Panel
Transforming a Legacy Company
- The panel features four CEOs leading transformations of legacy companies with histories spanning decades to over a century: Best Buy (147 years since 1876 founding), Campbell's Soup (147 years), Lands' End, and Suntory.
- Hubert Joly (Best Buy) joined in 2012 when the company faced a "menu of challenges" including strategic threats from Amazon and Apple, leadership instability, and operational decline in customer service.
- Best Buy identified "showrooming" as a primary threat but turned it into an asset by matching Amazon prices in-store and leveraging their physical locations as technology showcases.
- Federica Marchione (Lands' End) inherited a stable but declining e-commerce business caused by a lack of innovation, despite a strong legacy brand and platform for global expansion.
- Denise Morrison (Campbell's) took the helm of a 147-year-old company in decline due to complacency, facing a "perfect storm" of global economic realignment, demographic shifts (Millennials), and consumer trends toward health and digital engagement.
- Takeshi Nishimura (Suntory) identified the need for transformation due to Japan's declining and aging population, prompting a strategic pivot from domestic dominance to global competition.
- Suntory acquired Beam for $16 billion to facilitate its transition from a multi-domestic Japanese company to a global beverage entity.
- Campbell's established the purpose "Real food that matters for life's moments" to unify diverse business units and new acquisitions, including Bolthouse Farms, Plum Organic, and Garden Fresh Gourmet.
- Best Buy implemented a "bicycle theory" for its turnaround, prioritizing immediate operational fixes and employee re-engagement over long-term strategy formulation to stabilize the business before innovating.
- Best Buy matched Amazon prices and introduced partnerships with Samsung and Apple to create "stores within stores," recovering lost sales and improving customer experience.
- Campbell's reorganized from geographic divisions to category divisions and incentivized retirement-eligible Boomers to accelerate a demographic shift toward Generation X and Millennial leadership.
- Lands' End maintained its core product lines (e.g., items under $100) while launching a new "Canvas by Lands' End" line to bridge the gap between its traditional customer base and younger generations.
- Land's End launched a sustainability initiative to plant one million trees annually, leveraging the founder's environmentalist legacy to engage modern consumers.
- Suntory faces cultural resistance to change rooted in Japanese corporate practices like lifetime employment and seniority systems, requiring a gradual shift to global competitiveness.
- Campbell's engaged Millennials through immersive research, including pop-up bars and shopping together, to reverse an 85% core soup sales baseline that was below average for the demographic.
- Best Buy created a "Strategic Growth Office" to incubate new business models, such as the "In-Home Advisor Program," to shift from transactional sales to solution-building.
- Best Buy's leadership issued "get-out-of-jail-free cards" to executives to encourage risk-taking, provided actions were legal, ethical, and aligned with strategy.
- Land's End emphasized "leading by example," with the CEO wearing company products to foster brand ambassadorship and authenticity among employees and customers.
- Suntory fosters cultural integration through a corporate university and talent exchange programs between domestic and international subsidiaries (e.g., Jim Beam).
- Hubert Joly defines transformation leadership as requiring high energy, a bias for action (quantity of decisions), optimism, and a mix of legacy and new skills like digital and supply chain management.
- Federica Marchione seeks a successor who can operate a machine without her, combining the soul and agility of a startup with the scale of a large corporation.
- Takeshi Nishimura looks for a successor who is an evangelist of core values, possesses a global perspective, and accepts diversity as a driver of innovation.
- Campbell's goal is to increase Millennial engagement with its core soup brand to close the gap to the market average, currently sitting at 15% below average.
- Best Buy removed a billion dollars in costs to reinvest in price competitiveness and quality service, reversing the trend of declining customer engagement.
- Suntory aims to increase EBITDA from $3.5 billion to $6 billion by 2020, driven by the global expansion of its acquired brands.
- The panelists agreed that culture (identity) must remain rooted in core values while business models and skills evolve to meet future consumer needs.
- Denise Morrison noted that purpose-driven culture changed employee behavior from shipping cases to focusing on the quality and affordability of the food inside them.
- Best Buy found that asking existing leaders to reinvent the business model while running day-to-day operations was ineffective, necessitating separate incubation teams for new ventures.
- Land's End identified that customers naturally abandon the brand between ages 13 and their parenting years, creating a specific demographic gap to address with new product lines.
- Campbell's made acquisitions like Juicero and Project Acre to understand the new food landscape and partner with entrepreneurs rather than just acquiring products.
- Hubert Joly emphasized that the difference between great and good leaders in a turnaround is the quantity of decisions made, not just the quality.
- Suntory leverages the "Lost in Translation" movie connection to highlight the global reach of the brand while navigating cross-cultural management challenges.
- The panelists concluded that transforming a legacy company requires respecting the past identity while aggressively addressing the immediacy of present crises and the long-term vision for the future.