2. Out of the Box Thinking with Girl Scouts of the USA CEO, Sylvia Acevedo

Curious what role those tasty cookies play in the success of Girl Scouts of the USA? Learn how Sylvia Acevedo, CEO of Girl Scouts of the USA, applied out of the box thinking to pivot during crisis and how she’s transformed the 108 year old organization to increase its relevance with American Girls in the digital age. For more information about Girl Scouts of the USA, please go to www.GirlScouts.org. To learn more about taking your organization from the new normal to the new exceptional visit www.hipersolutions.com.

Transcript

David Morris  00:10

Welcome to HiPER leadership. Today, I am thrilled to have Sylvia Acevedo join me. CEO of Girl Scouts of the USA, exemplar HiPER in so many ways, we're going to really dial into Out-of-the-box [style choice] thinking. Good morning, Sylvia.

Sylvia Acevedo  00:27

Good morning, David. It's a real pleasure to be here. 

David Morris  00:30

Thank you. So, this podcast is really dedicated to the mission of unlocking the maximum potential of HiPER leaders in their organization. Our audience is mainly owners, investors, executive sponsors of large-scale initiatives, and especially during these days looking at the pandemic and the next normal. The big question now and frankly, whenever there's change is: what leaders to bet on. And, one of the things things that I've been so intrigued by, Sylvia, over the years with you, is this pattern of out-of-the-box [for consistency] thinking. Now, HiPERs, HiPER leaders are the 1% of leaders that are motivated by impact, as opposed to traditional executives that tend to be a little more politically driven, or they tend to be about title or position. I have just seen this pattern on HiPER leaders, which is all about specific game change. And, what we've been aiming to do is identify the traits that really cause HiPER leaders to stand out from others. It's interesting, I was talking with Sylvia earlier today just about some of the accomplishments. And what's interesting about it is how it all starts with a tap on the shoulder. It starts in the tap on the shoulder where, all of a sudden, a HiPER leader is asked to do something, which is sort of near impossible, and Sylvia, (when you are) you've had so many of those. Talk to me a little bit more about that near impossible, the one that we were talking about earlier today.

Sylvia Acevedo  02:02

All right, well, thank you very much, David. So that particular opportunity was to sell software in Latin America and the software cost close to $4,000. And the product itself, AutoCAD was rampantly available for free via piracy. So, the Mission Impossible theme was basically the company was getting about a million dollars in revenue from Mexico all the way down to Tierra del Fuego. So, it was like, Okay, can you do any better than that? And in a few couple of years, we had over $20 million in sales, and we were responsible for (half of a) half of the profit one year and you know, so that was kind of that mission impossible. How can you do something like that where basically that you're competing against free and in very challenging economies, how can you get companies to actually pay for the software?

David Morris  03:04

Okay. And, you know, when (when) you were tapped on the shoulder for it, did they even think it could be accomplished? Or was it like, you know, “Sylvia, try your best, but you know, we don't really know what to do.” How did you sort of see the opportunity?

Sylvia Acevedo  03:18

Well, actually, they really didn't have a lot of expectations, which is why (we) all of our profit was just on top of what had been forecast. So, it really did boost the company's bottom line. They didn't have that expectation. But for me, I didn't see it as challenging as people saw it in terms of either the risk, it's a very volatile market; the challenges, you know, with currency, you've got all those issues as well; being a female traveling in those markets; and it's a product that, you know, mostly engineers, architects, large firms, you know, would use, so, you know, (I didn't quite) I thought “Wow, there's a lot of opportunity here.” In addition, what I saw was a lot of the software companies were only approaching the way you sell software through the carrot, I mean, the stick method: they would go to companies and say, “We're going to sue you, if you don't buy the software.” And sometimes those people who would go in to be investigating how a company was using software actually died. There was [sic] three cases of those software auditors who lost their life. So, this was a really high stakes game. I looked at that opportunity, and I said, you know, there's the stick approach or there's a carrot approach. And I sat back and I looked at all of the companies that were multinationals, and also large corporations in those markets that were large, multinational corporations. I went to the company and I said, “Look, we know you are using thousands of AutoCAD seats in your company, but you don't have the manuals, you don't even know if you've got the right versions. What if we provide you a special deal to get all the software, all the manuals, all the support at this introductory price.” And not only that, for the companies that did that, we gave them an award. So, they got recognized amongst their peers, not just (in south) in their country or in South America, but in the world as being somebody who was buying, who was using legal software. And we did that and we were able to get, you know, the train companies, the oil companies, the copper companies to buy the software. And (it really it) it also did something else, which is it made money for the third-party resellers. Previously, people hadn't been able to sell the third-party printers, all the add-on additional software, because there really wasn't a market for it because people weren't buying it. But now they were buying legitimate software and so they wanted the legitimate versions of the add-on applications, as well as wanting the graphs, plotters, and and printers. So, these resellers suddenly had another revenue stream to sell to companies, and they reinforced selling legitimate software. So if they got into a company, a large company that (wasn't selling,) wasn't using legal software, they would say, “Wow, you know, I can get you this amazing printer and all this technology so that you can compete, but you've got to be using [the] legal version[s] of software.” So, we took a very much of a carrot approach, and also rewarding the executives who are making that decision. And it really propelled us to integrate (~or into great, unclear) sales.

