Nexxus Group CEO Mark Landgren on Valuing Positivity, Perseverance and Teamwork

Listen to Mark Landgren, CEO of The Nexxus Group, as he speaks with Rich Huttner at “CEO Adventures in Leadership”. Mark advises how maintaining a positive attitude, celebrating life, trusting team members, and learning from mistakes fuel business success.

 

Interview transcript:

Rich Huttner, CEO Adventures in Leadership:
Hello everybody, this is Rich Huttner, the host of CEO Adventures in Leadership. Each week we bring you words of wisdom from a CEO who has met the same challenges you are facing, or may face one day and has succeeded. Now, let’s go to our guest for this week.

Wouldn’t it be great for retail chains if they didn’t have to tie up so much cash in buying store inventory? Wouldn’t it be great if their suppliers knew in real time exactly which of their products were selling so they could produce more of them? Our CEO guest today leads a company that makes this miracle called scan-based trading happen. I am pleased to have with us today Mark Landgren of the Nexxus Group. Mark, welcome to CEO Adventures in Leadership. I’m very excited about talking with you and learning about your business, which is an unusual one. Tell me a little bit about the Nexxus Group, the concept of it and why you feel that the company has a great future.

Mark Landgren, CEO, The Nexxus Group:
Well, thank you Rich, it’s a pleasure to be here. I’m sitting out looking outside my window to the first major blizzard of the year. It’s nice to be here at home and to be on the air with you. Nexxus Group is a company that’s been around for 17 years and we provide a technology platform for scan based trading services or better known in the industry is SBT. SBT is a manner of doing business that’s utilized by retailers and their supplier partners. SBT is different from the traditional buy-sell relationship that has been in place for dozens of years, hundreds of years and in many instances, thousands of years of how suppliers and retailers interact. In a traditional buy-sell relationship the supplier sells its products to the retailer, and the ownership transfers at the time that the product lands at a warehouse or at a store. And from there on the retailer is responsible for that product until it’s sold to the ultimate consumer. Now you’re probably familiar with the term consignment, whereby a supplier provides product to a retailer and that product ownership never transfers. This is similar to what Amazon does today. You know, ironically, in 2020, more than 50% of all products sold on Amazon are not owned by Amazon. The suppliers only utilize Amazon’s merchant services, marketing services warehouse services, but the ownership never transfers to Amazon. So what happens in scan based trading is the supplier retains ownership of the product in the retailer stores and we call this distributed inventory. Until the moment in time when the retailer scans the product, at which juncture that inventory title transfers to the retailer, who then owns it for probably seconds, two minutes until the ultimate consumer buys it and pays for it. So it turns traditional retailing truly on its head. So if you look at most large retailers, one of their largest assets sitting on the balance sheet is illiquid its inventory. And by employing scan based trading, retailers are able to basically free up that cash because they only own inventory for seconds or minutes instead of for days, months or in sometimes even years. So there’s certainly a benefit to the retailers because they gain that free cash flow on their balance sheet. And we also give them a lot of operational efficiencies because we step in the middle and they think of us as a conduit between the retailer and the supplier. And we take data back and forth from their point-of-sale systems and we cleanse it and we act upon it. So from the supplier standpoint, they now have to hold on to the inventory longer than they would have under a traditional buy sell relationship. But in exchange for this, they get something that’s very, very valuable to them. They get sales visibility. So they will get sales data that’s generally 24 to 48 hours old, by SKU by store that tells them exactly what and how they’re selling and at what velocity they’re selling their products in each store. So it gives the supplier actionable data that they can work now with a retailer to sell more product they can reduce their out of stocks and they can also help them in their supply chain in producing more product. So there are benefits to both the retailer and the supplier in a scan based trading relationship.

So in a nutshell, the retailer frees up an enormous amount of cash that would be ordinarily used to buy inventory, which could be very slow moving, or they could run out of stock. On the other hand, the supplier gets the benefit of knowing exactly what’s going on in the marketplace and can adjust their production, their marketing, in light of the latest market trends. Are we in sync on that? Is that a pretty good understanding of some of the key benefits of the business Rich?

Rich:
That’s a great synopsis. Actually, it’s funny, most people don’t get it that quickly. One of the other benefits is suppliers oftentimes get paid quicker in a scan based trading relationship, as opposed to a traditional buy sell relationship. Okay, so now we’re grounded and we’re with you. What do you feel it’s been the toughest challenge of building this business when you’re faced starting a business that has great value to both parties, but they don’t know it, and the people inside the company may not have the confidence to sell or explain it? How do you deal with that?

