Industry Breakthroughs

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Judy Marks CEO Siemens USA

Marc Kidd SIX TOP CEOS SHARE Chris Policinski CEO President & CEO Captivate INDUSTRY Land O’Lakes BREAKTHROUGHS

Judith E. Glaser Scott McNealy CEO 22 Year CEO Benchmark Communications, Inc. Sun Microsystems

Alex Robbio President and Co-founder Belatrix Software

The CEO Forum - November 2017 THE RISE OF YOU.

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IBM and its logo, ibm.com and Watson are trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. See current list at ibm.com/trademark. Other product and service names might be trademarks of IBM or other companies. ©International Business Machines Corp. 2017. P32339 Table of Contents THE INTERVIEWS 8 Judy Marks 5 From the Desk of Robert Reiss CEO, Siemens USA 6 Companies in this Issue 58 CEO Library 14 Chris Policinski President & CEO, Land O’Lakes CEO INSIGHT 38 Book Review 24 Marc Kidd Amazon Marketplace Dilemma CEO, Captivate James Thomson, Partner with Buy Box Experts 30 Judith E. Glaser CEO, Benchmark Communications, Inc. 56 Board Governance Jaberwocky 40 Alex Robbio Nancy May, President & CEO, President & Co-founder, Belatrix Software BoardBench Companies

50 Scott McNealy CEO ROUNDTABLE 22 Year CEO, Sun Microsystems 20 Women Leaders From Success To Significance The CEO Forum Team Deb Russo Allison Burke www.ceoforum.ceo Creative Director Deputy Editor 46 Top CEOs Place High Value On Corporate Ethics 203-470-3509 203-313-9496 And Social Responsibility To Drive Business [email protected] [email protected] Robert Reiss, The CEO Forum Robert Reiss Kenneth D. Brown Founder, Host & CEO Manager of CEO Communications 60 Leaders Share Keys To Business Transformation 203-894-9400 203-249-4490 [email protected] [email protected]

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SIXTY LEADING GLOBAL CEOs, who are part of CECP: The CEO Force for Good, gathered earlier this year at the 12th annual Board of Boards in NYC to discuss engaging key stakeholders—such as community, employees, investors, and consumers— through business and social strategies that will drive company success.

2017 FORCE FOR GOOD FIRST ANNUAL CEO INVESTOR FORUM HONOREES LONG-TERM PLAN PRESENTERS

Michael Corbat, Mitch Barns, CEO, Nielsen Vincent Forlenza, CEO, Citi Chairman, President, Bruce D. Broussard, & CEO, Brian C. Cornell, President & CEO, Humana Inc. BD Chairman & CEO, Target F. William McNabb III, Michael Corbat, CEO, Citi Chad Dickerson, Chairman & CEO, Thomas DeRosa, CEO, President, & Chair, Etsy Vanguard CEO & Director, Welltower Inc Dr. Risa Lavizzo-Mourey, Martin Schroeter, Anthony F. Earley, Jr., President & CEO, CFO, IBM Corporation Robert Executive Chair of the Board, Wood Johnson Foundation PG&E Corporation F. William McNabb III, Chairman & CEO, Vanguard Discussant: Robert Pozen, Senior Lecturer, MIT; Denise Morrison, Former President, Fidelity Investments President & CEO, Campbell Soup Company First-of-their-kind presentations by corporate leaders to investors representing more than $20 trillion in assets under , CEOs: Save the Date Anne M. Mulcahy management took place the afternoon of the Board of Boards. Chairman, Board of Trustees, February 26, 2018 Save the Children; Former 13th annual Board of Boards & Chairman & CEO, Xerox 3rd CEO Investor Forum (NYC) Corporation April 19, 2018 Presented during the Board 4th CEO Investor Forum (CA) of Boards proceedings to individuals for bold leadership THE CEO FORCE in corporate social strategy. FOR GOOD cecp.co/bob cecp.co/sii 212-825-1000 The 12th annual Board of Boards was made possible with generous support from Newman’s Own Foundation, PricewaterhouseCoopers [email protected] LLC, and USAA.

CECP_WSJ_fullpage-colorresized-717.indd 1 8/14/17 8:43 AM From the Desk of Robert Reiss

When I wrote The Transformative CEO (McGraw-Hill 2012), a key finding in my research was that the top transformative CEOs often had one thing in common – they learned from CEOs of other industries, and then they used those insights to transform their own company. That concept led us to create the magazine you have in your hands which features six top CEOs who have transformed their industry. We have entitled this issue Industry Breakthroughs.

We start off with Judy Marks, CEO of Siemens USA, who shares insights on the future of industries like manufacturing and energy, and how the concepts like ‘digital twins’ will change the very core of industry throughout all elements of the supply chain. She also shares how to cascade a culture of innovation through 50,000 employees.

Chris Policinski, CEO of Land O’Lakes, discusses how many people may perceive the $13 billion company to be sole- ly a manufacturer of butter, however Land O’Lakes is actually a technology company which is reinventing industry by leading the concept of precision agriculture. For CEO readers, Land O’Lakes is one of the great case studies of our time of how to reinvent a beloved brand and capture the opportunities of the digital world.

Marc Kidd is CEO of Captivate, the company that has the dominant market share of digital TV in elevators and office buildings for over 10 million upscale consumers. Captivate has built a model unlike any other company using advanced data models to help building owners significantly increase tenant satisfaction through analytics, matching building workers with timely and perfectly connected content providers and advertisers. Marc also shares leadership insights from football which he learned from his Hall of Fame dad.