David Morris  06:45

Wow, wow. I want to double click on a couple pieces of this, just to put the numbers back out there. So, when you were tapped on the shoulder for the assignment were revenues effectively zero?

Sylvia Acevedo  06:55

A million dollars I think.

David Morris  06:57                                                           

Okay. And when you are finished with the assignment it was?

Sylvia Acevedo  

20

David Morris  

20. And in software, maybe just help the audience understand, what is the significance at $20 million? It was a publicly traded company, 20 million extra dollars. What's sort of the big deal as it relates to the PE(maybe?) multiple? How does it really add up actually?

Sylvia Acevedo  07:15

So, imagine on your bottom line, you had millions of dollars that you really had never gotten from this region of, of the world. You didn't factor that in. So suddenly right to your bottom line, you have this profit that you can add on, so it increased the earnings per shares, and obviously, boosted the stock price as well.

David Morris  07:37

Yeah, I'd imagine if it was like a 10 or 20 times PE, you're talking 200 or 400 million, right within value creation. 

Sylvia Acevedo  07:46

Oh, absolutely. And the other one is that it was a transformative legacy. Those resellers are still in business. Other companies like HP, with its printers and plotters (already may) also made additional business. (In in), we had the first Software Developers Conference in, in Brazil, before Microsoft, before Apple. We did our first software developer conference with additional software being developed around the architectural specifications for the Brazilian market that could be used with AutoCAD. And I remember when we did that conference, people said, we've never had it. People don't pay for software in Brazil. And it actually turned out that there was a market, the large companies paid or companies who had international business, they paid for the software. So, we actually had the dubious recognition of doing the first Software Developer Conference in Brazil.

David Morris  08:43

I think what's so remarkable about this story, Sylvia, is that I was just in conversation the other day with someone in the NBA and we were talking about Michael Jordan, where, you know, with his type of HiPER leadership, didn't only raise his own game and his teams but the entire NBA, how basketball was viewed. And here's an example that yeah, it's $20 million, maybe 400 million in enterprise value, which is terrific for the business. But the reality is what your out-of-the-box [consistency] thinking did, using the carrot is you recognize, that it wasn't just the software they were going to buy. It was the credibility, it was the status, it was the legitimacy. It was ultimately having an event there. And by doing that, in understanding what the customer really did want, okay, it wasn't just to see they had a license, but it was all those wonderful things that come along with it. That probably just changed the way they even viewed software in general. They probably were buying other vendors afterwards that didn't even relate to your brand just because they wanted the status that came along with that.

Sylvia Acevedo  09:46

You are absolutely right. It allowed them to show to their peers in the global market that yes, you may think that you know, Latin America is a bottomless pit of piracy, but it is not. And here's the leadership that I am showing by the copper company in Chile or the oil companies in Venezuela or the railroad companies in Argentina or Mexico, you know, they could all hold their heads high with their international peers be saying, I'm playing by the same rules that you were playing by.

David Morris  10:21

Wonderful. An example of why we believe for HiPER leadership, this is a box that has to be checked when owners, ambassadors, and executive sponsors are betting on somebody to transform their organization during this pandemic more than ever. As we shift into more about what it's like to live with this out-of-the-box thinking, to have really a lot of a lot of it [the out of the box thinking]. You know, one thing I'm curious about is just going back, even to the early days, Sylvia, when did you first realize this superpower? And again, I’ve known you, I have seen some of the other things that you've done, so I've seen this pattern of out of the box thinking; I just learned this one today. I mean, I'd never even heard this story before. Okay, but there's this pattern with you. When did you realize that all of a sudden, you can just come out with these, just, you know, out-of-the-box thoughts?