Mark:
That’s a very good question rich, because that’s the dilemma that I wake up with and try to tackle every day. So our customers are both retailers and suppliers. And we deal with over 100 retailers across North America and almost 70,000 retail doors. So we work with some of the largest retailers in the country. And the challenge we have with working with retailers is trying to explain all the benefits across different departments. When we go to a CFO, if we’re lucky enough to get to a Fortune 50 CFO, they’ll understand the cash implications right away. But oftentimes, they have a harder time understanding from a merchandising perspective, how to implement this and how to get the buyers to explain to suppliers the benefits that they’ll receive on the SBT platform. So we spend a lot of time evangelizing the benefits of scan based trading. And in large retail organizations, we find that people turn over quite quickly that they get promotions or they move out to other organizations. So I feel like oftentimes, it may take months and months to get somebody up to speed and then all of a sudden, they get promoted out of the position, or they transferred to another retailer. And we’re back at square one. So it’s a challenge that we feel as though we’re beating our head against the wall, oftentimes. But when you get through, and somebody really gets it, magic happens. So that’s what keeps us going.

Rich:
Well, it sounds like this is a business in which belief, perseverance, resiliency, are vitally important to success. How do you deal with all this on a personal basis, you’re the CEO of this company, you have to get up every morning, and realize that there’s a communications challenge ahead of you to make the business grow? How have you adjusted to that? What are your thoughts about how any CEO might deal with a period in which they are building a business like you are?

Mark:
Another good question. For me, I’ve always had a very positive attitude. And I think that’s helped me, because I’ve had successful business ventures, and I’ve had unsuccessful business ventures. And the one thing that I’ve learned through all this over the last 25 to 30 years, is that you got to get up every morning, and you got to put your pants on, and you have to go to work and try to make it work. Over this period of time, I’ve developed quite a decent perspective, it was interesting, I heard something last week, somebody described perspective as being determined to find of happiness. I thought about that a little bit. And it really resonated with me. So depending on your perspective, something small, or something large can be really successful or a failure, just depending on how you look at it. What I’ve tried to do is every morning, I wake up with the excitement, enthusiasm about how much I know personally that this product can benefit people, and then try to impart that upon our team, as well as our potential customers.

Rich:
So it’s a positive attitude is one of the keys to your success. How about the other people in your company? How do you develop them? So they will have the same positive outlook as you consistently display?

Mark:
Well, it’s interesting, what we’ve done over the years is we’ve really refined our hiring process. So now, one of the key determining factors for getting hired at Nexxus Group is having a positive attitude. So in the process of our interviewing, we really look for people who, when presented with potential problems, don’t get frazzled on it, but just look at it and say, “Geez, there’s got to be a way or a solution to that.” That’s a very important indicator for us, whether you’re going to be successful or not at Nexxus Group is just having a positive attitude. I often tell folks when they’re being interviewed, and when I used to interview a lot of our staff, I would ask him to give me the biggest mistake that they’ve ever made a mistake that would get them fired for most jobs. And I would counsel them and say, “Listen, this happens to all of us.” And I’d give them an example of something that I did that I thought was outrageous. One of the reasons for that is just to humanize who we are, and say, listen, none of us is perfect. But if you come in with the right attitude, every day, you’re going to end up being successful long term. You can make mistakes. I like mistakes actually, just as long as they’re not huge mistakes. Because that’s how we all learn. And that’s how we get better.

Rich:
So it’s hire the attitude and train the skill.

Mark:
Exactly. I mean, the funny thing is Richard, very, very, very few people have ever even heard of scan based training before they apply at Nexxus Group. So it’s much easier to teach the skill set than it is to teach the attitude.

Rich:
So scan based trading, which is obviously a good solution for many retailers and for many suppliers as well. Those that are creative and imaginative can see the benefit in the data and understanding the market better. Next question for you. You’ve sort of indicated some of the toughest challenges that you’ve faced. What about when things are going well? How do you celebrate and reward in your company? What are some of the things that you found effective?

