Welcome back to The Workaround. I’m Bob 👋
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The world’s biggest brands can’t get a break lately.
Late last year, both Nike and Starbucks brought in new CEOs after experiencing declines in share price and product sales. Panera did the same in January. Intel did it in March. Subway followed in July.
Target is the latest iconic brand to show its CEO the door. A move that was “widely expected and likely overdue” after losing customer, employee, and investor confidence through a series of miscues.
While the challenges are massive, I would love to be one of these replacement CEOs. Hell, I’d even take zero salary and only benefit from the stock upside. Why? Because turning around iconic brands almost always comes from simply running a playbook that has been used to perfection countless times in the history of business, government, and culture.
I first learned and used this playbook when leading big brands at Procter & Gamble. Nothing is stopping you, too, from doing the same. Here’s how…
Why Legacy Brands Go Wrong
Great brands are built when an entrepreneur does something really right. This leader taps into an unmet need, and through courage, hard work, intelligence, and lots of luck, hits on something that goes from Zero to One to Billions and Billions Served.
By creating or winning a category, this business secures loyalty from customers, employees, and investors. There’s a kind of positive inertia that kicks in, and the train of success keeps on rolling, even after the founder hands the reins over to a successor.
Market tastes change and competitors work to break in, but the power of these brands provides an unfair advantage.
But eventually, all good things come to an end. Sales growth stalls, then falls into negative territory. Big contracts are lost. Top employees leave while others are RIF’ed. Earnings estimates are missed, the share price drops—and investors no longer believe the CEO’s promises.
Study the examples above and many others, and you’ll find a common element: The (non-founder) CEO lost focus on the core business that made it successful. Instead of minding the shop, their minds wander to…
The global conference circuit, where they pontificate at Davos for weeks about the state of the economy.
Making mergers and acquisitions that seem sexy and get them in the news, but are off-strategy, expensive, and distracting.
Pushing needless, flawed product upgrades.
Micro-managing their employees and staying busy on the small stuff they don’t really understand.
Micro-optimizing their compensation plans by pulling forward quarterly sales and playing other games to hit short-term goals.
All these very human weaknesses are usually the result of some combination of fear and a big, bottomless ego hole to be filled—plus the absolute power that corrupts absolutely.
A successful brand, business, or even country1 can run itself for quite a while, even with these distractions. That’s because the stakeholders and shareholders involved are stuck in their habits.
Customers don’t want to have to invest the energy into finding an alternative.
Employees don’t want to invest the energy into finding a new job, and they don’t want to say goodbye to their work friends.
Investors don’t want to have to sell their positions, take the tax hit, and figure out where to put the money instead.
But, disappointment by disappointment, and person by person, eventually the market adjusts. People go elsewhere.
Usually, there’s some tipping point that captures the greater public awareness. Like last week, when Cracker Barrel changed its logo to something that not only shredded brand heritage and differentiation, but also replaced it with something boringly bland and corporate. Customers were already feeling its quality decline, and this big public move was just the final straw. It’s no surprise that this comes from an outsider CEO. And, seriously, is there any decision more cliché than changing the logo?2
Eventually, these brands hit rock bottom and reach the moment of crisis that can be a fantastic opportunity. The CEO is fired and takes the blame with them. This scapegoat model of group catharsis is a recurring phenomenon in human societies, dating back to…well…the domestication of goats.
The new leader gets to hit the reset button. Employees and investors are desperate for change, so no longer slow the process with bureaucracy and meddling. Conscious attention—focus—returns.
Almost always, the playbook points to getting back to the basics—you know, the stuff that made this a product or service that people loved all along.
Why do I blame “the leader”—usually the CEO? Because they ultimately have responsibility for the business. They are also the farthest away from making the product or serving the customer, which means all they have to do is ensure the ship is heading in the right direction.3
An internal candidate is often best for the job. They bring a combination of institutional memory, years of dedication, and the trust of employees. They are fighting for a cause that is bigger than their paycheck or title. This is usually a much better bet than a hired gun from the outside, who not only lacks the internal candidate’s strengths, but is always looking for their next job—especially in case the going gets too tough.
Long-lived brands either find these phoenix leaders or they perish forever. When they figure it out, many of the employees, customers, and investors come running back. And the brand rises again—until its CEO gets distracted again. Rinse. Repeat. Just like at that big company that makes shampoo…
Learning from the Brand Rebuilders
I started my marketing career at Procter & Gamble (P&G) in the late ‘90s. The company is a house of brands that you know and love, including Tide, Crest, Olay, Pampers, Pantene, Febreze, Old Spice, and many more. Most decision-making on these brands is pushed down to individual brand managers, directors, and general managers. And these leaders switch roles every few years as they climb the corporate ladder.
But not all of these brands are always at the top of their game.
