From cadet to commander
How a West Point mind-set put Steve Cannon on course to win the top job at Mercedes-Benz USA
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Steve Cannon was no more than a dark horse candidate to become head of Mercedes-Benz USA last fall after his boss, Ernst Lieb, departed.
Still, Cannon was always pretty good when it came to securing leadership positions, going back to his days at the U.S. Military Academy.
"What's cool is that West Point is a collection of large fishes from smaller ponds," said Cannon, who graduated in 1986. "Everyone is the captain of this or that, or the valedictorian. They pick the best and brightest. We were a bunch of alphas."
And the best of the best became leaders.
"They ranked you in everything from your academic standing to your military standing to your physical fitness and athletic standing," he said.
Cannon, whose 133 push-ups in two minutes is still an Academy record, was chosen as commander of the so-called "beast barracks," West Point's summer training detail for newly arrived plebes. He was also a regimental commander, one of the top cadet leadership positions.
Late last year Cannon was competing again. German press reports cited several German candidates as possible successors to Lieb, who was ousted in October after accusations that he misused company funds. But it was Cannon, the company's head of sales and marketing, who got the job.
Which thrilled dealers.
There hadn't been an American running Mercedes' U.S. sales arm since Mike Jackson held the job in the 1990s. Jackson, now CEO of AutoNation, the top Mercedes retailer in the United States, called the appointment "a brilliant masterstroke on the part of Stuttgart."
He added: "Not only I but the entire Mercedes-Benz organization in the United States gave a sigh of relief."
Cannon, a youthful 51, is a different breed of executive -- an ex-Army Ranger who was patrolling the Czech-West German border when communism collapsed in 1989.
Five years later he was part of a small team in Germany that developed the M class, Mercedes' first SUV. A few years after that he was plotting Hyundai's big rise in the United States.
Today, Cannon, tanned and taut, with bulging muscles visible through his dress suit, is battling Lexus and BMW for the top luxury sales spot in the United States. And he is launching a major effort to make Mercedes' customer satisfaction scores the best in the business -- something predecessors tried but failed to achieve.
Mercedes ranked seventh out of 11 luxury brands for customer service in the latest J.D. Power and Associates survey.
Elite training
Cannon was raised in Wyckoff, N.J., just 10 minutes from Mercedes-Benz USA headquarters, in a family of six children. As a champion wrestler in high school he was recruited to the Academy.
"We were a very competitive family," he said. "We weren't a military family, but two of us ended up at West Point."
Cannon majored in economics and minored in engineering. After graduating as a 1st lieutenant, he became an Airborne Ranger in the Army Artillery.
He received elite training at the grueling Army Ranger School and the Army Airborne School.
In 1987, Cannon was sent to Bayreuth in West Germany and spent three years in charge of a unit that patrolled the border with Czechoslovakia.
"You would look over at your East German counterpart but it was almost like looking through a time machine," he said. "It looked like you were peering back into the 1950s."
In 1989, Cannon had a front-row seat at the fall of the Iron Curtain. The west was inundated by East Germans driving their malodorous Trabant and Wartburg cars.
"All the pent up demand of 40 years under the communist system started to unleash itself in my town," said Cannon. "We were invaded by these Trabants and they ignored every parking rule. They were stacked everywhere -- it was crazy. They bought every orange, banana -- every piece of fruit -- and chocolate. The town was picked clean."
In 1991, on his way to the Army's Kelley Barracks in Stuttgart to sign release papers, Cannon drove past the global headquarters of Daimler-Benz AG.
"I saw this thing with a giant revolving star and thought, wow that's an enormous place, what is Mercedes doing here?' And two months later, I'm working for Mercedes-Benz in the United States."
Erich Krampe, then CEO of Mercedes-Benz USA, made Cannon his executive assistant.
"He loved my West Point background and my military experience and the fact that I spoke the language and understood the culture," said Cannon. "He was willing to forgive the fact that I didn't know anything about the car business."
Krampe handed Cannon some big assignments, like heading up the advertising agency review.
"Right out of the gate, I am running a $150 million account review on behalf of the CEO," he said. "That exposure is what mentally got me tracked into the marketing space. That was huge exposure to the marketing world."
When Krampe was named head of global sales and marketing, he asked Cannon to join him in Stuttgart. Cannon got in on the ground floor as a senior marketing manager in 1994, working on the just-approved M class.
"I was the first American to join this skunk works project that would design, develop and find a location in the United States that would ultimately produce a sport utility," he said. "I got to live that project from the first drawing, working with a development team to make sure the product was right for the U.S. market, because that would be the No. 1 market."
