0:00
It's great to be here to talk to you today, you heard all my background and I'd be happy to talk to that in the Q&A session as much as you'd like.
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0:08
One of my proudest accomplishments, though, is I have three children and two of them are actually here at school right now.
0:14
I don't see them though, but would you please raise your hands, they are there [LAGH] nice to see you boys.
0:21
[LAUGH] I would have seen you last night, but you were out partying, so I couldn't do that, no, just kidding, they study all the time.
0:28
[LAUGH] It's really an interesting time to be talking about leadership, it's certainly an unprecedented time, I don't think I have to tell all of you that.
0:38
And in addition to crisis in our economic situation in the world today, I think we also have a crisis in leadership.
0:45
And if you think about how many leaders, whether it's in the business world or other organizations have fallen, that says a lot.
0:51
And I think you all have the opportunity to take a hard look at that and ask some questions about why that's going on.
0:57
There was a study recently that CEO credibility is at an all time low, and that CEOs are somewhere between a villain, a liar, and incompetent [LAUGH] and those are the highlights of the study.
1:08
So you don't feel really like people look to you and say, wow, you're a CEO, aren't you a great person?
1:14
But you know what, they're not all the same, and I think we have a lot to demonstrate that some bad examples are not the ones we should follow, so what does that mean for all of you?
1:23
I think now more than ever, there are huge opportunities for great leadership.
1:28
And here at Stanford, having the opportunity you have with the peers you have, which is an amazing group just to get into this school.
1:34
And the best respected professors and instructors, what a wonderful experience to learn a lot and learn what it means for your own leadership.
1:42
As you heard about my background, I had a little bit of a different, unconventional path.
1:47
When I got out of school it was a recession out of undergraduate, I had no money, and I just started getting odd jobs, and I worked at the post office sorting mail.
1:56
I went to college, paid my way through and I'm sorting mail, and I said, boy, what a great accomplishment.
2:00
I know every ZIP code in Illinois, [LAUGH] but they paid me and it paid my bills for a while.
2:07
But it taught me a lot, it taught me a lot about how to treat people in leadership.
2:11
So as I experienced sorting mail, working the night shift by the way, you learn, what meal do you eat when you get out of school?
2:19
Is it breakfast, lunch, dinner, when do you sleep, it really is a challenging time, but it's a boring job, a really boring job.
2:28
And I looked around me and saw a lot of these people were going to do this for their whole life.
2:32
And what I also learned is it was a boring job, tedious, a night seemed like forever, and the people who are leading that or managing that, made it even worse.
2:42
And I will never forget that saying, how do you find a way to bring dignity, and some element of fun, if possible, to a job that's tedious?
2:51
And for the rest of my career, I'd be managing people that were in situations like that.
2:56
So I remember how I felt and I think that was one of the best lessons I had, even though it wasn't a glamorous job, it certainly taught me a lot.
3:04
Now, I have the opportunity, it is an opportunity to lead Sara Lee which roughly 44,000 people worth $13 billion in global sales.
3:14
And you heard some of the brands, what people don't know mostly about Sara Lee, is that it is such an international company.
3:19
We do sell in 200 countries, we're the world's third largest coffee provider, and if you're in Europe at all, you'll see the brand name, Douwe Egberts, Maison du Cafe, different names by different countries.
3:31
Well, not probably up to 70% of our profit comes outside the United States.
3:38
So if you say Sara Lee to anybody, they usually say cheesecake and in reality, that's probably the smallest part of our company.
3:44
So, we recently entered this new era of presidential leadership and in this crisis, the topics of leadership and management come up all the time.
3:52
So I'd like to spend a little bit of time talking about our own experience and what we've had to deal with and what that means to me and to us and the company.
4:00
And everybody has a different definition of leadership and someone once told me the best thing to find out is if you turn around and anybody's behind you, following you, you're probably leading.
4:09
[LAUGH] And it's a great opportunity to set the tone.
4:12
But really, a leader is really someone who inspires people to act and to do the right thing.
4:19
Not just to get things done and check the box but to do the right thing and even if it's unpopular or difficult, it's something we all have to do.
4:27
I think leaders need to participate, it's not just watching over things.
4:30
A leader listens, leads, and learns during the process and has to make some tough decisions many times.
4:37
But that leader also accepts blame for failure and shares credit for success, in essence, a leader leads.
4:45
So I try to be the best leader I can, certainly I'm not perfect but what I find most challenging about my job now, the one I'm in is that it's necessary to make investments for the long term.
4:56
You have to do that because you're setting the course for the future but the pressure on the short term is just extraordinary.
5:03
I think all of you see it, read it about it but it's quarterly earnings, it's this month what's going on, it's next month.
5:11
And the long term is really what's going to matter if you're going to make a sustainable difference, so I call this managing for the long term in a short term world.
5:19
So we see our government dealing with these issues right now, they're trying to figure out what short term do we need to do, what stimulus package.
5:27
But also, how do we do it in a way that really affects the long term health of our economy and trying to get it back on track.
5:33
And it's a balancing act and that's what I face all the time and what I and my team have been working on since I actually got this job about four years ago.
5:42
One example of this balancing is creating value for shareholders over time, that's who I have to report to and deliver something to and that's what every CEO has to do.
