Building A Better Business

April 17, 2017

A positive corporate culture can lead to success. At least, that has been the result for Imperial Co., which had its best year yet in terms of revenue, over $80 million, thanks to strong leaders that focus on people and creating a core set of values for the business. This is an important distinction for Lance Whorton, the company’s president and CEO. These core values represent the company and every employee needs to believe in them.

“We use our core values when evaluating new hires and employees,” said Whorton. The candidates must meet at least 80 percent of the values to be retained and be open to growth. “Growth is important because life is about progress, not perfection,” added Whorton.

These core values have also come into play as Imperial has made acquisitions over the years, bringing in those company owners and blending their culture and operational processes with Imperial’s existing process in a way that makes the organization stronger. “At many of our branches, we have these company owners that now work for us. I think that’s where we excel, saying ‘here is the incredible things you brought in with your culture. Continue to do that. And here are the few processes that you need to follow,’” explained Whorton. “Each branch is a unique culture. That’s why people stay with us — they have flexibility.

”Whorton credits Imperial’s founder, Paul Tims, for laying the ground work for the core values and a people-centric management style. “Paul deserves a ton of credit for not only founding the company, but getting us where we are,” said Whorton. “We piggy backed off of what he created. The golden rule principle is what he called our core values before we went through the exercise of creating them.

”Tims is now semi-retired leaving Whorton in charge of the day-to-day operations. One of those daily tasks is looking at reports and using data to make informed decisions about service. “We’re data hogs,” Whorton joked. However, his dedication to collecting and analyzing data isn’t a joke. “If the average net income for the average operator is 4 to 5 percent of revenues, we make twice that amount,” said Whorton, humbly. Outperforming the marketplace is due to Imperial being data driven with investments in hardware and software in addition to data analysts and a robust IT department. It has helped Imperial become the leader in its service area — much of Oklahoma, Northwest and Southwest Arkansas and the Texas pan handle.

Evolving from a one man show

Tims began imperial in 1979 as a coffee service operation. He serviced accounts himself and grew the business for 7 years before he added his first employee. Despite positive office coffee service (OCS) sales, Tims was looking for more revenue opportunities and decided to add vending in 1994. It was a great match that took Imperial to the next level. In 2012, Imperial added micro markets, which presented a bit of a learning curve, but has proven a profitable segment.

Whorton joined Imperial after spending most of his career in sales for the United Postal Service (UPS). He had a brief job with an independent Coca-Cola bottler where he met Tims and kept in touch even after he started work for a technology company that suffered during the 2000 crash. “I always admired him and appreciated his insight,” said Whorton. When Tims offered him a position in 2001, Whorton was excited to become part of the company.

Whorton joined Imperial after spending most of his career in sales for the United Postal Service (UPS). He had a brief job with an independent Coca-Cola bottler where he met Tims and kept in touch even after he started work for a technology company that suffered during the 2000 crash. "I always admired him and appreciated his insight," said Whorton. When Tims offered him a position in 2001, Whorton was excited to become part of the company.

Before Whorton joined Imperial ,and continuing afterward, the company made dozens of acquisitions. Not only did Tims and Whorton work to blend the employees and leaders of these companies into the operation, but also to keep a steady and strong course for Imperial as a whole.

“We take pride in that during so many acquisitions over the years, those company owners and their staff are still here, working for us,” said Whorton. He also admitted that the fast growth sometimes left the company trying to do too much or without a clearly defined goal. It was during one of these times when through an acquisition the company grew 35.5 percent in one day, that Whorton was told about the book Traction. “ I was introduced to the book by an industry peer, Vic Pimberton with Pepi Companies, in Dothan AL,” he said. Whorton explains that the book is essentially a road map for businesses, laying out an Entrepreneurial Operating System (EOS). For Imperial, it helped them identify what made them unique and take strategic planning further with three year goals and 90-day goals. “It creates long term focus and accountability,” said Whorton. He credits at least some of the past year’s growth to the EOS. He certainly credits EOS with the positive changes he has seen in the company. “It’s helped me be a better leader,” said Whorton. “It has helped us to pull initiatives that are not on the roadmap today. It has helped prioritize what we are focused on.”

Innovative processes and user experiences

As part of the EOS, Whorton defined what was unique about Imperial and one of things he articulated was a commitment to innovation. In the early 2000s, Imperial added Crane Streamware’s VendMax vending management system. The company experienced such a positive return that five years later they took the plunge into dynamic scheduling, prekitting and telemetry all virtually at the same time, with Cantaloupe Systems. “We dropped a route almost immediately,” said Whorton. In fact, he has found that adding telemetry pretty consistently leads to a 35 to 40 percent reduction in routes. A soft benefit, or unintended consequence, of reducing routes is that the very best of the best route drivers stay. “Our turnover is far less than the industry average,” said Whorton. Imperial route drivers have larger, more efficient routes. The company shares the revenue of these routes with drivers in commission form, but also offers a base pay that encourages attention to detail instead of a fast pace.

