Senior executives will face many challenges throughout their career. Whether it’s dealing with activist shareholders, a new organisational model or a career change, good leaders will see these hurdles as an opportunity to learn and improve. We asked the Criticaleye Community to share some of their biggest challenges and what they learnt from them.
“There can be a tendency for leaders at the helm of a successful company to become complacent and slip into the shadows of success,” warns Charlie Wagstaff, Managing Director at Criticaleye. “You should always be vigilant about what’s happening around you, reflecting both internally and externally. Sharing experiences with colleagues and peers is one way to ensure ongoing relevance.”
Now, we hand over to four executive and non-executive directors who reveal their stories.
Dealing with Activist Shareholders
David Comeau, Criticaleye Board Mentor and former President, Asia Pacific Biscuits, Mondelez International
Having worked at the US food giant, Kraft for 25 years, I participated in the full spectrum of category portfolio development as we built the top market positions in 28 food categories, many of which were land-locked in the US.
In 2012, realising we needed to focus on core global category growth, we spun off 24 food categories and named the new company Mondelez International. We identified ourselves to investors and employees as a strategic growth company with a focus on snacking.
Two years in, it was clear that our objective of four to six percent top line growth was not materialising. This raised investor concerns and led to pressure from several well-known activist shareholders who saw risk in the accelerated growth strategy. It wasn’t long before several activists joined our board of directors with plans to focus on leaner, albeit slower, growth.
Our challenge was to sell the new story to investors, while the internal challenge was to shift the mindset of committed employees from a relatively new proposition of building a global growth company, to a much leaner and slower growth environment.
The leadership imperative was to communicate and engage employees in a positive way and to lead by example as we pursued the new path. Benchmarking our organisation against others in our peer group helped drive home the need to stay competitive and think on our feet. To counter any risk of it appearing that the activist shareholders were forcing the change, we also had to communicate often, engage in employee sentiment and give open feedback.
What I learnt: You have to communicate often and confidently that you are steering the ship. The quicker management acknowledges changing seas, the more credible you are. Practice letting go of pre-conceived strategies and consider early on how to retool your team and organisation to drive a winning culture.
Introducing a New Organisational Model
Jora Gill, Chief Digital Officer, The Economist Group
Developing technology products, like our app, is a team sport. You need lots of different parties from the business to be involved, from those who deal with customers to those who code the digital platforms.
However, the organisation was set up in a linear way and we needed to switch to a more agile approach.
Previously, each team worked independently on their part of the process. Feedback loops were too slow. I realised that we needed to change the organisational model to include cross-functional teams.
We started small with 100 people, all within my department. We focused on the outcomes rather than effort and worked with people to create new KPIs. The team was open to change, but it took them about a year to come together culturally and really start performing.
Now the successes have been reported, the whole company is beginning to adopt this way of working. It’s encouraged individuals to look at the whole sum of the business and not work in silos.
What I learnt: It’s not all easy; you must make tough decisions. To truly adopt an agile way of working and empower your people you must step back and accept that you might not be the smartest person in the room on a particular issue.
Taking a Career Change
Chris Bates, Group CFO, Survitec Group
My career aspiration was always to be Group CFO, but to do it I had to move sideways, upwards and roundabouts. My career path even led me to become a CEO, before I eventually became a Group CFO.
Being a chief executive was not something I aspired to and, while I proved to myself that I’m capable of successfully doing the role, I didn't get a great amount of enjoyment from it. However, convincing people of that was hard and when I realised I wanted to move back into a CFO position they doubted my commitment to a financial role.
To get on track again, I had to go backwards in my career and take a divisional CFO role. Yet, there are positives. I’ve come across many people who have gone the technical route to a CFO role, which is admirable, but I feel I benefit from a much broader view of the business.
I’ve been Group CFO for eight years now and I still really enjoy it. I don’t pine for the life of a chief executive at all.
What I learnt: It’s very valuable to know what you enjoy and what gets you out of bed in the morning. Once you’ve tried a few things, you appreciate it more. Be honest with yourself rather than responding to what others want, because it can take a lot of resolve to achieve your goals.
Conducting a Turnaround
Vanda Murray, Criticaleye Board Mentor and Chairman, Fenner
When I joined as Managing Director of a new company in the building materials sector, immediate change was required. The damage had been done – a competitor had copied the product, without infringing the patent, and was offering it to customers 50 per cent cheaper. Sales were rapidly declining and the leadership team underestimated the permanent change in the marketplace. Restructuring, cost and price cuts were urgently needed.
There were over 800 employees in the company. I joined in September and by December, 30 per cent of the workforce was gone. It was hard for everyone but we made it clear that jobs were being made redundant, not people. We also ensured there was constant communication and support. Recruitment tools were made available; we got outplacement consultants to talk to people, and we offered voluntary redundancies.
This stretched across the company – a layer of management was removed and I also halved the number of directors. They were skilled people, but not right for the business at that point.
We did a lot within the first year and maintained profitability, albeit at a lower level. After two years the big changes were made and the company could look towards a growth trajectory.
What I learnt: Don’t wait and expect things to get better – you must reflect on the information you have and act quickly. In difficult times you should communicate more. Some people want to think, wait and analyse; that’s the worst thing to do in a turnaround. If you don’t have the answer, just be honest. Your people will respect you more for that.
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Don’t miss our next Community Update on the thorny subject of executive pay.