Leaders at the helm of companies in need of change rarely have a straight line forward when it comes to turning around businesses steeped in decades of history.
Chief executive officers from Land’s End, Best Buy Co. Inc., Campbell Soup Co. and brewer and distiller Suntory Holdings Ltd. discussed their experiences as agents of change all while striking a balance between heritage and the future today during the Milken Institute Global Conference.
Best Buy in 2012 faced an “all-you-can-eat menu of crisis,” said ceo and chairman Hubert Joly. There were online players such as Amazon.com to contend with, the vertical integration of Apple and other vendors, operational challenges and a founder proposing a buyout. The retailer that caused the deaths of many of its competitors, at the time, faced mounting challenges.
“What you were reading at the time, we were supposed to die,” Joly said.
The company cleaned up via a number of initiatives, including changing up the management team, improving employee morale and price match guarantees for consumers. Best Buy’s next phase now has it piloting an in-home adviser program that sends workers out to people’s residences to make suggestions on technology updates.
“That’s a completely different business model,” Joly said. “It’s going from selling products to selling solutions, going from conducted transactions to building relationships. [It’s a] very significant transformation.”
Affecting change is crucial to remaining relevant because “what got you here won’t get you there,” pointed out Campbell president and ceo Denise Morrison.
“The food industry is in a revolution,” Morrison said. “When you have all this change, you can either lead change or be a victim of it.”
The 147-year-old company has made strides to appeal to Millennials focusing on fresh food products and international markets, while Morrison stressed the importance of authenticity: “You can’t be something you are not because consumers will see right through that.”
That’s one of the reasons Land’s End ceo Federica Marchionni this year reintroduced the Canvas label to the market, now called Canvas by Land’s End.
“I couldn’t do it in the name of Land’s End only. Why? Because I didn’t want to change anything that was working,” she said. “What I’m doing is adding new consumers. Canvas by Land’s End…is a way to recruit the new generation of fan[s] and that’s very crucial. The age of our consumer is not as broad as our lifestyle product offer[ing].”
She pointed out that kids will wear Land’s End when they’re still being dressed by their parents, but leave the brand when they start making their own wardrobe choices. They don’t return to the brand until they themselves become parents. “All this gap of age is an opportunity,” Marchionni said.
The ceo, previously at Dolce & Gabbana, presented her plan for the business to the board in April with the longer term goal of elevating the company and growing it into a global brand. But she walks a fine line in which she’ll make her appeal to a segment of the market not currently shopping the brand while also having to retain the existing customer base. The idea in elevating the brand does not equate to suddenly taking it to premium or luxury prices, which would alienate loyal customers, she pointed out.
“My point was not to change the price point,” Marchionni said. “That’s the best way to respect your customer, so I didn’t touch the offer [of] the best product[s] that are sold at the best price, so from the $29, $49, $89 [price points]. Those are still there.”