Some would say that Steve Matyas took quite a risk 14 years ago when he left the cosy confines of an established retailer, Shoppers Drug Mart, to hook up with a fledgling new Canadian office products company as its first employee.
Yet, when you're the son of Romanian immigrants who defected so the family could have a new lease on life in Canada, gambling on a career hardly qualifies as risk. So, when opportunity knocked in 1991, Matyas embraced the challenge of joining entrepreneur Jack Bingleman as a vice-president in the startup of Staples' Canadian operations.
Within nine years, the industrious native of Bucharest was heading up the flourishing Staples operations in Canada as president, and today, the company ranks as one of Canada's top retail success stories, boasting 240 stores and more than $2 billion in annual sales. Those numbers have exceeded even the wildest dreams of a shoot-for-the-stars executive.
1. Why did your family leave Romania?
|Ken Kerr, Business Edge|
|Staples Business Depot president Steve Matyas has watched the company develop into a Canadian office supplies giant in less than 15 years.|
"Primarily, the reason was that my folks felt that living under the communist regime was not one of the best things for the long-term health of our family, so we fled the country. My father got a student visa to go to Belgium and my mother and I went to Italy. We met in Italy, took a boat over to Canada and settled in Windsor. I was seven then. I don't think about it as much as I did when I was younger, but certainly I pinch myself every day."
2. Were your parents your main role models?
"Yes. They both worked very hard. My father is an engineer and my mother is an accountant. Because they had difficulty finding jobs in those fields, they decided to open up a restaurant. They worked very long hours and it was a very valuable learning experience for me, seeing how hard they worked. At the end of the day, it doesn't matter how intellectually gifted you are. On top of that, you need to put in the time to make sure things work out. Of course, education was also very important to my parents."
3. How has your experience early in your career with Abbott Laboratories and Shoppers Drug Mart helped you succeed at Staples Business Depot?
"At Abbott Labs, I started in a junior position as a sales rep in downtown Toronto and that helped me get a good understanding of customer service. It taught me the importance of looking at things from a customer perspective rather than from an operation perspective or an inward perspective. I think that was important because it gives us an opportunity in our business now to have a better understanding of the customer and a much stronger focus on the customer, making sure that the customers get what they want, rather than what we want to sell them. At Shoppers, they were very good at taking risks on people and rotating them through a number of functions if they believed the people had some potential for growth. I started there in operations and they moved me into jobs where I didn't have experience. They moved me from operations into merchandising, and then to marketing and advertising. They took a lot of chances and risks and that has really paid off handsomely. That has led me to be more of a risk-taker in terms of taking chances on individuals in our company, as well as taking chances on their ideas."
4.Why did you leave Shoppers in 1990 after 10 years with that company?
"Murray Koffler, who was chairman of Shoppers Drug Mart, always tended to be very paternalistic. He was a big believer in a concept that gained some traction over the last few years with Jim Collins' book Good To Great. That concept was, "surround yourself with great people and eventually you'll find the 'what' of what you want to do, but the 'who' is most important.”
Because Murray was very paternalistic, he repatriated all the senior executives back to corporate headquarters (from the company's divisions). At that time, I was relatively young - not that I feel a lot older today. I would have been one of 11 senior executives that would have had a job that didn't have a lot of meat on the bone, so to speak. So, at the time, I felt that it was important, because retail is such a small business, to make sure that Murray knew I was going to start looking around to reposition myself with a better opportunity. It just so happened that a childhood friend of my wife's ran into her and we eventually got together with her and her husband. Her husband told me about a joint venture between Staples and the former president of Beaver Lumber (Jack Bingleman, founder of Staples Canada). I made a cold call to Jack, we got together, we hit it off almost immediately and I joined him in March of '91 after about five months of discussion."
5. What impressed you about Jack Bingleman?
"He was very forthright, very direct, very honest and very humble."
6. What have been some of your most important lessons in working your way to the role of president?
"I've learned a lot about patience. One of the things that I think I've really learned at the end of the day is how to nurture people, taking risks and ensuring that we have an environment where people aren't afraid to take chances. I think that, more often than not, senior executives tend to be caretakers rather than rulebreakers. I think it's best that we create climates in which radical innovation can flourish. I've been extremely lucky in the way things have turned out when I've taken risks."
7. What do you remember about Staples Business Depot in its infancy in 1991?
"You almost like to think of it like a first girlfriend. You always have these romanticized ideas in your mind about how it really was, and I'm not sure that my memory is quite that good. Perhaps I'm going to embellish it more than it is. But I remember it being a very exciting time. On Day 1, our volume was about four times what we expected to do, which leads you to believe that we were extremely lucky or awfully poor at forecasting, or a combination of the two. Our intent at the beginning was to open 26 stores in Canada by the time five years rolled around. Again, our forecasts weren't on the mark as we had about 60 stores in five years. We never envisioned that the Canadian office supply industry could support more than somewhere around 50 stores at maturity, and here we are today at 240 with plans to grow to the range of 300-350 stores."