5:52
But the question is, who are the shareholders?
5:55
Is it the day trader, is it the hedge fund manager, the short seller, is it a value investor and what's over time?
6:04
Sometimes overtime can be as short as a couple days, so you're really having to figure out, whose needs are you trying to meet?
6:11
And so with all these different perspectives, it really takes some courage and takes leadership to get the board and the management to really focus on a long term when those short term pressures are in your face every day.
6:23
So that's what we did starting in 2005, we embarked on a comprehensive transformation of Sara Lee.
6:28
And at that time as Dean mentioned, we were a holding company, we had a disparate group of companies reporting into a central location, but just merely sending their profits in and that was about it.
6:40
So they're very independently run and didn't have a unifying purpose and things were going okay, but we knew if this was going to be successful for the long run, that model wasn't going to work.
6:50
So we announced a lot of changes and the changes really shook the foundation of everything that was in the company.
6:56
But we knew we had to do it to be competitive over the long term and to get our costs and get some synergies across these companies.
7:03
So we worked on this plan to transform Sara Lee into a world class consumer products company and that one that would deliver growth over time, get our margins improved and deliver reliable results.
7:13
So it was actually, today is the anniversary four years ago that we announced this and nothing had started yet, but we said, here's the plan, here's what we're going to do over the next five years.
7:24
And it was to change our focus, how we operated, how we invested in our business and really define who we were and what we wanted to be as a company.
7:31
So during that time period, in the last four years, we sold or spun off 40% of the business.
7:36
So we went from a $20 billion down, today roughly $13 billion business.
7:40
And that included our apparel operations, does anybody know which which one that was? >> Hanes.
7:45
>> Speaker 1: Hanes, yes, we sold underwear, [LAUGH] we implemented a lot of changes in our infrastructure.
7:51
We created global IT centralized procurement, restructured our international operations, we consolidated many headquarters into one and, Outside of Chicago, but that meant moving people from multiple cities to the one.
8:05
And we worked on developing a new culture.
8:07
And I really can't emphasize this enough.
8:09
Without a new culture, you couldn't get done what we were trying to get done.
8:13
And the list goes on and on, I could tell you more about a lot more changes.
8:16
But I'm actually pleased to be here today and say, we've really made a big evolution where we've gone from this holding company structure to one that we refer to it as an allied group of companies that focus on food, beverage, and household and body care products around the world.
8:30
So we centralized those critical functions that we could leverage our scale in and increase our efficiency.
8:37
It's been a lot of work, [LAUGH].
8:39
It's not been an easy task, and we could have stayed on the status quo.
8:44
But I know that the status quo would not have delivered a great company down the road, in fact, it probably would be deteriorating over time.
8:52
So we knew we had to change what was going on.
8:56
So while it took a lot in the short term, it was the right thing to do.
9:00
But I remember when we first announced it, the analysts thought we were out of our minds, thought I was out of my mind.
9:06
And they said, you can't do all this at once.
9:08
Imagine, any one of these big change initiatives in and of itself is pretty big.
9:12
But we were doing them all at the same time period, because we needed to really jolt into a new company.
9:17
So they said, it's too much, we don't believe it.
9:19
So our stock price plummeted the first year, and so it set us back.
9:24
Now, they didn't believe we were fully capable because we didn't have credibility as a company.
9:29
They watched Sarah Lee over the years, and we'd make announcements of things we would do and they wouldn't get done.
9:33
And so that was built up over a number of years.
9:38
Why would they expect anything different than that?
9:41
So we launched it, we said, we'll get it done, and after four years, we've reported every step along the way.
9:46
Where are we on this transformation?
9:48
But through this, I learned real change takes real time, but if you want real results, you have to do it and you have to stay committed to it.
9:57
So in this time period, we've grown our core brands, and we're gaining market share in key geographies and in key categories.
10:04
But unfortunately, right now, it's not reflected in our stock price, and that certainly is very disappointing.
10:11
So the question is, does that mean we should change what we're doing and look for a different answer?
10:15
Well, no, we don't think so, because so many things have to be in place to make a company great.
10:21
And sometimes these things are hard to get in place.
10:24
But ultimately, the best way to get a higher stock price is to continue to grow and improve the business.
10:30
And so we're really staying focused on that until we know that it's not the right answer.
10:36
So we also know that system wide capabilities are key to success.
10:40
And that, I can tell you, is not something the analyst community ever asks one question about or even looks at it, or even thinks about.
10:48
So while you're building these capabilities, it's all that is there are the numbers to watch.
10:53
But we know that over time the numbers will come if we do the right things.
10:58
But like most management teams, we do need to make modifications.
11:02
So I'm not saying we're staying true to every element of our plan, but in an environment like this, you have to look at things a little differently.
11:09
And so we need to reduce costs even more, and we need to drive additional sales, but we have to continue at the same time to create value for the long term.
11:19
So these things include, as we look at the long term, first is governance, really, which is all about accountability.
11:25
Second is strategy, which is all about our focus, and third is about operations, which comes down to execution.
11:32
So let me just talk a little bit about each of those.
11:35
So if you start with governance which is accountability, it starts with the board and it starts with me.
11:41
And as a CEO, I know I'm accountable for Sara Lee's performance.
