Believe in Your Brand
Martha Stewart Living Omnimedia Inc.
New York, New York
The situation with Martha was hard for people here. So of course there were morale issues when I came in as CEO last fall — some great people had lived through three very tough years. One thing I tried to do immediately was to let everyone know what I saw as an outsider — that the company had inherent strengths because it had been built smartly from the beginning.
There was an enormous amount of uncertainty about when the company would be able to get all of this behind it. But I think Martha’s decision not to wait out her appeal, choosing instead to serve her time, allowed people to finally plan again for a future. We were able to reassure everyone that by August we’d have Martha back, free and unencumbered.
The advertiser issue was a key worry of mine. We had to get out with a positive sell again. I think that people had forgotten how to — or had not been able to — sell proactively for a while. Would we be able to bring advertisers back? Would public reaction to Martha be positive? Those were the unknowables on some level, but I had to operate on my instincts. If we did our work right, those things would take care of themselves.
The interesting thing is that people never wavered in their loyalty to the brand. Our readers never left the magazines — the advertisers did, though they’re back. Our sales at Kmart remained stable. At the end of the day, if people get what they expect from a brand — and more — they’re going to stick with it, no matter what the headlines say.
Susan Lyne was named CEO of Martha Stewart Living Omnimedia following a shake-up at ABC, where she had been president of the entertainment division.
The Toughest Times Bring the Truest Focus
Former U.S. senator and 2004 Democratic vice presidential nominee
Raleigh, North Carolina
People look for strength in a leader, particularly in times of uncertainty. Strength, in my mind, comes from conviction. Strength comes from having a clear set of beliefs that you’re willing to fight for every day. If your causes are part of who you are, if they give you purpose, you never stop fighting.
Being a strong leader, of course, is not always easy. The Friday before Election Day, my wife, Elizabeth, was told that in all likelihood she had breast cancer, a diagnosis that was confirmed by a specialist the day after the election. What both of us had to do for the next four days — in the most intense moments, in the highest political stakes that exist, I think, in the world — was to go out and not just function but fight with all our energy and passion for our vision of the country. I couldn’t sleep at night. I was worried to death about her. And all this happened at a time when the talented people who had been working on our campaign were completely worn out after putting in 20-hour days for such a long time.
But it’s in those most trying moments when real focus comes to you. After that visit to her doctor, Elizabeth said, “Millions of women have been through this, and there are many millions of Americans who are depending on us. There is too much at stake. We have to stay completely focused on what matters to this country.” Seeing that strength within her during those difficult days gave me — gave us — the power to continue our fight.
John Edwards, shown here in New York, is director of the Center on Poverty, Work, and Opportunity at the University of North Carolina at Chapel Hill. Elizabeth Edwards has completed her cancer treatment after surgery in March. No word yet on whether he’s running for president again in 2008.
Keep Your People Looking Up
When we started Song in 2003, it was during an economic downturn. The industry still hadn’t recovered from 2001, and we were facing intense competition from carriers like JetBlue on our Northeast-to-Florida routes. There were also lots of skeptics who said that airlines within airlines didn’t work, and they had plenty of evidence to back them up. While we were confident in the product, we knew we’d have to find frontline employees who were resilient enough to withstand all of these forces. At the same time, we had to tell them we didn’t know what the future of Song was going to be.
In our initial hiring process, we developed an audition — yes, we called it an audition — in which assessors looked for a certain entrepreneurial mind-set. One of the exercises involved having a group come up with an impromptu public announcement describing what they envisioned Song to be like. What we listened for was not so much what they said but how they said it. We wanted to see if people could carry out an otherwise routine job requirement in an upbeat, creative way.
That approach reflects my own. I’ve always been an optimist, trying to stay focused on my own daily challenges and doing what I can to keep Song great. In an uncertain industry like this, you have to. Living in cost-cutting mode for all 27 years of my career, I’ve always tried to create a positive work environment. At the end of the day, you can’t forget the importance of having fun.
Joanne Smith was named president of Song, a subsidiary of Delta, in January 2005. Her predecessor, along with several other company executives, had resigned as part of a sweeping transformation plan announced last fall to avoid a bankruptcy filing. Smith had previously served as Song’s vice president of marketing.
Move Forward, but Respect the Past
Symbol Technologies Inc.
Holtsville, New York
I had barely found the bathrooms at Symbol’s offices when I discovered that accounting fraud was still being committed by a current employee. Before I came to the company, the board told me there were issues, but that description was just the tip of the iceberg. The former management team had been falsely inflating revenues since 1998.
Among employees, there was a lot of disillusionment, a feeling of “how could this happen on my watch?” You have to put yourself in the shoes of someone who lived through this. From 1998 to 2003, people thought what they were doing was leading to profit, when actually it was causing the company to lose gobs and gobs of money. Then this new team comes in, and we’re having to make all these radical changes, even now. There was a lot of anger.
The one thing we did was overcommunicate, with mind-numbing consistency, to every associate about what was going on, why it was going on, and how it would affect them. I held quarterly all-hands meetings. I set up monthly coffee sessions where I would invite individuals in to talk without their managers. We put in place a very aggressive communications campaign via email and voice mail. Even with all that, though, I can’t say we were 100% effective. The one thing I have learned, importantly, is that it’s critical not to be just cognizant and aware, but to be sensitive to the associates who were here before. You have to take time to honor the past.
It was a very scary and lonely time for me. But I am a significantly better-prepared CEO now than I ever would have been without this experience. Once in a while, getting knocked on your ass is a good thing.
William Nuti left his position as a senior vice president at Cisco in 2002 to come to Symbol Technologies, a leading maker of handheld scanner technology. Symbol’s former CEO, Tomo Razmilovic, is still a fugitive in Sweden.
Soon after we went to press with our September issue, Nuti joined NCR as its president and CEO.
Honesty Is Always in Fashion
Bruno Magli North America
New York, New York
North America had always been a precarious market for Bruno Magli, and it was especially so after September 11. The business was under siege: We had treacherous retail leases and currency pressure from the euro, and were undergoing management changes as the Bruno Magli family retired. By 2004 we needed to clean up the business. Frankly, the fastest, most effective way to do that in the States was to file for Chapter 11 bankruptcy.
Even though we were using it as a strategic tool, the very word “bankruptcy” can cause heart palpitations. The parent company in Italy was dumbfounded — they pictured us closing the business and selling the furniture. But this was all very carefully planned.
Still, I was anxious. In fact, I was a nervous wreck. No matter how much expert advice you get from lawyers and PR firms, it’s still bankruptcy. I kept thinking, Oh my God! I’m plunging this 74-year-old company into ruin. But it was such a release to be able to tell employees that I was nervous, too. Don’t hide it. You absolutely have to be honest with people. We said, “We’re not going to tell you that nobody’s going to lose their job.” Although we had to lay off about 50 people, there were no surprises.
I know this doesn’t sound right, but the bankruptcy was like a gift. Everyone knew we were changing, so a buzz built around what our future might be. It was like a startup with the safety net of an established brand and a strong corporate parent. And the results showed. By this spring, we couldn’t deliver enough products to meet demand. That was a real vindication.
Bruno Magli North America emerged from bankruptcy in January. After closing its retail stores in the United States as part of the restructuring, the luxury shoemaker opened its first shop-within-a-shop concept in May at the Arthur Beren shoe store in Beverly Hills.