Recently we discussed developing a culture of innovation and how the power of open minds can lead to the greatest and most productive results—both with solution providers as well as inside the retail enterprise.
But innovation is typically the product of need as much as it is an outcome of ideas and often requires reaching beyond our comfort zones. The reach and influence of the entrepreneurial spirit can present itself in many different ways, and the insights of those willing to step up and think outside the box can have a significant and lasting impression on our communities as a whole as well as the loss prevention industry in particular.
For perspective and input, we turned to Jorge Nazer, chairman and founder of Grupo ALTO and ALTO US to discuss his thoughts on the subject.
What do you think it takes to create a successful startup company in retail asset protection?
NAZER: Since founding our company just over ten years ago, I’ve had the opportunity to talk about this very issue with many different entrepreneurs, both in Latin American and across other latitudes. Some were successful, and some were not. But what I´ve found is that I keep coming back to the same basic principles over and over again, and I believe that those lessons are at the core of what makes a successful and growing company.
First, it’s important to think big and to do so from the very beginning. As an entrepreneur, it’s essential that you don’t limit your own vision—not in size, scope, nor ambition.
We founded our company as a pilot in a single supermarket in Puerto Varas, a small town in the south of Chile. The store was affiliated with Walmart, and our plan was to expand from there to other locations throughout Chile. But from the beginning we resisted thinking merely in terms of becoming partners with just one retail chain or even the idea of expanding exclusively within a single industry. We knew that we had something special with our model and felt that it could become something larger and more universal.
We saw ourselves taking the company to any place and situation where theft, fraud, and malpractice were having a negative impact both on business and on society as a whole, even if that took us out of our comfort zone. We dreamed from day one of becoming international, of adding more and more companies to our network, adapting our model to different industries with different needs, and reducing losses for our clients regardless of location, activity, industry, or even language.
It’s been ten years since then, and today we are reducing losses for clients not only in retail but also in logistics, health care, utilities, insurance, and even public transportation. In this first decade we have grown tenfold, and the potential is still immense. I really don’t think we would have achieved this if we had remained in our comfort zone and limited our vision.
Thinking big is what gives you the passion to drive your dream forward and convey it to the people that work with you, especially when you have a deeper purpose and a meaning behind what you’re doing that transcends a specific industry, geography, or national culture.
What do you feel is the key to successfully meeting the needs of this diverse business model while managing such rapid growth?
NAZER: Put people first. More specifically, put your people at the forefront of innovation and growth. We have been capable of successfully replicating our model in different industries and deploying that model on a large scale in several countries because of an internal focus on innovation. That really drives everything that we do.
Our predominant mindset has been that we consider each one of us within the company to be an entrepreneur. We go to great lengths to realize the potential of our team through a culture that emphasizes the value of ideas developed inside the company. We continually reinvest in idea development through an innovation process that allows us to capture and develop ideas from our people, our clients, and other parties with whom we become involved as part of our operations.
We’ve already spent several million dollars in internal innovation projects. As a result, four of the six businesses that ALTO currently operates have sprung from ideas submitted by our own employees or by our partners, which were completely developed in-house. When you look at it this way, you realize that being entrepreneurial isn’t so much a matter of one individual but must rather be a distinctive feature of the team as a whole.
To put it in other words, I cannot be the only person that embodies entrepreneurship within our business. It’s imperative to empower your people with that same vision and big thinking. You don’t need to look elsewhere for great ideas and growth opportunities; harvest them inside.
What do you feel is the best way for leaders to capture and maintain an innovative mindset?
NAZER: In order to succeed, you have to shake the fear of stepping outside of what is considered safe and learn to embrace the self-destructive nature of your ideas. That is the only way to truly innovate. This forces us to be creative in terms of continually finding new ways and situations in which our presence could be relevant. And, in a way, that effectiveness has played in our favor in the past.
Our logo, for instance, which was initially only recognized by law offenders, is now also relevant for other groups, such as employees and customers. It is associated with compliance, respect for the law, and security, both in internal work environments and in public spaces. This has allowed us to take our services to places as diverse as offices and warehouses, parking lots, and, more recently, public transportation.
For example, the results in public transportation have been amazing. Previous estimates placed the evasion rate in Santiago, Chile, at 50 percent of passengers during peak hours-half the passengers weren’t paying for their tickets.
With the introduction of ALTO’s model, in a little over eight months, fare evasion in Santiago diminished by 20 percent, which means that 400,000 more people were paying their fares. In this case, the success of the model rests in large part on the effectiveness already achieved in other settings, such as retail stores. So rather than having a diminishing effect over time, our impact becomes amplified when approached creatively.
So don’t be afraid of self-destruction. What appears to be an inherent problem with your idea in the long run could be a blessing in disguise—if you look at it the right way.
Why do you think so many startups struggle to get past the first stages of development?
NAZER: This is not an easy question to answer, but I believe that it must be asked for every startup that really wants to transcend and be successful. As an entrepreneur you have to aim to make an impact. And by this, I mean an impact on society as a whole. Look to make a change for the better that is broader than what your company does, but one you can identify with and make your own.
In our case, this impact is the reduction of certain types of crimes that translate into fewer losses for our clients. That is the core reasoning behind our model, and it was certainly its inspiration from the beginning. After all, we set to tackle the root causes that explain theft, petty crime, and small offenses in many industries and locations, and those causes are deeply engrained in our culture and social behavior. By acting upon those causes, we were effectively changing things.
To this day, one of the most significant and rewarding aspects of my job is seeing the ALTO model literally interrupt criminal careers before they actually become careers. By ensuring a fair and timely sanction of individuals that are just entering that path, we are tackling the problem before it’s too late for them and too costly for society as a whole. They become visible to the system in time for better reinsertion and better opportunities.
This was one reason that ALTO’s model was adopted by the Chilean government in 2010 while developing a new national program for crime prevention and control. At the request of Chile’s president, I had the privilege of heading a governmental effort that took our principles to the realm of public policy. It created a precedent: a successful private endeavor could provide inspiration for improving the safety and the quality of life of the community.
This is the kind of impact that I’m talking about-one that inspires both you and your people, giving meaning to your vision and crystalizing your passion. This kind of impact literally becomes fuel for your company.
So as entrepreneurs, we must ask ourselves, “What impact am I making? What impact can I make?”