Judith E. Glaser, is founder and CEO of Benchmark Communications, Inc. which has created and deployed, through their 2,500 associates in 75 countries, a new concept of “Conversational Intelligence”. This is also implemented through one of Benchmark’s companies, Creating We Institute, which helps CEOs transform their enterprise by acti- vating conversational intelligence throughout their culture.

Alex Robbio, co-founder and President of Belatrix, has reinvented the software implementation business through a model of outsourcing primarily from Argentina. This not only has the distinct advantage of being in the same time zone as U.S. outsourcing, but the hidden advantage of tapping into the highly entrepreneurial Argentine workforce creating new innovative solutions. Additionally, Robbio shares the American Dream story of overcoming tremendous odds to bring Belatrix to the U.S.

Finally, Scott McNealy, as co-founder and 22 year CEO of Sun Microsystems discusses what it was about the company that transformed the industry and built a culture of people who decades later still rave about the experience. Of interest to CEOs, McNealy shares truly profound leadership principles he created such as, “Dunk ‘em under the water” to build leaders, and the “rule of 11” to structure your management team. He then outlines his philosophy on what CEOs can learn from golf.

Hope you find this issue of value in transforming your enterprise.

Robert Reiss

www.ceoforum.ceo The CEO Forum 5 Companies In This Issue

Siemens Corporation is a U.S. subsidiary of Siemens AG, a global powerhouse focusing on the areas of electrification, automation and digitalization. One of the world’s largest producers of energy-efficient, resource-saving technologies, Siemens is a leading supplier of systems for power generation and transmission as well as medical diagnosis. With approximately 351,000 employees in 190 countries, Siemens reported worldwide revenue of $88.1 billion in fiscal 2016. Siemens in the USA reported revenue of $23.7 billion, including $5.4 billion in exports, and employs approximately 50,000 people throughout all 50 states and Puerto Rico.

Land O’Lakes, Inc., one of America’s premier agribusiness and food companies, is a member-owned cooperative with industry-leading operations that span the spec- trum from agricultural production to consumer foods. With 2016 annual sales of $13.2 billion, Land O’Lakes is one of the nation’s largest cooperatives, ranking 209 on the Fortune 500. Building on a legacy of more than 96 years of operation, Land O’Lakes today operates some of the most respected brands in agribusiness and food production including LAND O LAKES® Dairy Foods, Purina Animal Nutrition, WinField® United and Land O’Lakes SUSTAIN™. The company does business in all 50 states and more than 60 countries. Land O’Lakes, Inc. corporate headquarters are located in Arden Hills, Minn.

Judith E. Glaser founded Benchmark Communications, Inc. in 1980, and The CreatingWE Institute in 2007, to focus on working with CEOs and their teams to develop new strategies for addressing their competitive challenges in a world of moving targets. Benchmark Communications, Inc. has become one of the most pioneering and innovative firms in the consulting and coaching industry and is the world’s leading authority on Conversational Intelligence®, WE-centric Leadership, and Neuro-Innovation. Through the application of ‘the Neuroscience of Conversations®’ to business challenges, Benchmark shows CEOs and their teams how to elevate levels of trust, engagement, co-creating and innovation to positively impact the bottom line.

Today, Benchmark is bringing Conversational Intelligence® into companies, government, healthcare, and educational institutions with practitioners in 75 countries. Through ‘Pow- ered by Conversational Intelligence,’ leaders and their teams create a safe and supportive culture that leads to greater insights, new partnering skills, and higher levels of candor and caring with elevated ROI.

6 The CEO Forum www.ceoforum.ceo Captivate is the #1 Nielsen-rated location-based digital video network. Known for its vast footprint of 10,000 elevator and lobby displays located in 1,600 premier office buildings across the U.S., Captivate brings life to work by connecting 10+ million unique monthly viewers to the world outside their office. By engaging its viewers with timely news and actionable information, Captivate provides advertisers with a highly desirable and difficult-to-reach audience of affluent and influential business professionals through creative, research-driven and Nielsen-measured advertising and marketing programs. Founded in 1997, Captivate is owned by Generation Partners. For more information, please visit www.captivate.com.

Belatrix Software helps companies thrive in the digital world by turning their ideas into high quality, innovative software based on highly-tuned Agile development processes which fully leverages Latin America’s nearshore benefits of time zone overlap and cultural alignment. Customers use Belatrix’s digital transformation services to create best-in-class software products, lower time to market, and gain a competitive edge while at the same time reducing their costs and management complexity. Belatrix’s dedicated labs, focusing on UX, continuous delivery, mobile, DevOps, and QA automation, help organizations become digital leaders. Belatrix’s clients include both established Fortune level and emerging, venture backed firms. Some of the firm’s clients include Disney, Adobe, AOL, PwC, Fluor, and Shutterfly. Belatrix is a South American company with offices in Florida, New York, San Francisco, Mendoza, Buenos Aires, Bogotá and Lima.

Curriki (curriculum + wiki), founded by Sun Microsystems in 2004 as the Global Education & Learning Community, was spun-off in 2006 and is an independent 501(c)(3) organization working toward eliminating the education divide by providing free K-12 curricula and collaboration tools through an open-source platform. The mission of Curriki is to use technology to help break down economic and geographic barriers that prevent children worldwide from having access to quality education, and thereby to make learning possible for anyone, anywhere in the world.

