Billion Dollar Bidding
Move over E-bay! When auctions come up in conversation, a number of companies come to mind. E-bay of course, Sotheby’s maybe, but maybe not Burnaby-based, Ritchie Bros. They are, however the largest auctioneer of industrial products on the planet operating in over 110 locations, in 25 countries around the world.
Our guest this month is Ritchie Bros. COO, Bob Armstrong. Bob joined Ritchie Bros. in 1997 and has seen the company’s gross auction sales exceed $3.5 billion dollars. His role, as he describes it is less sales and more operational efficiency, but he had some interesting things to say about innovation and transparency, two words that we have been hearing a lot about these days.
Ritchie Bros. is somewhat unique in the auction world as they take pride in their “no reserve, no minimum bid” philosophy. In other words, the customer sets the price. While this might seem to the company vulnerable to low bids and money losing auctions, this philosophy of strategic transparency ensures that each auction is eagerly awaited and attracts bidders from around the world, on-site and over the internet at rbauction.com.
As the company has grown larger, Bob’s role has expanded and he and most of the company’s employees have gotten busier and busier. While this is obviously the path to business success, Bob shared with us his concerns about the ability to innovate in a fast paced environment where employees are focused on day-to-day operations.
I have to agree and think that this is a concern of many companies. In this current recessionary climate, where risk taking is already at a low, are larger companies in danger of losing their capacity to innovate? As a company gets bigger and more structured, of course both risk-taking and the time to innovate start to erode. Can we as managers reverse that trend and encourage innovation at every level of the organization?
Another key topic that I discussed with Bob was the issue of transparency. In the 21st century, transparency has become a byword of excellence in business management. Bob is fortunate to work for a company that has embraced transparency since its inception. We can learn a lot from their experience. Transparency breeds trust from vendors, customers and other company stakeholders, obviously an advantage in business operations.
At this intersection of trust and innovation lies acceptance and more importantly good feedback. Innovative companies must of course come up with bad ideas as well as good. When the trust bred by a corporate culture of transparency leads a company to introduce less than successful concepts, feedback from stakeholders tends to be both honest and helpful, reducing the amount of time spent on bad ideas. On the other hand, successful innovative concepts are embraced and rapidly spread by the company stakeholders. The role of transparency in innovation may be undervalued but is very real.
What is your role at Ritchie Bros.?
As the Chief Operating Officer for Ritchie Bros. Auctioneers, I oversee our auction operations, IT, property development and appraisal teams. Essentially my mandate is to improve the operating efficiency of our business. I’m focused less on how we can generate more sales and more on how we execute our auctions.
What key trends are affecting your industry?
A big trend over the past ten years regarding the buying and selling of commercial and industrial assets has been the increase in transparency. Everyone is more informed than ever before because of the quantity and quality of information available. No longer are there certain players who have an information advantage over others. This makes it more difficult for intermediaries to buy low and sell high.
Ritchie Bros. has always stressed the importance of transparency. We conduct unreserved public auctions, meaning there are no minimum bids or reserve prices—our customers set the prices, not us and not the equipment owners. In order for this type of auction to be successful our customers must be equipped with detailed equipment information. This is why we encourage our customers to inspect the equipment before the auction, and why we provide equipment details and make auction results available on our web site.
We believe our dedication to transparency has helped us become the world’s largest industrial auctioneer selling more equipment to on-site and online bidders than any other company in the world. We have been conducting auctions for the past 50+ years and during that time we have established 110 locations in more than 25 countries, including 41 auction sites worldwide. Last year we achieved US$3.5 billion in gross auction proceeds.
How do you measure innovation success?
With Ritchie Bros., success is based on our ability to provide exceptional customer service while increasing operating efficiency. We are always looking for ways to improve in these areas—we want innovative ideas that will improve the customer experience or help us sell more equipment items in less time or with less staff.
For us, one of our most precious assets is the time our Territory Managers (sales people) are available to work with their customers and potential customers. We are always searching for innovations that allow them to spend more time with customers.
Also, as we continue to expand and purchase land around the world, which can be very expensive, we must find ways to maximize the utilization of that land. We are always looking for innovations to help us achieve this.
What is the biggest pitfall that impedes successful innovation?
All of our best innovations have come from someone in our organization having a creative idea and the guts to follow it through to its fruition. However, as we continue to expand and get busier, there is a continuing pressure on our people to complete the day-to-day business. This allows them less time to devise new and better ways to accomplish the tasks at hand.
Also, as we continue to expand, we increasingly institute rules, policies and procedures that might stifle innovation. We continue to struggle to find ways to encourage our employees to think outside of the box as we grow and become more structured every year.
What is an example of an innovative company that people have never heard of?
VendAsta, which is a small software development company based in Saskatoon, Saskatchewan. They helped us develop our Field Asset Information Management (FAIM) system, which allows us to capture higher quality equipment information and to do it much more efficiently. It saves our sales people time and enables us to service our customers better.
The folks at VendAsta went beyond our requirements and ended up delivering a product that exceeded our expectations. They took the time to get to know what we really needed and built a far better system than we had originally specified.
Bob Armstrong Biography:
Bob Armstrong joined Ritchie Bros. Auctioneers in 1997. Bob has worked in several roles within the organization, starting as the Company's Manager of Corporate Relations. In 2000 he was promoted to Vice President, Investor Relations and Corporate Secretary. Subsequent roles included Vice President, Internet Services and Vice President, Finance. In November 2004, Bob was appointed Chief Financial Officer and Corporate Secretary. In 2008 he became the Company's Chief Operating Officer. Bob is a Chartered Accountant with a Bachelor of Commerce degree from Queen’s University. Prior to joining Ritchie Bros. he worked for several years with KPMG and held financial management positions in the shipping and television production industries.
