Relatively few startups are founded by twenty-somethings just out of college. According to the Kaufman Foundation, only 24 percent of new entrepreneurs fall between the ages of twenty and thirty-four.
That means the average entrepreneur has made a major change, both professionally and personally, in order to start or lead a business. Maybe that means launching a new venture; there's plenty of advice for how to do that. But what if it's acquiring an existing company -- or becoming the CEO of an existing company? Where do you start?
To find out I talked with Darcy Horn Davenport, the CEO of Premier Nutrition Corporation (PNC), the active nutrition company. PNC's net sales have grown each year since its acquisition in 2013 by Post Holdings, Inc.; in 2017, net sales grew 24 percent to over $700 million, driven in large part by a 50 percent increase in sales of its Premier Protein brand.
So yeah: Darcy clearly knows something about growing a brand.
You step into the CEO role. How do you decide where to focus first?
It sounds simple, but you have to start with truly understanding what the company does.
It's a portfolio approach, but overall the goal is to help people make healthier decisions, or lose weight, or refuel after a workout, or as a healthy way to replace a meal.
So when I first started three years ago, a lot was going right. We had strong brands, great products, nutrition is a high growth category... but the biggest issue was with Premier Protein. We had high loyalty but limited distribution and fairly low awareness.
So the first go was to expand distribution within channels and with retailers and to get more items on the shelf. That meant investing in new products, new pack sizes, new flavors... and we did a lot of work around effectively communicating with consumers and amplifying our marketing message.
Now my focus is very different. Now that we have the brands in a really good place, now that we have national distribution with basically every retailer that carries nutrition products... there's still upside, but now I'm more focused on our corporate infrastructure, on the right people, systems, etc to help us reach our goal of being the active nutrition category leader.
So to answer your question (laughs): First, it's all about sales. Then you can work on other areas.
No startup founder or new CEO comes to the job with every skill required to do the job. How did you bridge that gap?
You're right. I started in finance and accounting and quickly realized that wasn't my passion -- but oddly enough it's incredibly helpful for what I do now. After a fortuitous conversation with a recruiter I realized I wanted to go into brand marketing. I have a passion for consumer insights, for consumer behavior, for solving problems for consumers... I realized that was the perfect career for me.
My longest stop along the way was with Dreyer's Ice Cream, and not only did I learn to be a marketer, I saw for the first time how much impact a strong culture can have on a company's results. We had a wonderful culture there.
So what I now do is a combination of my finance background, of leaning in to my marketing side because at the end of the day we're a brand company... and also focusing on how to motivate and inspire our team of 150 people.
My job now is to inspire and empower our employees to really reach their potential -- which is the very same thing we try to do for our customers. That's where I spend a ton of my time.
Luckily I had some experience with launching new products, partnering with operations, managing a P & L... so I was familiar enough in those areas that i could talk the talk. But at the end of the day, it's all about people, and building a strong team.
You're a big believer in creating a purpose.
Purpose is critical for every company.
In our case we had a number of brands, mostly built through acquisition, and we had a good values system in place... but we aren't a founder-led company. I wasn't the entrepreneur that created these products. That's often where purpose comes from: The ideology of the original founder.
What I felt we really needed was a higher purpose that unified our brands and provided a motivating north star to guide our employees.
Keep in mind that consumers are incredibly savvy. They see right through inauthenticity. But when you have a purpose the entire company buys into, believes in, and is motivated by... consumers see that, too.
That's one of the main building blocks of why we've been successful.
Wanting to create a sense of purpose is one thing. Actually pulling it off is another.
The process took five or six months. The reason it too so long is because I felt strongly that we needed to have everyone be part of the process. I didn't want it to be a top-down initiative. I wanted it to be bottom-up, a common goal, one that everyone had their fingerprints on.
That takes time.
It also helps that we have an incentive where if we get 10 percent above plan we have a year-end meeting in Hawaii, and at one of those meetings we had the entire company participate. We started with about five different options, really got into what makes this place magical, and incorporated the feedback and narrowed it down.
What did you end up with?
"We bring good energy to the world."
It's perfect, because everything we do can be guided by that. The products we launch, the acquisitions we make... it has to ladder up to that purpose. The way we treat our employees has to ladder up to that purpose. The way we treat our customers has to ladder up to that purpose. The way we treat our partners, our vendors... it's all guided by the idea of bringing good energy.
If it doesn't bring good energy to the world -- or at least to our small piece of the world -- we don't do it.
That's a lot like Herb Kelleher, the Southwest Airlines CEO. Whenever he has decisions to make, he asks, "Will this help us the the low-cost provider?" Having a simple purpose makes decision-making a lot easier.
It's critical that your purpose can be applied to all of your decisions. Does it provide the guardrails that will help guide you? That is absolutely critical.
For us, "We bring good energy to the world" has helped us stay true to and build on the cultural foundations we already had.
For example, we use it often in recruiting. There are a ton of very qualified and successful people who I would not categorize as "good energy."
When you're a high growth company, keeping an effective culture alive when you're adding so many people from different companies, different cultures, etc... you need to have a very clear and deliberate north star.
I'm sure you went into the job with certain assumptions. What turned out to be different about the job than you expected?
I thought a CEO always has to have the right answer. I thought the CEO always had to be the center of attention. They're constantly making the calls, and that made me uncomfortable.
I'm a really collaborative person. I don't have all the answers. I like doing the work; I don't like being the center of attention.
Having been in this seat for over three years, the biggest thing I've learned is that there are many different ways to lead. There's power in actually not having all of the answers. There's a power in being quiet and having the people around you raise their game and express their full potential.
Now I see my job as empowering everyone around me. It's not about me. It's about everyone else -- and creating an environment where everyone can thrive.
It might sound cheesy but that really is how I look at my job. I'm a mother of two small kids, and that feels good to me.
If I had to do the job the way I thought when I first started... I probably wouldn't still be doing it.