Wayin, the Digital Campaign CMS platform enables marketers and agencies to deliver authentic interactive campaign experiences across all digital properties including web, social, mobile and partner channels. Wayin services more than 300 brands across 80 countries and 10 industries including leaders like CNN, Microsoft, MLB, AOL, Discov- ery and Universal.

www.ceoforum.ceo The CEO Forum 7 Judy Marks CEO Siemens USA

In 2017 Judy Marks was named CEO of Siemens USA, charged “Products today are born digital with leading 50,000 employees in the global technology power- and become physical, but retain house’s largest market. An engineer by degree, she brings to Siemens more than 30 years of experience in global technology businesses, a digital twin.” and she assumes her new role at an exciting moment for the company Mark Rylance, Cate Blanch- as it drives forward digital industry. “Siemens is a software company,” Marks says. “Most people don’t know that in the last 10 years in the U.S. alone, we’ve invested $15 billion buying industrial software companies, whether it’s computer-aided design, engineering or automation. We recently closed a $4.5 billion acquisition of Mentor Graphics in Oregon.”

Robert Reiss: What does the Siemens brand mean to you?

Judy Marks: We were started by an entrepreneur, and we continue to appreciate entrepreneurs today. What the brand really means to me is innovation, delivery and commitment. We’ve reinvented ourselves so many times over the years, and today we are an industrial innovator that supports our customers around the world.

8 The CEO Forum www.ceoforum.ceo Judy Marks CEO Siemens USA Judy Marks CEO Siemens USA

“What’s really happening today is what we call advanced manufacturing. It’s the next industrial revolution, or the fourth industrial revolution. This time it’s the convergence of manufacturing with software and digital solutions.”

How would you describe what’s really happening are the domain experts. We understand how a vehicle in the manufacturing world today? works. We understand the rules of the road. When you apply technology, it gives you the ability to do things faster, Here in the United States, Siemens has 60 manufacturing to do things potentially safer, and to do things on a scale plants, and we use what we sell - automation and digitali- that you aren’t able to as a human, but humans complete zation are two of our key markets globally. What’s really the value chain. Highly skilled workers are our greatest happening today is what we call advanced manufacturing. asset, which is one of the reasons we’re ramping up our It’s the next industrial revolution, or the fourth industrial commitment to industrial reskilling. This year we’re ex- revolution. This time it’s the convergence of manufactur- panding our apprenticeship program, which is focused on ing with software and digital solutions. advanced manufacturing skills. We are also providing an additional $2 billion worth of industrial software grants That convergence drives data and analytics, which im- to educators, and committing to hire an additional 1,000 proves decision making and drives an improved value veterans over the next three years. chain, from idea creation to engineering design, to manufacturing to delivery. Even in the delivery, I think we’re What are you most excited about from our digital seeing changes. We call it additive manufacturing. future?

Most people know this as 3D printing, but there’s even Digital technologies have the ability to change our very more to it than that. For example, if you’re going to create way of life, and it’s positive. Digitalization has the abil- a product, it’s born digital. You create it digitally with a ity to remove barriers because it is a great equalizer for 3D model; you take that model, release it onto the man- people, for cultures and for countries. I even see it within ufacturing floor, and you’ve already integrated in the Siemens. Any large company has built up organizational supply chain you need. You use that model for computer boundaries, and to me, digital is the ultimate equalizer. integrated manufacturing that integrates humans, robots, We don’t have a chief digital officer because we think ev- artificial intelligence, and numeric control -- everything is erybody needs to be digital. in one place and then you deliver it in perhaps the shortest cycle time you’ve ever done. Talk about the role of Siemens in our energy future.

When you’re done with all of that, you have what we call Siemens is spread across the energy value chain to sup- a digital twin. That means it lives in a physical state and port our customers. Our portfolio includes fuel efficient it lives in a virtual digital state, so you can maintain it. If power generation, energy management technologies, and you have obsolete parts, you can address it. If you have oil and gas. a field force, they can actually use that digital twin to do field service. Products today are born digital and become There are two key areas where we want to make a differ- physical, but retain a digital twin. ence. The first is on using advanced digital technologies to make energy systems more efficient and more reliable. What is the relationship between man and ma- Also, as the grid becomes more demand-focused, we are chine? positioned to better serve customers who want on-site power. As more and more universities, hospitals and fac- There’s a place for technology and a place for humans. tories pursue on-site power solutions to reduce their de- They’re complementary and both are needed. As hu- pendence on the grid, we have solutions to enhance ener- mans, we have the analytics and we define the rules. We gy security, resilience and surety.

www.ceoforum.ceo The CEO Forum 9 Judy Marks CEO Siemens USA

“We’re on the precipice of a significant generational change in energy. The United States has traditionally relied heavily on energy imports. That has changed drastically. Specifically now, natural gas is changing the global energy landscape, enabling America to boost energy exports and increase domestic energy security.”

What are some of the opportunities in energy that Asia, you want to bring power to your people because U.S. CEOs should be thinking about? power helps drive the national economy. You want cost effective, efficient power generation that reduces emis- We’re on the precipice of a significant generational sions. Natural gas is the right answer and the U.S. is now change in energy. The United States has traditionally re- a major source. lied heavily on energy imports. That has changed drastically. Specifically now, natural gas is changing the global You became CEO January 1, 2017. How would you energy landscape, enabling America to boost energy ex- codify your leadership philosophy? ports and increase domestic energy security. Natural gas is cleaner. When you liquefy it, it shrinks significantly in I have a few key elements that have been true my whole mass and can be shipped all around the world. Think career since I started as an engineer 33 years ago. First about all those nations that today may not have sufficient and foremost is set the mark and work hard. I demand power or electricity. Seventeen percent of the world’s as much from myself as I do with the people I surround population doesn’t have access to electricity. That’s over myself with. I challenge my colleagues to find the best tal- a billion people. ent, eliminate obstacles, set the strategy and the vision and then let them succeed. Put everything in place so that your If you’re a leader in one of those countries, be it sub-Sa- teams can succeed. If they succeed, the company will con- haran Africa, the Middle East, or in developing parts of tinue to succeed. That’s number one.