Driver compensation based on targets

In order to slow the drivers down, especially on micro market routes, Imperial uses a compensation model that focuses on performance. Drivers are paid a commission and a bonus if they meet certain targets, whether in vending, micro markets or foodservice. “In micro markets, for example, the commission is based on targets such as revenue growth, spoils, account retention and a number we call percent fill,” explained Whorton. “Percent fill is essentially the number of units sold at an account, by how many we filled and how many we spoiled all by specific product names.”

Being able to measure performance against targets is all due to data, which is a top priority for Imperial. “We have two full time analysts,” said Whorton. “One does micro markets and reporting mostly, while the other does purchasing analytics.” Imperial also employs someone to do what it calls “data pooling.” “One person pools all the data we receive from different inputs such as various industry partners and systems, into one usable report,” he added. That single report, done in an Excel version called PowerPivot, is distributed through the company where each department can filter for what they need. “Staff, depending on what they do, can filter, so customer service staff can filter information specific to customers. We have operational filters, merchandising standards, percent fills, etc. They can manipulate the data to capture the data they want,” Whorton said. The company has a cloud server to run the various reports, which is time consuming due to file and data size. The cloud server also allows the company to post the reports online so everyone has access without downloading the huge files. Imperial employs four full time IT staff to manage the cloud server and other digital needs.

Whorton feels that data and reporting is very powerful. “It really gives us insight into how our business is changing,” said Whorton. Imperial has used the data to create more operational efficiencies and even merchandise vending machines. “We have planograms that are designed per class of vending machine — blue collar, white collar, call center — and we function on that data very specifically,” said Whorton.

Manufacturers and suppliers have noticed how Imperial uses data. Many ask to launch products or do test promotions with Imperial due to the level of data it can provide. “We are approached constantly to do tests or combo tests,” said Whorton.

Whorton employs two full-time marketing staff who create content as well as push content out for their various loyalty programs, both created internally and with partners. Whorton has found that loyalty remains in strong demand among consumers. In the customer surveys Imperial puts out, loyalty and rewards are preferred by more than 60 percent of respondents. Whorton keeps asking customers about it to get better at offering loyalty programs that people actually want. “We can’t deliver on every request, but as an industry we are behind with loyalty. It’s still a need in our channel,” he said.

Reaching the 150 micro market mark

When Imperial decided to launch micro markets in 2013, Whorton felt late to the segment and wanted them installed fast. “We installed 50 micro markets very quickly and had to reevaluate them because it’s a different business model with spoils and thefts,” said Whorton. Compared to the extremely efficient processes of Imperial’s vending side, micro markets weren’t keeping up. “Markets brought on a lot of new challenges...It wasn’t as profitable out of the gate. However, through work and merchandising and education of our staff, it has become even more profitable than vending, but it’s taken 3 or 4 years to do that,” Whorton added. Micro markets currently make up about 20 percent of Imperial’s overall revenue and is growing. The company has 150 micro markets placed from three different suppliers: Company Kitchen, 365 and ECRS, which is the software provider behind Breakroom Provisions.

When deciding which market to place, Whorton considers many things. “Cost is always something we evaluate. However we also look at reliability, downtime and true enhancements. We want to be progressive and we want to take advantage of the impact on the consumers — be able to tie multiple channels together such as foodservice, vending machines and micro markets,” said Whorton. And of course, having promotions and loyalty programs already built into the software is critical. “That’s how we go from delivering a soda or a sandwich into really having a platform that allows us to identify our consumers and identify a more convenient way to provide what they want, when they want it,” added Whorton.

No rest for OCS

Another relatively small, but growing area of revenue is OCS, representing 10 percent of overall sales. Imperial began roasting is own coffee as a point of difference. “We really believe in the convection roasting process,” said Whorton. “Paul believed in having a higher quality product that we had control over.” The coffee is roasted at the headquarters in Tulsa,OK, and has been very successful in filter packs and open brew coffee service. That side of the business has been steady. Growth has been in specialty coffee, which includes single-cup for Imperial. “We have seen growth in businesses supplementing office coffee service with specialty coffees,” Whorton said.

Vending remains a strong revenue generator despite the growing segments of micro market and OCS. However, none of it would be possible without the people. “Our team makes the difference, truly,” said Whorton. Imperial has a proven track record of folding in new team members through acquisitions and blending their core values into a clear, strong vision of the future. It’s the ability to do this well, and stay accountable by utilizing data, that truly sets Imperial’s success story apart.