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6 • May 26, 2014 • Powersports Business NEWS www.PowersportsBusiness.com www.PowersportsBusiness.com NEWS Powersports Business • May 26, 2014 • 7 INDUSTRY LEADERS INDUSTRY LEADERS Tim Calhoun hit a big crossroads last fall. Within a few months of his purchase of Leo- Vince USA, Sito Gruppo, the parent of his primary brand, placed itself on voluntary liq- uidation. That left Calhoun to decide, should he forge ahead without the brand he had sold for a decade, or should he close his business and move on. Calhoun leaned on his nearly 30 years in this industry, ranging from a small motorcycle shop to Tucker Rocky to Indian Motorcycles to Western Power Sports, among others, and chose to re-strengthen his company, its employees and its manufacturing partners by forming a new, similar business venture. Now Calhoun, formerly CEO of LeoV- ince USA, serves as CEO of his newly created SpeedMob, Inc., which he describes as a "boutique distributor of premium brands." Calhoun, a 2014 Powersports Business Industry Leader, is looking forward to better servicing dealers not only in the powersports industry, but in automotive and bicycle as well in 2014 and beyond. What has been the biggest challenge in your current position, and how have you dealt with it? I think the biggest challenge for me is when I was a national sales manager, even managing 80-85 salespeople, they're all cut from a similar cloth, and they're all driven in a very similar manner, and they're really easy to deal with, but when you're in a small- to medium-sized company, and you have 15-25 people, you've got a lot of personalities to manage, and you've got to find ways to make people work together very well, and you have — especially in our business — some real generational gaps between an old guy like me and the 20-year-old working in the other room, and I think those are always the challenges that we all have. What's the biggest opportunity for the industry, and how can the industry take advantage of it? If you're a twin dealer, the H-D 500 and 750 are home runs. Talk about a youth market. For the metric side I've got to tell you I think the big- gest opportunity for the motorcycle industry right now, if I'm a dealer — and some people may laugh at me, and that's fine — but I think if I was a metric dealer right now, especially in urban areas, I'd be dedicating some of my floor space to bicycle. I think everybody who's anybody in racing both club and pro, dirt and street or even track day riders, they're out there riding a bicycle to train, and the commute mar- ket is rising fast. I feel these two-wheel sports go hand in hand, and I think dealers are abso- lutely missing the mark leaving all those dollars on the table to some bicycle dealer down the road when they could dedicate a very small area to some great brands of bicycle products. Nationally the bicycle work commute numbers continue to grow, and with the introduction of hybrid bikes that will increase. And when you're looking at an average add-on sales for this level of bicycle riders, it's ridiculous; it's what we were in motorcycle industry back in the day, and it's a great crossover market; two wheels are two wheels. Some people pedal, and some people ride, and many do both. What is the best advice that you can give others in the industry? Strengthen your financial knowledge; this was my Achilles tendon early on, and through many painful lessons it improved. If you're in col- lege, get the background. If you are older, there are many resources on the Internet or shot- gun approaches to get up to speed. The truth is always in the numbers, and the better you understand how to read them, the healthier your business will be, if you have the strength to act on them. … Be decisive, and when you decide be bold and swift in your actions, there will be times when you need to do a "Crazy Ivan" to shake the competition off your tail or to forge forward into untapped markets. If you run the numbers, measure the potential for success and decide to go for it, then do. … Let the num- bers dictate when you expand or contract, not your ego or the opinions of others or what other companies are doing; this has been the undoing of many companies. … Do not let your com- petition dictate your business, pay very close attention to them, learn from them, measure their successes and their losses, but ride your own race. … Find a purpose beyond what you do for a business, a reason beyond your job to help you get out of bed in the morning and get to work, and most importantly, care about what you do. For me this is knowing I have a respon- sibility to my team and the faith they place in my wife and I that we keep them employed and my brands relevant in this market. I know that suc- cess in my company will allow me to take care of my family, my employees and allow me the opportunity to give back to my industry and my community in a way that is larger than I could otherwise. … Believe in yourself, even in the darkest hours. Be solution minded, not problem reactive. Be honest with yourself and listen well to others, really listen. … Make the hardest calls first, own your mistakes and make sure you always honor anything you shake hands over. THERE'S MORE ONLINE Read what Tim has to say about… The formation of SpeedMob, Inc., his new 'boutique distributor' The importance of providing a personal touch with customer service Restoring his passion for riding Mark-Hans Richer doesn't blame dealers for being a little nervous at his appointment as chief marketing officer of the Motor Co. As he claims, there were two marks on his motorcycling soul: he started in adver- tising in Chicago working on packaged goods and McDonald's burgers ("Strike one," he says). A stint in automotive in Detroit didn't necessarily lower the raised eyebrows, as he says he heard "he's going to turn us into automotive" more than a few times. "I knew they had nothing to worry about because that is the LAST thing I would wish on us — no 'Summer Sellathon' please," he said. From Polaris' purchase of the iconic Indian Motorcycle brand in 2011 to the unveil of the new Thunder Stroke 111 engine last year at Daytona Bike Week to the Indian re-launch at Sturgis last summer, Steve Menneto has chalked up his share of accomplishments over the past few years. As vice president of motorcycle brands Indian and Victory for Polaris Industries, Menneto's growing list of achievements continued earlier this year, when he was elected to the Motorcycle Industry Council board of directors. Throw in the receipt of the V-Twin Expo Industry Leader of the Year for 2014, and there's no doubt that Menneto's accomplishments are worthy of 2014 Powersports Business Indus- try Leader status. Menneto's powersports blood has run in his 20 years in the industry, beginning with his successful Menneto Powersports dealer- ship operation in upstate New York. His ten- ure at Polaris has included stints as director of North America sales and general manager of Victory Motorcycles, all prior to becoming VP of Motorcycles in 2009. But the Indian re-launch, both a once-in- a-lifetime experience and still a work in prog- ress at the retail level, particularly needed Menneto's attention over the past several years. Here, he shares his insight about Indian and the industry in general. What is the biggest opportunity for the industry, and how can the industry take advantage of it? I think the biggest opportunity for the industry is recruiting new riders. In 2013, our industry in North America finished at half the size it was in 2007. There are many reasons for the decline, including fewer OEMs, economic chal- lenges and aging rider demographics. However, the biggest opportunity for the industry is to attract new riders of all ages. Motorcycle rid- ing is fun — there is a great social aspect to it, and it allows you to discover places, people and experience. Millennials today crave those experiences, but as a group they have yet to rec- ognize motorcycle riding as a way to serve their interest in exploration. Our industry has to do a better job of communicating the benefits of this tremendous lifestyle. How we do it, is by OEMs and dealers pro- moting safe riding through rider safety courses. We can recruit through local ride clubs and outreach programs. Social media is a great medium to promote motorcycling, giving rid- ers a chance to promote their lifestyle to inter- ested yet hesitant non-riders. Growing the category is our biggest opportunity and we all have to work together to make it happen. What has been the biggest challenge in your current position and how have you dealt with it? Building the Indian Motorcycle business from the ground up has been the biggest chal- lenge. We are still in the beginning stages as we approach our first year after the launch of the new 2014 Indian Chiefs. We acquired the business in April 2011 and we had to build everything from scratch: A new team, new bikes, new apparel and accessories, new supply chain, new dealer network, new mar- keting plans and so on. Everything was new and we were working against the clock. We knew that if we delayed too long and the brand became idle, we risked losing the rid- ing community's interest in the brand after the acquisition. While we had to execute in a short period of time, we also had to balance customer expectations, quality and costs vs. speed. We dealt with — and still deal with it — by being customer-centric in our deci- sions. We have one chance to get it right and build a great, enduring business. Making sure we think about satisfying our customer is core to our strategy. What is the best advice that you can give others in the industry? I think our industry does an outstanding job of making compelling products. The best advice I could give is to put as much effort and focus on people and process. The Indian acquisition and launch required the entire Polaris team's collective efforts. We have great people working on the Indian Motorcycle business directly and supporting us indirectly. It begins with senior leadership support and commitment to the end goal, like the support we received from the board and Scott Wine (CEO) and Bennett Morgan (COO). We have exceptional people on our engi- neering, operations, international, HR, finance, sales and marketing teams, who all played a huge role in the success of Indian. We were supported indirectly by the great people in our ORV, Inter- national, PGA and Snow businesses, whose prof- itability allowed us to invest in Indian Motorcycle and not cut corners. It's a terrific story of how all the people in your company can really have an impact on a growth initiative or new business. We also focused on our processes right from the beginning. As an organization, Polaris is committed to becoming a Lean Enterprise and we applied Lean Production Tools to our processes as we built the Indian Motorcycle product and business. The more waste you can remove from your processes and the more value added to the customer, the more success- ful your organization can become. THERE'S MORE ONLINE Read what Steve has to say about… The leadership traits that made the Indian launch come to fruition The key ingredients for those seeking success in the industry Building off Victory's success to launch Indian Prospective Indian dealers Sarah Schilke wasn't born into the motorcy- cling industry — her family didn't even ride — but after she became a licensed rider herself and was hired into a motorcycle safety pro- gram, she was hooked on the sport and the industry where she's remained ever since. Schilke has spent time working for the American Motorcyclist Association and the International Motorcycle Shows, and she combined her passion for motorcycling with her love for Germany — where she studied in TIM CALHOUN CEO / SPEEDMOB, INC. FORMER CEO OF LEOVINCE USA STEVE MENNETO VICE PRESIDENT / MOTORCYCLES / POLARIS INDUSTRIES MARK-HANS RICHER SENIOR VICE PRESIDENT & CHIEF MARKETING OFFICER / HARLEY-DAVIDSON MOTOR CO. SARAH SCHILKE HEAD OF MARKETING & PUBLIC RELATIONS / SCHUBERTH NORTH AMERICA P01x08-PSB7-News.indd 6 5/14/14 2:01 PM