"I remember sitting in daylong meetings arguing about cupholders in the days when cupholders weren't essential in SUVs."
German 24/7
Living in Stuttgart meant total immersion in the Mercedes-Benz and German culture.
"I was living and breathing German 24/7 to the point where I thought my head would explode," Cannon said.
Cannon, who is married and the father of nine, "had two kids at that point, and I was having trouble getting them to speak English with Dad because the big influence was German."
Cannon moved to Alabama when the team selected Tuscaloosa as the site for M-class production. But in 1997 he shifted to the Daimler-owned debis Financial Services in Norwalk, Conn., as director of marketing. He worked as a consultant for a dealer software firm from 2000 to 2001.
In 2001 he joined Proxicom, a New York digital marketing firm that did Web site and data development for Ford, General Motors, Toyota and Mazda.
"I got great exposure to the nuts and bolts of the digital marketing and technology world," he said. "Then the Internet bubble burst."
In 2002 he got a call from Richards Group, which had just won the $500 million Hyundai advertising account. Richards was a finalist in the agency search Cannon ran for Mercedes, and he had kept in touch with founder Stan Richards.
"He called me because he had no one with any car expertise," said Cannon. He joined Richards and spent five years working exclusively on Hyundai.
He worked alongside Joel Ewanick, who was director of brand planning at Richards Group and later vice president of marketing for Hyundai. Ewanick is now GM's top marketer.
"The best thing I learned from being an agency person is how important good client leadership is," Cannon said.
By 2007, Hyundai had gone "from the cheap Korean brand to a contender with the biggies in the business," he said.
Next Cannon got wind that the top marketing job was open at Mercedes-Benz USA.
"When you work for Mercedes-Benz, you never get that brand out of your blood," he said. "Here I was speaking fluent German but was working for a Korean company. I had this skill set I never used."
Cannon knew CEO Lieb from his M-class days and sent him an e-mail: "I think I am the perfect person for the VP of marketing."
Rejection letter
Lieb didn't call. Instead he routed the e-mail to Mercedes' human resources department, which sent Cannon the generic rejection letter.
"I got really annoyed and thought, I will not let this go, I am not getting rejected without getting in the door," he said.
He called on his Mercedes connections in Germany, and Lieb, who agreed to a meeting. A week later the job was his. He framed the rejection letter and occasionally teases the human resources official who sent it.
As marketing chief, Cannon negotiated high-profile sponsorships for the brand that include the Masters golf tournament, the U.S. Open tennis tournament and PGA golf tournaments.
A major coup was a 10-year deal for naming rights to the Louisiana Superdome, home of the New Orleans Saints and host of six Super Bowl games. Next year the Mercedes-Benz Superdome again will host the big game.
The Saints are owned by Mercedes dealer Tom Benson. At a dealer meeting in Stuttgart in April 2011, Benson casually mentioned to Cannon and other executives that his team had received permission from the state of Louisiana to shop stadium naming rights.
Cannon jumped at the opportunity and negotiated a deal within months. The Times-Picayune of New Orleans, citing sources, said the deal is worth $50 million to $60 million.
Last year Mercedes-Benz was narrowly beaten by BMW in the race for the No. 1 luxury brand in the United States. Cannon won't say whether he expects Mercedes to win this year. It's important to the company, he says, but not important to the customer.
"The real challenge is the customer experience," he said. "We will steer more resources toward this than we ever had before, and you will see us moving toward No. 1."
One of the key elements is the Driven to Lead program that will train 11,000 customer-facing dealership employees this year.
"It is one of the most ambitious training programs that we have embarked on," he said.
But Cannon is just getting used to his new command. He thinks the new job is so "cool" that he's tweeting about it on Twitter as "SteveCannonCEO -- CEO of Mercedes-Benz USA. Father of 9, yes that's right, a baseball team. Former Army guy and history geek with a passion for marketing."
1982-86: U.S. Military Academy, cadet
1987-91: U.S. Army Airborne Ranger/West Germany, 1st lieutenant
1991-93: Mercedes-Benz USA, executive assistant
1993-97: M-class project, Stuttgart/Tuscaloosa, Ala., marketing manager
1997-00: debis Financial Services, marketing director
2001-02: Proxicom Inc., VP
2002-07: Richards Group, principal
2007-11: Mercedes-Benz USA, VP-marketing
Jan. 2012: Mercedes-Benz USA, CEO
You can reach Diana T. Kurylko at dkurylko@crain.com. -- Follow Diana on 
