The Take On Jake

By John Stouffer

Burton’s founder and new President Tom McGann talk about the success of the company and challenges to the business and sport.

Burton Snowboards is a maturing company. Going into its 22nd year, the company has offices in Burlington, Vermont; Innsbruck, Austria; and just outside Tokyo, Japan; in addition to a separate snowboard factory in Burlington. It also has snowboards made in three other snowboard factories exclusively, products made in more than twenty different countries, and reps and distributors around the world. All told, more than 500 people work for the company worldwide, with 235 in the Burlington factory and 200 in the headquarters alone. Burton now offers more than 4,200 different product skus under its name, with even more in the Red and Backhill programs.

With its global reach in this volatile market, the company has succeeded despite all the market fluctuations. SNOWboarding Business visited Burton’s Burlington facilities a couple of days before its owner, Jake Burton Carpenter, held his annual fall party for the staff and friends. Because the party is such a big deal, just about all the Burton employees were in town–including the heads of the European and Japanese offices. We figured it’d be a good to time catch everyone in the office.

Things turned out to be a bit more hectic than we expected. There were tons of visitors and team riders roaming through the halls normally filled by employee’s wandering dogs. Plus, the building was in the middle of its third major renovation since 1992, when the company first moved in. This year Burton separated the board factory from its administrative offices, which includes sales, marketing, product development, customer service, finance, factory showroom, and other support services. These offices and the board manufacturing plant had both outgrown the room available, so each desperately needed space to breath. In October, the existing facility was in the process of getting a new front sidewalk complete with banks for skateboarders, renovated offices, and a mini prototype snowboard factory. The main production plant, located about ten minutes away, was up and running at full speed producing Customs, Balances, Rippeys, Canyons, Supermodels, Factory and Ultra Primes, and the FL Projects.

Despite the confusion and distractions, SNOWboarding Business was able to spend time with both Carpenter and McGann, the man who took over most of the day-to-day business of the company, for exclusive interviews.

We met with Carpenter over lunch in downtown Burlington, a few minutes from the office. He stopped to say hello to several people both on the street and in the restaurant, appearing to be quite the town celebrity. He talked candidly between bites of his meal, speaking at times off the cuff and at other times taking time to think about his answers. At one point he said this was the first time Carpenter had publicly discussed some of these topics.

The following are excerpts from the original interviews. For the complete interviews, please log on to our Web site: twsnow.com

SNOWboarding Business: What has Burton done to prosper in the volatile snowboard market?

Carpenter: We’ve seen the benefits of stability. This is an industry where there’s a lot of change and that’s a big part of the dynamic.

We have a lot of history and we use it to our benefit. At the same time we have a lot of young–for lack of a better word–riders making the decisions or speaking up and affecting the decisions we’re making.

We’re also financially solid because we’ve been around for a long time and we’ve done well. It’s a never-ending challenge and the biggest threat to us now is keeping the interest–I don’t want to say excitement, but whatever it is that snowboarding has been known for–we’ve got to keep that going.

[That interest] was provided over the last couple of years by a lot of little companies coming in and injecting this or that or whatever, and some of that’s gone now. We feel a lot of pressure to continue to provide change and new ideas.

We’re incredibly competitive. We feel that we’ve been here from the beginning and we’re entitled to protect our turf. At the same time, we’re looking at it collectively because we enjoy the competition.

Burton’s now venturing into new areas with Red, Backhill, and the shoe program. What’s the idea behind that expansion?

It’s a lot of things. Surprisingly, some of the things that initially get our thoughts going in that direction are from a human-resources perspective. I just want to have this be a great place to work. And if it’s a great company, that’s how people will look at it, talk about it, and so forth. A big part of it is providing opportunities within the organization.

Red and Backhill are snowboard companies and those seem to be logical steps, but what about launching a footwear brand?

This probably wouldn’t be as big a deal–you probably wouldn’t even be asking the question–if we were just making a winter shoe with the Burton name written on it. When we started making underwear, that was probably a bigger deal.

But the footwear won’t be under the Burton name.

No. We would never make a non-snowboarding product with the Burton name on it. That’s out of respect to Burton.

For me as the owner, it’s not a bad move to have some diversification. Not so much as a rainy day [protection] for snowboarding, but you could look at that as one benefit to it, but just in the interest of growing out and exposing ourselves to different things.

I’ve seen our reps who are exposed to different products. They can bring new ideas and new energies to what we’re doing and our business. I think that’s a benefit for us.

But why footwear?

It was because everyone has a really difficult time going into a store and finding a shoe they like.

And I think footwear companies haven’t shown the same respect for their consumers that we have for our riders. I could be very naive and overconfident in this respect, but it will be well received in terms of not screwing up distribution and not oversaturating the logo. We don’t have intentions of being the next Nike. I don’t think we’ll ever even approach Burton’s size.

With Burton being the number-one snowboard brand worldwide, where do you see the company going in the next three to five years?

We’ve always been at the whim of the market. You’re better off asking a kid on the chairlift then asking me, because I can’t really tell you where the industry is going.

We’ll try to do everything possible to keep the flavor there and not let the image [of snowboarding] get taken over by U.S. Skiing and have them tell people outside the sport what snowboarding is about.

How has your role in the company changed in the last several years?

It’s been an evolution, but making Tom [McGann] president changed it a lot over the last couple of years, and clearly for the better. I’m still involved, though.

