Douglas R. Conant likes a challenge. The president and CEO of the Campbell Soup Company, Conant picked up the reins nine years ago when the company's share price was down and customer loyalty was on the wane. He knew that he could assemble a team to revitalize the company, revamp the product line, fuel innovation, win back customers, and make Wall Street love soup (and cookies and spaghetti sauce and juice) again.
In part one of this two-part interview, Conant described how engaging the workforce was integral to his plan. Engagement, he believes, creates trust and inspiration -- and trusting, inspired employees can accomplish extraordinary things. But he knew it would be difficult work. In fact, he predicted that it would take a decade to get the company firing on all cylinders again and the workforce engaged top to bottom.
"You need disciplined people. You need disciplined thought. Then you need disciplined action."
And Conant was right -- his strategy boosted engagement, productivity, and profitability, just as he'd expected. But before he could take a victory lap, the recession hit. In 2008, consumer packaged goods median shareholder returns dropped 25%. But as Conant explained in the first part of this series, tough times motivate and energize both him and his team at Campbell. Furthermore, as he explains in this second part of the interview, as the economy worsened, Campbell was prepared. The workforce was highly productive, innovation was bubbling, and leadership was tightly focused on winning in the workplace so Campbell could win in the marketplace.
This long process was not effortless, though. As Conant notes in this discussion, at the outset, it required assuaging Wall Street's impatience, pushing an unpopular program through a resistant workforce, and rescuing an unhealthy company -- in other words, overcoming a series of difficult challenges. Read on to discover how Conant and Campbell turned those problems into a remarkable success.
GMJ: In your first 18 months on the job, you replaced 300 of your top 350 leaders.
Douglas R. Conant: Yes, and it took about another year to get all the right people in the right seats on the bus.
GMJ: About the same time, an initial assessment of employee engagement at Campbell found that the company's scores were among the lowest of any Fortune 500 company Gallup had ever studied. Soon, though, your engagement program started showing results. What was the result of a more engaged leadership team?
Conant: The team became self-governing. As people get engaged, they get engaged in more than just their departments. They start getting engaged in the enterprise, and they have conversations with each other about how the company can move forward, not about how IT moves forward or how supply chain moves forward or how Pepperidge Farm [one of Campbell's subsidiaries] moves forward. When you're engaged in trying to do something special to lift the entire company up, all of a sudden the conversations change. People feel more accountable to each other, and they don't want to let each other down.
It actually gets easier to lead, because the flywheel starts to work. As in the Jim Collins' model, it's simple. Collins says the good-to-great model must have three things. You need disciplined people, which requires getting the right people on the bus. You need disciplined thought, which is how you will compete, and we built the strategy to do that. Then you need disciplined action.
Once you get everybody on the same page and they're all thinking about the enterprise, all of a sudden, the actions naturally become more aligned, and you become more effective in the marketplace. Then people feel even better about it. Then they want to talk to each other more. Then they want to work together more. That's the flywheel effect.
We've gotten to a point where higher executive engagement has brought a focus to the enterprise, not just to pieces of it. That just didn't exist before. My challenge now is to keep the flywheel going, to keep engagement up throughout the entire company, to make sure we have the right people on the bus, and to make sure that, at a high level, the strategy is right.
GMJ: These evolutions take time, and it's hard to explain to Wall Street -- which thinks quarter to quarter -- that you need two or three years to make substantive changes.
Conant: Well, you can't talk your way out of something you behaved your way into. This is a very mature industry. If you're a wounded company, the other companies that have been around for a hundred years will smell it, and they will take advantage of you in a heartbeat. It takes a long time to get back in fighting form. Jim Collins said it takes seven years to take a company from good to great. He said it would probably take us ten years to go from bad to great, because it takes three years to get the right people on the bus in the right seats. And he was right -- there are absolutely no shortcuts.
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Jim Woods is president and founder of InnoThink Group. A global management consulting firms specialized solely in helping organizations of all sizes in all industries catalyzing top line growth through strategic innovation and hypercompetition. Jim has over 25 years consulting experience in working with small, mid size and Fortune 1000 companies. He is a former U.S. Navy Seabee and grandfather of five. To arrange for Jim to speak at your next event or devise an effective hypercompetition strategy email or call us at 719-649-4118 for availability. Subscribe to our free innovation and competitive advantage newsletter. Don't miss a single new business idea!
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