8. Does the parent Staples company allow you much independence in running the Canadian operations?
"My experience is not much different from most other folks (CEOs) who are Canadian (subsidiaries), which is that you're only as good as yesterday's numbers. When things are going very well, you have a lot more autonomy than when things slide down the other side of the mountain. We've been extremely gratified with our results and our success over the past 14 years and, as a result, we've really been at the forefront of financial metrics for the parent company. We've often led the parent company in terms of sales per square foot and in terms of operating income per cent, and so on.
"As a result, we do have an awful lot of autonomy relative to other folks who are subs of large U.S. or international parents."
9. If I apply for a job with your company, what do you want to see on my resumé?
"I'm not so sure that we focus as much on skillset, to be honest with you, as we do on attitude. I think that, if you've been out of school for anywhere from five to seven years, we take a look at where your direction is. We've been very flexible. When we started in this business, because of my parents' background in the restaurant business, we took some chances hiring people from the restaurant industry and the fast-food business. And we've had some remarkable success with people from that industry. So we look for people who have the right attitude more so than skillsets, because we think that we can teach people skills. Our business isn't rocket science, it's really a people business. It's about how we treat people and how we make them feel when they do business with us."
10. How has the office supplies business in Canada changed during your time with Staples?
"About 10 years ago, there were all sorts of predictions from pundits that the office supplies business would change considerably and we would become a paperless society with a paperless office. The irony of that is, in fact, we sell more paper today than we've ever sold before, both on a per capita basis and in total tonnage. A lot of that has to do with the number of e-mails that people print out. We've also seen a huge increase in the amount of technology that has become a core part of our business. When we started the business in 1991, there wasn't such a thing as a Palm Pilot, for example, or a Blackberry (handheld) and those have become core commodities when it comes to small- business folks and mid-sized and large businesses as well."
11. How do you see the product line changing down the road?
"I see more dependence on technological advances and technological resources and less dependence on the traditional office supplies. Even today, we see a lot of people writing their notes on their tablet laptop computers as opposed to writing on paper. We're seeing a gradual shift toward that and a gradual decline from paper-based business. We're seeing a slow but sure erosion of paper-based calendars and organizers and it's not just in our business. It's happening in the market in general."
12. What is your company doing to cope with the increasing competition in the office supplies space?
"We try and do a good job of differentiating ourselves. What we need to do is provide our customers with an unequivocal reason to shop us first. What is really going to create a gap between us and the competition is giving them that reason. At the end of the day, in our business we're frequently reminded that there's almost nothing that we sell that you can't get some place else. So the specific product or service alone can't be the sole differentiator. You have to do other things, such as making sure you have the best selection possible and you have to make sure you have what I would describe as a 'repeatable differentiated experience' and that speaks to customer service. The real key to it is making sure that customers look at you and say, 'You know, there's something really special and different about my interaction with the Staples Business Depot organization.' But if you're successful, you start spawning competition. It's an unfortunate part of life. On the other hand, if you stop to think about it, the inverse is even more unfortunate."
13. Has Staples Canada lost some market share recently to competitors like Sam's Club and Best Buy?
"Despite the fact that Sam's Club and Best Buy have come into the market, we've had some fairly significant increases in many of the categories in which we compete. It's hard to measure the opportunity cost. For example, if you're growing at 10 per cent, you have to ask whether you would be growing at 15 per cent, for example. It's difficult to say. But I would say that they are growing and taking market share. Fortunately, it's not from us."
14. Are you placing more emphasis on serving the small-business customer?
"Yes, much more. We're constantly looking at what we can be doing better to serve the small-business customer. And we're not only looking in the rear-view mirror in terms of what's happened in the past, but we're looking toward the future, thinking about all the changes we're expecting in wireless (technologies) and everything, what impacts that will have on our small-business customers and how we can handle their needs in the future. Roughly, about two-thirds of our business is from small businesses."
15. Are you satisfied with the growth of your online store?
"Our percentage of online sales is somewhere between five and 10 per cent and it's growing at double-digit increases every year. It has been growing substantially. We've made a tremendous improvement in our website and made things a lot easier for customers to use. In Canada, we took a page from the folks at Amazon (online retailer) in learning how to create that customer intimacy. For example, with our new website, if you visit the site and you're a registered user, it says, 'Welcome back, Gyle.' You're probably thinking, 'So what, everybody says welcome back, Gyle.' But the Staples site says, 'Welcome back, and would you like to go back to your favourite aisle or would you like to go to your list of favourite items?' I think our customers have had a repeatable experience of customer intimacy with our organization that is really valuable, and I think that's a valuable lesson from Amazon."
