Roaring out of Recession Stronger Than Ever

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SPOTLIGHT

Research shows that 9% of companies come out of a Roaring Out of recession stronger than ever. Here’s how they lay the groundwork for success. Recession

by Ranjay Gulati, Nitin Nohria, and Franz Wohlgezogen •

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1 Article Summary Idea in Brief—the core idea

2 Roaring Out of Recession

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S POTLIGHT Roaring Out of Recession

Idea in Brief What strategies can companies use to survive a recession so that they’ll thrive when it ends? A yearlong study suggests that enterprises that cut costs by focusing on operating efficiency even as they spend more than rivals on marketing, R&D, and assets are likely to be postrecession winners. Companies that only cut costs heavily during a downturn don’t flourish after it ends. Neither do the few businesses that only invest more than rivals during a recession. Even companies that were doing well beforehand don’t retain their momentum—85% of market leaders get dislodged during a recession. Cutting costs while making investments isn’t easy. CEOs must be disciplined about costs and learn to spot investment opportunities that offer reliable returns in reasonable payback periods. If they get the mix right, it helps them tackle short-run problems and create a successful medium-term strategy. OPYRIGHT © 2010 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. BUSINESS SCHOOLOPYRIGHT © 2010 HARVARD PUBLISHING CORPORATION. C

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Research shows that 9% of companies come out of a recession stronger than ever. Here’s how they lay the groundwork for success.

SPOTLIGHT Roaring Out of Recession

by Ranjay Gulati, Nitin Nohria, and Franz Wohlgezogen

Great leaders know that how they fight a war return. Folksy wisdom abounds (how many often decides whether they will win the peace. times have you read that Procter & Gamble, Yet as CEOs continue to combat the myriad Chevy, and Camel flourished during the Great challenges thrown up by the Great Recession Depression because they advertised heavily?), of 2007, they are increasingly unsure about but empirical studies are few. That’s why we what strategic approaches to deploy. Many decided to mount a yearlong project to analyze worry that the 27-month slowdown is far from strategy selection and corporate performance over in the United States. Others feel that al- during the past three global recessions: the though a recovery may have begun, it could 1980 crisis (which lasted from 1980 to 1982), prove to be short-lived, and they would do well the 1990 slowdown (1990 to 1991), and the to brace for a double-dip recession. Almost all 2000 bust (2000 to 2002). We studied 4,700 business leaders reluctantly admit that the public companies, breaking down the data into current crisis also marks an inflection point: three periods: the three years before a reces- The world after it is unlikely to resemble the sion, the three years after, and the recession one before it. Their priority, when they get a years themselves. (See the sidebar “Analyzing moment’s respite, must be to remake their or- Strategy Shifts.”) ganizations to cope with the “new normal.” Our findings are stark and startling. Seven- But CEOs, like generals in the heat of battle, teen percent of the companies in our study are so busy tackling short-term priorities that didn’t survive a recession: They went bankrupt, the future is obscured by the fog of war. were acquired, or became private. The survi- Unfortunately, little research has been done vors were painfully slow to recover from the on strategies that can help companies survive a battering. About 80% of them had not yet re- recession, get ahead during a slow-growth re- gained their prerecession growth rates for sales covery, and be ready to win when good times and profits three years after a recession; in fact, OPYRIGHT © 2010 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. BUSINESS SCHOOLOPYRIGHT © 2010 HARVARD PUBLISHING CORPORATION. C

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Roaring Out of Recession•••SPOTLIGHT

