Episode 835 - The Opportunity Sitting in the Basement: The H.B. Reese Story

0:04 Helping leaders motivate their people to a higher level of performance through strong human relations, team building, and goal achieving. This is the 7-Minute Leadership Podcast with your host, Paul Falavolito. Hello, everyone, and welcome to the 7-Minute Leadership Podcast. It's episode 835. There is a candy here. sitting on store shelves all over the world that can teach us something about leadership.

0:36 And strangely enough, the lesson has very little to do with candy. It has everything to do with recognizing what might be sitting right beside you. His name was Harry Burnett Reese. H.B. Reese had worked for Milton Hershey. He worked on one of Hershey's dairy farms and later in the shipping department of the Hershey Chocolate Factory. And Reese looked at what Milton Hershey had built and thought something along the lines of, if Hershey can sell that much chocolate, maybe I can make a living making candy too. So Reese started experimenting, not in some multi-million dollar research facility, in his basement. He made hard candies, chocolate-covered nuts, raisins, mints, caramels.

1:25 He experimented with different products while trying to support a very large family. Eventually, around 1928, he created something pretty simple. Chocolate. Peanut butter. A little cup. That's it. The Reese's Peanut Butter Cup. And here's where the story gets interesting. Milton Hershey wasn't Reese's enemy. Hershey actually supplied Reese with chocolate.

1:54 Reese built his company in Hershey, Pennsylvania, practically in in the shadow of the Hershey Chocolate Company, two candy companies operating in the same town. One was already becoming an American institution. The other was a guy making candy who had struggled financially, tried different businesses, and was still figuring out what worked. Think about that for a second, because we have a tendency to look at successful companies, successful leaders, and successful products after they've made it. Then everything looks obvious.

2:30 Of course, Reese's was going to become huge. Chocolate and peanut butter. Who wouldn't see that? Except nobody knew. That's the point. Leadership is easy when you're looking backward. Everything makes sense after somebody proves it. The real skill is recognizing potential while it's still small. H.B. Reese didn't immediately build an empire around the peanut butter cup. It originally existed among an assortment of candies, and then something happened.

3:03 People kept buying the peanut butter cups. Reese paid attention. By the mid-1930s, they had become his most popular product. And then World War II created shortages in rationing, including sugar rationing. Reese made a massive decision. He stopped... producing his other candies, he put his attention on the peanut butter cup. That's leadership. When the evidence starts telling you something, are you listening? Leaders love plans. We build budgets. We create strategies. We have meetings. We write five-year projections that somehow pretend we know what's going to happen five years from now. Meanwhile, the market is talking to us. Our employees are talking to us. Our customers are are talking to us. The numbers are talking to us, and sometimes

3:56 we're so busy protecting the plan that we miss what is happening right in front of us. Reese listened. The peanut butter cup worked, so he leaned into it, and it worked extremely well. H.B. Reese died in 1956. His six sons took over the company. Milton Hershey had already died in 1945, and then in 1963, the two stories finally came together. The Hershey Chocolate Corporation acquired the H.B.

4:29 Reese Candy Company. Think about that journey. A former Hershey employee starts making candy. He builds a small company in the same town. Hershey supplies the chocolate. One particular product starts separating itself from everything else Reese makes. Reese bets heavily on that product. Years pass. Both founders die, and then Hershey eventually acquires the company Reese built. Today, Reese's is one of the most recognizable candy brands on the planet.

5:01 Hershey says its factory produces approximately 25 million Reese's peanut butter cups every single day. 25 million every day. And somewhere inside that massive global brand is still the DNA of a guy working in his basement trying to make something people would buy. That's what I want leaders thinking about today. What is sitting in your basement? Not literally.

5:27 What is the small idea inside your organization that nobody is paying much attention to? Maybe it's an employee who doesn't have the impressive resume. Maybe it's a service that represents 5% of your revenue today. Maybe somebody on your team keeps suggesting a different way to solve a problem. Maybe your customers are using your product differently than you intended, and maybe there's a small part of your business quietly outperforming everything around it. Pay attention, because leaders have a dangerous tendency to associate size with importance. Big project, important.

6:07 Big customer, important. Big budget, important. Big title, important. Small idea, we'll get to it later. That thinking can cost you. Some of the biggest opportunities you'll ever encounter arrive looking completely unimpressive. They don't walk into your office carrying a PowerPoint presentation. They don't come with guaranteed revenue. They don't have a proven track record because they're new. Sometimes they're sitting quietly in the corner waiting for somebody to notice.

6:39 And there's another lesson here. Your job as a leader isn't to personally have every great idea. Hear that again. You do not have to personally invent everything that moves your organization forward. Some leaders struggle with this. They become so attached to being the smartest person in the room that every new idea has to come through them. That's how organizations become stale. Your next great idea might come from the newest employee you hired. It might come from somebody working the front desk. It might come from the person loading the truck. It might come from a customer complaint.

7:18 And it might come from something your organization tried 10 years ago and abandoned too early. Leadership requires enough awareness to recognize value regardless of where it comes from. And here's the part I really love about the Reese story. It wasn't instant. We live in an instant results world. Post a video and check the views five minutes later.

7:44 Launch the product and expect sales immediately. Start the program and ask two weeks later why it hasn't transformed the company. H.B. Reese's story unfolded over decades. There were failures, there were financial struggles, there were different candies, there were different businesses. There were years when things were uncertain. Then eventually there was a product that people couldn't stop buying. Leaders need to understand the difference between an idea that isn't working and an idea that hasn't had enough time to work.

8:18 Those are very different situations that requires judgment. Look at the evidence, watch the customers, watch your employees, study the numbers, then make the call. And when something starts working, don't be afraid to put more resources behind it. Reese eventually stopped trying to be everything. He concentrated on the product customers clearly wanted. There is a leadership lesson right there that could save some organizations millions of dollars. Stop trying to be great at 20 things. Find what you're unusually good at. Find what your customers value. Find where you have momentum. And then pay attention to it because somewhere inside your organization right now could be your version of the peanut butter cup. An idea, a person, a process,

9:09 a product, a service. Something small enough that it's easy to overlook. And years from now, people may look backward and say the opportunity was obvious. It rarely is. It becomes obvious after somebody had the courage and awareness to recognize it early. So this week, walk through your organization with a different set of eyes. Look at what is quietly working. Listen to the ideas people keep bringing you.

9:43 Pay attention to where customers are naturally moving. Your biggest opportunity may already be inside your organization. It may be small. It may be unpolished. It may be sitting in the basement. Leadership means being awake enough to see. what something could become. This has been the 7-Minute Leadership Podcast, and I thank you for listening.