Mark:
That’s something that we focus a lot on. And it’s interesting, we spent over a year sort of putting together our mission statements and our core values. What are the interesting core values that came out of our numerous brainstorming sessions and discussions was “celebrating life.” It didn’t come from me, it came from the team, it said, we really do a great job celebrating life. And I said, “What do you mean by that?” They said, “Well, listen, every time somebody has a baby, we have a baby shower, we hold Thanksgiving dinners, full dinners in our cafeteria, we have all kinds of opportunities where we will hold field days, and we go out and we take cruises.” And it’s just celebrating the everyday successes. You know, what I’ve learned over the years is that I spend more time at work than I do at home. So I have sort of two families, I have work family and a home family. Oftentimes, they actually interact and intertwine. But I found that if you can’t enjoy what’s happening during the daytime, where you spend most of your waking hours, then you’re not going to be as successful. So we’re a small company, we have just under 50 employees. But for a number of years, we actually rented out a condo down in Puerto Rico and let all of our staff use it. We provide flexibility and always have folks can work at home if they need be, especially if they’re sick or taking care of somebody. So it’s just being flexible and understanding how we would want to be treated. That’s sort of how we try to treat our teammates.

Rich:
So you do have some remote workers, you mentioned in the context of telling us how much effort you put into seeing that people have a positive experience at work at the Nexxus Group. How do you manage these remote workers, especially during COVID? I imagine a lot of workers have been relocated to being remote. What have you found effective in that area?

Mark:
Well, we’ve had remote workers for as long as I’ve been with the company over 10 years. So we’re used to it. But it was always a minority of our staff, as opposed to the majority of our staff. But the one thing we did after the various hurricanes, especially in Houston, three or four years ago, we looked at what could happen to our organization if a hurricane hit our main office up here outside of Boston. And what would that do to our business process, and we said, we have to do something so that we can have everybody remote if we needed to. So we switched out all of our desktops and gave everybody laptops and we set up a secure system connecting into our platform. And we started utilizing about two or three years ago. And so folks up here in the North, when we had snow days, for example, we told people don’t bother coming in just work from home tomorrow. So everybody was used to be able to work from home for you know, a day or sometimes a week. So when COVID hit, we were actually quite well prepared. For the first three months, we shut down the office. And I was pretty much the only one in the office going into to check on mail, for example. So we were very lucky that we were able to transition to a COVID remote environment without a lot of disruption.

Rich:
Mark, so let me ask you this question. You started off in your career, as I’ve researched it, selling hats in college. And now you’re the head of a technology company. How did this all happen? I don’t understand where you gain the expertise to be able to start a complicated technology company.

Mark:
That’s a funny question, because I’m asked that on occasion. And my stock answer to that is, business is business. It’s really very basic. You need to have revenue, there are expenses, and there’s profit. And it doesn’t matter what kind of business you’re doing. But the tenets of business are all the same. So when I started my first business selling baseball hats when I was in law school, I had no idea what I was doing. I was a political science major. As an undergraduate, I worked on Capitol Hill in Washington, DC for three years in politics. And when I first started the company, the only thing I knew is that we had a product that was better than anybody else. I didn’t know anything about finance. and subsequent to that I’ve been the CFO of three companies. And I didn’t know anything about marketing. I didn’t know anything about operations. We did adopt a tenet that I learned many, many years ago from the retailer, L.L. Bean, is it just guarantee everything, make everything right? If you make a mistake, tell the customer you made a mistake and make it right. So with that and pretty much that alone. I started my entrepreneurial career. And then I just learned along the way. And that’s what we do. So by the time I took over a technology company, I’m not a technologist. I’m not a technologist by far. But I understand that we have to sell a technology and it has to work, it has to provide value, and we have to provide that value at a profit to us. So I was able to take that understanding and work with a team. And I have a highly effective team that are specialists in different areas, including our IT and operations and finance. And what I learned a long time ago was to rely on them hire people smarter than you are, and give them autonomy to make their own decisions. And that served me very, very well. So we oftentimes laugh when we’re talking about new technology upgrades, and my CIO will say, okay, and I’m going to dumb this down for Mark, everybody else will understand. Great. Now, Mark, let me put this in laypersons terms, and I will challenge them on it. But I have a lot of trust my team. But I’m also pretty good about understanding concepts in laypersons terms.

Rich:
I’m gonna ask you two follow up questions to that. One is where your confidence comes from, and where your humility comes from. So let’s start out with the first one, your background, has given you the confidence to approach these unknowns with a very positive attitude.