Sylvia Acevedo  11:12 

You know, I don't see it that way. I just know this is how I look at the world. So, one of my first jobs was actually as an engineer in Silicon Valley working at IBM. What I did that was a little different is[sic], you know, I was doing facilities and if you think about it, wow, how boring is that, you know, moving desk [I think this is right, but I don’t understand this sentence], or it was a manufacturing line. And so, you know, people are like, “Oh, (this is) you get the really entry-level jobs, Sylvia, we're moving this particular production from one building to another”, but I didn't see it that way. I saw it as, “How can we improve productivity by a better design?” And so, when I'm, you know, I was given this really small task, and by doing that with thinking about “How can I make the workers more (more) productive”, you know, “Do we need to change the type of equipment?” “Do we need to change the layout?” Looking at all those elements, that actual production skyrocketed, and because the production skyrocketed, IBM was at the time building the largest manufacturing facility that they had in Silicon Valley at the time, it was 756,000 square feet. And because of the innovation I showed on that small job, and its impact on production, I got to be the lead designer on the entire main product that was being put into that building. And again, I looked at it in a very different way. I looked at it [as], it's in a clean room facility, which is all white and you're wearing those burkas so that you're not exuding anything that might damage the disk drives or the computer equipment, and it's a very sterile environment. And I again, I looked at it as of not just how are we going to fit and maximize the amount of equipment, but how do we improve throughput, not just by the physical design, but also by the design of making it easier for the staff so that they can be more productive, because it takes a lot of time to, you know, put on the cleanroom gowns and then also go through the air showers and then start working. And then if you have to take a break, then there that whole thing takes a lot more time. Well, I designed that into the system, (I) we used a whole new type of locker system to make it more efficient. And then also we added color. And that sounds like a no brainer. But at the time, it was sort of no color; it's a no-no, but we added color by putting banners that didn't interfere with the airflow. So, at a glance, you could see where you were by these color-coded banners. And then the other thing I did, which was I added windows and even though we were completely inside, what I realized is that people were feeling very claustrophobic and we added windows so that they could look at people out in the halls. And all of these things dramatically (improved) increased production. Now for me, they were sort of like, “Gosh, (just) this [is] just the right thing to do.” I didn't think of it as anything different. But now I look back and I realized that because I thought differently for that small job that gave me that opportunity for the much bigger job. And for quite a while, it was IBM showcase manufacturing facility that they would bring people in and because we had designed it, where people could look in and see the state-of-the-art manufacturing without actually having to don the, what we call the cleanroom bunny suit, you could have more people come and see it without them having to actually get in the production environment, which could also possibly taint the (the) material and the disk drives and the computers.

David Morris  14:59

Well, one of the things that really strikes me about this is out-of-the-box thinkers don't necessarily think of themselves as thinking that differently (laughs). It's the other 95% that don't just naturally think this way that all of a sudden say, “OMG” and (and) one of the (one of the) things that I just noticed in going through some of our insight tools, is that sort of flexible, systemic thinking, (you know), on one hand, the big picture thinking, but then the agility to, whenever you hit the obstacle, to be able to just so quickly maneuver and then [be] energized by the adventure, novelty, newness. These are just some of the things that we saw stood out.

Sylvia Acevedo  15:38

Yeah, you know, you're right. When you see things that are very, you can kind of see the other aspect of it. So, I think about some of the demographic work I did when I lived in Austin, Texas, and I had just finished selling a company, me and three other engineers created a company and sold it and I had choices, and I decided at that time that I wanted to, (you know,) figure out how to give back. And by giving back what that meant was, “How could I make a difference?” And the demographer of Texas, he had given a presentation about the changes and how that was going to be bad for Texas. And I remember leaving his presentation and thinking, “Oh, my gosh, this is really horrible.” And then I thought, “Wait, he's talking about people like me, they look like me. And I'm like, this is not the way.” And so, I began to reinterpret the data in a way that showed that this could be a competitive advantage for Central Texas. And that the actual workforce that we had was a competitive advantage, and by doing that, I created this grassroots mobilization that allowed our Chamber of Commerce to bring in a lot more outside companies. It became a grassroots mobilization educational event around the country, and it got me on the White House commission.

David Morris  16:56

Fabulous, I am gonna [going to] transition this: so what you can sort of see so far in Sylvia's career, in [unclear] these various tours of duty, these various endeavors, each of which require this out-of-the-box thinking together. At Girl Scouts of the USA, this is an analogy I want to put out there, which is if we think about Hollywood, and specifically the role of the producer, the producer being able to envision a possibility, to be able to line up the money, to be able to develop the team, to be able to pull it off. That producer: I just see so many analogies with your thinking, Sylvia, and the thing I want to understand when you (when you) took on this role as CEO, and how here it was really a matter of not just coming up with some out-of-the-box thinking Sylvia, but the alignment that you had to develop with your team, with the stakeholders, the board, etc. is how (you know how) you would describe the (the) challenge you were tasked with, and specifically how you now dealt with the near impossible of being able to align the amount of stakeholders you have, and then going into this whole pandemic. So, love to just hear how you deal with that, more in this producer role, as opposed to being able to do a lot of it just on your own. Now you're having to do it through so many other people.