40% of them hadn’t even returned to their ab- pleasure if realized and disappointment if not. solute prerecession sales and profits levels by Other people are prevention-focused—con- the end of that time period. Only a small num- cerned mainly with safety, security, and re- ber of companies—approximately 9% of our sponsibility. They strive to avoid bad out- sample—flourished after a slowdown, doing comes, experiencing relief if they succeed and better on key financial parameters than they pain if they fail. Situations have a potent influ- had before it and outperforming rivals in their ence on cognitive orientation: A recession, for industry by at least 10% in terms of sales and example, can trigger a response that overrides profits growth. a person’s usual orientation. These postrecession winners aren’t the usual By applying this perspective to our empirical suspects. Firms that cut costs faster and deeper research, we were able to classify companies than rivals don’t necessarily flourish. They and their approaches to managing during a re- have the lowest probability—21%—of pulling cession into four types: ahead of the competition when times get bet- Prevention-focused companies, which make ter, according to our study. Businesses that primarily defensive moves and are more con- boldly invest more than their rivals during a re- cerned than their rivals with avoiding losses cession don’t always fare well either. They and minimizing downside risks. enjoy only a 26% chance of becoming leaders Promotion-focused companies, which invest after a downturn. And companies that were more in offensive moves that provide upside growth leaders coming into a recession often benefits than their peers do. can’t retain their momentum; about 85% are Pragmatic companies, which combine de- toppled during bad times. fensive and offensive moves. Just who are the postrecession winners? Progressive companies, which deploy the op- What strategies do they deploy? Can other cor- timal combination of defense and offense. porations emulate them? According to our re- Let’s now analyze these groups. search, companies that master the delicate balance between cutting costs to survive today Don’t Be Too Defensive and investing to grow tomorrow do well after a Confronted by a recession, many CEOs swing recession. Within this group, a subset that de- into crisis mode, believing that their sole re- ploys a specific combination of defensive and sponsibility is to prevent the company from get- offensive moves has the highest probability— ting badly hurt or going under. They quickly 37%—of breaking away from the pack. These implement policies that will reduce operating companies reduce costs selectively by focusing costs, shrink discretionary expenditures, elimi- more on operational efficiency than their ri- nate frills, rationalize business portfolios, lower vals do, even as they invest relatively compre- head count, and preserve cash. They also post- hensively in the future by spending on market- pone making fresh investments in R&D, devel- ing, R&D, and new assets. Their multipronged oping new businesses, or buying assets such as strategy, which we will discuss in the following plants and machinery. As a rule, prevention-fo- pages, is the best antidote to a recession. cused leaders cut back on almost every item of Ranjay Gulati ([email protected]) is cost and investment and reduce expenditures the Jaime and Josefina Chua Tiampo Four Responses to a Slowdown significantly more than their competitors on at Professor at Harvard Business School Companies, not surprisingly, don’t all follow least one dimension. and the author of Reorganize for Resil- the same strategies during a recession. That Sony, which announced a cost-reduction tar- ience (Harvard Business Press, 2010). could be because of differences in executives’ get of $2.6 billion in December 2008, epito- Nitin Nohria ([email protected]) is the cognitive orientation during a crisis. Accord- mizes the prevention-focused approach. It Richard P. Chapman Professor at Harvard ing to Tory Higgins, a Columbia University plans to close several factories and eliminate Business School and the author, with psychologist, human beings are hedonistic— 16,000 jobs, and will delay investments—such Rakesh Khurana, of Handbook of Leader- we avoid pain and seek pleasure—but they dif- as building a much-needed LCD television fac- ship Theory and Practice (Harvard Busi- fer in how they try to achieve those aims. tory in Slovakia—in its core electronics business Press, 2010). Franz Wohlgezogen There are two basic modes of self-regulation. ness. This strategy resembles the approach ([email protected] Some people are driven most by goals, such as Sony took during the 2000 downturn, when .edu) is a doctoral student at Northwest- achievement, advancement, and growth. over a two-year period the Japanese giant cut ern University’s Kellogg School of These promotion-focused individuals are mo- its workforce by 11%, its R&D expenditures by Management. tivated by ideals and aspirations that provide 12%, and its capital expenditures by 23%. The

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Roaring Out of Recession•••SPOTLIGHT