11:45
If I don't deliver the results, my job is on the line, that's just the reality of the thing.
11:51
So to help me drive success and to keep my job, I use the board's expertise, experience and diversity to make the business better, it's that simple.
12:02
So good governance, which you read a lot about these days, it doesn't just mean regulations and policies, which there are plenty of right now, because even if the same rules and policies are in place for every single board, we would find some boards effective and some not so effective. So why would that be?
12:20
Well, I think it's because even though everybody has the policies in place and can check the boxes on that stuff, in order to make the board strong, you have to have the right people working within a right environment.
12:31
So sometimes what happens in a boardroom is kind of a mystery to people.
12:35
But if you create the right environment, you can get very good help and support from the board.
12:41
So as Dean mentioned, I've served on many corporate boards, and I can tell you that every single one of them are different, they do not behave the same.
12:49
So some require you to do nothing more than show up, attend the meeting, listen and leave, that's not a lot of fun.
12:57
And others really can take advantage of what a board can offer.
13:00
Outside perspective, years of business experience, and truly gain the knowledge of all the members sitting around the table.
13:07
So at Sara Lee, we believe that talent management shouldn't just focus on employees, it should encompass the board as well.
13:14
So we've changed our board as the company has changed.
13:17
In fact, only five of our 13 current directors, they are still from the pre transformation days.
13:24
So one example of how we've changed, we actually have an activist investor on our board.
13:29
Last year a hedge fund purchased 7% of our company.
13:32
And in working with them as one of our share owners, we said, probably they're actually smart people, they ask the right questions.
13:39
So we approached their CEO about being a board member and he joined almost a year ago.
13:46
And while a lot of companies fight this situation, we embraced it because we knew he was going to ask tough questions, he was going to push on tough issues, but raised a lot of things that we should be thinking of.
13:58
And I believe that our board is much stronger now, now that he has actually joined.
14:02
So we've also worked hard to create the right environment for these board members.
14:06
So as a result of a climate of transparency and openness and talking about the business issues, they ask the right tough questions, they tackle the tough issues and they encourage us to make the tough decisions.
14:18
And I can tell you that's a very helpful spot to be in as a CEO.
14:23
So now that you have the right people in the right environment working on the board, it's the strategy that guides us.
14:28
And I'm sure you take a lot of classes on strategy.
14:31
You really have to have those strategies in place, because that's what guides the long term direction and the plans that define the parameters around where we allocate capital, where we have long term innovation, what are the priorities for markets we go into.
14:45
And then you have limited resources, and you have to put them where you're going to have the most success.
14:50
So we're now starting the next phase of our corporate journey, and we're striving really to outperform the market in which we're competing against and build sustainable advantage in the marketplace.
15:02
So I'm convinced that we're going to have a resulted increase shareholder value as we execute our plan, which brings me to my next point which is about operations.
15:12
Now, many would argue that the most important component of companies ability to get to the long term is the ability to execute.
15:19
And sometimes this is the least glamorous thing, but really I think probably one of the most important.
15:24
So when we started our transformation, we basically changed how we operated and the underlying theme we put in place was continuous improvement, because it's the basis now for everything that we do, whether it's continuous improvement in processes, infrastructure, our organization or our product portfolio.
15:43
We worked as a team to make sure that we had a common goal in the pursuit of the common goal, and then we all worked to improve it as we go.
15:52
So we knew that we had some long term challenges that would need long term fixes not quick ones.
15:58
So solid execution is really what's That's helped put us on the path for renewed prospects for growth and profit.
16:05
So, okay, so you got good governance, you have a clear strategy.
16:07
Hopefully you have good execution.
16:09
Our continued success, though, is going to hinge on the ability to recruit and motivate the best people.
16:16
If you have 44,000 people around the world, if they give you all they have, you can get there.
16:22
If they give you half their energy, you are not going to get there.
16:26
So it starts with a culture.
16:28
Are we all operating in common cultures?
16:30
Ours is based on the values of teamwork, integrity, imagination, inclusiveness, and a passion to excel.
16:37
When we hire people, if they can't pass the culture test or the values test, they really shouldn't come work for us.
16:43
And as leaders, it's to instill that right culture and proper values to stand the test of time.
16:48
This is something that you have to keep at, keep at, keep at.
16:52
So we also have a solid mission.
16:54
A lot of times these are posters on the wall.
16:57
I'm sure you've all worked for companies where you had a mission, vision, value statement.
17:00
Think about whether or not you can remember what it says.
17:03
I think a lot of times it's just a poster, but we really wanted to build it with the input of our employees, so we gave people around the world an opportunity to input into that.
17:13
So we had focus groups from Kuala Lumpur to St Louis to Chicago to Amsterdam, all around the world.
17:21
And people commented on what's great about Sara Lee.
17:24
What is it we're trying to do?
17:25
What strengths should we retain, and how do we connect it to your own personal job? Does it connect?
17:32
Is it all bringing it together?
17:34
So we did a lot of listening.
17:36
We had people look at all the feedback and whatnot, and really it ended up righting itself in the end.
17:42
We put it out on the Internet, got comments back on it.
17:45
And the simple statement is we want to be the first choice of consumers and customers around the world by bringing together innovative ideas, continuous improvement, and people who make things happen.
