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How We Survived -- and Thrived -- After a Generational Battle Over Technology

By Scott Moorehead, CEO, The Cellular Connection, Marion, Ind.
I joined the family business, The Cellular Connection, in 2000. At the time, people at the company used email, but it was a little haphazard. We had a website, but it wasn't that functional. And we still recorded all of our sales and inventory by hand. For a cell phone distributor and retailer with more than 900 employees and 160 stores, we weren't as efficient as we could be.

We needed to upgrade our technology, and we needed to upgrade our stores, which felt a little outdated compared to some of the wireless companies' retail stores. But the big question was how quickly we could bring the company into the 21st century. The older and younger members of the management team agreed that we needed to update and improve our sales systems and in-store experience. But not everyone agreed about how fast we needed to change or how much we should invest in the transformation.

The battle between generations
The younger members wanted major change now, and the older members were skeptical of major change. It took years of research and meetings to build senior management's trust to the point where we had some autonomy. Every time the younger generation had an idea, we had to test it out and present the results to the older generation. We did everything in baby steps and only presented our findings when we were fully prepared.

It took us dozens of meetings over the course of a few years to reach a decision about how to update our retail stores. The younger crowd wanted to invest a lot of money and get a whole new look as fast as possible. The older crowd thought that an expensive renovation would do more for our stores' glitz and glamor than sales. They had been doing things one way for so long that they didn't think we needed a drastic change.

So we started off with cheap renovations: new looking but poorly made cases and display screens. This didn't increase our sales much, and in a few years our stores started falling apart. Then we went back to the drawing board. We made charts of optimal customer flow, and showed senior management the cost benefit of investing in higher quality cases that you would have to replace less often. Eventually they let us renovate a few store locations the way we wanted to. We went store-to-store gathering feedback from customers and sales information. We came back to the management with excellent results and they gave us the go-ahead.

Remaking the store
We created modern display cases that let customers pick up any phone, and above each case we installed interactive flat-screen monitors with more information about the products. We also totally redesigned the layout of our stores so that customers pass a series of interactive stations that walk them through the process of purchasing cell phones, Internet service, and television service. We modernized the flooring and fixtures, and installed digital pricing displays and screens with looping information about our products throughout our stores.

We went through a similar process when it came to upgrading to point-of-sale (POS) software. We spent months researching different programs and meeting with senior management, explaining the drawbacks of not using POS software- inaccurate inventory, bloated warehouse staffing and a poor in-store experience for customers at the check-out counter. Once we had some basic software in place, we saw that we still had operating inefficiencies, and our company needed to upgrade to more industry-specific POS software. It would be expensive and require lots of employee training, but our inefficiencies were costing us big time: We were still losing about 10% of the revenue Verizon owed us each month. The evidence for upgrading our software was incredibly strong, and we won this battle, too.

All of our hard work and research, as well the fact that our business choices paid off, helped my generation earn the trust and respect of our seniors.

The renovations cost us almost $7 million. The POS software meant going from an annual software cost of about $10,000 to about $120,000. They were both big investments, but without them we probably wouldn't be in business today. Our revenues grew from $48 million in 2003 to $98 million in 2007, about the time the renovations were taking place. I became CEO in 2008, and by 2009 our revenues grew to $192 million.

The changing of the guard
By now, none of the old senior management is still working here. At times it was difficult having to fight them, but the truth is, we younger folks weren't always right. We had some dumb ideas-like trying to introduce XM satellite radios to our product line-that were major flops. I think it was our diligence and hard work that made the older generation feel that they could leave the company safely in our hands. They saw we cared about the company as much as they did.

Scott Moorehead plans to open more than 80 additional locations throughout the Midwest as TCC continues to expand. The company expects a $50 million increase in revenue in 2010.
-- As told to Harper Willis