Sylvia Acevedo  18:23

Well, thank you for that, (you know), I really look at my business background as being so instrumental. So, working with a reseller channel is perfect preparation for working with 111 different councils, because they're their own organization, they’re their own 501c3, and the way that you can motivate them is only through inspiration and aligning your interests with their interest. And I realized that with that example of selling software in Latin America; that I could get the reseller support if I aligned our interests with their interest. So that was incredibly important for me. The other part is also working in the educational space, so really understanding the needs of parents and their kids. So that helped me understand the importance of program. So, when I started, I really focused on three things, which is called, our membership because we're a membership organization. And membership is driven by program. That means it's got to be fun, relevant, and safe for girls. Movement, which is the combination of those 111 councils and Girl Scouts, and then money, we have to be focused on having the fuel to drive your [sic] business in the future. So, in terms of relevance and programming, what I realized was that we had not done any really substantive investments in programming for girls, and especially that was relevant to the life they were living today, many of them with a mobile device in their hands. And so, in the last three years, we've come up with 100 new badges in STEM which is science, technology, engineering, and math for things like robotics, cybersecurity, coding, digital data analytics, mechanical engineering, automotive engineering, as well as the great outdoors. And if you think about every badge, that's like a bullet point on a girl's resume, so we have made the programming amazingly relevant. And that's where we started is getting that relevance for the girls. And then the cookie program, which (is) fuels the entirety of those 111 councils. That's where they get their dollars. It doesn't come (to) [from] national it comes from the iconic cookie program, which is the largest entrepreneurial program in the world. So, what I realized then is we didn't have the right type of baker relationships and we began investing in that. And we have really overhauled that business, and because we did that three years ago, now when COVID hit and shortened our cookie season, the team already was a well working high-functioning team and it could quickly pivot, and in nine days created an entirely new back-end system handling logistics and supply chain challenges, but doing that in nine days in a massive marketing campaign that enabled us to really (provide, say,) save the cookie season this year.

David Morris  21:15 

Yeah, I mean, if you take a look at this specific tour of duty, COVID, we just take a look at a retrospective across the last eight weeks or so. Okay, if you had just been brought in for that, what effectively is the magnitude of the accomplishment? And what was the number one challenge for you as more of a producer, Hollywood producer-type, as opposed to individual contributor, you had to do this through others, but what was essentially the out-of-the-box objective you put out there, and how did you get everyone aligned as opposed to doing [it] yourself?

Sylvia Acevedo  21:49

You know, David, that's a really great question. And the first thing was a deep dive on the severity and again, having (that big, you know,) that extensive business background working in high-risk situations, having worked in technologies where you see ups and downs, you know, the booms and busts, I realized that it wasn't just going to be a business impact it was actually going to be, you know, a health issue as well. And we were in the middle of the cookie season. So, you know, girls were having in-person sales. So, the first thing was you have to take a leadership position. And so, we immediately stopped girls from having in person sales. And now it just seems obvious, but back then, (you know,) in early March, (you know), people were still not, (you know,) appreciating the severity of COVID. So, one is leadership. The second thing is really never losing sight of what's our strategy and, and our strategy is to provide compelling programming for girls, and to create girls of courage, confidence, and character who make the world a better place. And so, what were the two key, what we call Super Bowl, wins around that? Well, one was clearly, “How do we save the cookie program because that enables us to have the game-changing experiences for girls?” The other one is, “How do we virtualize our entire product program portfolio, which is normally only done in person, and put that [up to] make that virtual?” We did both of those things at the same time. And then at the same time, we found out about the stimulus funding. And when (we read,) I read about it on that Friday, that it was passed, I called our DC office. And I said, “On Monday morning, I want to have a presentation on how we're going to utilize this if we're (if we're) eligible. And by Monday afternoon, I want you to do a webinar for our entire 111 councils.” And as a result of that we were able to act very quickly. So, I think bottom line, it was communication, we increased our communications to the field to our staff, we were very clear about what our objectives were. You're very clear about what you're not going to be doing as well and keeping people informed and making sure that the actions that you're taking are aligned with those, (you know,) quote unquote, Super Bowl wins. (You know,) it allowed us to accomplish something in just, you know, a few weeks that if I had said earlier in January, we are going to do all of these things, by the end of March, everyone would have laughed and would have said that that was impossible, but instead, that impossibilities became a reality.