10 The CEO Forum www.ceoforum.ceo Judy Marks CEO Siemens USA Judy Marks CEO Siemens USA

No two people ever have the same career or walk in the so they feel like it’s their company. I also don’t want them same shoes. You need to appreciate that everyone sets dif- to work so diligently at trying to solve a problem that they ferent goals for themselves and understand the goals of don’t call in reinforcements. Earlier in my career, I thought your team and who you’re representing. You have to take that if I was in charge of a project, and if I worked hard very seriously your responsibility to your employees, your enough, I could solve it, and the reality is, there’s nothing customers and your shareholders every day. You need to wrong with asking for help. We need to create a culture lead through tough times. where asking for help is okay. That’s how you innovate and basically create the company over and over again. On a personal level, you have to find what I call ‘your own normal.’ It’s important that in life, you find an ecosystem How do you cascade a culture of innovation through- that works for you. In my life, that’s how my husband, my out 50,000 people? daughter and I have formed our family and have grown up together between work and life, and our normal is You communicate, communicate, communicate. Now- what works for us. adays, you do that through in-person meetings, through social media and through access. You do that through What’s the relationship between challenges and celebrating the small victories, as well as the big ones. your leadership philosophy? You do that by celebrating diversity – which makes you much more effective at solving problems and delivering What I coach and counsel a lot of our employees on is for customers. And you need to be visible; you need to what we call ownership culture. I want them to be part of be out there and you need to be called on things if you’re owning the company, even if it’s just one share of stock not walking the talk. Communication is irreplaceable.

www.ceoforum.ceo The CEO Forum 11 Judy Marks CEO Siemens USA

“What I coach and counsel a lot of our employees very few women CEOs in America. What is your on is what we call ownership culture. I want take on that? them to be part of owning the company, even if I can only speak to the career I’ve had, and I’ve been it’s just one share of stock so they feel like it’s blessed. There have been a lot of challenges, but there their company.” have been a lot of people who believed in me and who gave me every opportunity to succeed, whether that was Any of our employees can reach out to me at any time. at IBM, Lockheed Martin or now, at Siemens. We have a responsibility right now as women leaders and I’ve been What’s #1 on your dashboard when you wake up pretty vocal about this. There’s a group that came before in the morning? me, albeit small, that made it better for my generation. I currently view that as an imperative for me to take a stand Working for a global company, I’m already hearing from and be visible and to make sure that we take advantage Asia and Europe when I wake up in the morning so that’s of 50 percent of the population. Diversity of thought is sort of my first breath! But number one for me when I critical in any organization. We need people who can wake up is how can I make a difference for our employees solve problems and women leaders are an essential part and customers that day. Whether it’s visiting a plant or of that. seeing customers, I am the voice of the company, and it’s essential to lead with ethics and integrity. When people Do you have any advice for women who are execu- see you representing those values and being real, they’re tives in organizations and want to become CEOs? with you. I would offer a few things. Number one: let your perfor- Let’s talk about women in business. There are mance speak for itself. If you look at women leaders today,

12 The CEO Forum www.ceoforum.ceo Judy Marks CEO Siemens USA Judy Marks CEO Siemens USA

Judy Marks and Robert Reiss – Interview aired 6/4/17

Judith F. “Judy” Marks is the CEO of Siemens USA, a global powerhouse focusing on the areas of electrification, automation and digitalization with 50,000 U.S. employees and approximately 60 manufacturing sites. In May 2017, Judy was also appointed CEO of Dresser-Rand, A Siemens Business.

Marks came to Siemens from Lockheed Martin in 2011, and served for over four years as the President and CEO of Siemens Government Technologies (SGT), Inc. delivering Siemens products, services, technologies and solutions to all branches of the U.S. government. In 2015, she took over it isn’t about being a woman, it’s about being a successful the leadership of the Siemens Dresser-Rand integration as leader. a result of the Siemens acquisition of the Houston-based company and was simultaneously appointed as EVP, Global Second is it’s okay to network. Networking is not a bad Solutions, at Dresser-Rand, part of Siemens Power and Gas term. Sponsorship is not a bad word. You need sponsors, Division. Marks oversaw the development and deployment and women in leadership positions have an opportunity to of comprehensive global projects and programs to meet client sponsor tomorrow’s leaders. needs and drive growth in the oil & gas industry.

What is the future of Siemens?

It’s interesting when you work for a company that’s this old and has reinvented itself so many times. We’re now a large business to business, industrial company that is basically marrying technology and hardware with software for the future. The future is very bright for Siemens as we continue to innovate, and we are also seeing the swing from localization to globalization and we need to be pre- pared for the pendulum to continue to swing. It keeps us all on our toes and makes us become better leaders.

It was a pleasure speaking with you.

Thank you, Robert.

www.ceoforum.ceo The CEO Forum 13 Chris Policinski President & CEO Land O’Lakes, Inc.

