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Tod Nestor remembers his first performance review like it was yesterday.
Sitting across from his manager inside the offices of Pepsico’s Purchase, New York, headquarters, Nestor recalls receiving a pat on the back before the manager’s feedback began to sting.
“It seemed like there were two minutes of ‘Here’s what you’re doing well’ and two hours of ‘Here’s where you have to do better.’ I walked out of there pretty angry and frustrated,” explains Nestor, who says that he later circled Pepsico’s spacious campus twice on a long midday walk.
“By the time I began my second loop, I had told myself that ’90 percent of what that individual just told me was correct,’’’ says Nestor, who subsequently began viewing the manager’s feedback not only as being largely accurate but also as a valuable commodity.
“When I accepted the fact that feedback about performance was something that could make me better—and not just criticism—my life changed,” he acknowledges.
Going forward, Nestor says that he looked for feedback inside every corporate corridor.
“People got sick of me trying to pull the stuff out of them,” says Nestor, who believes that while he did not always respond to feedback, he did always listen to it and carefully consider whether he should respond.
Guest: Tod Nestor, CFO & President
Company: Energy Focus
Headquarters: Solon, Ohio
CFOTL: Tell us about this company what does it do and what are its offerings today?
Nestor: Energy Focus is an LED lighting and controls company. LED lighting is like comparing a smartphone to a rotary phone. LED lights are actually extremely high-tech—it’s almost like having a laptop inside the light. If you were to take one apart, you would be amazed at how many computer components and wafers and chips are in there. These lights are not a commodity. They are very differentiated. Unfortunately, the industry historically has sold them very much like a commodity, through the same channels as fluorescent and incandescent lights. Energy Focus does not. One thing that sets us apart is that we use a direct sales model, which does give us, we think, a competitive advantage.
We will soon be launching a new product that has dimmable and tunable LED lighting. It allows you to leverage your existing wiring without having to use Bluetooth or wifi or do a big rewiring in a facility. This is coming out in the market soon, and we think that it will be revolutionary. The people who have seen the demos have been very excited about it. This type of approach is what sets us apart.
I think that we’re a very unique company that is positioned very well in an industry that’s going to be growing extraordinarily rapidly over the next 10 years. The key to success is growth, profitable growth, and we will do that. I really want to return Energy Focus to cash flow break-even—this is a very important goal for the next 12 months. We will be getting this new product launched successfully, and of course I’m always focused on generating shareholder returns. One of my key objectives that is the underpinning of everything that I do is generating shareholder returns.