Nielsen seeks demand on a 'watch and buy' basis
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China Daily, July 21, 2011
'Demand chain'
Besides hiring the best people to boost business, Calhoun believes the business model also needs to change.
For Calhoun, companies now need to shift their focus from the supply chain to the demand chain. That is the subject of his new book, How Companies Win.
In a world of contracting markets and diminished consumer demand, Calhoun, together with The Cambridge Group founder Rick Kash, show companies through the book how to find new customers and bigger profits.
For the past 20 years, the growth formula for business has been to increase revenues by expanding product offerings and streamlining supply. But with the recent global recession, the world economy has changed forever. Now the old tools - most notably supply-chain management - are no longer enough.
In a new digital age characterized by over-supply and too many product types in almost every market, the new challenge is to locate and capture the elusive pools of high-profit demand.
Kash and Calhoun have the answer: a revolutionary, demand-driven model that has already proved successful for some of the world's most admired companies, including Best Buy Company Inc, Anheuser-Busch Companies Inc, The Hershey's Company and Allstate Insurance Company.
From GE to Nielsen
Before joining Nielsen in 2006, Calhoun served as vice-chairman of The General Electric Company and president and chief executive officer of GE Infrastructure, the largest of six GE business units.
Under his leadership, the business annually contributed more than $47 billion in revenues and $9 billion in profits to the company, driven by a team of more than 120,000 employees around the world.
The scale of the GE Infrastructure business was 10 times that of Nielsen. Calhoun's move, for many people, came as a surprise.
His mentor and long-time boss, GE's CEO Jack Welch, observed that Calhoun's GE contemporaries were taking CEO slots at far larger corporate icons.
"I think if he had waited a little longer, he might have gotten a really big one," Welch was quoted by Fortune as saying. "But this was the right offer at the right time in the right environment."
Calhoun said he had his reasons for coming to Nielsen.
"It was my desire to practice leadership in a different environment and to test myself, my own leadership development. Also, part of it was my personal interest: I can spend a little more time with my four children," said Calhoun.
"I want to complement, not repeat. I feel this is a perfect complement: I have seen the development through the eyes of governments and economic policies, now I get to see the development through the eyes of the people and consumers. It's a wonderful perspective to have," he added.
Guo Lan, director of business development for Nielsen's "buy" segment, was a bit surprised when she learned that Calhoun would leave GE and join Nielsen.
"He was named 'the most lusted-after managerial star' by Fortune and could take any CEO job, so I was curious to see what kind of impact he would bring to us," recalled Guo.
"He did bring us pleasant surprises in terms of pushing on the integration of different lines of business and outlining a clear business strategy: 'watch and buy'," she added.
"As a simple and elegant abstraction, 'watch and buy' highlights our key competitive advantage and it is quite helpful in communicating our business," said Guo. "I am not a celebrity worshipper, but I am really a fan of David."
Nielsen's financial performance has been improving ever since he joined in August 2006.
From 2007 to 2010, the compound annual growth rate of Nielsen's revenue was 5.2 percent, with revenue hitting $5.1 billion last year. The adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) grew 9.7 percent to $1.4 billion, which is 27.5 percent of revenue.
For Guo, Calhoun is an easy-going leader. She spoke to him face-to-face for the first time at the company's 360 Consumer Conference in Orlando this year.
"He is as charismatic off stage as he was on stage," Guo said.
In the eyes of Mitch Barns, president of US media client service for Nielsen, Calhoun is a real leader and is inspiring.
"More importantly, what he is doing is always in line with what he is saying," said Barns.
When describing himself, Calhoun said: "I'll always be a student, always learning. And I'm an optimist. Very few things get me down."
For him, the biggest benefit from working at Nielsen as CEO is his own personal development.
"I see the world differently. I appreciate it in a different way. I feel fortunate to lead the company with 35,000 people and hopefully contribute to their personal development. All those things are very satisfying," said Calhoun.
In his spare time, the executive loves sports, with skiing being his first love and golf the second
"I'm sure it's because of the competitive element they require. I'm pretty active, so I try to engage in them as often as I can, but never often enough."
Calhoun's family life is also important to him.
"I follow every step of their development, and you know, that's pretty good," he said of his four children.
Although Calhoun spends much time traveling around the world on business, he always makes time for his children, no matter how busy he is.
"If they have needs, you make sure you get them on the phone. You go to see them, swapping emails with them. You are always there for them. Believe it or not, in today's world, you can do that no matter where you are. And these technologies we have are available to us. I can have personal discussions with them, watch them on my screen anywhere in the world," he said.
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