Inside Kids2 is an ongoing series that spotlights our colleagues who are doing extraordinary work across the Kids2 network. The following is a conversation with our President Dave Calhoun.
Dave Calhoun joined Kids2 in 2016 to oversee the internal transformation of the organization’s team, consumer, and retailer-facing operations and grow a corporate culture that motivates and engages all team members.
In your opinion, what’s the coolest or most interesting thing happening in the toy industry right now?
It is interesting to watch how technology is beginning to allow toys to be much more multi-dimensional for all age groups. The industry is in the early stages of technology redefining what a toy is and what a toy can do. I believe the limitations of a toy today are not what they are going to be tomorrow.
How are parenting trends changing the baby toy and product industry?
Today, parents have well-defined expectations around who they want to do business with and why. They expect companies to have authentically defined brands and brand positions that are easy to understand. And they expect products that are safe, engaging, purposeful, and beautifully designed.
For consumer products, design is more critical than ever before, quality is at a higher standard, and the expectations are higher.
In the past, parents felt the need to put the toys and gear away when people were coming over. I don’t think that is the case anymore. If a toy serves the design and quality requirements moms and dads have today, it can live in the home environment.
An example is our joint venture with Hape where we combined Cap Touch technology and wood together to create a unique user experience. It feels magical to touch wood and hear a sound. The simple and classic design looks great in the home. The line of Baby Einstein Hape Magical Touch musical instruments has gone over incredibly well around the globe.
Kids2 is opening its first fully-owned manufacturing facility in China, how will this change the organization?
It will change us in lots of ways. It dramatically increases the size of our team. For the first time in our company history, Asia-based team members will become the largest part of Kids2. Operating our own manufacturing facility also provides strategic advantages as we build technology and modularity into our products. We will have the ability to execute at a high level. We will better secure our Intellectual Property. We will be better positioned to compete at opening price points in new categories when we control the making of the good. We also will have more control over lead time to market. So, we can produce goods faster to market, get ahead of coming trends, and better meet retailer and consumer demands.
How is Kids2 changing to adapt to the future?
Over the past three years, we have made a significant investment in company operations and global growth; made strategic pivots in the way we work, and brought on new talent to complement our existing Kids2 team. With a drive to help parents create tiny wins for bright futures, we have made strategic changes to create purpose-driven brands that bring products to the market that are high functioning, tech-oriented, and beautifully designed. Some of these investments include:
- Establishing a growth office at Kids2 including Brand, Insights and Global Design and Innovation functions that did not previously exist.
- Creating a designated future innovation group to keep us at the forefront of our industry.
- Building our own manufacturing facility and office in China so we can have more control over the supply chain from the making of the good and the quality of the materials used, to the Intellectual Property that goes into it. This will help improve margins, drive competitiveness, and grow business.
- Redefining our brands, Baby Einstein, Ingenuity, and Bright Starts, to reflect a clear brand position and a strong brand purpose for each. Each brand will have a unique methodology for product design and content. We are also focused on building communities around our brands to engage in conversations that authentically reflect the quality, value, and purpose our brands represent. We relaunched Baby Einstein in 2018 and will relaunch Ingenuity and Bright Starts in Q4 2020 and 2021.
We will continue to adapt and evolve. In 2020, we will grow our team, invest in infrastructure, and explore new opportunities to grow the business.
What is the biggest challenge you have faced while reinventing a 50-year-old toy company?
Trying to transform and position Kids2 to be a modern consumer product company is a big pivot from a company that was very focused on producing and selling great products for the past 50 years. Refocusing around the importance of design in all we do is a big task, and we have had a lot of external challenges at the same time.
The Toys R Us bankruptcy is at the top of the external challenge list. When that tsunami of disruption hit the retail market, it was a huge challenge for manufacturers to overcome, and our team has done exceptionally well.
Then there is the retail apocalypse where thousands of retail stores of all kinds have shuttered in such a short time. The US retail market is oversaturated, and we are going through a natural commercial real estate correction. The growing services of e-commerce have sped up the lack of need for that much retail space. Government, political, and regulatory issues, including the trade war with China, also bring challenges.
Internally, our biggest challenge is building a culture of change. It is very difficult to move an organization and keep its team cohesive during a time of transition. Everyone reacts to change differently. Some people are wired for change, some people are moderately wired for change, and some people are wired to be averse to change.
Change often makes people react with: “What do I need to fear and how is it going to impact me?” Since the only norm going forward for business is change, we need to reframe those questions to ask: “What could this change lead to that can be new and exciting?” and “How can this change bring new opportunities for me?”
Because the growth of Kids2 came from product and sales, the organization did not have the foundation to scale successfully. So, I like to say we are building the plane when we are flying it. We are modernizing IT, strengthening HR practices, implementing operational end to end processes, building global connectivity, and defining roles and structure. At the same time, we are pivoting to a design organization, opening a new manufacturing facility, redefining our brands, and launching new ventures.
It can feel overwhelming and chaotic for people, and it is not lost on me. The market is moving faster than ever before, and slower than it will be in the future. If we wait in today’s marketplace, we will lose the opportunity.
The market is moving faster than ever before, and slower than it will be in the future. If we wait in today’s marketplace, we will lose the opportunity.
Our world today is in a constant state of change. Technology is always changing. New companies are entering the marketplace creating great products with easy ways to buy at lower prices. Industries are disrupted by new modern approaches to old problems. Companies must be positioned to pivot very quickly to compete.
What are the keys to building a high level of trust in an organization?
First, leaders need to be genuine and consistent in what they do and how they lead every day.
Second, leaders must be transparent. We are a very transparent organization from Ryan Gunnigle, our CEO, to the executive team. We are happy to answer questions and address concerns with anyone on our Kids2 team and we share our results regularly with the organization. We are all in this together.
Finally, communicate clearly and often. We communicate regularly through multiple channels – videos, town halls, digital boards, social media, newsletters, advisory teams – to keep information flowing to the team.
Kids2’s purpose is to help parents create more tiny wins for bright futures. How does this purpose affect your day to day business decisions?
It is the reason why I am here. My wife and I are blessed to have four, healthy adult children who are off to a good, solid start in their adult lives. I have traveled the globe for many years in business and saw so many places in the world where there are great challenges for children to develop. I care deeply for all children and believe they should get equal opportunity regardless of geography, religion, race, gender, disability or socioeconomic status.
At this point in my career, making a difference is a driving force for where and how I want to spend my time. So, at Kids2 we are trying to drive bright futures for all children through what we do every day— creating products and content around gear and play that help parents achieve tiny wins that lead to bright futures.
Kids2 is a global company that designs solutions to help early-stage parents and families create tiny wins that build bright futures. The Kids2™ brand portfolio includes the leading infant, baby, and toddler brands Baby Einstein®, Bright Starts®, and Ingenuity®. Headquartered in Atlanta, Kids2 spans globally with 12 offices on four continents serving customers in more than 90 countries and has been inventing and reinventing baby products for 50 years. Led by CEO Ryan Gunnigle, it operates with an agile start-up approach, which fosters the company’s growing success.