From time to time, they slip. A competitor beats them to market with an innovation. A key retailer relationship goes wrong. The price/value equation gets out of alignment. Or the newest TV campaign lands with a thud. And, often, one or more of the leaders under whose watch this happens does not make it to the next rung of the ladder.
But one of P&G’s core strategies is to “stack talent like cordwood”—so there’s always fresh internal candidates standing by. When times of trouble hit one of these brands, they undergo the reset process described above, almost always reverting to what has always worked: retail relationships are mended, pricing is adjusted, and a new TV campaign goes live.
I recall someone early in my tenure pulling me aside to point out that this was happening regularly across the company, in business units worldwide. Brilliant career strategists sought out turnaround opportunities and shied away from established brands that were already at the top of their game.
“Oh, Pampers just lost distribution at Costco…Man, I’d love to go work on that brand now—all you have to do is fix that and you’re a hero!”
On very, very rare occasions, the entire house of brands at P&G is threatened by a weak leader. This happened during my first year at the company. The new CEO, Durk Jager, came into the job with the intention of remaking the entire company. He looked at the soaring stock prices and leaner teams at tech companies and got envious.
Jager launched a 6-year plan called Organization 2005 to both accelerate innovation and reduce costs. He promised faster growth to Wall Street and personally chose to launch (dubious) products.
This included Fit Fruit & Vegetable Wash, a natural soap for your produce—which happened to be my first brand assignment! As the junior person on the brand, I had a front-row seat to seeing the higher-ups green-light this launch under the pressure of Jager to grow at all costs. It failed just a few months after launch.4
Jager tried to cut costs with off-the-wall ideas, too. He decided to create an airline, dubbed Imagine Air, because there were numerous flights between the U.S. and Europe, and Delta wouldn’t offer a discount. The plane had to stop for hours in Iceland to refuel.
Eventually, as lifetime employees saw the stock they held for retirement cut in half within weeks5, Jager became the first CEO in the company’s 168-year history to be fired.
A.G. Lafley, a long-time internal leader, was picked to replace him. As Roger Martin reminds us this week, he stopped promising accelerated growth to investors and returned to basics. He cut ill-advised innovation and fixed the handful of big, legacy brands that represented the company’s core.
I got to use the playbook on Mr. Clean a few years later. It was a declining brand that was almost divested a few times, but our category leadership committed to keeping it. Then they left us, the brand managers, to figure it out.
My predecessor did the first heavy lifting by getting back to basics, investing in new packaging and advertising to remind consumers that Mr. Clean is a heroic cleaning icon. Then, my job was to add innovation that would make the brand relevant again. We launched multiple category successes, including Magic Eraser. The big guy came back to life, tripling sales in one year, and has managed to retain his leadership over the 20 years since.
The Turnaround Strategy Travels Well
Several P&G alumni took the turnaround strategy to new jobs outside the company.
Brian Niccol has achieved this at Pizza Hut (during a recession), Taco Bell (when the company was purchasing subpar meat), and Chipotle (after it lost its focus). He is now attempting to do it once again at Starbucks. His "Back to Starbucks" plan is straight out of the P&G playbook! The initiative aims to simplify the menu, provide faster service, reestablish stores as a community coffeehouse, and foster better relationships with store staff.
My friend and P&G alum, Julie Theobold, shows how this can be done at a non-profit. She was recruited to turn around the Court of Master Sommeliers, the body that grants recognition for wine expertise, after major harassment issues under the previous leadership. She brought fresh discipline to the group and has revived it along many measures, including inducting its most diverse class.
[Side note: Several of these alumni succeeded by bringing in my friend, Leonora Polonsky, a master brand-builder at P&G, who left and opened her own strategic consultancy in 2008. This post was inspired in part by her LinkedIn posts about Target and Cracker Barrel.]
The art of the turnaround goes far beyond P&G and its alumni network, of course. Ed Catmull turned around Disney Animation. Satya Nadella got Microsoft back on track. And Steve Jobs’ return to Apple is a classic example.
I also had the opportunity to practice this when I became the CEO of my last startup, Ahalogy.
I was second banana to my co-founder and CEO. As the person closer to the realities of the marketplace, I strongly felt that we needed to pivot the business and become profitable. The company was dying, and I was ready to resign. But my executive team got behind me and convinced me to fight for what was needed. Things played out, and my co-founder stepped aside. My investors helped make it happen, then got out of the way.
I landed the CEO role on an interim basis, and despite looking at upcoming layoffs and long odds to turn it around, that first day back in the office, I felt like the clouds parted and a light was shining down upon me. I could stop wrestling with my co-founder and focus on figuring out how to survive. This significant change had a positive impact on the company, enabling us to take dramatic action to find product-market fit and profitability.
Long story short: we made a big pivot, got profitable, and were acquired by a strategic buyer for a premium price. Without the clarity of our crisis and our team coming together, we would have become another forgotten, failed startup.