cuts helped Sony increase its profit margin ized: The finance department makes across- from 8% in 1999 to 12% in 2002, but growth in the-board cuts, paying little attention to initia- its sales tumbled from an average of 11% in the tives that may be the nuclei of postrecession three years before the recession to 1% thereaf- growth. Four, pessimism permeates the organi- ter. In fact, Sony has struggled since then to re- zation. Centralization, strict controls, and the gain momentum. It has invested in developing constant threat of more cuts build a feeling of new products such as electronic book readers, disempowerment. The focus becomes sur- gaming consoles, and organic light-emitting vival—both personal and organizational. diode TV sets, but finds itself bested in those Few prevention-focused corporations do product categories by Amazon, Microsoft and well after a recession, according to our study. Nintendo, and Samsung, respectively. They trail the other groups, with growth, on A focus solely on cost cutting causes several average, of 6% in sales and 4% in profits, com- problems. One, executives and employees start pared with 13% and 12% for progressive compa- approaching every decision through a loss- nies. Whereas in the three years after the 2000 minimizing lens. A siege mentality leads the recession, sales for the 200 largest companies organization to aim low and keep both innova- grew by an average of $12 billion over prereces- tion and cost cutting incremental. Two, instead sion levels, the prevention-focused enterprises of learning to operate more efficiently, the or- among them saw sales grow by an average of ganization tries to do more of the same with just $5 billion. Moreover, cost cutting didn’t less. That often results in lower quality and lead to above-average growth in earnings. Pos- therefore a drop in customer satisfaction. trecession profits for prevention-focused enter- Three, cost-cutting decisions become central- prises typically rose by only $600 million,

Analyzing Strategy Shifts In December 2008 we started a project to before to during each recession and adjusted and to asset-related items such as CAPX and identify the strategies that companies deploy them for the industry average; second, we cal- PP&E. during economic downturns and to evaluate culated the percentile scores of those changes We then calculated the three-year com- their effectiveness. We studied corporate per- and assumed that only those in the top or bot- pound annual growth rates for net sales and formance during the three recessionary peri- tom 33 percentile were significant increases or earnings (EBITDA as a percentage of sales), ods prior to the current one: 1980 to 1982, decreases. adjusted for industry averages, to understand 1990 to 1991, and 2000 to 2002. We identified four groups on the basis of the top- and bottom-line performance gener- We collected financial data on all the com- specific combinations of changes in resource ated by these strategies. Using growth rates al- panies listed in Standard & Poor’s Compustat allocation: lowed us to compare the performance of big database, analyzing 4,700 companies across Prevention-focused companies, which and small companies; by adjusting for indus- the three recessions. Using data for the three had cut back further, relative to their competi- try averages, we could compare performance years prior to each recession, the three years tors, on one or more of the six items, and across industries even if the recession had af- after it, and the recession itself, we analyzed hadn’t increased expenditures on any of them fected them differently. strategy shifts during the recession years and more than their competitors had. We concluded that companies with both developed hypotheses about how they had af- Promotion-focused companies, which had sales growth and profits growth 10% higher fected companies’ postrecession performance. increased expenditure on at least one of the than those of competitors after a recession To identify strategy shifts, we calculated six and also not decreased expenditure on any had achieved breakaway performance. (Our how companies’ resource allocations had of them by more than their rivals had. findings are valid, however, for a broad range changed between the prerecession and the re- Pragmatic companies, which had adopted of definitions of breakaway performance: cession years, using six balance-sheet items: both a prevention focus, by reducing COGS or growth rates from 5% to 20% better than the number of employees; cost of goods sold nor- employees more than their peers had, and a industry average.) malized by sales; R&D expenditures; sales, promotion focus, by increasing SG&A, R&D, Finally, we calculated the probability that general, and administrative expenditures; cap- CAPX, or PP&E more than their peers had. companies in each of the four groups would ital expenditures; and plant, property, and Progressive companies, which had re- achieve breakaway performance by dividing equipment stock. duced COGS but hadn’t cut employees more the number of winning companies that had Only major allocation changes affect a com- than their peers and had also allocated more used a certain strategy by the total number of pany’s performance, so we isolated those in resources, relative to their competitors, to companies using that strategy. two steps: first, we calculated changes from market-related items such as SG&A and R&D

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Roaring Out of Recession•••SPOTLIGHT