Robert Reiss: Land O’Lakes is a $13.5 billion com- “When you understand our pany with 10,000 employees and an iconic brand. portfolio, it really goes from farm However, the business model is actually very different than most people realize. to market and we’re experts at Chris Policinski: It isn’t what people think of and showing farmers how to grow that’s kind of the fun part of telling the story of Land O’Lakes. Most people think of us as a butter company, more with less in any climate, so if you ask 100 people, 98 of them would say, “You’re in any soil.” the butter company.” Indeed, that is accurate. We were formed in 1921 by a small group of upper-Midwest dairy farmers who shipped their product to the local town creamery. It was a very high quality product but they couldn’t get it to market profitably. These farmers had a very simple, but powerful idea. One farmer said, “What if we form a marketing company that aggregat- ed our supply and bargained on our behalf with a little more power in the marketplace to get our product to the population centers of New York, Philadelphia and Boston?” The short answer to that simple but powerful strategy: It worked. The product really was better and it took the market by storm.

14 The CEO Forum www.ceoforum.ceo Chris Policinski President & CEO Land O’Lakes, Inc.

“Land O’Lakes is actually a technology company where in addition to not being just a butter company and having three business units, Land O’Lakes Dairy Foods, Purina Animal Feed and WinField United Crop Inputs, a foundation of all our three businesses is what we call ‘marketplace back.’”

Just a couple of years after forming Land O’Lakes, those ogy company where in addition to not being just a butter same farmers said, “That worked. What if we had you company and having three business units, Land O’Lakes aggregate our demand and you bought or did things for Dairy Foods, Purina Animal Feed and WinField United us better, faster or cheaper then we can do as individu- Crop Inputs, a foundation of all our three businesses is als?” We formed a feed company in the mid-1920s and what we call ‘marketplace back.’ We listen to what our then later a crop inputs company: seed, crop protection consumers and customers need first and foremost. On the products, crop nutrient products. If you turn the clock agricultural side of our business, which is two-thirds of forward nearly 100 years, those are our core businesses, our portfolio, most of our competitors are more produc- all a little less than $5 billion in sales. We’re still farm- tion-oriented. They produce and then they sell, and their er-owned and it’s a wonderful portfolio for us, but a little variable is largely price. Our variable is giving consumers different than what most people think of. or customers what they need. In WinField United, what our customers said they needed was the ability to grow As you plan your strategy, as a cooperative, how more food with less input. If you’re a corn grower or a do you involve all the different owners and what soybean grower, that is the ticket to high profitability. is the dynamic? To do that, we test crop data again and again at nearly It is very interesting. There is a lot of mystique to being 200 Answer Plot® sites around the country. We collect a cooperative. The first thing I say to our owners is being data around the variety of crop inputs that a farmer a cooperative is not a strategy. It is a form of ownership. could buy then can tell a farmer what works in their That’s where a lot of member-owned organizations and climate and in their soil for the way they want to farm agricultural cooperatives get in trouble. It is a form of optimally. They get great agronomic advice -- we tell ownership. It is not a business strategy, so we run our them what works. But we’re also able to mix and match business as a business. We benchmark our performance the offerings from all of the vendors that are out there against investor-owned companies in terms of profit- selling seed and crop inputs economically. They get the ability, return on equity and growth. When we do that, crop they need and manage the cost of that crop. our owners will enjoy all the benefits of ownership plus a growing equity stake. They get a handsome dividend We show our agricultural customers how to manage as we have a very high dividend rate. They also have their crops throughout the season through a precision the ability to give us input around what they need done through our governance model, a little more directly than if they weren’t on our board and in our governance “We show our agricultural customers how to structure. That’s been very helpful. manage their crops throughout the season through a precision agriculture toolkit. Our big data plat- In fact, I talked about our three business units and how form gives them information around how to get we got there. It was a result of our owners saying this company could help them with something they needed that crop agronomically and economically just help with, which turned out be a good business idea. right. Then, through a variety of tools, we can monitor the health of that crop as it grows You’ve told me Land O’Lakes is actually a tech- rather than applying all of the crop inputs at nology company. Is this true? the beginning of the year just in case a disease Indeed that’s accurate. Land O’Lakes is actually a technol- or pest comes or it was a wet year.”

www.ceoforum.ceo The CEO Forum 15 Chris Policinski President & CEO Land O’Lakes, Inc.

agriculture toolkit. Our big data platform gives them in- gy company, you’re also somewhat of a manage- formation around how to get that crop agronomically and ment consulting firm. economically just right. Then, through a variety of tools, we can monitor the health of that crop as it grows rather If you strip away what we do in the business I just de- than applying all of the crop inputs at the beginning of the scribed, WinField United, you could look at us as a high- year just in case a disease or pest comes or it was a wet year. end consultant that provides information and has the ability to transfer that information to action on the farm. We bought a French satellite imagery company a few We get paid when we sell a bag of seed or a crop input, years ago that maps the crop’s growth in real time. We but it is a high-end consulting company. For example, compare that against historic images so we can tell when even in our Purina Animal Feed, we’re a different kind a crop is not on track. When we see that, we send in a of feed company. We’re not production-oriented. We team with more sophisticated tools to diagnose that crop think “marketplace back.” We formulate our feed prod- to figure out what’s going on. Then in a very precise way, ucts to build healthier animals. That’s easy to say, but to we essentially write our prescription at that time if it’s sell that as a more expensive product, we have to have needed. Farmers love this because not only do they get the the data that shows a rancher or a dairy producer that it’s agronomic advice of what’s going to work in their climate worth it. For example, young animal feeds, which might and their soil based on our big data platform, they also get be a little more expensive than what they have typically the economic edge of mixing and matching the different used, actually are more economical for their operation. offerings of how to get that crop at the lowest possible cost Again, we use data to prove value. of seed and crop protection. We show them how to use less to get more and that is an ultimate homerun economi- You’re making a real business case for them cally. It’s also a homerun from a sustainability perspective. about how to effectively run their business? Growing more with less, while we call it precision agriculture, is also precision conservation. Absolutely.

