Outerwall's Culture of Innovation
The Motley Fool is on the road in Seattle! Recently we visited Coinstar -- now officially renamed Outerwall -- to speak with CFO-turned-CEO Scott Di Valerio about the 22-year-old company's well-known coin-cashing machines, as well as its more recent acquisition of Redbox, and future initiatives to expand into other aspects of the automated retail market.
In this video segment, Scott describes Coinstar's innovation and openness to new ideas, balanced with the structure and discipline to evaluate trial programs and prototypes realistically and know when it's time to move on. The full version of the interview can be watched here.
A full transcript follows the video.
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Eric Bleeker: Great. First generation of the company Coinstar, second Redbox, and really beginning a third one right now. You talked about making low bets across the business. How would you establish what you want to put manpower behind, versus when you're going to move on beyond an idea?
As we know, one thing that can concern shareholders a lot of the time is companies chasing some too far. How are you going to establish the discipline for the right moves to make?
Scott Di Valerio: Right. Well, we are very structured in how we make investments in our new business innovations, and what the metrics are that are required for them to continue, for us to continue, to invest. We do kind of run them on a survivalist basis.
There are key metrics that each of the businesses that we decide to move forward with are on. They have to hit them on a monthly/quarterly basis. If they're not hitting those metrics, we make some tough decisions. We're looking for alternative solutions for our Orango business, which was our used/refurbished electronics business. We shut down Chirp about two years ago.
Again, it's around being very structured. Once a business isn't doing, consistently, what it needs to do, we turn it off and move on to others. We have a team that really does focus on bringing new businesses to marketplace. We set up card tables and test them out, and then begin to figure out how that business might work if it's successful.
We have enough to keep churning those through, so we don't need to hang on one that that might not be doing what it needs to.
Bleeker: Got you. I guess that would lead into, from a leadership perspective -- and I know you're new on the job here -- but how would you foster that kind of culture, where people are always looking for new ideas?
You're clearly looking to take advantage of some of these verticals, and what you see as a huge opportunity in automated retail. How do you build out a culture within a company, that people are trying new things and not afraid of failure, and being really innovative?
Di Valerio: We're lucky because it's in our DNA, because of how we started the company, both the coin and the Redbox businesses, as well as some of these newer businesses. What we try to do -- you mentioned it -- allowing people to fail, but to learn from those failures and then keep making the right investments going forward.
We really do try to foster a company where people feel like they have the power to make decisions. They're empowered to go after businesses, but they also are empowered to make mistakes and then to learn from those mistakes. I think we've been successful at that.
We've structured, in order to be able to do that, we have a team that's really focused on the new business innovation. We have teams within each of the lines of business that are focused on that, that continue to extend out our brands and not sit back on our haunches.
Again, it's a matter of just allowing that openness and really being -- as we talk about -- being inventive, being intuitive with our businesses, and then also being inclusive, both from our employee base but really also inclusive by understanding what our customers want.
The article Outerwall's Culture of Innovation originally appeared on Fool.com.Eric Bleeker, CFA, and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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