The Washington Post had an interview with Levi Strauss CEO Chip Bergh, a former Procter & Gamble exec who last week saw his jeans company go public after an eight-year period (the company’s shares started at $17 each and rose 32 percent the first day) in which his leadership helped resurrect what had become a moribund company and turn into a growth enterprise.
Some relevant excerpts:
• On his biggest challenge when he took over: “Bad things happen to companies that don’t grow, and this is a company that had a very steep decline for a five-year period of time, and then it kind of bumped along for about a decade. When companies aren’t growing and creating value and paying bonuses and people [don’t] see their compensation growing over time, the good people leave.
“Now to be clear, there were still a lot of good people inside of the company, but they lost a lot of talent. I didn’t expect it when I joined, but I had to turn over almost my entire executive team. In my first 18 months, nine of 11 of my direct reports were gone. If you want to change the culture, you’ve got to change the people.”
• On his management approach: “I’m not the smartest guy. I just ask good questions and can kind of connect the dots sometimes. It would be humility, and being really clear about expectations, giving people responsibility with accountability, and setting a really high bar for people.
“A big part of the culture that we’ve got now is one of trust and transparency. I do something we call ‘Chips and Beer’ - kind of cute, right? - we do it late in the afternoon. We actually serve beer. It’s basically open mic. People can ask me anything. Sometimes I can’t answer everything, but it’s good to know what’s on people’s minds. I’ve been doing this for six years now, and over time people recognize I’m approachable, I’m real.”
• On the impact of taking political positions on issues like gun control: “That quarter and the ensuing quarter, our business grew double digits. I don’t think there was any negative impact. Maybe more consumers were coming to the brand, but it’s hard to prove that in either direction. I do think as governments back away from some of their responsibilities to society - and I’m not just talking the United States; I’m talking globally - I do think that as leaders we have a responsibility to step up and not be afraid to take on these important issues.”
Some relevant excerpts:
• On his biggest challenge when he took over: “Bad things happen to companies that don’t grow, and this is a company that had a very steep decline for a five-year period of time, and then it kind of bumped along for about a decade. When companies aren’t growing and creating value and paying bonuses and people [don’t] see their compensation growing over time, the good people leave.
“Now to be clear, there were still a lot of good people inside of the company, but they lost a lot of talent. I didn’t expect it when I joined, but I had to turn over almost my entire executive team. In my first 18 months, nine of 11 of my direct reports were gone. If you want to change the culture, you’ve got to change the people.”
• On his management approach: “I’m not the smartest guy. I just ask good questions and can kind of connect the dots sometimes. It would be humility, and being really clear about expectations, giving people responsibility with accountability, and setting a really high bar for people.
“A big part of the culture that we’ve got now is one of trust and transparency. I do something we call ‘Chips and Beer’ - kind of cute, right? - we do it late in the afternoon. We actually serve beer. It’s basically open mic. People can ask me anything. Sometimes I can’t answer everything, but it’s good to know what’s on people’s minds. I’ve been doing this for six years now, and over time people recognize I’m approachable, I’m real.”
• On the impact of taking political positions on issues like gun control: “That quarter and the ensuing quarter, our business grew double digits. I don’t think there was any negative impact. Maybe more consumers were coming to the brand, but it’s hard to prove that in either direction. I do think as governments back away from some of their responsibilities to society - and I’m not just talking the United States; I’m talking globally - I do think that as leaders we have a responsibility to step up and not be afraid to take on these important issues.”
- KC's View:
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I like the idea that Bergh says that he will continue to run the company the same way, even though it now is public; he says that he’s always felt responsible to the board and stakeholders, and that he’ll feel and deliver on those same responsibilities now. The Levi Strauss family still controls the company through its stock, so it isn’t an enormous change.
But … there was a good piece in Forbes about the IPO observing that “the blue-jean maker is built for the long term, having done business since 1853 … But Wall Street has a way of converting long-term thinkers into short-term operators. Critics like James Dimon and Warren Buffett (both running public companies) point to the dramatic decline in listed firms over the past 20 years as evidence that quarterly earnings guidance and an obsession with real-time stock prices are ‘harming the economy’.”