17:58
I would argue that there isn't a person, Sarah Lee, that couldn't quote that for you.
18:02
They know their own personal role, they know the importance of innovation, and they know the importance of making things better every day.
18:09
So we're still focused on the same statement, and we're actually happy about that because we haven't found a reason to change it in good times or in bad.
18:18
So one thing we just recently did relates a little bit to our culture and values.
18:23
We introduced a program called returnships.
18:25
And returnships are like internships really, but they're aimed at people who have taken time away from work, either to take care of families or serve in the military or other reasons.
18:35
So we offer a chance for people to get back into the workforce in a flexible arrangement as well as some training and networking opportunities.
18:43
And we're hoping that these returnships, much like internships, turn into full time jobs, although they might be flexible full time jobs and employment.
18:52
So this is a pool of talent that most companies tend to ignore.
18:56
And if any of you know people who've been out for a number of years, you can't get interviews.
19:00
You can't even get interviews.
19:01
So we open the door and we've gotten more than 1,000 resumes in a very short period of time.
19:06
And if you Google it, you'll see there have been endless articles written about this program.
19:11
So it's obviously hit a chord and a need for people.
19:16
But when the media was interviewing me on this, they'd say, why would you introduce returnships now?
19:21
The economy's bad, why are you doing this?
19:23
And with all that's going on in the financial markets, why launch this?
19:27
And my answer was, well, why not now?
19:30
When times are hard, the need for great people doesn't diminish.
19:33
In fact, it grows even stronger.
19:35
So we need good people to help us get through this.
19:37
And now is not the time to abandon plans or stop searching for great people.
19:42
It's time to find them and make the plans work.
19:46
So we've all seen tough situations before.
19:48
I'm a bit older, so I've seen more tough ones.
19:50
But recessions, unemployment, the tech bust right in the critical place we are in the country right now.
19:57
And they make things harder, but they don't make them impossible.
20:00
And as each of you begin your post MBA careers, you're going to have to deal with this economy as well.
20:05
It's certainly not over in the next year or two.
20:07
So there are a few things I just want to share about what have I learned about managing in difficult times or good ones?
20:13
What I've learned over the years.
20:15
First of all, this is really revolutionary thought.
20:18
But the customer pays the bills.
20:22
There is no money if customers don't buy what you sell or the service you provide.
20:27
You have to focus on them always and give them what they want and do it better than the competitors do.
20:33
And one example I just experienced at Sara Lee is when I first came to the company almost five years ago, I called on this company, Sysco, that's s-y-s-c-o, not c-i-s-c-o.
20:46
And it happens to be the largest food service distributor in the world.
20:50
They were enormous and they had the potential to be a huge company.
20:54
But the first meeting I went to, they said, not only do we not do any business with you, no one is allowed to say your name in the company. We hate Sara Lee. The guy told me that.
21:05
He said, we hate Sara Lee.
21:07
So the relationship had been damaged so much that they didn't even want to talk to us.
21:12
So we just kept chipping away at it, kept calling on them, like good salespeople do.
21:17
You bounce back up and go back and try to get them to try something.
21:20
So we did, and things improved a lot and the relationship definitely got repaired.
21:27
And the evidence I have of this is I went there last week and we were presented an award for being one of their top 10 suppliers.
21:33
This is out of a list of like 6,000 suppliers they have. We are number six.
21:38
I was like, how could that happen?
21:40
I mean, it was incredible.
21:41
So fast to move up and it was really so gratifying because the basics of business is about selling things to customers that they want to buy and giving them a service.
21:49
And you don't let up until they see that in you.
21:53
So we know we're making progress.
21:55
The second thing is reduce, reduce, reduce.
21:58
And in difficult times, it's even more important to relentlessly eliminate waste and reduce cost.
22:05
And these are times, and this isn't just chopping heads off, it's finding ways to do things better, more efficiently.
22:11
So if you take costs out of the business ongoing, you'll be really a good company.
22:16
But during this time period, if you take even more costs out, you'll come out of the recovery that much stronger.
22:22
So with our continuous improvement effort, we had a very strong cost focus and a lean mindset across the company, and we've been successful over the last four years, hundreds of millions of dollars have come out, but right now it's not enough.
22:35
We're all being challenged with a competitive marketplace, consumers who are changing their purchasing patterns.
22:42
So you have to be able to get the value to the consumer even more so.
22:45
So we launched a project we call Project Accelerate.
22:48
And it's a multi year project to provide an additional 200 to 250 million dollars over the next couple of years.
22:54
And the success of this is going to be key for us immediately and over the long term to keep our momentum going.
23:02
Third thing learning for me is allocate resources wisely.
23:06
And obviously, cash is king all the time, but especially now, cash is king with the liquidity tightening that's going on.
23:13
So we've managed our cash very conservatively.
23:16
And a couple years ago, we were getting beat up about it, saying, why do you have cash?
23:20
Why are you sitting on cash?
23:22
Why don't you lever up and take your company, get the benefit of higher leverage?
23:27
Well, as we look back now, we're very happy we didn't do that, and it's helped us weather the storm.
23:32
But now driving cash is absolutely critical, and you have to keep revisiting your plans and making sure that everything you're doing still makes sense.
