Smart Business Magazine, Mar 2013

14 Smart Business Indianapolis March 2013 When Paul Davis joined Coinstar Inc in 2008 the leading provider of automated retail solutions had recently acquired 18 different businesses and was at an inflection point capable of moving in several directions The Bellevue Wash based company had gone from a single line of business coin counting to five lines money transfer electronic payment services Redbox DVD rental entertainment and coin counting Davis had the task of reining in these different businesses that the company had acquired and deciding where to go next One of the first things I did when I joined the company was a deep dive to understand and get alignment throughout the organization about what our core was says Davis CEO of Coinstar Inc As a result of that deep dive Davis landed on the automated resale platform as the companys core which two of Coinstars businesses Redbox and coin counting were focused on Davis and his team then did an analysis of the remaining 17 businesses which revealed that they werent the right fit Of those 18 companies that were acquired we sold off 17 in the first two years so it was a major reshift Davis says We ended up with our two core Cashing in your chips Paul Davis placed his bets on a sharper focus as he cleaned house of 17 firms and doubled Coinstars revenue in five years businesses today which are our coin counting business and Redbox With a much clearer focus on the companys future direction Davis was able to play to the strengths of Coinstar His execution on the strategy to grow the coin counting business and Redbox earned Davis a No 4 ranking on the Fortune 500 list for technology visionaries in 2012 Heres how Davis evaluated the company and placed Coinstar on a path that would leverage its strengths Find your direction Coinstar a more than 2 billion 2700 employee company had primarily been growing through acquisitions before Davis became the CEO in 2008 By divesting the majority of those acquisitions Davis shifted the focus of the company and its growth strategy to a more organic one The company was a clear leader in the DVD rental space not No 1 at the time but it had the clear potential to get there and in coin counting it had more than an 80 percent share of the market In these other businesses they really didnt leverage what we knew Davis says Money transfer had very little to nothing to do with kiosks E pay had very little to do with kiosks In the business that they called entertainment it was a fairly antiquated business that was capital intensive and we werent seeing any growth When Coinstar focused on Redbox and its coin counting business it found that all of its money and all of its growth were coming from those two businesses The other businesses were drains on the bottom line They were prohibiting us from doubling down on those growth sectors and realizing our potential he says It meant that we had to get rid of these other businesses that had not been integrated Davis biggest key to finding Coinstars next direction was asking what the core of Coinstar was and how the company could leverage that BY GREGORY JONES GJONES@ SBNONLINE COM The way we have managed innovation internally is we think really big We start small and once we land on an idea we scale quickly But if you fail you fail cheaply PAUL DAVIS CEO COINSTAR INC CLICK OR SCAN to read more stories about acquisitions or go to bit ly SBN_ Mergers FEATURE COINSTAR INC