retail news in context, analysis with attitude

Last week MNB took note of a Fortune story about how many CEO changes there have been in the food industry over the past 18 months, in both the retail and supplier companies. Some of the retirements are because of age, and some because of pressure, but there’s also a recognition that old answers won’t address new questions.

This prompted one MNB reader to write:

Kevin, all CEO’s of CPG / FMCG companies are in unchartered waters.  Increasingly consolidated customers, low consumer discretionary spend, dispirited workforces chasing stock price increases (where middle rank workers are participating at a lesser rate each year) compounded by a Board of Directors which cares more about governance than growth are a few impediments.  There are some exceptions obviously, but most CPG / FMCG companies are focused on bottom line, not topline. Why?   There is no one single reason, but I would argue that a key root cause stems from a prioritization of finance people being appointed CEO vs. those with a sales / marketing pedigree.

I personally believe that CEO’s (painting with a broad generalization) fail at two things:  First, not getting to ground zero often – really understanding the work their organization needs to deliver through their own eyes. This is consistently one of the central messages that comes through in the TV series “Undercover Boss”.  Secondly, not taking teammates on the CEO journey – pushing them & teaching them.  Not just the identified successor leaders, but others who express the interest further down in the organization. There’s not one thing in any CEO job responsibility that keeps them from doing this – most simply consider both of these areas work they delegate to their leadership team.

In times of low growth,  true diversity (of thought, experience) is needed, companies increasingly don’t have internal bench strength, therefore going to recruiters to find outside talent. This comes with a high price tag, including pre-developed exit agreements, since those being recruited know they are likely to have a short (under 4 year) tenure.   A lot is said about industry compensation differences based upon gender; another disparity never addressed is that between internally promoted CEO’s and those brought in from the outside.

Headhunters themselves are to blame; their own research will show that diverse experiences are needed, but they aren’t willing to say to the Board Chairman (who, by the way, owns CEO bench strength as one of their personal deliverables) “Hey, we think that you need someone who possesses these skills, knowledge and experiences” because they will lose the placement fee.  Many in your community likely get frustrated with retained search because they are very “square peg, square hole” in building their list of candidates.  I’ve been told personally by a couple of big name retained search firms that they know new skills / abilities are needed in a particular search, but they can’t risk losing the account.  After all, the Board Chair needs the CEO roles filled quickly. They often focus more on one’s “widget experience” than they do leadership skills, the key exception being when an industry has high competition restraint clauses.

Another key issue, rarely addressed, is a new definition of “scale” (or its verb, scaling) is emerging, (which is often a key success measurement for CEO’s).  Globalization is all but over for well-known CPG brands; they have completed their “flag planting”. Infusing online channel sales into bricks and mortar is presently more a share shift than growing the total pie for most legacy CPG’s.

With the emergence of big data and private label, CPG CEO’s are realizing that heretofore tactics like “raising price” or “add 2-3 line extensions” or “adding topline through acquisition” or “using CMA agreements to buyout shelf in small format stores” are short term, not long term tactics, not to mention that retailers hold the data which challenges these tactics success.  Successfully scaling is going to require multiple, likely unrelated streams of work going on simultaneously. Some of which will fail.

Which for me, points towards future CEO appointments from sales / marketing heritage vs. finance.   “Selling more” simply needs to be a priority; of Boards and their CEO’s.

Another MNB user had some thoughts about the importance of being prepared to be relevant in a changing economy:

Personally, I have been on a learning path for the last year to be prepared for the coming way of AI/machine learning. I’ve worked with Walmart, and other retails thankfully, for well over thirteen years and I see the coming changes. One good example is the layoffs that happened at Walmart after the new OTIF replenishment system went live. The system uses machine learning to forecast and has far less need for human intervention than the previous version. It’s far from perfect, but that doesn’t mean it’s going away.

My point is this, you don’t need to pursue an advanced degree to get prepared. The basic idea is to find a way for the software to work for you and not the other way around. If you work for the software, eventually you will be programmed out of the equation and I believe that reaches into any field that can be programmatically done such as, finance. I tell my friends that are category managers to learn programming languages that are centric to data analysis such as, R and Python. You don’t need to be an expert, you just need a good working knowledge of the software to go deeper and faster than your peers.

Again, you don’t need an advanced degree or any degree to be marketable. There are tons of free resources available from Harvard, MIT, and the University of Michigan or one could use a service like, which is often available through the local public library. To build your portfolio, simply apply what you learn to real problems you have at work and matter to you.

Programming isn’t sexy and at times it’s hard (because thinking critically is hard), but it can teach a person to think logically and to problem solve better. Both of which seem to be absent from public schools these days.

It reminds me of the scene from Hidden Figures, when Dorothy Vaughn, played by Octavia Spencer, decides that since it appears that NASA would like to replace her human “computers” with machines made by IBM, the humans better learn how to program the IBM mainframes.

Adapt or die. No excuses.

On another subject, from MNB reader Kirk Altmanshofer:

As I read this piece on Panasonic's concept of a roaming delivery refrigerator, I couldn't help but wonder if this is an example of life imitating art. In this case the art being Disney Pixar's Wall-E. Of course the Terminator franchise also comes to mind. Everything seems cool until the machines rise up against us. A roaming refrigerator is a scary enough adversary, but let's arm it with a hotplate just for kicks. But if I was working for the aforementioned Disney, I'd be contacting Panasonic now to discuss licensing deals for an R2D2 version. There has to be a potential market already waiting for something like that.
KC's View: