Step2's CEO looks for more product launches, more design

STREETSBORO, OHIO — After just six months on the job, Chris Quinn and his team have a clear direction.

The new president and CEO of toymaker Step2 Co. LLC is bringing to bear his years of experience at New Balance, Procter & Gamble, Mars and Clorox. His plan: Rebuild the brand and expand the horizons of North America's largest rotational molder.

Quinn has made himself available since joining Step2. He launched a 60-day listening tour. He hosts weekly “Breakfast with the CEO” meetings. He also writes a monthly blog (“Chris' Corner”) for employees. Recently, his nine-person executive team released a one-page strategic document, then surveyed employees for their reaction.

“We had 90 percent of associates in this company who felt extremely confident in the new direction,” said Quinn, 50, who earned his bachelor's degree at Denison University and his MBA from the University of Michigan. “The commentary we received was, ‘We've been waiting for the executive team for leadership, to give us a sense of where we're going.'”

That expression of collective relief is understandable as Step2 has had a handful of chief executives in recent years. The 820-employee operation is owned by two private equity firms: Ares Capital and Liberty Partners. Ares is the majority owner, Quinn said.

So what is that strategic direction? New product launches, for starters. This spring, for example, Step2 launched five new products. For spring 2016, they'll have 18 new items.

The key to this ramp-up is hosting focus groups at the Streetsboro headquarters every two weeks for the moms who make up the company's target consumer.

“We've more than doubled our effort to listen to what she wants and to really reveal concepts and get feedback on the concepts that we have in the pipeline,” Quinn said, who added that focus groups are limited to five to eight moms to encourage dialogue.

In addition, Quinn hired an outside design firm from Ohio to work with the company's five in-house product designers to maximize idea generation.

Quinn cites his experience at Clorox as his best training ground, especially when it comes to appreciating details. He tells the story of Step2's recent focus group on colors, a first for the company. Moms rated near-identical toy kitchens.

“We may include a hot dog or we may include a hamburger in our kitchen. That matters. Because, to a mom, a pizza slice may connote something very differently than something that's a healthy alternative. The decal. The Pantone of the color. All of that while it sounds very, very boring the more we get into managing the details, the more we can take this brand that has so much potential and really elevate it in the consumer's mind.”

His listening tour also confirmed how important the Step2.com website will be for the brand.

“We sell large big bulky products. The most efficient way to get our consumer satisfied is not to put a big two-story playhouse in their trunk, especially as SUVs are shrinking — they're going to SAVs, sport activity vehicles — the best way to get our consumer the product is to ship it to them,” Quinn said.

Only 10 percent of Step2's $175 million in sales comes through e-commerce. Quinn's goal is 30 percent, which would include e-commerce revenue from retail partners like Wal-Mart Stores, Toys ‘R Us and Target.

Quinn believes Step2 has to grow beyond the United States, too, where it generates 82 percent of its business.

“I think we have a false paradigm [that] because we have big bulky products that are expensive to ship that we have an inability to have a robust international business without standing up manufacturing, without standing up some sort of partnership that involves localizing our production process. I want to challenge that perception,” he said.

As for end markets, Step2's strength remains toys and lawn and garden. But Quinn wants to explore business-to-business applications for plastics like highway, government and medical.

“We don't want to lack a focus, but we're thoughtfully looking at engaging in some of those enterprises because we think we can bring our technology into new space,” he said.

But in its current key arena — plastic toys — Step2 is partnering with local medical researchers to show the benefits of its low-tech products in an ever-spinning, high-tech world. Quinn believes Step2 products bring families together.

“We've tested with our moms share group an iPad and one of the things that the moms told us was they don't want an iPad in a kitchen. The fact is if they want an iPad, the child already has access to an iPad. They truly want an alternative,” he said.

That alternative will be on display with pro sports teams. Step2's marketing team has worked out partnerships with the Cleveland Browns, Cleveland Indians and Columbus Blue Jackets where fans of those teams can interact with toys at stadiums or other events associated with the ball clubs. 

“There's a tremendous amount of children that are participating around professional sports and we think it's a great avenue even though we have a very tight marketing budget for us to be able to engage that consumer and give them an opportunity to see what Step2 is really all about,” Quinn said.