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How a company soothed back pain — and innovated a sales model

From start-up to Entrepreneur Of The Year® winner, VARIDESK stands and delivers growth strategies.

The better the question. The better the answer. The better the world works.

What is the right path to accelerate growth?

The most direct line goes straight to the customer.

Just a few years ago, businesses relied on traditional supply channels for office furniture. Desks, lamps and workstations were fairly standardized in function with limited options. That changed when the VARIDESK co-founder was suffering from sciatic nerve back pain at his desk and had an idea. He elevated his laptop using a cardboard box on his desk so he could stand and work. This led him to design a product that would let him stand at his existing desk – that was functional, streamlined and alleviated his pain.

The first VARIDESK variable height desktop product, and its subsequent introduction to the market, started a new chapter for the industry.

“Back pain is the second leading cause of absenteeism at work,” according to VARIDESK CFO Craig Storey. “The idea was born out of back pain but led to a company that creates products and office solutions that change the way people work around the world.”

The original desktop converter was just the start. Company co-founders Dan Flaherty and Jason McCann are on a path to simplify how businesses buy office furniture by turning the dealer distribution model upside-down by selling direct to consumers online. “What’s best for the customer?” became the focus for future product development and improvements. The answers came from the customers themselves, forging a strong identity centered on transparency and a model for continual customer feedback as VARIDESK grew into an office furniture company with a full suite of simple, agile products – from electric standing desks and storage, to moveable walls and lighting.

From “back pains” to “growing pains”

The EY Growth Barometer Survey indicates that US companies lead the world in innovation through customer centricity – a finding mirrored by VARIDESK’s rapid growth trajectory. Quality, innovation and customer collaboration were significant drivers as the company expanded its product line to include additional versions of the quick-to-assemble conference room furniture, seating solutions and lighting accessories. The transition from desk-on-top-of-desk products to a suite of full-office solutions, including movable walls, demonstrate VARIDESK’s mission to make the workplace a happier, healthier and more productive place.

As VARIDESK’s fan base grew beyond the U.S., and the company began to scale globally, complex business issues arose. Keeping up, and ahead of, rapid growth required a trusted business advisor.

“EY has been recognizing, supporting and guiding high-growth entrepreneurs for more than 30 years,” said Partner, Ernst & Young LLP, and EY Americas Entrepreneur Of The Year Leader Debra von Storch. “It’s my job to help accelerate a company’s growth; to help them achieve their strategy and purpose.”

Craig Storey, CFO, VARIDESK and Debra Von Storch, Partner, Ernst & Young LLP, EY Americas Entrepreneur Of The Year Leader

With VARIDESK’s impressive trajectory and ensuing business needs, von Storch and her team stepped in to help align the company’s organizational structure with its growth strategies.

“When we first met, we had pressing needs related to tax structure in the global market,” said Storey. “We needed to manage risk and avoid unnecessary exposure,” he said. “Everyone on the EY team was very responsive and helped us navigate what is normally a painstaking process.”

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Defining growth goals, setting up the right corporate structure, developing supportive capital strategies and outlining the best talent acquisition methods were additional priorities addressed by the EY team.

According to Storey, in addition to providing exceptional service on these complex projects, the EY team was very proactive in keeping VARIDESK ahead of potential issues as their growth continued at a break-neck pace.

VARIDESK leaders standing working product
The better the question. The better the answer. The better the world works.

A trusted business advisor is a collaborator for growth

The value lies in speed and connections.

As VARIDESK expanded its product line and market share and looked to its next growth phase, von Storch’s team brought additional value to the relationship.

“When you work with EY, they provide value over and beyond what’s in the engagement letter,” said Storey. “Debra brought more keys to more doors than I ever could have expected. We look for nimble collaborators, and for customer-focused partners that understand a real sense of urgency and match our speed. The EY team was always willing to make an introduction, provide a piece of research or grind through strategy with us. Their work is evident in our accelerated growth over the past two years.”