23:41
And then fourth, people have the answers in tough times and in good times.
23:46
But tough times especially, you have to rely on your people, and the employees have the answers.
23:52
People who are closest to the business have the answers before layers above them even begin to see what the answers are.
23:59
Questions Can you tap into what they know and know how to do and help them help you solve what you need to do in the company.
24:06
So one of my favorite sayings is one that Wayne Callaway, who is a former chairman and CEO of PepsiCo, he said, you have two ears and one mouth, use them in that proportion.
24:19
So a lot of times, you have to communicate, communicate, communicate, which people often translate into tell, tell, tell, talk, talk, talk, but really the most important thing is to listen.
24:29
And if you get your people to participate in solving the problems by giving you the answers and you listen to them, and you empower them to act, half the battle is done.
24:40
So for us, you listen day-to-day, but we conducted an engagement survey about six months ago, and first time we ever did it to 100% of the population.
24:50
And we got more than 90% participation all the way from a bread route driver to forklift operator to senior management. And what do they think? How are we doing?
25:01
Are we following our values?
25:03
Are we empowering people?
25:03
Are we giving them the freedom to act?
25:05
And so we have all that data and it's broken out by geography, and we're now in the process of having teams work on improvement.
25:11
It is what it is, and there's always room for improvement.
25:14
So why don't we look at our data and say, what can we do differently to make sure we're getting the most out of our culture and our people.
25:22
So we're very excited about that and we think that'll take us to another level.
25:26
So, and last to conclude, to then go to Q and A, but leadership really is more important than ever right now.
25:32
And if leaders bury themselves in their work, which is easy to do, never being seen or heard, that's not going to help.
25:39
So we've gone out of our way to try to get out there more.
25:43
We had an investor conference where we had our senior team talk to all the analysts.
25:47
Sharing our results, and where we're headed as a company, talking about our strategies and plans, and then having an interactive session.
25:56
And it's easy to stand up when everything's great and give answers, but it's harder when it's tough.
26:00
But people still want to know what are you doing about it, and where are you going.
26:04
And it's even more critical as leader of people that you get out in front of your people and talk about the business.
26:10
If I pulled up all the articles that were written about me, or our company, our employees certainly they wouldn't have a lot of confidence because I have to say it's not all glowing great news.
26:21
So people look to their leaders to give them the perspective and how should they be thinking about things, and why should I have confidence in our leadership team and in the company.
26:30
So morale depends on it and you have to be out in front of them.
26:35
So I say it's now time for leadership, and like I said when I started out, it's a tremendous opportunity for all of you.
26:42
There's an economic crisis, can't avoid, it looks like there's no end in sight right now.
26:48
And it's easy to think that the problems we face are too big to conquer and that people can't solve them.
26:53
But we can and we will, it's going to happen, we always do it.
26:58
So it's now a time everyone can be part of the solution by remaining focused on what you can control, sticking to your long range plans and avoiding knee jerk reactions, and having confidence in yourself and your decisions.
27:10
So as we emerge from this, I think there will be people who saw opportunity and others who saw only crisis, people who saw solutions where others saw only problems.
27:21
And they'll come from all levels of the organization and they're going to have different titles, different job responsibilities, different ages, different genders, but they'll have one thing in common, they will be our new leaders.
27:33
So I hope that many of those people are actually sitting here in that audience and take us to new heights.
27:39
So with that, I'd be more than happy to take any questions you have.
27:42
>> [APPLAUSE] >> Thank you.
27:55
>> [APPLAUSE] >> Okay, anything's fair game, way back there.
28:06
>> Speaker 2: So you've talked a little bit about how you balance the pressures coming from analysts versus the needs of the company.
28:14
You've also been personally scrutinized and held up as an example of the woman who can have it all, the family, that high power career.
28:22
Can you talk about how you balance the pressures of other people wanting to use you as a role model, the media wanting to hold you up as this example versus what you need in your own personal and professional life?
28:33
>> Speaker 1: Yeah, it's a great question.
28:35
I left my job at PepsiCo, I think I was doing well at the company and I think I had a great future, and I love my job.
28:46
But I wanted to spend more time at home, so my way of dealing with that issue was I left my job.
28:54
Now, I don't recommend that for everyone, but that is an option.
28:57
But when I left my job, I said my moment of fame in life was for quitting my job, that's not exactly what I always aspired to have happened.
29:05
>> Speaker 1: [LAUGH] >> Headlines, quits her job, I was on every talk show, etc.
29:09
So I was the poster child for a woman chucking it all and leaving her job.
29:14
So there was a lot of pressure that came with that, and it really struck me as I'm one person making a personal choice that's right for me.
29:23
I don't claim it's the right choice for anyone else, but I think in the end, that's what every person has to do, male or female.
29:28
You have to say in life, here's the list of things that are important to me and what my goals and aspirations are, and here's what I have to give up and trade off to get them, or modify them, but it's only the right decision for you.
29:39
So I got comfortable with that, saying, this is my choice, my decision, I'm very happy I made it, if I had to go back, I'd do it 100 times over.
29:49
But there is pressure with that, and so when I came back to work, it went in reverse, you can come back to work.