whereas for progressive companies they in- sayers are marginalized and realities are over- creased by an average of $6.6 billion. looked. That’s why promotion-focused organizations are often blindsided by poor financial Don’t Be Too Aggressive results. Some business leaders pursue opportunity Worse, when these companies are forced to even in the face of adversity. They use a reces- tackle bloated cost structures, the changes they sion as a pretext to push change through, get make often prove to be too little, too late. Be- closer to customers who may be ignored by cause each function and business firmly be- competitors, make strategic investments that lieves that it contributes to corporate success, have long-term payoffs, and act opportunisti- finger-pointing increases. Trade-offs are diffi- cally to acquire talent, assets, or businesses cult to make and decision making becomes that become available during the downturn. sclerotic. These strategies are designed to garner upside Whereas prevention-oriented companies benefits. lower their cost-to-sales ratio by about three per- At the height of the 2000 recession, for ex- centage points relative to peers over the course ample, Hewlett-Packard drew up an ambitious of a recession, promotion-focused enterprises change agenda even though sales and profits are unable to reduce that ratio. Promotion- were falling. Carly Fiorina, then the CEO, as- focused CEOs sometimes increase expenditures serted, “In blackjack, you double down when rather than cutting back, believing that this will you have an increasing probability of winning. push them ahead. If investments take longer We’re going to double down.” HP embarked on than expected to generate paybacks, or innova- a massive restructuring program, made the tions don’t resonate with customers, these com- largest acquisition in its history by buying panies run headlong into trouble. Compaq for $25 billion, and increased R&D ex- Despite a focus on growth, promotion- penditures by 9%. It also spent $200 million on focused companies’ postrecession sales and a corporate branding campaign and $1 billion earnings rise by only 8% and 6% respectively, What Are the on expanding the availability of information whereas those of progressive companies’ shoot technology in developing countries. These ini- up by 13% and 12%. Among the 200 largest Odds... tiatives strained the organization and spread companies that tackled the 2000 recession, that companies in the four groups will top management’s attention too thin. When promotion-focused enterprises grew sales by significantly outperform their rivals the recession ended, the company found it $15 billion and profits by $1.5 billion, on aver- (by 10% or more) on both top- and tough to match the profitability levels of IBM age—far lower than progressive companies’ av- bottom-line growth after a recession? and Dell. By 2004 HP’s earnings, at 8.4%, had erage increases of $28 billion in sales and $6.6 slipped below IBM’s 16.8% and Dell’s 9.3%. billion in profits. (Throughout this article, “profits” and “earnings” refer to earnings before interest, taxes, The Elusive Balance % depreciation, and amortization [EBITDA] as a The companies most likely to outperform 21 percentage of sales.) their competitors after a recession are prag- Organizations that focus purely on promo- matic as William James defined the term: “The PREVENTION FOCUS tion develop a culture of optimism that leads attitude of looking away from first things, % them to deny the gravity of a crisis for a long principles, ‘categories,’ supposed necessities; time. They ignore early warning signs, such as and of looking towards last things, fruits, con- 26 customers’ budget cuts, and are steadfast in sequences, facts.” The CEOs of pragmatic com- PROMOTION FOCUS the belief that as long as they innovate, their panies recognize that cost cutting is necessary sales and profits will continue to rise. Even as to survive a recession, that investment is % customers clamor for lower prices and greater equally essential to spur growth, and that they 29 value for money, these companies add bells must manage both at the same time if their PRAGMATIC FOCUS and whistles to their products. They simply companies are to emerge as postrecession don’t notice that because the pie is shrinking, leaders. % they must capture an even larger share from ri- A combination strategy sounds easy to de- 37 vals to keep growing. Optimistic leaders attract velop: a little offense, a little defense, and employees who thrive in a forward-looking, voilà, you’re a winner. If only it were that sim- PROGRESSIVE FOCUS growth-oriented environment. When positive ple. Companies typically combine three defen- groupthink permeates an organization, nay- sive approaches—reducing the number of em-

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Roaring Out of Recession•••SPOTLIGHT