In 2017, McCann and Flaherty won the U.S. Emerging Entrepreneur Of The Year award. This opened more doors, connecting them to a new community of the most impressive leaders in business. The EY team continues to play a vital role in making introductions and creating connections that result in breakthrough go-to-market strategies.

Varidesk WEOY winners
The better the question. The better the answer. The better the world works.

What exponential growth looks like

VARIDESK’s approach is transforming office furniture, commercial real estate and the active work environment.

With a laser focus on transforming the office furniture and design industry, VARIDESK continues to innovate. “We’re enabling flexible, nimble, active offices that can be assembled in less than five minutes – with no tools – to meet any company’s changing needs,” said Storey. VARIDESK’s nearly 300 employees have sold more than two million units in 130 countries and to 98 percent of the Fortune 500 companies. With the right growth plan in place, the company is in a strong position to continue its path to success.

As VARIDESK’s trusted business advisor, von Storch keeps the question, “What is the best path to accelerate growth?” front and center. “Successful hyper-growth companies should consider questions about their business advisors, too,” said von Storch. “Are you culturally aligned to build something together? Are you getting canned or out of the box answers? Are services created in the context of where you are headed?”

With the right trusted business advisor, the path to growth is clear.

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How digital transformation opened new channels for growth

With the physical limitations of their fleet holding back growth, EY helped Royal Caribbean create new digital revenue streams.

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How can digital drive growth when there’s no scope to expand?

As cruise passenger numbers are growing globally, Royal Caribbean is striving to meet increased demand and digitalize without downtime.

In the hospitality industry, fully booked rooms point to a thriving business. However, in this transformative age, it’s essential that businesses constantly monitor trends. Innovative companies know the minute they rest on their laurels is the moment they start to sink.

The challenge of duality — finding a way to maintain your existing business while developing new revenue streams in parallel — is acute. When you are reliant on physical space for revenue, taking that physical space out of service for upgrades and redesigns can present a significant business risk.

Royal Caribbean Cruises found itself in this position. The company has long been an innovator in their industry, particularly in maximizing the physical spaces on board its cruise ships to accommodate the ongoing significant global growth in cruise passengers (from 17.8 million visitors a year in 2009 to an expected 27.2 million in 2018).

The challenge the company faced was in finding new ways to drive growth and attract a new generation of customers in the digital age. While cruises may have a reputation for appealing to older holidaymakers, nearly 41% of cruise passengers in 2017 were under the age of 34 — and millennial passengers expect digital on-board experiences.

the past, the hospitality and leisure space had catered to growth by increasing capacity. Build more rooms and pools, and when space to build is limited, put on more shows and rethink your use of space to get more customers through the doors. For cruise lines in particular, such upgrade work can also lead to ships being out of service for months, making the work uneconomical.

“Our ship design and our guest experiences are all cutting-edge, but it was time to consider digital transformation, something we haven’t spent a lot of time thinking about in the past,” says Lisa Lutoff-Perlo, President and CEO of Royal Caribbean’s Celebrity Cruises division.

This is all too common an experience for CEOs, with EY finding that 50% of CEOs do not believe their companies have implemented the necessary steps to counter disruption. Failure to do so is putting market leadership and capitalization at risk.

Executing this kind of transformation is no small task. “The cruise business is an amalgamation of many different industries,” explains Cheryl Grise, EY Advisory Lead, Southeast Region. “It’s media and entertainment, health meets hospitality, and retail meets transportation. It’s all of those industries coming together — industry convergence at its finest.”

This meant EY had to tap into its knowledge and experience across multiple sectors and service lines to unpack and address the core challenge.

Person surfing on board a cruise liner
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Finding the right approach to exceed customer expectations

Looking at digital from every angle is helping Royal Caribbean to transform customer experiences and business operations.