What’s really interesting to me is everyone would Do you think other CEOs from different non-com- think of Land O’Lakes as mostly a butter competitive industries could learn from this? pany. However, you said, “No, we actually have our three divisions.” You’re not only a technolo- I do, Robert. The first thing you have to look at is your

Committed to communities where Land O’Lakes, Inc. employees live and work, the Land O’Lakes Foundation donates fresh product like mac and cheese to food banks around the country.

16 The CEO Forum www.ceoforum.ceo Chris Policinski President & CEO Land O’Lakes, Inc.

nesses with a common theme of value-added branding and marketplace-back thinking was a transformation. We had a lot of commodity businesses. We had some branded businesses. We were in many industries. We not only said we’re going to transform our portfolio but we have to transform our culture. This is a different strategy. It required a different structure and different staffing to support with different skills. So we went about that journey. I described the first -- getting focused on what we were good at, the three business units and the philosophy of value-added branding.

The second piece was structure. We came in and said, “We need to structure the company differently and be more of an operating company and less of a holding Land O’Lakes is raising its profile on college campuses while encouraging the next generation to consider a career in agriculture. company.” We pulled up many of the functions that were embedded in the business units and put them at a corporate center, where we got the benefit of scale. We skill set and that’s what we did at Land O’Lakes. A doz- were not just pulling up the shared services or control en years or so ago when I came into this role as CEO, we functions like accounting or IT, which we did and it low- weren’t performing and we had let our portfolio get very, ered our cost, because we eliminated the redundancy. very broad so in a sense we were a holding company. We We improved the quality. had many more businesses than the three that I’m de- scribing to you. We took a step back and we said, “We’re On Glassdoor, you actually achieved a 94, which not performing in aggregate at the level we want. We’re is a great rating for a CEO. What’s the key to your not earning the returns we need. We’re talking more leadership philosophy? about baskets, caps and covenants than we’d like and less about growth.” I happen to believe food and agriculture We said that structure has to have a different kind of staff. is the best growth industry of our generation right now. To be successful in an operating company, this staff has to be a high teaming culture because corporate centers We stepped back, analyzed our portfolio and looked at are serving the units and the sales and marketing units what we were good at and we defined that by where we have to give good information to corporate center. So we were making money. Interestingly, we were making mon- repopulated the company. Half of our 10,000 employ- ey in feed, Purina Feed; crop inputs, WinField United as ees are new to the company in the last five years. To do it is now called; and in our food business. We were mak- that, again, we stepped back and said, “We have to have ing the most money in what represented our most val- a compelling proposition to those employees. What’s our ue-added branded products. So we said, “We still have purpose?” We really landed on something that is powerful this muscle of a marketplace back company – driving for me and for every one of our 10,000 employees. Our insights, consumer-customer insights into innovation.” purpose statement is feeding human progress. That’s where we really turned the corner as a company and that’s the advice I’d give any CEO. “The transformation of Land O’Lakes from being Tell me specifically what you do to build this more of a holding company to one tightly-focused great culture. on three businesses with a common theme of The transformation of Land O’Lakes from being more of value-added branding and marketplace-back a holding company to one tightly-focused on three busi- thinking was a transformation.”

www.ceoforum.ceo The CEO Forum 17 Chris Policinski President & CEO Land O’Lakes, Inc.

Now, you might think for a butter company that’s an and say, “That didn’t go so well. What can we do better odd statement. When you understand our portfolio, it next time?” really goes from farm to market and we’re experts at showing farmers how to grow more with less in any cli- I tire of talking about those expectations, but I talk about mate, in any soil. We have this great market-sensing tool them at every meeting because that’s what shapes the in our food business that allows us to aim that business. culture. Culture is a mysterious word. Culture is nothing Frankly, purpose has been even more important than I more than behaviors repeated over and over again by an thought it would be. engaged workforce and we have to keep reminding them of what behaviors we want to see. The second thing is discipline in the manner which we execute. We have four leadership expectations at every Let’s talk butter. I love butter, but isn’t it unhealthy? meeting with our employees. We hold our big group meetings twice a year, but I hold a breakfast meeting Butter is actually healthier than you may realize. The with small groups of employees every week and I talk emerging discussion around the science of food has about our four expectations, first of which is deliver removed products like butter that contain saturated fat from sults. We have to figure out through good and bad times a category that was viewed as less healthy to a category how we’re going to deliver results. I’m proud to say that that’s today viewed as more healthy. That is in fact fueling over the last decade, we have doubled the size of the a little bit of a resurgence of butter. The discussion of fats company. We’ve improved our return on equity to 20%. and oil has turned a little bit more to focus on partially hy- Every year that journey has set a high water mark and drogenated oils as being less healthy manmade oils versus that is to deliver results. saturated fat, which is naturally occurring.