ployees, improving operational efficiency, or on that approach much less than their peers do. both—with three offensive ones: developing Only 23% of progressive enterprises cut staff— new markets, investing in new assets, or both. whereas 56% of prevention-focused companies This yields nine possible combinations, some do—and they lay off far fewer people. of which are more effective than others. (See Companies that rely solely on cutting the the exhibit “What’s the Best Combination of workforce have only an 11% probability of Moves?”) achieving breakaway performance after a One combination has the greatest likelihood downturn. There may be several reasons for of producing postrecession winners: the one this. In our experience, morale is usually better pursued by progressive enterprises. These com- at companies that stress operational efficiency. panies’ defensive moves are selective. They cut Employees at these companies appreciate top costs mainly by improving operational effi- management’s commitment to them, and they ciency rather than by slashing the number of are more creative in reducing costs as a result. employees relative to peers. However, their of- They don’t spend their time worrying about fensive moves are comprehensive. They develop job security—as do people at companies that new business opportunities by making signifi- rely on deep staff cuts. And although layoffs cantly greater investments than their rivals do may reduce costs quickly, they make recovery in R&D and marketing, and they invest in assets more difficult. Companies run the risk of scal- such as plants and machinery. Their postreces- ing up too late, especially if hiring is more diffi- sion growth in sales and earnings is the best cult than they anticipated. People are loath to among the groups in our study. It’s important to work for organizations that reduce head count understand why the companies that use this in difficult times. Moreover, as these compa- combination do so well after a recession. nies rehire, costs shoot up. Operational efficiency. Most enterprises im- In contrast, companies that respond to a plement aggressive cost-reduction plans to sur- slowdown by reexamining every aspect of their vive a recession. But companies that attend to business models—from how they have config- improving operational efficiency fare better ured supply chains to how they are organized than those that focus on reducing the number and structured—reduce their operating costs of employees. Don’t get us wrong: Progressive on a permanent basis. When demand returns, companies also lay off employees, but they rely costs will stay low, allowing their profits to grow faster than those of competitors. During the 2000 recession, Office Depot and Staples took differing approaches to cost man- What’s the Best Combination of Moves? agement. Office Depot cut 6% of its workforce, but it couldn’t reduce operating costs signifi- Companies that focus simultaneously on increasing operational efficiency, developing cantly. Although the company created an in- new markets, and enlarging their asset bases show the strongest performance, on av- centive plan to boost sales, its sales growth fell erage, in sales and EBITDA growth after a recession. (Percentages, which are adjusted from 19% before the recession to 8% after— for industry averages, refer to the three-year compound annual growth rate.) five percentage points below Staples’ postre- PROMOTI FOCUSED MOVES cession sales growth rate. MARKET ASSET By contrast, Staples closed down some un- DEVELOPMENT INVESTMENT BOTH derperforming facilities but increased its workforce by 10% during the recession, mainly to EMPLOYEE GOOD BAD WORST support the high-end product categories and REDUCTION SALES 4.6% SALES 3.9% SALES 3.3% EBITDA 6.6% EBITDA 3.3% EBITDA -5.2% services it introduced. At the same time, the company contained its operating costs and OPERATIONAL came out of the recession stronger, bigger, and EFFICIENCY GOOD GOOD BEST more profitable than it had been in 1999. Its SALES 7.1% SALES 8.4% SALES 13.0% EBITDA 4.2% EBITDA 8.4% EBITDA 12.2% sales doubled, from $7.1 billion in 1997 to $14.6

OCUSED MOVES OCUSED billion in 2003, while Ofﬁce Depot’s rose by F about 50%, from $8.7 billion to $13.4 billion. BOTH BAD BAD GOOD On average, Staples was about 30% more prof- SALES 5.2% SALES 5.2% SALES 9.2% EBITDA 2.1% EBITDA -0.5% EBITDA 4.6% itable than its archrival in the three years after that recession. PREVENTI

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Roaring Out of Recession•••SPOTLIGHT

