think you have to
have a huge amount of endurance. You
have to be able to run both the sprint because, as I said earlier, you’ve got
to do things quicker, better, faster than anybody else, but you have to keep
doing it quarter after quarter over a very long period of time to really build
an established business. So you
have to have a significant amount of physical endurance and I think mental
agility.
W:
Going forward, what criteria do you use to measure your leadership
success?
N:
I’m never satisfied, so things can always be better.
I think that part of the role of the leader in a competitive environment
is to do a good job rewarding the accomplishments and always raise the bar.
I think it’s always difficult to do a self-evaluation, and it’s more
important or more apropos for other people to raise my leadership capability.
W:
If you were to assume a position in an incumbent, how would you enact
change?
N:
It’s creating a focus, it’s creating a competitive framework, setting
high goals, and then constantly, constantly reinforcing that whether
it’s reorganizing, creating some sense of change, creating some sense of
urgency, doing things out of the expected to shake things up is what you have to
do.
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