When Newell Brands brought its headquarters back to Atlanta three years after a tougher-than-expected merger with Jarden Corp., the company had some soul-searching to do.
The maker of Sharpie pens and markers, Rubbermaid containers and Graco baby products was already a large agglomeration of brands before the $15 billion deal, but the combination took the complexity to the next level. Debt had increased, but operations weren’t meaningfully streamlined. And sales were dropping — a major red flag for a consumer packaged goods company.
When CEO Ravichandra K “Ravi” Saligram took the helm of the company last October, he encountered a mishmash of 49 ERP systems, more than a thousand legal entities, 110 warehouses and factories, 110,000 product SKUs and more than 400 websites under the Newell Brands umbrella.
The way he interprets it, a cultural clash had developed, with Newell execs seeking a more centralized approach and Jarden’s bent on giving each brand more leeway. That hindered integration, leaving overhead “bloated” and morale “in the doldrums.” His challenge was to salvage the good and jettison the bad, relying heavily on a personal management style that aims to elevate and empower employees.
“I’ve always believed that the CEO is a mere orchestra conductor. You’re only as good as your orchestra, so you’ve got to get fantastic musicians,” Mr. Saligram said during a leadership session during the annual U.S. India Business Summit and Georgia Tech Global Business Forum in Atlanta Oct. 26.
“No jerks” remains one of his hiring philosophies, and he embraces the idea of “reverse mentoring” — learning from those younger and less experienced, lest one be blindsided by competitors unencumbered by corporate inertia.
“It’s a lot more fun to be the disruptor than being disrupted. Because it’s the person who’s thinking in their garage, and they don’t have fetters. They think differently, they imagine the world differently. So we’ve got to be constantly disrupting ourselves,” he said.
Checking your ego at the door is one of the most important things an executive can do — and model for employees, said Mr. Saligram, who has served as CEO of Ritchie Bros. Auctioneers and OfficeMax, as well as in other executive roles at Aramark Corp. and Intercontinental Hotels Group.
“When people believe that you’re authentic, genuine, and that it’s all about them, not about you, that leaders really take accountability — things happen,” he said. “And your job is to show the direction, create an environment, empower people and let people flourish.”
With the team in place, Mr. Saligram turned toward improving factory productivity, reducing complexity and “restarting the growth engine” at a company with $9.2 billion in annual sales and more than a 100 brands, 25 of which account for the bulk of those revenues.
But he realized the new leadership needed a simple way to communicate the operating principles of this transformation from the board room all the way down to the factory floor. They settled on five C’s: culture of winning, consumer first, customer collaboration, channel management and continuous improvement.
But just as quickly, another one came along and threw a wrench into everything: coronavirus.
People First in a Pandemic
The pandemic’s arrival caught everyone off guard, but Newell saw the effects early in its China plants, so it was ready when coronavirus began sweeping the globe. It was early to implement safety measures like masks and sanitization in factories, framing workers as its own “frontline heroes” keeping the business going when many of its products and factories were deemed essential all through government-mandated shutdowns.
The key was to show a heartfelt commitment to the team all the way down.
“That really was our north star, that people-first philosophy,” Mr. Saligram said, noting that the company added two additional C’s to its list during this extraordinary era: “caring and compassion,” and “call on your conscience.”
That latter goal took shape during the widespread national protests against police brutality and racism that broke out after the killing of George Floyd in Minneapolis.
“It really for me was an awakening, that we’ve got to do things to really work on reducing and eliminating systemic injustice and barriers. The American Dream can’t be just for a few; the American dream has to be for everybody,” he said, noting that consumers now want to see companies taking stands on the issues they care about.
Pretty soon, though, it also became evident that the pandemic presented opportunities for a company whose cookware, appliances and containers help make life at home a little easier and enjoyable.
After taking steps to ensure liquidity, Mr. Saligram fired up the innovation engines to capitalize on new trends, which he said centered around hygiene, hobbies and home.
“So our products, whether it’s Calphalon, whether it’s Oster whether it’s Rubbermaid as people are organizing their pantry — so they’re taking off like rocket ships.”
Within a few months, Rubbermaid had launched a commercial sanitizer line that Newell Brands expects will be a $100 million business in a few years. Oster put out a rechargeable handheld blender. WoodWick launched a candle designed for outdoor patios where people began to entertain. Mr. Coffee introduced an iced coffee maker for those who couldn’t get their daily Starbucks as easily. Coleman outdoor gear saw a bump. All these helped offset softness in the writing business, a key source of margin dented by school and office closures, even as Sharpie managed to introduce its first ink gel pen.
Even with the writing business weighing heavily on growth, Newell reported sales growth of 5.1 percent to $2.7 billion, posting net income of $356 million for the third quarter.
This corresponded with an explosion in e-commerce that Newell rode, focusing heavily on omnichannel — providing consumers a seamless experience whether they visit a physical store or, increasingly, on Newell’s websites or online retailers like Amazon and Walmart.com.
During the most recent quarter, 21 percent of Newell Brands sales came via e-commerce, with that number reaching 60 percent for Graco baby products like car seats and strollers.
More than a quarter of those revenues came from abroad, concentrated in 10 mostly developed countries internationally.
No Flag Planting
Prompted by moderator John McIntyre, who heads up the Center for International Business Education and Research at Georgia Tech, Mr. Saligram gave an overview of Newell Brands’ global reach, which mainly spans major markets like the U.K. and France in Europe, as well as Australia, Canada and Latin America.
[pullquote]”The CEO is a mere orchestra conductor. You’re only as good as your orchestra, so you’ve got to get fantastic musicians.”[/pullquote]
The company sources heavily from China and listed the lingering impact of the Trump administration’s trade war with the country as a potential headwind, despite the governments’ so-called “phase one” trade deal that delayed the implementation of some planned tariffs.
While Newell often adapts its global brands’ positioning to align with local market conditions, Mr. Saligram believes a company’s values should transcend borders.
“Integrity, kindness, compassion, teamwork — all of these are universal values,” he said. “Every employee, whether they’re in India or in China or in Brazil or Mexico or Canada, they should sleep well at night. We never should, as a company, make them do things that will not give them a good night’s sleep.”
A native of India, Mr. Saligram said in his travels and work in more than 40 countries, he’s found that people are mostly the same.
“Eighty percent is similar; 20 percent is different,” he said. “So the jobs of leaders is to leverage the commonalities and address the differences in an appropriate way.”
As for global expansion as a means for further growth, that’s in the cards, but Newell’s strategy will based more on the quality of markets than the quantity.
“It’s not about flags on maps, so you can boast and say, oh, we’re in 150-200 countries. It’s important to have depth, because you need to understand the consumers and supply chain so that you can be a leader in that country. And most of our brands, we’re No. 1 or No. 2, and we do that by building depth rather than breadth.”