Mark:
Yeah, that’s really interesting. Because when I look back at my childhood, I was pretty quiet and pretty shy, all the way through high school, and even partially through college. And then I sort of had a coming up period in my junior and senior in college. And then when I went to Washington, DC, right out of college, it was just a whole new world. And I was young. And like many people that age, I just thought I could conquer the world. And I was able to do a lot of great things at a very young age. And I think that gave me the confidence to say, hey, why not make it just as easily could be somebody else. Somewhere along the line, I built up some resiliency to being okay with making mistakes. And I think that’s what’s really helped me along because I’ve made so many mistakes over the years. But I know that if I make a mistake, and if you can admit that mistake, and just come back and try not to make it again, you know, you’ll better yourself. And I’ve been able to do that over the years and not have any fatal mistakes. Now, I’m just sort of happy in my own skin, I guess.

Rich:
Okay, now the second question I asked, I sense a sense of humility in you and something you’ve cultivated, or does it come naturally to you if you’ve talked about the mistakes you’ve made and how much you’ve learned as a result of them? Is this an important attitude for a CEO?

Mark:
Oh, it certainly is. Humility is something that you learn over time, I think, and I had many instances, and when our first company that had company was doing well, we were doubling year over year, everything went right until it didn’t. So when we ran into trouble, we had to come up with a lot of humility, because we thought we were the golden boys, myself, and my partner and everything we touched, turned to gold, and then all of a sudden it didn’t. So you have to learn that life is full of ups and downs. And that’s what brings me back to my whole concept of perspective. I often tell the story when I talk to young entrepreneurs, about what it’s like on the entrepreneurial journey. After the failure, my second company that I bought went under, I actually saved it, so I didn’t have to bring it to bankruptcy. At that time, we had done very well, my both my wife and I, who was an attorney, I had to go into a hospital when my wife had just given birth to our son, who’s now 18 and tell her that I had some good news and bad news. And I was trying to speak with her as an attorney instead of our spouse. She said, Well, what’s the bad news? I said, “The bad news is I took the last $20,000 in our savings, I gave it to the bankruptcy attorney.” And we had had a fair amount of money saved up from the sale of my first business. And when she had left her first job, she got a great severance package. So we’d wasted all that. Or I should say, I had lost all that in less than a year’s period of time. I told her what the good news is, we have a Homestead Act, so they can’t take our house. She looked at me and said, “Are you kidding me?” Now she’s an attorney. So she’s a lot more risk averse than I am. Even though I’m attorney by trade. She said, we’re never doing this, again, you’re never putting your name on a personal guarantee, whatever, borrowing any money again, if you want to be an entrepreneur. So I had to just realize that I wasn’t nearly as successful as I thought it was. And it didn’t matter. In the end, when you make a big mistake like I did.

Rich:
Well, you’re still successful because you have your wife, right.

Mark:
I do have my wife and she saw through it. It was rough at the time. But it actually ironically changed how I did business. Subsequent to that I’ve grown all the businesses that I’ve been involved in without signing a personal guarantee. So I learned that there’s a way to do that, because the only way I could stay in business was to not sign a personal guarantee. So I’d have been able to buy the business that I have. And I’ve been able to grow the businesses through some different financing mechanisms that didn’t require personal guarantees.

Rich:
Well, that’s a lesson for us all, isn’t it? Yes. You mentioned that you had great confidence in your team and you granted individual team members the appropriate autonomy to come to the fore and do their jobs well and you look to hire people who have an expertise that you don’t have How do you develop these people? How do you take them to the next level as the company grows to meet the expanding business challenges ahead?

Mark:
But that’s interesting, because most of the upper level people that hire already have so much skill. And oftentimes in their past professional experiences, they were stymied by their bosses or supervisors. And I just tried to take that obstacle away, and say, listen, how would you do it, and as long as they have the same basic tenets that I do, is that, you know, we treat everybody the way we want to be treated, and we provide the best product that we can, as long as we can do that profitably, then I let them get creative. And so oftentimes, I’ll ask them to come up with new ideas on how to make our business more profitable, more efficient. Part of what I enjoy the most as a CEO is I get to act as a strategist and sit in these brainstorming sessions, and help us collaborate and determine what the best way forward is, as a CEO, I believe my role is to be the chief strategist, and not the chief operator. I’m not supposed to be the chief specialist, either. I look at the team as what’s going to make the business successful, because my definition of success as an entrepreneur is to be able to help create an organization whereby I can step away and the organization can continue on without me. So that’s what I look at every day and say, Okay, if I try to micromanage this particular project, or this particular part of our business, is that going to allow me to step away someday? This came to me later in my career, but I used to think that it was important for me to have my hands and everything. And that gave me some of my self-esteem and self-worth is, “Oh, they need me to be here. They need me to be there.” But what I’ve learned is, it’s actually better that if I can let the team do more and more, so that I’m not there, and God forbid, I get hit by a bus, and I was no longer there, that organization could continue to thrive. And to me, that’s sort of the one thing that I look at as being a success as an entrepreneur, if it can live on without me.