29:56
So while I never wanted to be that poster child, or that role model, or whatever, I figured I have a little bit of a responsibility now.
30:04
And so what I try to do is tell people, you can't have it all, it's impossible, they're only 7 days a week, 24 hours a day.
30:10
Only you can decide what you want, what's the most important, what you keep, what you give up.
30:14
And then I did this thing, this returnship program, I really drove that, because what I found is people who made the choice to leave the workforce for family reasons, mostly women, they couldn't get back in.
30:25
And here they were lawyers, investment bankers, people with tons of experience, and they didn't lose their brains, they were instead running society.
30:35
So if you go all across the country, women are running society, making the schools better, making everything work better.
30:41
So I said, but they can't get back in the door, and they don't have the confidence in themselves anymore.
30:47
So we're trying this in our own little way, I hope every company steals the idea and finds this new pool of talent to get back.
30:53
So it's not easy, but I now feel that I at least have a role to play to make it seem that you can make it work over time. Uh-oh.
31:06
>> [LAUGH] >> Hi, Brenda. >> Speaker 1: Hi, Alex.
31:08
>> [LAUGH] >> So from the time you took off to spend with your family, I was wondering how you translated the lessons, managing a successful household to managing a successful American icon.
31:23
>> Speaker 1: Well, thank you, Alex.
31:25
[LAUGH] >> [LAUGH] >> I found the challenges at Sara Lee much easier.
31:31
[LAUGH] >> [LAUGH] >> I don't [LAUGH] look at the products I turned out in my household, I feel pretty good about that, my proudest moment are my children.
31:49
It's a little different now, too, doing what I'm doing because I have three children, they're all at college, and I work.
31:56
I remember when I worked and my children were at home, You always feel that pressure about wanting to be with your kids, and that's where you feel pressure.
32:05
Now I actually feel less pressure because I know even if I came home, my kids wouldn't be there.
32:09
So for me, the timing of how I sequence this actually helped because I could work round the clock and nobody would miss me [LAUGH].
32:15
>> [LAUGH] >> It is a balancing act, though, that's what it is.
32:21
You have to juggle it, make it work, yes.
32:30
>> Speaker 2: You mentioned that you maintained a conservative balance sheet and that has obviously been pretty important for companies right now.
32:36
Can you talk about, was that a personal philosophy or how did you fight that urge to take on a lot of debt and kind of that decision making process?
32:45
>> Speaker 1: This is a little bit too managing for the long-term.
32:48
So we knew that we were going to have to stay the course, both from a strategy standpoint, but we also had to have our balance sheet and our financial approach support what we knew we were going to have to deal with all the time.
33:02
And we had to build in some risk factors.
33:04
We were launching on things that were quite drastic for our company, not drastic, but big.
33:11
And we said, well, if this goes wrong, this goes wrong, and this goes wrong, that leverage, it's a slim margin that you have to cover issues, cover problems. So that's why we did it.
33:23
It was against our strategy at the time, protecting us on the downside until we knew for sure that this plan was taking hold.
33:30
And actually the board was very supportive of that.
33:33
So while the returns on the stock could have been driven higher if we had higher leverage, we said, what if something slips?
33:39
We don't want to be walking on that brink of being a liquid.
33:44
So it was really against our plan that we built the capital structure and we looked at it over time and modified it.
33:49
So we went into share buyback program over time and did some other things, but it was balancing that capital structure to allow us to achieve what we were trying to do. Yes.
34:00
>> Speaker 2: And you said, everybody knows the vision, how did you impart that on everybody?
34:04
>> Speaker 1: Yeah, culture is the hardest thing.
34:06
How do you change the culture? Is that fair?
34:10
Culture is the hardest thing to change.
34:12
Human beings resist change no matter what.
34:15
You get used to a certain way.
34:16
So changing a culture takes multiple years and things that support it.
34:20
So the things we did to try to support it is okay, you get a common mission, vision, value, so that's an important first step.
34:27
Probably one of the most important thing that triggers a signal to you're serious about the culture is who you hire and who you fire.
34:33
So we put into place a very extensive talent review process.
34:37
And who you promoted said more to the organization than anything you could have said in words.
34:42
And people that you got rid of, maybe were delivering the results, but didn't fit with helping the culture move.
34:49
So that travels, those kinds of things travel.
34:51
So it was our talent review process, it was our compensation process, because part of our culture, we wanted to build accountability at a higher level.
34:59
So we had a very high leverage, over perform, you get a lot more money.
35:04
You don't perform, you don't get money.
35:05
And it was a company in the past that had a very narrow band.
35:08
And if you got a bonus, it was ranging from 98% to 105%.
35:13
Well, you don't differentiate performance in that regard.
35:16
So he said, no, you're accountable, and if you deliver the results, which is what we needed, you'll get paid more.
35:23
Some training, but mostly not formal training, more on the job.
35:27
And then really one of the biggest things was implementing lean.
35:30
If you know lean, it's all about having a process discipline and having people who do the work find a way to eliminate waste out of the system.
35:38
So we engaged employees via training on lean.
35:43
So we started out by doing it in some plants, show that it worked, moved to more plants, more plants, and we took it outside the manufacturing location.
35:50
And if a manager knows how to use lean, it's all about tapping into the talent of people who do the work to problem solve and do all that kind of thing.
