How Campbell's Soup Went From Stale to Innovative
It was 2001 when Doug Conant became CEO of the Campbell Soup Company—he was just the eleventh man to hold the title in the company's 132-year history. He inherited a legendary American company, but one shadowed at the time by thick clouds of gloom; Campell's had lost half of its market value in the previous year. Even the headquarters' appearance reflected this dismal atmosphere, right down to the rusty barbed wire fencing that traced the grounds' perimiter. As Conant recalls, one employee said to him: "This place looks like a high-security prison." Conant knew he'd have to reinvent the company at nearly each level. This involved changing everything from how the V8 vegetable drink tasted to creating more functional display shelving. For eight straight years, Campbell's sales grew—until hitting a wall last year. Inc.com's Abram Brown spoke with Conant, who stepped down as CEO in July, but still regularly heats up cans of his favorite soup (chicken and sausage gumbo).
You say Campbell's was in a "circle of doom" when you arrived. What was your first step?
I had to get the culture back on track, because my observation has been, is, and always will be, that you can't have an organization that consistently delivers innovation unless you have a high level of engagement and a high level of trust. People just won't take risks. And we had an incredibly low-trust culture based on what had happened. To get there, we recognized that we had to change the leadership profile of the company, and we turned over, in the first three years, 300 of the top 350 leaders of the organization—which is to my knowledge unprecedented in the consumer-products industry. Of the 300 people we turned over, 150 people were promoted from within, and 150 were hired from outside: people who were high-character, high-quality.
So the takeaway: Don't be afraid to replace your leadership. Then what happened with the actual products?
People didn't think of soup. It was sitting in the pantry, and people weren’t thinking of having it. So what we discovered was that to restore consumer spending, and remind people that soup was a good alternative, people needed to consume more of it out of their pantry. Prior to that, they'd only think about it when there was a snowstorm. You know, "It's cold out. I'll have soup." You didn't think of it otherwise. We instituted an advertising campaign that's evolved over the decade and restored consumer spending.
Advertising gets people into the store, but what about when they're shopping?
People had a lot of trouble finding the products they wanted at retail because all the soup cans looked alike. So we created something—a special display piece—called "gravity-feed shelving" where the products were more clearly labeled and where they actually rolled down and were served to the consumer in a much more intelligent way, and so people could actually find the brands they were looking for.
Hard to believe that soup cans have looked the same for decades. Few companies go that long without some product update.
It's amazing to think that the microwave was invented in 1947, and it took us over 50 years for us to figure out that we can have microwavable soups. So we created an entire microwave platform with a "soup-at-hand" platform and microwaveable bowls, which began to make soup more approachable for the millennial and Gen-X generations, who weren't into counter-top cooking.
So with fresh leaders and newly redesigned products, did you move toward new markets?
We made V8 the No. 1 vegetable-juice brand in the world, and the big innovation there was recognizing that over half the population didn't like the taste of V8. So we innovated with a fruit and vegetable combination called V8 V-Fusion.
How did you try and make the culture of innovation permanent?
We created a balanced-scorecard mechanism for the entire organization to work off that was linked to their performance-evaluation plan and their bonus plan, which made sure the organization was aligned and focused on the appropriate organizational activities. So we reinvented our score-carding in the organization.
There was a lot of management turnover and a lot of downsizing, and the work enviroment had become a little dysfunctional and chaotic. We just had to come back in and bring some structure to it, get the right people in place, and get it back on its feet. It wasn’t’ rocket science. It was just a response to a difficult period in the company’s period.
Any new training iniatitives?
Training changed in that we started to develop a circulum that focused on what I would call: functional excellence, and that is we have specific training in it, in manufacturing, in advertising—in every area of the company to help them become more functional. We also have leadership training. In the early days, we built a Campbell's leadership model. And we knew made those leadership [ideas] crystal clear. We evaluated the staff every year on the what and how. The what might be delivering Campbell microwavable soup on time and on budget. The how would be, Did you deliver in the spirit of the Campell Leadership Modell.
With Campbell's now experiencing a decline, what should new CEO Denise Morrison focus on?
I don't want to speak for her. … [But] she has presented to the analyst community and said we need more spirited innovations. She's put more resources targeted to innovation. But she hasn’t necessarily identified the [exact] areas [she'll put the resources toward.]
Granted you can always crack open a can of chicken-and-sausage-gumbo if you get too nostalgic, but do you wish you were still there to help with these recent troubles?
I loved the whole time I was there, but it's somebody else's turn now. I'll move on to new adventures.