Douglas R. Conant, the just-retired CEO of Campbell Soup Co., talks engagement, leadership, and consumer loyalty in a Q&A
By Roy Saunderson
September 28, 2011
Nearing 100, Rideau Looks To the Future
In 2012, Montreal- and New York-based Rideau Recognition Solutions will celebrate its centennial, but it wasn’t always a supplier of recognition, loyalty, and incentive programs. The company’s roots go back to the 1912 founding of Stephenson Ltd., which made emblematic jewelry and engraved items. In 1982, the company changed its name to Rideau, and with clients like Avon, and as the supplier of medals and badges for the Canadian government, it focused on that business until the late 1980s, when it began to supply the corporate recognition market. It steadily expanded, becoming a years-of-service program provider and eventually an employee recognition company—the entity that continues today.
“Next year, we will celebrate our 100th anniversary in business,” says CEO Peter Hart. “When we began as a jewelry and medals production company, the focus was on the honor of being recognized and the receipt of a small token to commemorate that honor. That sentiment remains, but today we offer branded merchandise and debit and gift cards.”
Hart says the company has continually adapted to changes over the years, but today technology is the biggest change-driver, enabling digital gift cards and instantaneous peer-to-peer recognition programs. But one old concept that still has room for growth is the practice of recognition, Hart says. He explains: “Recognition is ethereal. Just because you give someone a reward does not mean you have recognized them. Training managers is key in creating a positive and meaningful recognition culture.”
So what does the future hold for Rideau and the incentive and recognition industries? Hart says greater competition among businesses will cause employee engagement to move to the forefront because it is a strategic company performance driver. “Globalization has increased competition, and companies can only afford to pay so much before they price themselves out of the market,” he says. “Strategic recognition helps create employee engagement. It’s not just about the money.”
And technology will continue to dominate. “Examples include mobile devices that allow participants to interact with programs anytime and anywhere, and the ease of updating and improving program offerings” through online-based management, Hart notes. “Technology allows us to do things that were unimaginable only a short time ago.”
Douglas R. Conant, who spent 35 years in the food industry, was CEO of the Campbell Soup Co. from 2001 to 2011, the 11th leader in the iconic company’s 141-year history. Over 10 years, he helped Campbell reverse sagging market share and establish world-class employee engagement levels. The company won the 2010 Catalyst Award for advancing women in careers and business, and Conant established the Campbell CEO Institute to shape future company leaders. Recently, at one of Rideau Recognition Solutions’ (see sidebar) Real Recognition Roundtables, Incentive
columnist Roy Saunderson, president of the Recognition Management Institute, a division of Rideau, interviewed Conant about employee engagement and TouchPoints
, his new book examining corporate leadership.
At the Campbell Soup Co., how did you show employees that the organization cared about them?
Conant: You have to demonstrate an unmistakable philosophy of commitment to the well-being of the people in your company if you are to have any hope of inspiring them to an unmistakable commitment to your company. You also need to demonstrate that commitment in meaningful ways to get people deeply engaged.
When I started in 2001, we asked people what they needed in order to excel. We put together a plan that tangibly demonstrated that commitment, called “Campbell Valuing People, People Valuing Campbell.” And we followed through that plan. We did what we said we would do, we told people what we had done, and, finally, we asked them what we needed to do next.
Over the past 10 years, this continuous-improvement approach helped us do amazing things. About halfway through my tenure, I began walking around the campus nearly every day for 30 minutes and visited employees to get firsthand feedback on our progress. It was incredibly helpful. I recommend this approach to all executives.
In your book, TouchPoints, you share steps for engaging employees. Can you tell us those steps?
Conant: From the outset, you have to create a bias to action. By developing a clear plan to revitalize employee culture, you create a better, higher-performing culture. You also have to get down to a granular level of culture-building that is clear and visible to all employees. Step one was getting out and listening to people and their issues. You have to confront brutal facts and feelings in the environment in which you are operating.
This is where the concept of TouchPoints can be most valuable. It has three main ingredients: listen, frame, and advance. You have to listen intently to what is said and not said, you have to frame the conversation, and you have to advance the agenda. This starts with adding a “How can I help?” mentality to the conversation and then a “How did it go?” mentality when the conversation is completed.
Why don’t more Fortune 500 CEOs implement these practices?
Conant: It is difficult to set high expectations and simultaneously be unmistakably caring with employees. That’s why I talk about being “tough-minded on standards” and “tenderhearted with people” in my book. Many executives stress over whether they should focus on standards or on people. The key is to do both. That way, you give them energy to be at their best every day.
How can CEOs stay connected with their employees?
Conant: In addition to “wandering around” frequently on campus, I (with my assistant) scanned the organization to find individuals and teams that were making a difference. I spent about 30 minutes each day personally handwriting 10 to 20 notes to those people and teams. It is critical that all executives find ways to “make it personal” with employees. I also wrote notes once a month to our 25-, 30-, and 35-year service-anniversary employees. It took discipline, but the practice proved to be amazingly powerful.
Over my tenure, I wrote over 30,000 notes. You can go almost anywhere in the world and find a Campbell office cubicle with one of my notes posted. The notes validated our strategies, told people that we were paying attention, and let them know that we cared enough to say thanks. Over time, we developed an entire culture of finding ways to celebrate contributions.
