Mattel Plays to Win in Global Marketplace

Mattel Chairman and CEO Robert Eckert never delivered the closing remarks he prepared in 2004 for high-potential managers assembled at Thunderbird for a weeklong executive education program on global leadership.

Instead, the roomful of Mattel managers from different parts of the world asked if they could turn the tables on Eckert and deliver closing remarks to him. Participants wore matching T-shirts as a sign of solidarity, and they expressed a shared a passion for the global strategy and vision of the California-based company that manages popular brands such as Barbie, Hot Wheels, Fisher-Price and American Girl.

What Mattel lacked, they told Eckert, was a clear statement of values that reflected the unique culture of the world’s largest toy company.

“Roughly 50 of us from the company engaged in a discussion on the values, and we didn’t do a very good job of even reciting them,” Eckert says. “What we had was clearly ‘corporate speak.’ The values really weren’t internalized like our strategy and vision.”

The group asked Eckert to address the issue with his senior leadership team. Instead, he turned the tables again and challenged the group to take the lead on the project. “It became a post-graduate exercise for the group after leaving Thunderbird’s campus,” he says.

What resulted was a statement of four values designed to guide the behavior of Mattel managers and partners everywhere the company does business: Play to grow, play together, play with passion and play fair.

“Play is serious business at Mattel,” says Eckert, who introduced the values to Mattel’s Board of Directors in February 2005. “Because we’re the worldwide leader in the toy business, play is an important word for us.”

The concept of having fun while doing good has helped catapult Mattel to No. 48 on Fortune’s “100 Best Companies to Work For” list. Mattel also earned a spot in 2009 on the Ethisphere Institute/Forbes list of the “World’s Most Ethical Companies.”

Eckert cites the articulation of the values as one example of the benefits that came from a long-term partnership with Thunderbird Corporate Learning that started in 2000, shortly after he arrived at Mattel from Kraft Foods.

“That speaks to the benefit we obtained from bringing people together from all walks of life and all parts of our business system globally to a place like the Thunderbird campus to have thoughtful discussions with one another,” Eckert says.

Reading the tea leaves
Thunderbird Professor Caren Siehl, Ph.D., worked closely with Eckert and other members of his senior leadership team as the academic director of the program.

She says Eckert inherited a company with strong global brands, but he saw the need to globalize Mattel beyond its existing foreign brand and subsidiary concepts to become a truly global company.
“He read the tea leaves pretty accurately,” Siehl says. “They had to expand into new markets and go deeper into existing markets.”

Along the way, she says, the company has worked to stay current in a constantly changing industry. “The challenge in the toy business is figuring out what kids want and parents will buy,” she says.
Siehl calls this the “challenge of being reborn while staying true to the brand.” The key is consistent innovation.

Eckert says the fast-paced nature of the toy business is one thing that attracted him to Mattel. “We’re dealing with the whims and preferences of 4-, 5- and 6-year-olds, and those change all the time,” he says. “New products are the lifeblood of our business.”

Another challenge for toy companies such as Mattel is maintaining the balance of power with big-box retailers such as Wal-Mart. Siehl says the push for less expensive toys requires Mattel to work closely with its global supply chain partners to ensure that costs are kept low without jeopardizing quality and safety.

“You will always have tension between the power of the brand and the power of the retailer,” she says.

Despite the challenges, Mattel’s focus on global expansion has paid off. When Eckert arrived in 2000, about 29 percent of the company’s business was done outside the United States. That number climbed to 49 percent by the end of 2008.

“We’ve really built an international powerhouse,” Eckert says. “We’re the leading toy company in almost every market in the world.”

Keeping the good people
One of the jobs of Alan Kaye, Mattel’s senior vice president of human resources, is to make sure the company attracts and retains the right mix of global talent to succeed in these global markets.
“It’s all about the people,” Kaye says.

The company gives its employees 13 paid holidays, two paid days to volunteer in schools, two on-site child-care centers, on-site fitness centers, adoption assistance, half days on Fridays and onsite toy stores with discounts.

All of these things help Mattel retain its best workers. Another key, Kaye says, is consistent application of the “play values” across the entire company.

He says corporate headquarters in El Segundo, Calif., sometimes resembles a scene from Santa’s workshop at the North Pole — with product testers driving miniature cars down the hallways and people playing with new toys. Similar evidence of people having fun while working hard can be found at other sites.

“The culture permeates the entire company,” Kaye says.

This consistency is not always easy to maintain at a company as large as Mattel, which has about 30,000 employees working in more than 40 countries. Kaye says one benefit of the custom program at Thunderbird was the opportunity to meet high potential managers from all over the world and build a team identity.

These managers worked closely together in classes taught by Thunderbird professors paired with senior executives at Mattel. For example, Thunderbird Professor Michael Moffett, Ph.D., taught global finance with Mattel Chief Financial Officer Kevin Farr.

“The goal was to balance the external perspective with the internal perspective,” Siehl says. “The buy-in from Mattel’s senior leadership team set the tone for the entire program and made it work.”

[This article has been reproduced with permission from Knowledge Network, the online thought leadership platform for Thunderbird School of Global Management https://thunderbird.asu.edu/knowledge-network/]