3 questions

W14508

EARTHWEAR FACE & BODY: COMMUNICATING CORPORATE CULTURE (A) Julia Cutt wrote this case under the supervision of Professor Mary Weil solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. This publication may not be transmitted, photocopied, digitized or otherwise reproduced in any form or by any means without the permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) [email protected]; www.iveycases.com. Copyright © 2014, Richard Ivey School of Business Foundation Version: 2014-10-28 It was early in the spring of 2014. Tammy Bessant, founder of EarthWear Face & Body (EarthWear), was sitting in her North Battleford, Saskatchewan kitchen, waiting for a batch of lotion to cool. 2014 had been a great year so far for EarthWear. The company’s books were completely balanced, and, for the first time, Bessant was paying herself a regular salary. But with all this success, she was feeling stretched thin. It had become a struggle to prepare and package product, fill orders, manage EarthWear’s social media and email accounts and run a table at the Saskatoon Farmers’ Market (including driving three hours a day twice a week) all by herself. Bessant knew that bringing on part-time employees would free up some of her time, but she was hesitant to delegate. Her unique selling style was key to EarthWear’s success so far, and she was unsure if this was something she could easily teach anyone. She wondered how she could effectively communicate her corporate culture to attract the best candidates for EarthWear. A NEED FOR NATURAL Bessant began making her own skin care products in 2006 out of frustration with the limited selection of “natural” products on the market. A personal experience with skin cancer had prompted her to learn more about the ingredients in what she was using. After doing some research, she was unhappy to learn that many all-natural products contained chemicals; there seemed to be no regulation of the use of the term “natural” whatsoever. Fed up with the situation, Bessant was determined to become an expert in natural skin care. She started by making a basic cleanser and lotion for herself in her kitchen. The first experiment was a success, and Bessant was more than satisfied with the products she had created. She found she even preferred the feel of her new natural products to the synthetic ones she had used in the past. Excited, Bessant told her yoga class in the town of Estevan, Saskatchewan, where she was living at the time, about her handmade all-natural creations. The class loved the idea of truly natural skin care and became Bessant’s test market. She produced products for them and developed questionnaires to assess what they did and didn’t want in their skin care. After brainstorming with her husband, Bessant decided on the name D

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“EarthWear Face & Body.” She felt the name shed light on what her products were for and where they came from — from the Earth to wear on the face and body. Word of mouth spread, and in 2007, when strangers started calling asking to purchase her products, Bessant realized her new hobby could become a business. She took pride in knowing that she was helping to educate the small town of Estevan about the benefits of natural skin care. ORGANIC GROWTH Bessant had a simple website created for EarthWear in 2010. The site allowed customers to make purchases online, introducing EarthWear to a wider variety of consumers. Bessant relied on a web designer to maintain the site, and as a result it took a few years to achieve the functional efficiency and design appeal she was satisfied with (see Exhibit 1). EarthWear experienced its first real growth when Bessant and her husband moved from Estevan to North Battleford, Saskatchewan in the summer of 2009. North Battleford was only an hour and a half drive from Saskatoon, which made it possible for Bessant to visit the Saskatoon Farmers’ Market (see Exhibit 2). A member-owned, non-profit cooperative, the Saskatoon Farmers’ Market was founded in 1975. All members had to “make it — bake it — grow it — sell it”; everything sold had to be handmade.1 In January 2010, Bessant became a member, selling her products on Wednesdays and Saturdays at the market (see Exhibit 3). Bessant found that the clientele who frequented the market were the ideal potential customers for EarthWear, since they were genuinely interested in the benefits of all-natural products. They soon became loyal, repeat customers. Bessant also attended a variety of trade shows and craft shows, looking to grow her business. However, even as she became more strategic about which shows to go to, she realized that people who visited these shows were typically not her target market. She eventually concluded that trade and craft shows were not a good use of her time. Before she made a sale, Bessant liked to have a conversation with each customer. She tried to learn about their skin care regimen and their existing knowledge of natural products. She never forced a sale, preferring a customer leave her table with a better understanding of natural skin care rather than a bag full or products he or she would never use. Her laid-back selling style was well-received by her customers at the farmers’ market and earned her local media attention (see Exhibit 4). In 2011, Bessant began selling her products wholesale to a few retail stores that specialized in natural and organic products. Some retailers were reluctant to accept her wholesale price of 30 per cent off suggested retail price — they were used to a mark-up closer to 50 per cent — but the EarthWear founder stood her ground. She did not want to risk cutting her margins too thin, and she knew that the retailers who were serious about carrying truly natural products would be willing to adjust their usual mark-up. Bessant made sure to do “on location” days at the different stores that carried EarthWear. She knew that she was the best promoter for her products, and she loved interacting with new customers, listening to their all-natural success stories and receiving thanks for her inspiration. By the end of 2013, Bessant’s days were jam-packed. She started her mornings by checking her email for new orders and then updating EarthWear’s Facebook and Twitter pages (see Exhibit 5). Next, she moved

1 “About Us,” www.saskatoonfarmersmarket.com/about-us/, accessed July 23, 2014. D