Our guest this month is Ritchie Bros. COO, Bob Armstrong. Bob joined Ritchie Bros. in 1997 and has seen the company’s gross auction sales exceed $3.5 billion dollars. His role, as he describes it is less sales and more operational efficiency, but he had some interesting things to say about innovation and transparency, two words that we have been hearing a lot about these days.
Ritchie Bros. is somewhat unique in the auction world as they take pride in their “no reserve, no minimum bid” philosophy. In other words, the customer sets the price. While this might seem to the company vulnerable to low bids and money losing auctions, this philosophy of strategic transparency ensures that each auction is eagerly awaited and attracts bidders from around the world, on-site and over the internet at rbauction.com.
As the company has grown larger, Bob’s role has expanded and he and most of the company’s employees have gotten busier and busier. While this is obviously the path to business success, Bob shared with us his concerns about the ability to innovate in a fast paced environment where employees are focused on day-to-day operations.
I have to agree and think that this is a concern of many companies. In this current recessionary climate, where risk taking is already at a low, are larger companies in danger of losing their capacity to innovate? As a company gets bigger and more structured, of course both risk-taking and the time to innovate start to erode. Can we as managers reverse that trend and encourage innovation at every level of the organization?
Another key topic that I discussed with Bob was the issue of transparency. In the 21st century, transparency has become a byword of excellence in business management. Bob is fortunate to work for a company that has embraced transparency since its inception. We can learn a lot from their experience. Transparency breeds trust from vendors, customers and other company stakeholders, obviously an advantage in business operations.
At this intersection of trust and innovation lies acceptance and more importantly good feedback. Innovative companies must of course come up with bad ideas as well as good. When the trust bred by a corporate culture of transparency leads a company to introduce less than successful concepts, feedback from stakeholders tends to be both honest and helpful, reducing the amount of time spent on bad ideas. On the other hand, successful innovative concepts are embraced and rapidly spread by the company stakeholders. The role of transparency in innovation may be undervalued but is very real.
What is your role at Ritchie Bros.?
As the Chief Operating Officer for Ritchie Bros. Auctioneers, I oversee our auction operations, IT, property development and appraisal teams. Essentially my mandate is to improve the operating efficiency of our business. I’m focused less on how we can generate more sales and more on how we execute our auctions.
What key trends are affecting your industry?
A big trend over the past ten years regarding the buying and selling of commercial and industrial assets has been the increase in transparency. Everyone is more informed than ever before because of the quantity and quality of information available. No longer are there certain players who have an information advantage over others. This makes it more difficult for intermediaries to buy low and sell high.
Ritchie Bros. has always stressed the importance of transparency. We conduct unreserved public auctions, meaning there are no minimum bids or reserve prices—our customers set the prices, not us and not the equipment owners. In order for this type of auction to be successful our customers must be equipped with detailed equipment information. This is why we encourage our customers to inspect the equipment before the auction, and why we provide equipment details and make auction results available on our web site.
We believe our dedication to transparency has helped us become the world’s largest industrial auctioneer selling more equipment to on-site and online bidders than any other company in the world. We have been conducting auctions for the past 50+ years and during that time we have established 110 locations in more than 25 countries, including 41 auction sites worldwide. Last year we achieved US$3.5 billion in gross auction proceeds.
How do you measure innovation success?
With Ritchie Bros., success is based on our ability to provide exceptional customer service while increasing operating efficiency. We are always looking for ways to improve in these areas—we want innovative ideas that will improve the customer experience or help us sell more equipment items in less time or with less staff.
For us, one of our most precious assets is the time our Territory Managers (sales people) are available to work with their customers and potential customers. We are always searching for innovations that allow them to spend more time with customers.
Also, as we continue to expand and purchase land around the world, which can be very expensive, we must find ways to maximize the utilization of that land. We are always looking for innovations to help us achieve this.
What is the biggest pitfall that impedes successful innovation?
All of our best innovations have come from someone in our organization having a creative idea and the guts to follow it through to its fruition. However, as we continue to expand and get busier, there is a continuing pressure on our people to complete the day-to-day business. This allows them less time to devise new and better ways to accomplish the tasks at hand.
Also, as we continue to expand, we increasingly institute rules, policies and procedures that might stifle innovation. We continue to struggle to find ways to encourage our employees to think outside of the box as we grow and become more structured every year.
What is an example of an innovative company that people have never heard of?
VendAsta, which is a small software development company based in Saskatoon, Saskatchewan. They helped us develop our Field Asset Information Management (FAIM) system, which allows us to capture higher quality equipment information and to do it much more efficiently. It saves our sales people time and enables us to service our customers better.
The folks at VendAsta went beyond our requirements and ended up delivering a product that exceeded our expectations. They took the time to get to know what we really needed and built a far better system than we had originally specified.
Bob Armstrong Biography:
Bob Armstrong joined Ritchie Bros. Auctioneers in 1997. Bob has worked in several roles within the organization, starting as the Company's Manager of Corporate Relations. In 2000 he was promoted to Vice President, Investor Relations and Corporate Secretary. Subsequent roles included Vice President, Internet Services and Vice President, Finance. In November 2004, Bob was appointed Chief Financial Officer and Corporate Secretary. In 2008 he became the Company's Chief Operating Officer. Bob is a Chartered Accountant with a Bachelor of Commerce degree from Queen’s University. Prior to joining Ritchie Bros. he worked for several years with KPMG and held financial management positions in the shipping and television production industries.
Labels: incremental innovation, Ritchie Bros
posted by Tats at 2:44 PM
0 Comments:
Post a Comment
<< Home