Investment in both existing and new busi- former why the company is spending where nesses. During recessions, progressive compa- no immediate benefits are apparent. It’s easier nies develop new markets and invest to en- to exhort everyone to sacrifice and share the large their asset bases. They take advantage of pain or to show courage and invest for gain. To depressed prices to buy property, plants, and pull off a combination of cutbacks and strate- equipment. This helps them both during the gic investments, CEOs have to exercise cost dis- recession and afterward, when they can re- cipline and financial prudence and detect op- spond faster than rivals to a rise in demand. portunities that offer reliable returns in Because their asset costs are lower than their reasonable payback periods. noninvesting competitors’, their earnings can Let’s look at how one company has man- be relatively higher. aged this difficult balancing act. During the These companies also judiciously increase 2000 recession, Target increased its market- spending on R&D and marketing, which may ing and sales expenditures by 20% and its cap- produce only modest benefits during the reces- ital expenditures by 50% over prerecession sion, but adds substantially to sales and profits levels. It increased the number of stores it op- afterward. The resources freed up by improv- erated from 947 to 1,107 and added 88 Super- ing operational efficiency finance much of this Target stores to the 30 it had already set up. It expenditure. In turbulent times, it’s tough for expanded into several new merchandise seg- companies to know where to place their bets ments, ramped up investment in credit-card for both the immediate term and the long run. programs, and grew its internet business. The Progressive companies stay closely connected company made several smart choices along to customer needs—a powerful filter through the way. Instead of trying to go it alone on- which to make investment decisions. line, Target partnered with Amazon to sell its products. It also teamed up with well-known Getting It Right designers such as Michael Graves, Philippe Pursuing a Janus-faced strategy isn’t easy. Cut- Starck, and Todd Oldham to cement its repu- ting budgets in one area while expanding tation for cheap chic, thereby differentiating them in another means explaining to those its products. who are being asked to bear the burden of the Meanwhile, Target relentlessly tried to reduce costs, improve productivity, and enhance the efficiency of its supply chain operations. For instance, in 2000 it was one of the 12 retail- Postrecession Leaders in Sales and Profits ers that founded the WorldWide Retail Ex- change, a global business-to-business elec- Growth tronic marketplace, to facilitate trading After a recession, progressive companies outperform pragmatic companies by al- between retailers and vendors. In January 2001 most four percentage points in sales and more than three percentage points in earn- Target consolidated its Dayton’s and Hudson’s ings before interest, taxes, depreciation, and amortization (EBITDA)—and do about stores under Marshall Field’s to take advantage twice as well as companies in general. (Percentages, which are adjusted for industry of the well-known brand name. These moves averages, refer to the three-year compound annual growth rate.) helped the company grow sales by 40% and profits by 50% over the course of the recession. Its profit margin increased from 9% in the three years before the recession to 10% after it. SALES These strategies contrast sharply with those EBITDA of other retailers, which focus primarily on growing store networks. For example, the dis- count retailer TJX Companies, which operates T.J. Maxx and Marshalls, added 300 stores to its network of 1,350 from 2000 to 2002, increasing its retail square footage by almost 25% and nearly doubling its capital expenditures. TJX’s competitors were scaling back growth plans, so real estate options were more plentiful and

AVERAGE PREVENTION PROMOTION PRAGMATIC PROGRESSIVE prices were lower. Although the increase in re-

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Roaring Out of Recession•••SPOTLIGHT

tail floor space fueled some healthy medium- brands, Market Pantry and Archer Farms; and term sales growth—four percentage points overhauled its operations to support the em- above peers’ growth in the postrecession pe- phasis on food. The retailer also increased riod—it didn’t improve the bottom line. That’s media spending and reaffirmed its positioning because TJX did little to change its business with the slogan “Expect more, pay less”—with model; it just scaled up its centralized buying an emphasis on the second half. These are and flexible distribution of merchandise. This early days, but the results appear promising: more-of-the-same approach put TJX’s bottom- By 2008 Market Pantry’s sales had increased line growth, which had been on a par with ri- by 30% and Archer Farms’ by 13%. And food vals’ before the recession, at 9% lower three has become a $1.8 billion business for Target. years afterward. Few progressive business leaders have a mas- Many CEOs find investing in bargain-basement ter plan when they enter a recession. They en- Progressive companies assets a tempting offensive move in a down- courage their organizations to discover what turn. But the revenues and profits from oppor- works and combine those findings in a portfo- stay closely connected tunistic investments can take a long time to lio of initiatives that improve efficiency along to customer needs— materialize, leaving a company saddled with with market and asset development. This agil- an asset base that doesn’t significantly boost re- ity, even as leaders hold the course toward a powerful filter turns. As TJX found, focusing purely on assets long-term growth and profitability, serves orga- also keeps companies from looking for more- nizations well during a recession. An analysis through which to make imaginative ways to build new businesses that of the stock market performance of companies investment decisions. will drive growth when the recession is over. that use progressive strategies reveals that they Target hasn’t faced this problem. During the can also ride the momentum after a recession current recession, the retailer initially saw a de- is over. Their approach doesn’t just combat a cline in same-store sales, in part because Wal- downturn; it can lay the foundation for contin- Mart’s message of everyday low prices went ued success once the downturn ends. down well with customers. Realizing that spending on “wants” was decreasing sharply, Reprint R1003C Target strengthened its position in a key To order, see the next page “needs” segment: food. It launched a new store or call 800-988-0886 or 617-783-7500 format that doubles the amount of floor space or go to www.hbr.org devoted to food; extended the range of its food

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