The second expectation is to shape the future. We’re not When we manage our butter portfolio, we try and offer a here to just tend to the business; we have to invent the fu- variety of product in that entire spread range. We would ture. There is no better demonstration of that than how have traditional butter, salted and unsalted, salted in sticks we’re transforming our business and crop inputs into a for folks who grew up with sticks and love them or our bak- big data company. The third expectation is mobilize tal- ers who really need a certain performance characteristic. ent. Land O’Lakes, and I think a lot of organizations like us, always had a reputation as being a good place We also have a range of spreadable butter products, to work with nice people. We have to mobilize talent. which are really combination products. There are spreads We want people who work here to resonate with our that have a larger percentage of butter, but they also have purpose, that understand the high teaming environment other ingredients like canola oil or olive oil that offer a and that really love this business. How we do that? Ev- different health profile. We also have light spreadable erybody has a job in mobilizing talent. butter with canola oil that offers a health profile of half of the fat, half of the calories for consumers who are “I’m proud to say that over the last decade, we have interested in that aspect. Butter really is healthier than it doubled the size of the company.” was viewed a number of years ago. So, we try and offer a range of products that fit the profile of what consumers The last is to act with integrity. There is a baseline and I are looking for. laugh a little bit because our HR group said, “We don’t need that anymore.” I thought, “You know, you’re right, What is the future for Land O’Lakes? in terms of ‘don’t cheat’ or ‘don’t cut corners and end up on the front page of the newspaper,’ but we’re not The future is really bright. We’ve doubled the company going to get rid of that commitment.” Act with integrity once and we can do it again in less time. That’s not a also means having tough conversations with an employ- tall ambition, it’s an aspiration. I go back to our purpose ee that’s not quite performing where you need them to. which is feeding human progress. We are participating In real time, if we have a high integrity organization, in what I believe is the best growth industry of our gen- we’re going to sit down with an employee and coach him eration. Population is going to go from 7 billion to near-

18 The CEO Forum www.ceoforum.ceo Chris Policinski President & CEO Land O’Lakes, Inc.

“We’re not here to just tend to the business; we have to invent the future. There is no better demonstr - ation of that than how we’re transforming our business and crop inputs into a big data company.”

ly 10 billion by mid-2050. It’s about a 40% increase in population. Great news -- there’s a middle-class emerging, primarily in Asia and in Africa. The first thing that happens when a middle-class emerges, they improve their diet. Estimates suggest we’ll need to increase food production by 70% between now and 2050. We’re going to have to do that with limited resources and only 12% more arable land - half of which can be brought into production realistically.

That’s where your precision agriculture comes in.

That’s it. We are well-positioned to show farmers how Chris Policinski and Robert Reiss – Interview aired: 8/6/2017 to grow more with less, to show those involved in animal agriculture how to build better, healthier animals and to grow more with less. Also, to use our consumer group to Chris Policinski has more than 35 years of experience in the sense what the marketplace needs and aim that part of food industry. He joined Land O’Lakes, Inc., in 1997 and our business at the most attractive opportunity. We are was appointed president and CEO in 2005. very well-positioned to double our company again in the next few years. Prior to joining Land O’Lakes, he held leadership positions with Kraft General Foods, Bristol-Myers Squibb and The Chris, a pleasure having you on The CEO Forum. Pillsbury Company. He serves on the board of several industry groups, including the Grocery Manufacturers Associ- Robert, it’s my pleasure to be here. Thank you. ation (as chairman), the Innovation Center for U.S. Dairy (as chairman), the U.S. Global Leadership Coalition and the National Council of Farmer Cooperatives, and is involved in local community boards including as a Trustee of the Uni- versity of Minnesota Foundation.

Chris is a lead director of the boards of Xcel Energy and Hormel Foods. Chris earned his MBA from New York Uni- versity and his undergraduate degree from the University of Notre Dame.

Chris Policinski joined former U.S. Secretary of Agriculture Tom Vilsack, owner of Fair Oaks Farms Mike McCloskey and COO of WinField United Mike Vande Logt in Fair Oaks, Indiana for the grand opening of the WinField Crop Adventure at Fair Oaks Farms, an exhibit for people to explore the science and technology behind modern agriculture.

www.ceoforum.ceo The CEO Forum 19 CEO Roundtable Women Leaders From Success To Significance

Aristotle incorrectly claimed that women had fewer teeth Robert Reiss: What key concept summarizes the than the 32 men have. Just as it amazingly took over a essence of what drives you? thousand years to prove Aristotle’s claim wrong, one of America’s greatest opportunities for growth has been hid- Cindi Bigelow: I just don’t know how to compromise on den in plain sight. anything. You don’t have the luxury of a bad day, and you can never compromise because no matter how busy you After interviewing 750 top CEOs, I’ve recognized that are, no matter what comes across your desk, you are the women are often better at seeing synergies between busi- final pass. So never compromise. nesses, and yet today only 32 of Fortune 500 CEOs are women. Henrietta Fore: I believe it is not only important what you do in life, but how you do it. So, I believe that being A few years ago I shared my personal goal to have 50 For- kind, compassionate, and respectful to people at every lev- tune 500 women CEOs, which frankly is still only 10%, but el in a company or a town or a society is of critical impor- would be a smart first step towards elevating the American tance in how we work. economy and society. In an effort to advance dialogue on success and advice to women, on September 18, 2017 I Sharon Prince: What’s been essential to me is creating moderated a discussion of six exceptional women leaders: new outcomes by looking forward. What drives me is working with an innovative, formidable team, and seeing • Cindi Bigelow, CEO, Bigelow Tea these new outcomes realized.