“Often, EY clients will come to us, and they’ll say, ‘We want to rethink the customer experience in a new digital way,’” says Grise. “And as you start to probe and ask more questions, you realize they’re saying a lot more than that. What we realized is that they weren’t just asking for the customer experience to be digitized; they were also asking how to become a fully equipped digital organization.”

What Royal Caribbean had begun to understand was that true digital transformation is “an opportunity to rethink how to go to market and how to operate the entire business,” says Raj Mirchandani, EY Account Lead, Royal Caribbean Cruises Ltd.

The real challenge was how a floating city could transform itself digitally beyond the obvious — by thinking about digital from every angle, from end to end throughout the company’s entire business. And then to undertake this with a duality mindset, enabling existing operations to continue undisrupted even as the digital transformation got under way.

“People today expect the ease of technology in everything they do,” says Richard Fain, Chairman and CEO of Royal Caribbean Cruise. “They find it saves them time and effort, especially when on vacation, where time is one of the most important commodities they have.”

“This was an opportunity to think differently about connecting with their guests, with their employees and also with new revenue streams,” Mirchandani explains. Done right, this could lead to new ways of operating that provide not just what today’s digitally savvy customers expect, but something that fundamentally changes their perception of what it means to go on a cruise.

Moving beyond just meeting expectations

“Royal Caribbean and EY understood that the primary focus of this project was guest experience,” says Adam Goldsmith, President and Chief Operations Officer, Royal Caribbean. “It starts with a tremendous amount of attention to the on-board guest experience that the emergence of these digital technologies could make possible.” 

To help enable digitally savvy customers to have their most fundamental expectations met and maximize their vacation time, an app was conceived. Designed to connect with guests before, during and after cruises, it allows them to book and manage their time on board. Its core functionality was relatively simple but supported a seamless experience from the connected world of land to the internet-free open seas via an on-board local network.

In addition, by embracing other digital technologies, such as virtual reality, Royal Caribbean will be able to expand the type of activities it can offer on board without the need to take ships out of service for long periods of time to install new facilities.

Crucially, there is now a more radical underlying data-capture and digital infrastructure that offers Royal Caribbean a greater understanding of guests’ behaviors and preferences.

The SeaSeeker mask was custom engineered by Royal Caribbean, and allows the wearer to take and share photos while underwater.
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How digital can power greater customer experiences

Adopting a digital mindset is helping Royal Caribbean deliver more valuable customer experiences around the world.

Beyond delivering new digital customer experiences, Royal Caribbean has set a course for digital to enhance how it operates from end to end — throughout its business. By transforming itself to put digital at its core, it is not only becoming better-prepared to meet customers’ current digital needs, but it is also becoming capable of adapting to future technological disruption to its business and services.

The app makes it easier for guests to discover and book on-board activities, increasing revenue. But the data being generated will also help the company understand where it needs to focus its on-board resources to improve customer experience

Adopting a new mindset

At the heart of this project was the understanding that businesses must be prepared to encourage digital disruption within their own sector or face the consequences of disruption themselves and that businesses need to adopt the mindset of duality to cope — adopting new approaches and innovating in parallel to maintaining their traditional business models so that those business models can seamlessly adapt.

These values will be essential to the future success of all sectors, not just hospitality and leisure. Companies must develop the ability to critically analyze their level of exposure to disruption and their ability to initiate it.

By adopting a digital-first mindset in both customer experiences and business operations, companies can position themselves to adapt and improve into the future, as technology and customer expectations continue to evolve.

As Jay Schneider, Royal Caribbean Senior Vice President, Digital says, “Digital doesn’t disrupt our business but accelerates our business... we’re constantly as a company thinking about how to transform every aspect of the guest journey, whether it’s at home, whether it’s on board, whether it’s post vacation, and then the same thing for the crew journey."  

Royal Caribbean Innovation and Transformation Lead Joey Hasty sums up digital technology’s role: “If I do my job right, you won’t even notice the technology. You’ll just notice really amazing experiences.”

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