16. What's your long-term vision for the company?
"We're not very good forecasters as I've indicated before, so I'm not sure how good this vision is going to be. I think if our current model coupled with some of the new prototypes that we're testing works out, I can see us in the vicinity of 400 to 450 stores across the country. One of my key objectives continues to be to find ways to continue to generate the type of rapid growth that we've enjoyed over the last 14 years. As your base becomes larger, it becomes more and more difficult to do. Yet, I think there are boundless examples of companies out there who have been able to do that. I think our friends at Wal-Mart are just a great example of a company that, despite its huge size, has been able to continue compounded growth that's been very impressive over 25 years. So I'm hoping to find a way to emulate that type of success."
17. Do you envision Staples eventually merging with another major office supplier, such as Office Depot?
"Back in 1996, Staples in the U.S. attempted to merge with Office Depot and that in turn would have created a merger between ourselves and Office Depot in Canada. At the time, the Canadian government approved the merger in Canada but the U.S. Federal Trade Commission declined to allow it, indicating that it would be non-competitive. Despite the fact that the U.S. merger didn't happen, we still wanted to proceed with the Canadian merger, but the folks at Office Depot felt it was an all-or-none situation. I don't foresee it happening now, to be honest with you. In terms of other major competitors at retail, there isn't really anyone out there that has a mix of product that would be conducive to an acquisition. Even if, for example, Sam's Club or Best Buy was available for purchase, it just doesn't make sense in terms of our core competency."
18. Who's the business leader you most admire?
"Warren Buffett (chairman of Berkshire Hathaway). I like the fact that he's a strong believer in decentralized businesses and like the fact that he believes in giving his business unit heads a lot of latitude to arrive at the numbers that they agree to. His role is essentially to make sure that the capital that's invested goes to where it is going to get the best return and the rest of it is used for day-to-day operations of the business. How to achieve the bottom line is left up to the business unit heads. And, clearly, he has been extremely successful with that formula for many years now."
19. How do you see your career evolving and have you ever contemplated working for the parent company of Staples?
"I've always felt, not only with this job but in previous positions I've had, that as long as I'm intellectually challenged, the job is rewarding and I enjoy the people I work with, you can't find a combination that is much better. As long as I continue to feel that way, I'd like to think that I can contribute here. As for (the parent company), frankly, I haven't given it much thought. I suppose I would (contemplate it)."
20. What is your greatest source of pride from your time at Staples?
"I would say the thing I'm proudest of is looking back on my start with the company when it was just an idea on a piece of paper and growing that to a business of more than $2 billion today. And, if you'd have asked me in 1990 if I would one day head up a company that was one of the top 10 retailers in Canada, well, I would have had a huge chuckle over that. I probably would have told you that clearly wasn't going to happen in this lifetime. I think a lot of people look back on their lives and their careers and think about things they'd like to do, but I guess I've been extremely fortunate in that I've been able to live out some of these dreams that, frankly, I never thought would be a reality. I've been incredibly lucky. I've had some great mentors and I've been extremely fortunate in being able to surround myself with some incredibly talented executives at Staples Business Depot who have really been the key contributors in making this company as great as it is."
* Title: President, Staples Business Depot.
* Born/Raised/Age: Bucharest, Romania/Bucharest, Windsor, Ont./50.
* Education: University of Toronto, genetics degree.
* Family: Wife Phyllis, two children.
* Career: Matyas joined Staples Business Depot in 1991 as a vice-president and was promoted to president in 2000. He began his career as a pharmaceutical sales rep with Abbott Laboratories in 1976. After five years with Abbott, he joined Shoppers Drug Mart as an operations consultant and spent 10 years with that company in various positions, including director of merchandising, director of marketing and advertising and executive vice-president.
* Accolades: Matyas was the 2002 winner of the Canadian Institute of Retailing Services' Henry Singer Award.
* Moonlighting: Matyas is vice-chairman of the board of directors for the Retail Council of Canada and is on the advisory committee for Ryerson University's school of retail management. He was appointed to the board of Epcor Utilities Inc. in 2003.
* Pastimes: Photography, reading.
Staples Business Depot
* Profile: Staples Business Depot is Canada's largest office products retailer with 240 stores under the Staples Business Depot and Bureau En Gros brands, and also sells its products online. The company is a division of U.S.-based Staples Inc., a $15-billion public company that trades on Nasdaq (SPLS).
* History: Staples Business Depot was founded by Canadian entrepreneur Jack Bingleman in 1990 and began operations in 1991 with its first store in Toronto. Staples Inc., one of the original owners, bought out the remaining 58 per cent of the company in 1994 to become the sole owner.
* Ringing registers: Staples Business Depot boasts sales in excess of $2 billion annually from its 7,000 brand-name office products.
* Website: www.staples.ca.
* Head Office: 30 Centurian Dr., Suite 106, Markham, Ont., L3R 8B9.
* Phone: 905-513-6116.
(Gyle Konotopetz can be reached at email@example.com)