At a time when PPG Industries is selling off sluggish units such as automotive glass and chemicals, Rick Elias occupies what appears to be an ideal seat. Effective yesterday, he became chief executive of Transitions Optical, the PPG joint venture that makes prescription eyewear that tints dark when exposed to bright light.
Transitions has been identified as one of PPG's growth stars. Mr. Elias, who helped launch Transitions for PPG in 1989, now oversees 1,200 employees worldwide. PPG does not break out sales for the unit, but two years ago Mr. Elias said its revenues were more than $300 million. PPG owns 51 percent of Transitions, and Essilor International of France owns 49 percent.
Q: You wear several hats running Transitions, based in Pinellas Park, Fla., and as vice president for optical products for PPG, based in Pittsburgh. Are you constantly traveling?
- Job: Chief executive officer, Transitions Optical Inc., and vice president, optical products, PPG Industries Inc.
- Age: 54
- Hometown: Gauyama, Puerto Rico; resides in Palm Harbor, Fla.
- Education: Bachelor's in chemistry, University of South Carolina, 1975; master's in business administration, Marquette University, 1981.
- Career: 1975-89: Held series of positions in PPG's coatings business, including chemist, product development, commercial development manager and market manager of steel coatings; 1989-present: Transferred to PPG's chemicals business to commercialize a photochromic lens technology and helped launch Transitions, where he has been vice president of sales and marketing, president, and as of Jan. 1, chief executive officer; 1998-2000: general manager, optical products for PPG's specialty chemicals; 2000-present: vice president, optical products, PPG Industries.
A: That's pretty much been the case for the last several years. About a year and a half ago, I started reporting directly to [PPG Chairman] Chuck Bunch and I went on to the operating committee and I now go to nine board meetings a year.
I have an office in Monroeville, hotel space at PPG's Downtown headquarters, and we have an open office at Transitions so I have a little cube down there. I only spend 10 to 15 percent of my time down in Florida. I spend 20 percent here and the rest is with customers on the road.
Q: So where do you live?
A: Mainly in airplanes! But I still have a residence in Florida because holding a residence in Florida where there is no income tax continues to hold some advantages.
Q: How did PPG get involved in the Transitions venture?
A: I was in coatings ... and in 1989 they came to me with a product to make a plastic photochromic lens. I didn't know eyeglasses. I didn't wear glasses and knew nothing about it.
I left a successful [coatings] sales group with 15 people working for me and came to start this up. It was a great opportunity and from the marketing standpoint, not too hard to understand. Glass photochromic lenses had been around since 1960 so it was obvious you could make a successful plastic photochromic lens but there was no successful technology. I was brought in to develop the strategy.
PPG sold raw materials to the optical lens industry. But we didn't know about making or distributing lenses. We don't make the lens, we apply the photochromic treatment to the lens. So we developed a strategy to partner with our biggest customer, Essilor International. They had the network; we had the technology. They agreed to give us a majority position in the venture and allowed us to sell the technology to them and all their competition.
That strategy really is one of the key things that made it successful. It allowed us to gain global distribution very quickly ... and finance more research.
Q: What were the early days like before you realized Transitions might take off?
A: At the beginning it was a small group of people. We were a bunch of Tom Peters nuts. [Tom Peters wrote "In Search of Excellence" and other best-selling motivational books.] We were thriving on chaos and all that. What was nice was we also had access to the quality disciplines that existed at PPG, like Six Sigma and lean manufacturing.
When you can put that successfully together with a very open environment where you are very focused on getting employee engagement, you really can create some unique opportunities for success.
Q: What was it like trying to create a new brand?
A: People go in and buy their glasses every two to three years as opposed to going to the grocery store and buying something off the shelf. So creating a brand on a product that is only purchased every two to three years offers some challenges.
Prescription lenses is not a category with a great deal of consumer involvement so companies hadn't done much with it. But we saw an opportunity. No one had gone into that space. We felt we had a very good product with a lot of attributes from the healthy vision side and we would meet a lot of things the consumer was starting to look for in their general lifestyles.
It was challenging, in the early 1990s, to go to PPG and ask for approval for $25 million to do TV advertising. It made for some interesting conversations in the company.
Q: Another challenge is that you're selling the product to eyecare professionals, not directly to consumers.
A: We spend a lot of resources on educating eyecare professionals on what Transitions can do for patients and for their practices. Once we get support from the professionals, we can go to the consumer and create demand.
Our hope is the consumer goes to their professional and says, "Hey, I saw this on TV." A challenge we have is that people spend more money on footwear and ice cream per year than on prescription eyewear. Buying Transitions lenses represents an upcharge to the consumer of between $60 and $100. It might cost me an extra $70 to have a pair of Transitions and get protection from UV rays and all that convenience, but when you break it down over two or three years that's only pennies per day. But it's the sticker shock. When you go in to buy your prescription lenses, you have a certain amount of money you're thinking about spending. You could spend it on an expensive designer frame. We're vying for that money.
Q: You don't disclose revenues but what is your market share?
A: About 17 percent of all prescription eyewear in the United States is Transitions. The re-purchase rate is between 80 percent and 90 percent. They really, really like the product. Globally, we only have an 8 percent share. We are a very, very successful business with 25 percent-per-year growth since the inception of the company.
Q: What is your management style? .....
A: Very open, as people would tell you. We believe in an open office environment. We don't have doors. What works for our business are cubes that are kind of around a bullpen. So I can bellow at all my direct reports at anytime!
We have very open communication. People hear what's going on and that eliminates about 50 percent of the meetings you have. People like to work there. It's fun and because it's fun is one of the reasons you are successful.
First Published: January 2, 2008, 10:00 a.m.