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on to prepping orders for the mail and preparing new batches of product in her kitchen. Finally, she packaged and labeled the new product, one of her most time-consuming tasks. In addition to selling at the farmers’ market on Wednesdays and Sundays from 10 a.m. to 3 p.m. and on Saturdays from 8 a.m. to 2 p.m., Bessant also sat on the market’s board of directors. EarthWear’s business was consistently growing; sales in 2013 had increased 31.5 per cent from 2012, with 37 per cent of revenue coming from retail stores, 30 per cent from the farmers’ market, 13 per cent from trade shows and the remainder from online sales. In just four short years, Saturday sales at the market had increased from the $200 to $400 range to the $400 to $800 range. But in spite of — or because of — all this success, Bessant was exhausted, both physically and emotionally. That being said, all the hard work in the past years was starting to pay off, and her overall numbers in 2014 had increased by 75 per cent. But it was time to find help so she could continue this kind of growth. EARTHWEAR’S FIRST EMPLOYEE In early 2014, after doing a rough calculation of how much product she had to make to get through the first quarter of the year, Bessant decided that she needed help running EarthWear. She was desperate for another set of hands, someone to help out at the farmers' market so she could stay at home and focus on making product. EarthWear’s first employee came to Bessant by chance. An EarthWear customer, Amanda Roberts, had asked Bessant multiple times if she needed any help with the business. Bessant liked Roberts’s personality and thought she would be good at interacting with customers. She took a chance and hired Roberts, assigning her a few shifts working at the farmers’ market and a weekend trade show. Roberts was kind and respectful, but she was unreliable. Unfortunately, Bessant had to let her go after scrambling to replace her at the last minute at two separate trade shows. This experience was an eye-opener for Bessant. Hiring Roberts had provided her with some much needed time to herself, but, in the end, Roberts had not been a good fit for EarthWear. Bessant knew she had to be more strategic about hiring in the future. She needed to find a reliable employee who understood EarthWear’s unique corporate culture. FINDING THE PERFECT FIT Bessant wondered how to go about finding the best fit for EarthWear. She had considered reaching out to her peers at the farmers’ market for recommendations, and she knew that companies often shared job postings on their social media accounts. Whichever avenue Bessant decided to use, it was important that she first defined what characteristics she was looking for in her perfect employee. Hard skills were not that important to Bessant. She believed that the specifics of cash handling and natural product knowledge could easily be taught. She already had a detailed product book that she kept at the EarthWear farmers’ market table and that could be turned into a training manual. When it came to hiring, Bessant was most concerned about personality. In her experience, customers often felt tricked or coerced into purchasing other skin care products. Bessant wanted every customer’s interaction with EarthWear to be educational and pressure-free. She believed that establishing trust was essential to building sustainable sales. When she ran EarthWear’s table, she worked tirelessly to make it an inviting space. Bessant wanted to ensure that new employees could maintain this aspect of her company's brand. D

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Bessant knew that personality was hard to judge from a resume or interview. She wondered what she could do to attract candidates that met her unique hiring criteria. CONCLUSION Bessant checked her watch; her batch of lotion should be just about cool. Besides interacting with her customers, making product was her favourite EarthWear task. She loved knowing that the products she made by hand, with pride and integrity, were helping people to live healthier, happier lives. In Saskatoon, EarthWear had become a well-known name, synonymous with “all-natural.” Bessant’s dream was that eventually her products would saturate the entire Saskatchewan and western Canadian market. She hoped one day she would need to acquire office and industrial kitchen space. But she could never grow EarthWear that big on her own. Product orders were already piling up, and Bessant was struggling to maintain all aspects of her business by herself. She needed help. She needed to find reliable employees that understood EarthWear’s unique culture. As Bessant got up to check on her lotion, she wondered how she could target her hiring search to find the best candidates.

The Ivey Business School gratefully acknowledges the generous support of K.W. Lemon and Ernst & Young Fund in the development of these learning materials.

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EXHIBIT 1: EARTHWEAR WEBSITE Products Page

Testimonials Page

Source: EarthWear Face & Body, http://earthwearbody.com/, accessed July 29, 2014. Used with permission.

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EXHIBIT 2: MAP OF SASKATCHEWAN WITH KEY EARTHWEAR CITIES

EarthWear Face & Body was created in Estevan, products are sold in North Battleford, Saskatoon, Meadow Lake, and Prince Albert.

Source: Image created by case writers.

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EXHIBIT 3: EARTHWEAR TABLE AT THE SASKATOON FARMERS' MARKET

Source: EarthWear Face & Body, www.facebook.com/pages/EarthWear-Face-Body-Products/303696232754?sk=photos _stream, accessed July 29, 2014. Used with permission. D

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EXHIBIT 4: EXCERPTS FROM PRIARIES NORTH ARTICLE

Saskatchewan Made, All Natural and Growing Strong Bessant is neither a counsellor nor a health professional but she does find herself engaging in conversation with people about some very significant issues. And it starts with simple, gently presented questions about what they normally put on their skin . . . “Everything you put on your skin is absorbed into your body,” she says. As creator of EarthWear Face & Body products, this is a subject of passion for her . . . Bessant brings this simple but challenging message with a great deal of gentleness. Creating and marketing her small batches of moisturizers, deodorants and lotions — made with local Saskatchewan ingredients in her kitchen — has meant drawing attention to the number of times that the term “natural” is misused in the cosmetic industry . . . What she is doing is showing how simple skin care can be. “Many people don’t trust the idea that you can take care of your skin with a natural oil or wash. I was convinced that I needed a gritty, sand-like wash to clean my face. It’s very liberating to find that you don’t need that . . ." Source: "Saskatchewan Made, All Natural and Growing Strong," Prairies North, November 2013, www.prairiesnorth.com/our-stories/people/local_natural_and_growing/, accessed July 29, 2014.

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EXHIBIT 5: EARTHWEAR FACEBOOK AND TWITTER PAGES Facebook

Source: EarthWear Face & Body, www.facebook.com/pages/EarthWear-Face-Body-Products/303696232754?sk =timeline, accessed July 29, 2014. Used with permission. Twitter

Source: EarthWear Face & Body, https://twitter.com/EarthWearFace, accessed July 29, 2014. Used with permission. D

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