Being a “turnaround leader” is pretty awesome for your resume and personal brand. And it’s not bullshit, it’s needed! There are great brands out there, managed by employees who care, that need this re-focus. The only tragedy is that it takes weak leaders and the harm they leave in their wake to see the value of the good ones.
The Profits in the Patterns
The meta-lesson here is in recognizing this as one of the many patterns of the complex adaptive system of organizations and markets.
These patterns reflect archetypes that have been present throughout human history, recurring themes in our stories. Here, Carl Jung would likely cite the example of the Phoenix, the mythological creature in many cultures that goes through a recurring process: It lives, burns out, and is reborn from its ashes.
Companies, too, burn out eventually through their leaders’ failures. This burning is necessary to eject that leader from the system, much like a fever in our bodies burns out a pathogen. Once that leader and all other distractions are burned away, the business can be reborn. And, like Jung’s Phoenix, it instinctively returns to what made it successful in the first place—in a way that becomes consciously noticed and appreciated as it never was before.
However, almost no one notices these recurring patterns. These secrets are only visible when we have intent to learn—i.e. curiosity—and can manage to turn down the ego forces that blind us, like fear and attachments. This is called being Conscious.
Once you ladder up and notice the pattern, we can more clearly identify when and where we have an opportunity to deliver needed change, whether as the internal CEO replacement, a general manager of a business unit, or PM on a tech team. Or we may see when it’s time to GTFO if it’s a hopeless cause.
This pattern and opportunity are typical in any organization—including cities, neighborhoods, and governments. A few years after my move to P&G, my town of Cincinnati suffered through riots. This crisis sparked the creation of 3CDC, an innovative public-private partnership that has transformed our neighborhoods in many positive ways.
We’re currently witnessing a success in progress in Argentina, where President Javier Milei is implementing much-needed, radical changes.
“The prerequisite for an economic miracle is an economic disaster.”—Niall Ferguson.
Turnarounds happen in technology, where the Hype Cycle is a recurring pattern. Today, several universities are undergoing much-needed reforms after losing trust from many groups. You can also see the pattern in media, sports, and fashion.
And they happen in our personal lives, too.
We can become complacent or arrogant. We may lose focus on what matters most by seeking money or titles instead of purpose and impact. Or we follow what others desire instead of finding our own path. And we become bored or distracted, sticking with what’s easy when we should challenge ourselves to keep growing.
Just last week, I spoke with an old friend who was forced to spend time resetting after cancer treatment. The time off and brush with death allowed him to find a new career path, and he has never been more energized.
Another friend recently hit a wall when the sale of his company fell through at the last minute. The resulting soul-searching led him to see the opportunity to hand over more responsibilities to his executive team. Today, his business is setting new records, and he is spending his time growing the company through innovative ideas that get him excited.
Often, when we hit rock bottom in a personal crisis, our internal CEO—the ego—finally resigns. We now have the freedom to recreate ourselves.
The change we make involves reconnecting with our true Self, which we lost sight of on our journey. But it’s never too late to discover who we really are and uncover the potential within us.
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BONUS: Cool Content of the Week
A little something I found meaningful. You might agree…
Michael Caine: “Use the difficulty.”
Everyone who has turned a crisis into an opportunity has a different phrase to capture the magic of this process. I call it “The Challenge Dividend.” Ryan Holiday says, “The Obstacle is the Way.” Naval believes, “Your real résumé is just a catalog of all your suffering.”
This week, I came across actor Michael Caine’s phrase: Use the Difficulty. As he shares in this short video below, early in his career6, a more experienced actor told him to turn any problem into part of the scene. He took that advice and turned it into a family motto, for both on and off the stage:
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https://time.com/7308590/trump-economic-chaos-stock-market/
Any logo-changing CEO should remember the story of Marissa Mayer at Yahoo! Or George Bush putting up his “Mission Accomplished” sign. It’s the least significant change, and should be done last, if at all. But it’s something the CEO can do without digging into the issues, inspiring employees, and making tough trade-off decisions. It also makes you wonder if this leader ever sat down at a Cracker Barrel restaurant. Beware: Your logo change might end up as a symbol of your failure.
Plus, they make the most money, so there.
Replacement CEO, Lafley, would write in his book that this was the #1 worst innovation in P&G’s 168-year history. This is now a point of pride for me!
I vividly recall my peers at the office mentioning that they would now have to work many more years because their entire retirement plan was invested in P&G stock.
As I explain in this post, these moments of early-career advice can have a profoundly positive impact on our lives.
Enjoyed the read! Love a good turnaround or even a reinvention, if you will.
Really appreciate the court of master sommeliers example.
I wonder if the Starbucks turnaround is truly possible. They are soooo far from where they began and their position has been ceded to far better community coffee shops with a great product. Will be interesting to watch!
Your writing always makes me think. Thanks!
I absolutely loved this piece from you Bob! Amazing storytelling weaving the lessons from the corporate macro to the personal micro and the relationship between the two.