It is important to note that these letters were never intended to be gratuitous; they were intended to be acknowledgments of important contributions to our company.
How should leaders cascade down engagement strategies from the top ranks to the front lines?
Conant: Model them. As a leader, you have to be the change that you’re asking for in others. You create signals—markers of how managers are doing. I asked all managers, “What are you doing?” and “How are you doing it?”
How did you measure employee engagement at Campbell?
Conant: We used the Gallup Q12 benchmark to evaluate our employee engagement levels relative to other companies. When we started, we had the lowest employee engagement among the 300 Fortune 500 companies Gallup had assessed. Gallup’s gold standard is an engagement ratio of 12:1, meaning 12 engaged employees for every one who’s looking for another job. Our ratio was 2:1, which meant that for every two employees, one was not engaged and probably looking for a new job. We clearly had a toxic culture.
We went from a 2:1 ratio to 4:1 in three years. Some managers were waiting for us to falter. I told them enough was enough; we had to accelerate our efforts to change. By the end of year three, we let go 300 of our top 350 leaders. We promoted 150 leaders inside the company and recruited 150 “blue chip” leaders from outside. With a lot of hard work, we achieved a world-class ratio of 17:1 in 2011, and the ratio for our top 350 leaders was an amazing 70:1.
What was your strategy for cultivating talent at Campbell?
Conant: As a leader, you need to be the chief talent scout for your organization. I was deeply involved in the recruitment of most of our leaders. To develop talent, we created the Campbell CEO Institute. We showed employees that their continued growth was important. We provided courses on leadership, strategy and problem-solving, and diversity. However, 80 percent of the curriculum was learned on the job every day. We realized that the managers were key to unlocking the full potential of our culture in that they touched everything in a proximal way.
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How has social media, in all of its forms, from Facebook to Twitter to foursquare, revolutionized consumer loyalty and marketing?
Conant: We are blessed with iconic brands that have huge presence in the fabric of consumers’ lives. They have a presence in 85 percent of American homes, with each home having an average of six products. Beyond the U.S., Campbell is the largest soup manufacturer in the world. We have the largest vegetable drink brand in the world with V8, and the third largest baked snack manufacturer in the world with Pepperidge Farm and Arnott’s in Asia Pacific, and the largest children’s cracker manufacturer in the world with Goldfish.
We are clearly part of the fabric of people’s lives, and social media allows us to connect more deeply with our consumers. In particular, it allows us to strengthen our connections with next-generation consumers like Millennials. We plan to build new and deeper relationships with new generations of consumers, leveraging social media.
Today’s consumers are demanding companies to be good corporate citizens. How important is corporate social responsibility as a marketing strategy?
Conant: We must be good stewards of our world, while we commit to being good stewards of our company. I have found that employees care deeply about our commitment to social responsibility. In my experience, the more we demonstrate our commitment in this space, the more engaged our employees become. We have been rated as one of the most socially responsible companies in the U.S. in each of the last four years by the Reputation Institute at the Center for Corporate Citizenship at Boston College—in the top 20 every year and as high as number two.
As we take initiative on this front, employees have increasing pride in our company and become more zealous as brand ambassadors. For example, we have a wonderful partnership with the American Heart Association (AHA). Before my arrival at Campbell, our soups had become the poster child for high-sodium products. Four or five years ago, we made a clear and visible commitment to reduce the sodium in our products down to heart-healthy levels. As part of that program, we partnered with the AHA to support its efforts, as well. That collaboration, along with others, enabled us to dramatically change our profile.
When we began supporting the AHA with its Red Dress initiative in February, our employees started several random acts of kindness for fund-raising around the AHA initiative. Over time, it has gone from being a product-based issue that the company needed to address to being a rallying point for the organization to move forward and help save lives. Employees have been wildly engaged, and the more engaged they have become, the more our profile as a health-minded company has improved, as has our business performance.
What must companies do today to keep consumers loyal and continuing to do business with them?
Conant: To maintain consumer loyalty, you must meet the needs of your consumers faster, better, and more completely and more uniquely than anyone else. You have no choice. That is what we live for as a company. It simply must be the foundational idea of what we are here to do … to be vigilant and to always be on trend.
As Andy Grove (co-founder of Intel) stated, “Only the paranoid survive.” You have to be so passionate (and paranoid) about what you do that you are “all over” your business. If you make a mistake, don’t deny it. Acknowledge it, fix it, and move on.
Wayne Gretzky once said, “I skate to where the puck is going to be.” In order to win, we have to continuously meet the needs of the consumer today and "skate" to where the trends will be tomorrow. To do this well, you have to have a rich, deep, and continuous dialogue with your consumers. This is another area where social media can be particularly useful.
One final thought. You only have to be better than everybody else and deeply committed to becoming better every day. You don’t have to be perfect. In this sense, better is best.
Incentive columnist Roy Saunderson is author of Giving the Recognition Way and president of the Recognition Management Institute, www.realrecognition.com,
which consults companies on improving employee motivation that leads to
increased productivity and profit. He can be reached at
email@example.com. Also, tune in every Tuesday to his radio
show, Real Recognition Radio.