35:59
So that was a big cultural mindset.
36:02
And then innovation is another way.
36:04
We said innovation is core to our mission statement.
36:08
So we built in a very strong, disciplined approach to innovation, trying to free people up as opposed to staying near in to take chance and to gamble on things against clear consumer needs, though, so there was process discipline to it.
36:21
So it was a combination of all these things coming together.
36:23
And so we're slowly moving, I think this engagement survey is our next step to really get it down to each local level.
36:29
Some of our divisions are way ahead, and some little work groups are way behind.
36:35
And so if we can target where we need more improvement, we can work more focused on it. Yes.
36:41
>> Speaker 1: So I'm wondering, did you ever doubt your ability to be able to get the job done and or how you deal with critics who may have doubted your ability to get back into the role?
36:54
>> Speaker 1: Everybody hear that?
36:56
Okay, I'll just say what's on my mind.
37:02
I'm my worst critic, I'm my own worst critic, and fear is a great motivator [LAUGH].
37:08
So I always see everything I do wrong, and I don't like to fail, and I don't like to fail other people.
37:14
So, yes, I've had my own doubts, I've had my own self-criticism.
37:22
But you have to, but that motivates me more.
37:25
Just personally, what motivates me more.
37:27
So there comes a point where all the critics, I mean, I was blasted, I mean, [LAUGH] I was blasted in the press, I mean, really blasted.
37:34
And one of my first presentations to the analyst community, a guy stood up and said, why do you think after spending seven years taking care of kids, that you can do this job?
37:47
You go, well, so I gave an answer, stayed calm, I didn't throw anything at him or anything like that [LAUGH].
37:53
>> [LAUGH] >> Although I felt like it.
37:57
The criticism's everywhere, and I've learned over time, I have to have a thick skin to that, because if you really let it get to you, it gets in the way, and there's just too much to be done. Do I like it?
38:08
Of course not, you don't like it.
38:09
But I've said to my own team, I go, we should use this as a way to say, we'll show them.
38:14
[LAUGH] That's a little bit I do, we'll show them.
38:17
You can criticize us now, but when the numbers are there and our stock price is up, I don't think I'll be hearing from you anymore.
38:23
But it's hard, you're very visible, and I think as a female, I'm a little bit more visible.
38:28
I think I get more scrutiny and waiting for me to fail [LAUGH] so they can write an article about it. Yes.
38:37
>> Speaker 2: So I'm wondering when you put your emphasis on the long-term and thinking in the next five or ten years, what sort of big themes do you see facing Sara Lee?
38:45
And how do you go about the process of identifying them and prioritizing them?
38:50
>> Speaker 1: Well, I'd say for sure, health and wellness is a big theme.
38:53
And we're a food company, so if we don't address that, we will not have products that are relevant to what a big, big consumer and growing need is. They have to taste good.
39:02
But health and wellness, it's going to be regulated, but there's an underlying current that the consumers, in fact, are looking for more of those options.
39:13
And we have to do something about the obesity challenge in the country, in the world, really.
39:19
So that theme sets direction for us on product development.
39:23
And so how do we deal with it?
39:25
We make sure that our R and D pipeline is working on things that deliver against that consumer need.
39:30
And it might be working with grain suppliers for a more nutritional grain in our bread like we've done, or taste profiles that can be delivered without as many calories or sweetener substitutes, that sort of thing.
39:42
That's definitely a big trend.
39:46
That's from a business standpoint, you have to keep renewing your long-range plan.
39:54
Even though I said you have to have your plan, it has to be renewed because things change so fast. A theme of.
40:00
Of customer consolidation that's been going on for a long time.
40:03
So that's really what led us to do this transformation.
40:06
Because here you have a customer like just take Walmart.
40:09
We had five or six meat companies calling on Walmart, competing with each other, one hot dog group with another hot dog group calling on the customer.
40:21
Believe me, the customer did not like that.
40:23
So we said it's our issue, we have to bring it together, have one voice to the customer.
40:27
So there's a theme of the customer and private label and the role that that's going to play in the food category.
40:34
And figure out how do we get value with innovation and a customer coverage and joint planning effort that deals with these big, not only national companies, but international companies. Yes, back there.
40:48
>> Speaker 2: On your decision to leave PepsiCo, what are some other critical decisions that you had to make and how have you gone about making them?
40:57
>> Speaker 1: Well, there are some personal career decisions.
40:59
I'll touch on those, and if you want to talk about some business ones, we can do that.
41:02
But my first big decision was to go to Frito-Lay.
41:09
I was working in Chicago, Wilson Sporting Goods.
41:12
Before that I sorted mail and was a waitress [LAUGH]. Then I got a job.
41:16
I remember my first job paid $10,000 a year and I was working in distribution for Wilson.
41:22
And then I got into marketing.
41:24
So I said, well, if I'm going to be a marketer, then I've gotta get with the big time marketers.
41:27
So I got the opportunity to transfer to Frito-Lay.
41:29
So that was a major pivotal point because it set me on a whole different course.
41:35
So that was one big move and I moved to Dallas.
41:38
Another professional decision was I was in the marketing department at Pepsi.
41:44
I was the head of a Pepsi brand when Coke reformulated.