Rich:
Let me ask you this, Mark, there are three key issues of the day. In my mind anyway, work life balance, diversity, and sustainability. Take your pick. How does your company address these issues?

Mark:
Well, we’ve worked on all three of those. Sustainability over the last couple of years and diversity for a little while. Over the past year, we’ve spent even more time on that. But the work life balance is something that really hits home to me, because I did such a poor job of it for so many years. So why don’t I speak to that?

So when I first started my business, I was in 24×7. And I was lucky that my wife was very successful in her career. And she was in 24×7. It was the point where I chose work over my family over my friends over everything. And work became my sole family. That was tough, it was tough on my relationship. And it was tough on my self-worth, because I tied in all my self-worth into how the company was doing. So over the years, once I started having children, you know, my wife would tell me, “Mark, you’re on the road all the time, you’re not coming home, you’re not playing baseball with your son, you know, you’ve been away for the last three games, you need to make a choice here, what’s more important to you.” So when I really sat back and reflected on it, I realized that my business was just a means to an end. And ironically, many people start businesses so that they can create enough wealth and flexibility so they can do whatever they want. And by the time they achieve that success, they realize that spent 30 years not doing what they wanted to do, and not achieving what they wanted to achieve. So in the last five to eight years, I’ve really made a concerted decision, after a lot of discussion with my wife on how do we balance it. What’s important to me, and part of that is giving up more to my team, I’ve learned, the more I give up to my team, the better the job gets done. And the better work life balance I have. We’ve done a good job with our team and giving them more work life balance, because I understand what it’s like to be a parent, what it’s like to be a son with a sick family member, what it’s like to go and enjoy a game or a play. So we really impart that upon our staff and make that an integral part of what we do. We’re understanding that way, we’re flexible that way. If somebody is not happy at work, they’re not going to be as productive. And ultimately, they probably won’t stay

Rich:
Listening to what you said and work life balance, I think there’s a lesson there for me, certainly, and for many others. As one fellow recently told me no one ever died on their deathbed and said the one thing I regret is I didn’t spend enough time at work. Okay, so now my question is, what’s the one question that I should have asked you during this interview that I haven’t asked you yet?

Mark:
One question that you probably should have asked me is, how did I become an entrepreneur? Why did I become an entrepreneur? When somebody asked me that question, I know exactly the day it happened. My father was a company man, he worked at a company a large company in HR for 42 years, and he started on the production line and worked his way up to head of HR for a company with division and over 1,500 employees. And one thing that I remember very vividly was when I was in my early teens, he came home and they had a downsizing or reduction in force, and it was really eating him up, I could tell because he was the one who had to deliver the messages. I asked him, again, I was in my early teens, but I asked him why he seemed to be so upset. And he said, Well, I’m having to let go people that have been here, and given 10 to 20 years of their lives, there are a lot of people that are in their 40s or 50s, and have kids in colleges, and they’re never going to be able to find a good replacement job at that point in their career. I took away from that. I said, Well, you know what, I never want to be in that position. I never want to be in a position where somebody else makes that determination for me as to whether I’m successful or not. From that little seed came to point when I was in law school, and I did pretty well in law school, and my parents were all excited for me to follow that traditional legal path and work at a large law firm. And when I told him that I wanted to sell baseball hats, they thought it was completely nuts. And my dad did until the time he came down, you know, several years later and saw that I had 100 employees, and we’d bought a building and we own all this machinery and that we were actually fairly successful. And I told him, I said, I never wanted to be in a position where I had to compromise any of my beliefs or attitudes in order to keep a job. Or on the other hand, I didn’t want to be a position where I was not in control of my destiny. That’s why I became an entrepreneur.

Rich:
Mark, one final question for you. If you could give one piece of advice to a CEO that would help them be successful, what would you tell them?

Mark:
Don’t be afraid to make mistakes. The more mistakes you make, the better off you’ll be. As long as you’re smart enough to realize that you don’t make fatal mistakes. So be willing to make mistakes, be willing to innovate, be willing to try new things, and you’ll be successful.

Rich:
Well, that message is a good one for us all. And Mark, CEO of the Nexxus Group, Mark Landgren, thank you so much for appearing as a guest on CEO Adventures in Leadership.