Robert Keegan was elected president, chief operating officer and a director of the Goodyear Tire & Rubber Co., in October 2000. Prior to joining Goodyear, he was president of the consumer imaging business and an executive vice president at the Eastman Kodak Co. in Rochester, N.Y.
In his first published interview with any tire publication since joining Goodyear, Keegan discusses changes at the tiremaker, its brand focus, and where the company is headed.
You came to Goodyear from a non-tire background. What were some of the challenges you’ve faced coming to Goodyear, and what has been your focus?
"The learning curve, primarily, was in getting to know how the industry works, how people think through their business, and finding out where there are untapped areas to grow this business and grow it profitably for Goodyear and our channel partners.
"I have spent a lot of time talking to various customers, learning how they run their business models and really trying to show people that I don’t want anything but open communication. And, I think that most of our channel partners feel the same way, although they don’t always agree with some things we might do.
"We’re dealing with the same consumer, and we’re attempting to create differentiated products and take the consumer to a richer mix of products. We’re dealing with a dealer structure that is critical to the business and critical to our success. And, we have to create win-wins between our company and that dealer structure."
Since you’ve come on board, Goodyear has brought in a lot of non-tire people. Why have you looked outside your own walls?
"My assessment when I came here was that we needed to blend into our operation some people from outside the company with people from inside. We saw that we had gaps, for example, in a few marketing areas. So, we brought Cathy Fischer in as chief marketing officer (corporate) and Mike Kitz in to a similar capacity in North America. But, in both cases, we blended those people with people who had longevity in the tire business and knew the industry.
"We felt that blend created a much richer set of backgrounds and tools. And, we could take those new tools and amalgamate them with the marketing tools and the knowledge that we had. We created a stronger effort, and we will continue to do that. When we go outside, we look for people who have skill sets that we need, but also people who have a maturity and a leadership style that will work very effectively in our culture.
"But, make no mistake about it, part of the reason for that is change. We recognize our need to change to drive better performance. We are looking for the best people that we can possibly find."
One of the complaints we’ve heard a lot in the last couple of years is Goodyear’s slowness in decision-making because managers are afraid to make decisions.
"We’ve put business unit presidents in place who don’t operate that way. Without them leading this organization in a way that’s open and welcoming to people’s opinions, you’ll never break that down in any large corporation – including Goodyear.
"In the past, we had operated in a very functional way. You had sales and marketing people. You had manufacturing people. You had logistics people, finance people, human resources people, etc. A very functional orientation.
"Replacement had its piece and OE had its piece. The same in truck and farm. To me, that was based on the theory that North American tire was a business. I don’t consider North American tire to be a business. I consider it a portfolio of businesses. So, what John Polhemus and his team did when they came on was say: ‘We are going to have a consumer replacement business, and Jim Vogel is going to run that. And, we are going to have a consumer OE business. Bryan Kinnamon is going to run that.’
"In the truck business, we did bring in someone from the outside, Ted Fick out of Paccar. He’s a young, aggressive guy. And Mark Pillow, another young and aggressive guy, is running the farm business.
"Our expectations for them are that they will run everything so that R&D and new product development streams through manufacturing, through logistics, through marketing and through the sales. And, they are business managers. That’s a big change. What that does is it pushes the business responsibility down.
"It was meant to drive decision-making down the organization. We recognized that, if we continued trying to get all of the decisions made at very high levels, we were going to be slow. People down the organization would build no experience making tough decisions and living with the results. And, that was not going to work for us in the long run."
Is that peeling away the fear they’ll be penalized for a bad decision?
"We want people who will take risks. We’re trying to build a whole organization of people who take the risks, who understand the risks and who learn from their mistakes.
"We don’t want a group of leaders who, at the first sign of trouble, take over all decision-making. We want leaders who say to people: ‘Take a risk. You know this area better than I do.’ Then, if there is a problem with what was decided, they should say: ‘What have we learned from this experience?’ And, then move on to the next one.
"The only way we will change is to have leaders who feel that way. We need leaders who know they’re not always right. I’m not a believer in the ‘Great Man’ theory. You need to create a good team of people who will take risks. Some people will step up, and some won’t."
In the last three years, North American Tire has had three different management teams, and all manner of product, SKU, inventory, fill-rate and production problems, and confusion over G3. How is that being sorted out?
"John has built the team and the organizational structure that he wants, and they are focused on working back from the market on everything from marketing and channel management to all of the other things we’ve talked about.
"We now can align manufacturing with the market through logistics, as opposed to those being in separate functional organizations. We are putting a lot of emphasis on supply chain and fill rates. We’ve given John a tough series of goals, one of which is improving fill rates while lowering inventories. That means he has to be more selective in what business he takes on, our product mix, and be more flexible in manufacturing.
"That’s absolutely critical. This is not a logistics issue. This is a business issue, and it has to be addressed by the sales and marketing people, by the logistics people, by the manufacturing people, and even by the research people."
Some dealers are concerned that Goodyear is spending a lot of effort on branding, creating this image with the consumer. They are asking, "What are you doing for me?"
"The only way dealers will ultimately see the benefit is when there is more velocity through their operations – more consumers willing to pay more money for our brands. And, that’s the intent.
"I can’t expect that people are going to say: ‘I really like the ads on TV. I think you are doing all the right things.’ The ads are ultimately a means to an end. The end is getting people to the counter, demanding the things that we’re advertising and being willing to pay higher prices for those brands. I believe that this is an undermarketed category. We haven’t been able to go from ‘awareness’ to ‘purchase intent’ to ‘sale’ with enough of a premium price.
"More revenue per tire is how we are going to win, and we need to influence the consumer to do that. Good product alone is not sufficient."
Another issue is that Goodyear is still struggling with the Kelly brand and is still trying to sort out Dunlop.
"I wouldn’t disagree that the integration of Kelly has been a rough one. But, if you look around our company now, a fair number of people with Kelly backgrounds are now in areas of responsibility in North American Tire. And, we like their customer focus.
"I’m not going to comment on what happened two or three years ago. What we are trying to do now is take the intense market focus of Kelly and bring it effectively into our entire company.
"In regard to Dunlop, we’ve got to do a lot of things. We haven’t been successful with the Dunlop brand through 2001, and that becomes a focus for us this year. And, we’ll have to use unconventional tools to build that business.
"We have great product in Dunlop, and we’ve got excellent OE fitments. But, we don’t have the distribution that we’d like to have, and G3 is one attempt to start building that distribution. We have to be very focused on building distribution, and, at the same time, we have to be doing a host of things with consumers. The tools we are going to use there are not going to be as mass media-oriented as with Goodyear. We can’t do that. It doesn’t fit right now.
"The product is there to do it. But distribution and general consumer awareness are not there to do that at this point, so those are the areas we’re really focused on."