41:49
You're all probably too young to even remember that, but it was a big deal.
41:52
And so I was marketing, it was great.
41:54
I had a great reputation for Pepsi marketing people and all that kind of stuff.
41:57
And then I was asked to move into a sales job and it was actually a lower level job.
42:02
And it was in the northeast and it was the head of sales for our on premise division, which was taking syrup to fountain accounts to put in.
42:11
I said, a lower level, how could you do that to me?
42:15
I'm good, I shouldn't get a lower level job.
42:18
And sales, I'm going from having MBA marketers working for me to having Teamsters, driving route trucks and unionized and tough nuts and all that stuff.
42:31
Best move I ever made too, another great move because if you're going to be a general manager and know how things work, you have to be able to lead people that don't work in the same building as you that have different aspirations.
42:45
So those Teamsters to me were working at the post office.
42:48
That's what they're going to do for their life now.
42:50
How do they come to trust me as a leader?
42:52
So that was a big personal move.
42:56
And then another big one that was pivotal for my learning process was I was having my third child.
43:05
There he is, [LAUGH] that little tot.
43:10
And I said, and my mother was very ill.
43:14
And so I said, I have to take time off, one, to have a baby and two, to see my mother.
43:18
And so I said that may mean I lose my job and maybe they don't take me back.
43:22
But I said it was worth for the right reasons, I did it.
43:25
So I left, and when I came back, there wasn't a role. That same role was gone.
43:31
But Pepsi let me come back to work.
43:33
They just didn't have this same job for me.
43:35
So the person at the time who I ended was the CEO of the beverage group.
43:39
He gave me a job of all this stuff, do this and this and this and this.
43:42
And so I called myself Ms. Elanius [LAUGH].
43:47
There was no job, it was just a bunch of stuff.
43:49
But that miscellaneous job turned into creating a transformation at Pepsi, you could read about it.
43:56
But it's called the Right Side Up company turning the whole focus to management, to the customer, all the things that went with it.
44:04
And that taught me so much about changing a culture, massive change in an organization.
44:10
And I've leaned heavily on that as I've gone to Sara Lee.
44:14
So there's three career points and you have to take a little risk with your career, and it may not seem right at the time, but if you can always say, hey, I'm going to learn a lot more in this next role, you ought to do it.
44:25
If you keep doing the same thing, you'll be great at it, but you'll not broaden yourself to be able to take on the bigger jobs, is that okay? That answer, yeah.
44:34
>> Speaker 1: Can you give an example of a big leadership challenge that you faced that you didn't feel particularly prepared for and how in hindsight you might be better prepared or handle that differently?
44:43
>> That I was not prepared for, yeah.
44:48
I'd say I wasn't as prepared as I needed to be to deal with the external analyst investor community, in the role I'm in, I have to be that spokesperson.
44:59
And I don't think I was as prepared as I needed to be.
45:02
I didn't realize what it would be like as much.
45:05
I had dealt with them before, but I wasn't the person on the point.
45:09
So if I had to do it over again, I think I might get lessons learned from other CEOs, talk more about that, get advice in terms of how do you deal with them, tell the story because I made a big mistake.
45:26
When we first announced the transformation, made a huge mistake.
45:28
And I link it to this thing I'm telling you about.
45:31
We laid out the plan, the five year plan from a company that didn't have a lot of credibility.
45:35
And we said by our fiscal year 12, we would hit a 12% margin.
45:42
So that's all we were being measured against during the time period.
45:45
And when we wouldn't have that trajectory as fast as it did or we slipped.
45:50
Terrible, they're never going to hit the 12% margin.
45:52
We told you you'd never do it.
45:54
I never should have given them a number.
45:56
It was too far out, it was too precise, there was too much distance to travel without knowing the ups and downs of what we were going to face. So that was a mistake.
46:06
And someone probably would have told me, don't be that precise, but I didn't know that.
46:11
So we've been recovering from that.
46:12
So we finally said, forget the 12%, we're just going to make progress.
46:16
We'll tell you when we get there.
46:17
>> [LAUGH] >> Speaker 1: And the whole question of guidance to the external world is a big subject, you probably can't.
46:25
People are moving away from giving as much because you get slaughtered by your own direction.
46:32
>> Speaker 1: Last question.
46:33
>> As CEO, how do you balance managing and leading?
46:38
So just the details [INAUDIBLE]- >> There are two different things, absolutely two different things.
46:45
Peter Drucker said, management is doing things right and leadership is doing the right things right, two different.
46:52
You have to do both or you have to have people to support you doing both.
46:56
So I think more of the burden on me is leadership because you have to bring the whole organization along with you.
47:04
And you have to make sure that you're setting clarity of where you're going so everybody knows and you have to inspire people to step up that it's worth challenge.
47:14
Now at the same time we have tasks to do.
47:17
And so my managerial part of it is clarity of who's doing what? What the timetable is.
47:24
Using my meetings to track progress against it, having scorecards on key metrics, using process discipline to make sure it's in place.
47:30
How do I know it's in place? I gotta track metrics.
47:32
So it's really, really the balance of it.
47:35
So you can't get away from doing both. Is that all right? The last question. Thank you all very much. Good luck to all of you. >> [APPLAUSE]