Restarting Growth: MNJ Looks Outside The Box, And Outside The Company

What does a solution provider do when a heady run of growth stalls and threatens the future of the business?

That's the question faced by the principals at MNJ Technologies, a Buffalo Grove, Ill.-based solution provider that saw sales grow from zero to over $100 million in the first 13 years of its existence only to see them plateau in 2015 and 2016 as the company wasn't able to transform fast enough to meet the changes of evolving customer requirements.

However, a chance encounter led to MNJ's hiring of a former real estate executive and former Canon sales executive who applied the lessons of other turnaround success stories, along with a little help from a comedian and former baseball pitcher, to change how the solution provider approached the business and helped restart growth.

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Ben Niernberg in 2017 ran a Chicago-based commercial real estate company, and early that year set up a 30-minute meeting with a potential new accountant. However, Niernberg told CRN, he instead found himself in what turned out to be the receiving end of a 90-minute interview with the accountant who just happened to be the brother of Susan Kozak, president and owner of MNJ.

That meeting led to MNJ's hiring of Niernberg in April of 2017 to help find a way to restart the company's growth.

MNJ at the time had gone through a tough couple years. The company's revenue peaked at just over $100 million, and then stayed flat in 2015 and 2016, Niernberg said. The organization had been focused primarily on commodity hardware sales, but in 2013 acquired a services company called Equivoice.

"The Equivoice business is phenomenal now," he said. "But at the time, it was focused on Cisco managed infrastructure and telephony. The two merged, taking a company selling commodities and added services. But neither side understood the culture or the demands of the other side, and how their offerings fit. Both sides didn't understand each other. There were clashes."

Niernberg said that when a company's growth stalls, there are usually two possible choices. The first is to put one's head in the sand and hope the issue goes away.

"The second is look at ways to get momentum back," he said. "It's to look at the needs of customers and how to meet those needs."

When reminded by CRN that there is a third choice -- getting acquired -- Niernberg said that was not a consideration. "Paul [Kozak] and Sue had an entrepreneurial take on the business," he said. "They took pride in the business they created."

The first step to recover growth is to understand why it stalled in the first place, Niernberg said. For MNJ, the primary cause was changes in the customer base and marketplace happening faster than the solution provider could react.

This was compounded by an internal climate and culture clash as the company moved away from its entrepreneurial mindset, and the usual issues faced by any company that has grown quickly in a short time. "At a certain size, processes and skillsets change," he said. "The skillsets needed for a $100-million company are not the same for a $50-million company."

Customers have over the last several years become better educated, and are less concerned with someone able to send the right products quickly than they are with how to match IT with their business needs, Niernberg said.

In 2015 and 2016, MNJ was struggling to cope with the issues, and the Kozaks realized they needed to find someone outside the company they would be comfortable enough with to loosen their controls a bit and bring in a new voice.

They found in Niernberg someone with experience in revitalizing underperforming companies or divisions of companies, he said. "They didn't need someone who understood technology, but someone who understands P&L (profit and loss), sales and marketing, operations, and how to grow a business."

When Niernberg joined MNJ, he set out a couple of key priorities to restart growth.

The first was to understand the needs of the customers and change to meet those needs. And the second was to create the company culture that allowed the company and its entire team to meet those needs. "It's not just something you say, but you need to enable it at each level of the company," he said.

Niernberg drew inspiration from a number of companies who have transformed themselves as their businesses changed, including Lego, Subaru, and Southwest Airlines. "Look at Lego," he said. "They're selling the same dumb blocks they've always sold. Yet their message is focused on creativity."

However, he also kept the words of Warren Bennis, author of "Managing the Dream," who said that the pace of change is just as important as the change itself.

"Even if you know you need to change and where you are going, you can't just drop an email on the business and expect it to work," he said. "You have to have the right pace of change."

Change at MNJ started with re-educating the company's salesforce not from a technology standpoint but from a business perspective, Niernberg said. "Sales reps need business acumen," he said. "We moved to retrain our sales team to understand the business implications and financial implications of their customers' purchases."

This was a slow process, Niernberg said.

"Remember the Bennis quote?" he said. "I've learned through the years that pace is the key. We didn't want to lose any salespeople. If we pushed too hard, we'd lose people, and then lose sales during the transition. We wanted them to understand customer needs. So we brought in customer panels to talk about needs. We did cases studies. We did business acumen training. We got the sales people to buy into the changes."

The second step was the implementation of a program designed by Niernberg called Being the Difference.

"Being the Difference became an internal and external mantra," he said. "We could sell products and services, but we wanted to emphasize how such sales make a difference to each other and to our clients. We wanted to emphasize how to help each other and our clients solve complex problems and solve their issues."

As part of Being the Difference, MNJ knew it needed to improve the ability of its employees to better communicate with each other and with clients. "Sometimes people hide behind emails," he said. "They forget how to talk."

Part of that was bringing in a company called ImprovTalk, a Chicago-based company that brings Ellen Schnur, formerly of the Second City improvisation comedy group, and Jim Mercir, former pitcher of the Oakland A’s, together to teach communications.

"They broke us up into four groups, each with a cross-section of the company," he said. "They focused on building communications skills and building each other up. It was super cool."

The transformation worked. After two years of stagnant growth, MNJ's commodity sales rose 7 percent and services rose by over 20 percent in 2018 compared to 2017. The company expects 10-percent growth in commodity product sales and 30-percent growth in services in 2019, and is already exceeding that pace, Niernberg said.

During that transition time, the company was able to keep its sales force intact, except for the kind of turnover normally seen in the channel, he said.

The successful transformation at MNJ does not mean Niernberg is looking for new opportunities elsewhere any time soon.

"We still have a long way to go," he said. "I'm here for a while. I love this industry. We're retraining sales people every three to five years because the industry changes every three to five years. The need to evolve is always challenging. And there's no limit to what we can do. I love the people here."