David Morris  24:28

I thought you were gonna say if they thought you would do that during your whole tenure as CEO then…(both laugh) [thought trails without completion] Well, it's again in these eight weeks, we saved the cookie business, virtualized the program portfolio, and then from a cash flow standpoint, what type of total numbers generated and additional sales and digital cookie sales? [both talk here, this is my best guess]

Sylvia Acevedo  24:47

(Well so), in our digital cookie sales, it's over $8 million with that Cookie Care [this may be a trademark] program. But there were so many, the cookie season had been shortened, and so we had over $50 million in inventory out in cookie cupboards, and in girls homes. And what happened was, the girls created their virtual cookie booths. And that truly moved those 10s of millions of cookie boxes across America. And they did it in a way that I have to say, you know, I may be the CEO, but what was so compelling is how everybody bought into the vision and then they created the magic. So, we saw girls creating, (you know), thousands, 10s of thousands of face masks for first responders. We saw girls orienting the cookie program so that those truck drivers that are providing our supplies to our doorsteps; when they stopped in New Mexico, when they stopped in Ohio, guess what? They had a Girl Scout cookie there. And what that meant to them: it meant that (you know,) somebody knows you're risking your life. Somebody knows that you are doing this for us and you are appreciated and we are grateful. And there were 10s of thousands of cookies that the girls organized to be delivered to first responders and hospitals. And (I have) [it] is so heartwarming, all the stories of those, (you know,) health care professionals which had been working crazy hours seeing so many people lose their lives to this COVID. But, (you know,) somebody was recognizing them. There was that cookie box (this this): The Girl Scout cookie is such an American icon. It's emblematic of so much more. It showed in a way; (you know,) another cookie wouldn't have meant the same, that you are important, that you are cared for, (you know,) that cookie box became joy, love, appreciation, and also, so many of our girls, they just unleashed, wanting to make the world a better place for all those seniors that were in community centers that weren't allowed to have visitors. And so, girls did a national service project by writing and creating artwork and cards for those folks that weren't able to have visits from anyone else. So, (you know), I love how people just took it to another level. And in Memphis, Tennessee, I love this, these girls did all these girls scout at home, their space science badges, their robotics badges, and they wanted people to know what they done. And so, they created signs, lawn signs that say, “Hey, I did robotics!”, “I'm a Girl Scout” or “I made a friendship bracelet” or “I got my space science badge” or “I have a rocket ship” [This was edited to reflect what the sign said, not what Sylvia said verbatim] which is one of my favorite yard signs. So, what I loved was, you know, if the vision is clear, then “Wow, magic happens.” And it is amplified in a way that the ripples are, you know, still, you know, affecting lives in such a positive way.

David Morris  27:45

Yeah, well, it must be so rewarding to you, (you know), in terms of how your career evolved, and to move into this kind of producer role, as we call it, to put that vision and strategy out there, lead by example, but then to just see the ripple effect it has is remarkable. Really amazing, Sylvia, what (what) I would like to close on is again, going back to the audience: investors, owners, executive sponsors, think large private equity firms dealing with challenging portfolio companies, etc. When they're interviewing candidates, and they're trying to determine if that candidate is a real HiPER; they're really impact- and mission-driven, and that they have this out-of-the-box thinking that we're talking about, what guidance do you have for them when they are selecting their CEO to really verify that the that the candidate thinks this way?

Sylvia Acevedo  28:34

I like to think of it as, do they ride the wave? Or do they make the wave? If you think about a surfing analogy, did you ride the wave, or did you make the wave? Because to me, that is the difference. You know, when you're a manager, you pretty much know your resources, your constraint, you know your market, you know the competition, and then within those constraints, you meet or exceed your goals and that is incredible management. That's excellent. But in times like now, the leader still captures success, still captures victory, even though all of those things are unknown. You don't know your resources, you have an uncertain environment, you have a high-risk environment. And yet, you're still able to achieve your goals. And so that would be the type of question I would ask them to look for those types of experiences for their executives.

David Morris  29:30

Thank you. I think based on past stories, they have reference checks, critical, etc. This has been a delight. Really appreciate you being with us today, Sylvia.

Sylvia Acevedo  29:39

Thank you very much, David. It's always a pleasure to work with you and your team.

David Morris  29:44

Thank you all for joining today HiPER leadership. Another example of a critical quality in determining if you do have a HiPER leader. Subscribe to the podcast and [I] look forward to introducing you to other exciting HiPER leaders.