When you have someone like myself there, you have advantages and disadvantages. I like to have things my way and it doesn’t take very long for me to start dominating a situation–which isn’t necessarily productive.

Tom is much more sophisticated in terms of his management skills than I am. I’ve got passion for the sport. I’m going to ride 100 days a year. I’ve got that as a goal.

How active will you remain in the management of the company?

On a day-to-day basis, not too active. I’m more active with product development. I’m very outspoken and like to give feedback.

I get every product and test it in January and go to New Zealand in the summer and test every softgood and a lot of hardgoods.

I’m a prick about the fact that I adhere to the roundtable structure. I learned that when Craig Kelly came around, straightened my ass out, and taught me how to listen to riders. I’ve done so ever since.

I’m less involved with marketing than in product development, but more involved than I am with sales and operations. I follow marketing just because I’m concerned with how the company’s presented.

I want us to always have an edge, but I don’t ever want us to start bumming people. I hate people who get inconsiderate, rude, and start hurting people. I’m really a subscriber to the "mean people suck" saying. At the same time, we really need to stay as edgy as possible in terms of staying healthy.

McGann Takes The Helm

Tom McGann was named Burton’s president in the spring of 1998. Previously, he had been the chief operating officer and has worked for Burton since 1991. But his relationship with the company didn’t start then. Prior to moving to Vermont, he worked for the Canadian-based Karhu snowboard and cross-country ski factory. It still builds snowboards for Burton.

McGann has been praised by Jake as being a much more sophisticated manager than he is, and indeed, he’s grown up with the company during the 90s. Now overseeing the day-to-day operations, there’s no doubt that his passion for the sport and for running the company is as strong as the owners.

SNOWboarding Business: How important is it for Burton to own its own factory?

McGann: Jake’s mission is that you can’t understand the business unless you have an incredible knowledge about putting together one component.

Since we’re a snowboard company, that’s the product we chose. It’s hard to be in this business unless you have a high level of internal technical and design capability.

Burton still uses OEM factories as well?

Those factories’ only business is to build Burton snowboards. We have a great group with long-term contracts–sometimes up to ten years. We have open technology transfers, regular meetings as a group, do problem-solving together, share materials, and transfer machinery.

The construction processes are pretty standardized. There are some tweaks here and there, but you can pretty much send tooling around to wherever you need to. If you’re getting behind in one factory, you can send tooling from another.

Why doesn’t Burton manufacture all its own snowboards?

In a way we do. If you think about it, if somebody’s business is 100-percent doing your business, and if they have the entrepreneurial drive there, it’s the best situation you can have. They’ll do exactly what you want them to do.

Managing remote locations can be challenging. You need to have that drive to make it perfect, to squeeze the last bit of efficiency out of it. To me, it’s the best of both worlds in a way.

We went through the factory yesterday. I was surprised how many people touch each board. Are there plans to make it more efficient or automated?

I had an experience with robots when I got out of university and went to work at a large manufacturing operation. We had an established assembly line with 60 robots doing welding and assembly. They’re really great if you’re not going to change the product a lot.

One thing you can do with well-trained, dedicated people is change the production process quickly and often. So the price of the efficiency from the standpoint of labor is the lack of flexibility. I really don’t want to lose that. That’s why we’ll stick with the model of shaping boards instead of assembling components. That’s the basic difference.

What are the difficulties Burton will have in the next three to five years?

Keeping this industry fun and keeping the focus on who we’re really doing it for is the real challenge. The primary thing is that the thirteen-year-old kid is stoked next August when the new product comes out.

It’s going to be challenging for Burton, too, because when you see a lot of these small companies going away, a lot of that fun also went away. So, who’s going to do that? That puts the challenge on us to do it.

A lot of people have said it’s hard to come up with anything new in snowboards.

I’ve heard that same thing. We have a lightweight freestyle board that carves better than one of our Alpine boards [from] several years ago.

In terms of performance, things are just starting. The industry as a whole has just started integrating interface and board performance and there’s so much opportunity there.

People affectionately refer to Burton as the Big B. And Burton owns the market worldwide.

I would say we’re serving a group of people who own the market. We don’t own anything. We get the right every year to supply product to the people who own it, and that’s an important distinction to me. I don’t look at it like next year we’re going to own the market. I feel like I can be in the can next year if I don’t do the right thing.

Is there a point where Burton could reach total saturation in the market?

I hope not. That would mean the industry is in such deep shit it’s going to be tough to define any industry at that point. I don’t think we’re anywhere near that yet.

I don’t really see a huge abatement in kids getting stoked to go snowboarding, so I’m feeling pretty good we can keep it moving forward.

What has Burton done that’s made the company so successful that none of the other snowboard companies have figured out?

I think sustainability in any business or organization comes from a core group of people who don’t loose their focus on the original vision.

The original vision here was to build great stuff that people have fun on; to build the best stuff, never sparing detail, and never backing off of our investment just because this year we might not make as much money.

Every component of the business–the catalog, everything, every year–has to be better, has to be perfect. What you did last year–don’t even talk about it. That was last year. The customer doesn’t care about last year. We constantly ask, "What are we doing right now for next year?" I think that’s what separated Burton.

Plus having someone like Jake–I mean, he never lets up. The guy could kick back, but he was in the office the other day yelling about the boot fit. He just never, ever stops pushing.