VermontBiz The corporate landscape is littered with the carcasses of companies (think Sears and Blockbuster Video) that have failed to transform their operations to keep up with a changing market. Adapting to such changes is difficult, says Sean Reilly, President and CEO of Lamar Advertising, which is why “every organization must be a learning organization.”
But learning and change aren’t without risk, according to Reilly, who knows firsthand through the transformation of his 120-year-old billboard advertising business that if you’re going to be, you have to instill a corporate culture “that encourages people to take risks.” be innovative and ahead of the crowd.
Reilly offered his insights on innovation and organizational transformation on the November episode of the 21st Century Business Forum, a webcast that features monthly one-on-one interviews with some of the country’s most prominent business people and thought leaders.
The most important change Lamar has made in this century is his pioneering effort to create large format digital billboards. Reilly said Lamar installed the first digital billboard in 2004.
“It cost $500,000,” Reilly said. “We had no idea what we were doing. But we were willing to experiment. We were willing to take a risk.”
“And as we learned more about his capabilities and more about what our customers expect from him, we refined the model a lot,” he said. “And now it’s the industry standard.”
A company that for decades had relied on paper and glue billboards for the majority of its business now operates the largest network of digital billboards in the world, according to Reilly.
“It’s generating great revenue for Lamar, but more importantly, great results for our customers. They love it,” he said.
However, the move to digital billboards hasn’t been easy, noted Reilly. That’s because innovation “isn’t just about hardware and software,” the CEO said. “It’s also about people” and their willingness to learn and adapt, he said.
“Our account managers had to get used to selling it,” Reilly said. Our ops people had to get comfortable with maintenance.” That means it took “a fundamental transformation of our company culture so we could really maximize the technology and software that Lamar developed,” he said.
Because of Lamar’s adherence to a bottom-up organizational style, “you can’t let strict rules and regulations come out of the company,” Reilly said. “Rather, what you need is some sort of service ethic,” where company-level employees work to “help our field workers be the best they can be.”
“If you want to know the secret sauce, that’s it,” Reilly said.
Also critical to Lamar’s success in attracting and retaining good employees is that “we nurture religiously from within,” Reilly said.
“The typical entry-level job at Lamar is an account executive, and almost every one of our general managers at Lamar started out as an account executive,” said Reilly, who noted that the average tenure for a Lamar general manager is over 25 years, and the average tenure for a regional manager of Lamar, of which there are six, is more than 35 years.
Because of that longevity, Reilly can say with confidence, “When you have the right people on the bus, the learning happens.”
The Economic Forum is presented by VermontBiz and sponsored by NBT Bank.
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