• Henrietta Fore, Chairman and CEO, Holsman Deanna Mulligan: Be values driven. If you have a team International that has a coherent set of values that everyone subscribes to and you put a goal out there that’s in line with the val- • Kate Gutmann, Chief Sales and Solutions Officer; ues, I think you can do anything. Without that, it’s pretty SVP The UPS Store; UPS Capital, UPS hard. Without being values driven, you fall back to being financially driven. • Shelly Lazarus, Chairman Emeritus, Ogilvy & Mather Shelly Lazarus: There is a lot to be said for what I’d call • Deanna Mulligan, President and Chief Executive authenticity. It’s being who you are, doing things on your Officer, The Guardian Life Insurance Company own terms, being comfortable in your own skin and being of America willing to go forward knowing that not everything you do will necessarily be popular, but it will be true to you. • Sharon Prince, Chair of the Board, President and Co-Founder, Grace Farms Foundation Kate Gutmann: For me, it’s problem solving. It is the,

20 The CEO Forum www.ceoforum.ceo Carolann Grieve, Senior Family Wealth Advisor, GenSpring Family Offices, Deanna Mulligan, President and Chief Executive Officer, The Guardian Life Insurance Company of America, Sharon Prince, Chair of the Board, President and Co-Founder, Grace Farms Foundation, Robert Reiss, Henrietta Fore, Chairman and CEO, Holsman International, Shelly Lazarus, Chairman Emeritus, Ogilvy & Mather, Cindi Bigelow, CEO, Bigelow Tea, Kate Gutmann, Chief Sales and Solutions Officer; SVP The UPS Store; UPS Capital, UPS.

“If it can be written, it can be solved,” and that’s just the I had fallen in love with UPS culture and people which way my mind has always worked. helped me through the tough days. I always kept my nose down and did my job, and always made sure I had career Robert Reiss: Talk about success … path discussions along the way.

Shelly Lazarus: I never had a career plan. I just loved Cindi Bigelow: I’ve always loved work and getting things what I was doing and I just wanted to do more and more right to the best of my ability. Just because you’re a female of it. It never felt like work to me. I was having the most (the same applies to males) doesn’t mean you know how to fun with the most interesting people. I was intellectually “run a business” but I think we do, in general, have a spe- challenged. And so I was oblivious to any kind of con- cific touch. I think women inherently know that you need scious career path, and I was always surprised when I was to look at business holistically. Which includes ensuring promoted … always. Someone would walk into my office you are also giving back to the community. and throw another title on my head and I’d go, “Okay, sure. Now, can I get back to work?” Henrietta Fore: Across all of my various roles in life -- from leading manufacturing and investment companies Deanna Mulligan: I think it’s been focusing on things to serving the country as head of management for the that are personally relevant and meaningful for me, which State Department, as head of USAID, and head of the is not often the advice people get. So, I’ve never focused U.S. Mint, to serving on numerous for-profit and nonprof- on the position, how much it paid. I think is this is some- it boards -- I have sought to stay true to my core beliefs. thing where I feel I can make a distinctive impact in soci- I believe deeply that opportunity, diversity, equality and ety, where I can add something that someone else can’t? inclusion are essential in an organization and in the coun- Is it interesting and is it meaningful? try; that these things are critical not only for success but also for the development of human progress. An organi- Kate Gutmann: I was raised by two working parents zation cannot be its best without the best ideas, without and I just didn’t understand the concept of not being giv- the best working environment. How we treat each other is en the same opportunity, just because I was a woman. So important. How we include each other’s ideas is import- when I started 27 years ago, I just ploughed ahead and ant. So if you go to a core belief system that begins with made sure that I wasn’t just at the table but I had a voice integrity, includes hard work, includes setting high lofty at the table, and have enjoyed it and contributed. Now goals that inspire people so that the whole team wants to

www.ceoforum.ceo The CEO Forum 21 CEO Roundtable Women Leaders

Carolann Grieve, Henrietta Fore.

Sharon Prince

Deanna Mulligan

achieve it and are proud of achieving it, that encourag- at work or at home. Get done what you can get done so es creativity, that encourages the hiring, the training, the you can get home to your family and really focus on them. promotion, and the mentoring of a diverse and excellent Also, push yourselves out of your comfort zone. Say yes to workforce, then you have a team. And most endeavors in opportunity even when you’re uncertain. Believe in who life are team sports. you will become to help you bridge from who you are at that moment. Sharon Prince: You’ve all joined existing companies. I started with a clean slate to think about creating a new Deanna Mulligan: I would say to young women, never kind of place, which became Grace Farms, a cultural and give up. If there’s something you want and if you want community center in Connecticut. We established a set of to combine a career and family, if you want to stay home initiatives that could advance good in the world, through with your family but you don’t think you can do it, you our core values of grace, peace and excellence. One of don’t think you can afford it, you think if you do it, you the things we’re doing is working to disrupt modern day can’t come back. Never give up because you may accom- slavery, through convening multi-sector experts, helping to plish more than you initially thought possible. pass legislation and initializing a global media campaign to bring awareness to the most significant humanitarian Shelly Lazarus: I always say, first, become indispens- issue of our time. able then tell them what you need. Along the way you will have many choices. Your choices need to be conscious. Robert Reiss: What advice do you have for women? You can’t let other people push you into a place that they think you should be. It’s your choice on your terms and Kate Gutmann: One of the ways I think for women to then you have to be comfortable with your choices. And be successful is being in the moment every time, whether from an employer perspective, you also need to challenge

22 The CEO Forum www.ceoforum.ceo Carolann Grieve, Henrietta Fore. Kate Gutmann

Shelly Lazarus, Cindi Bigelow

Carolann Grieve, Deanna Mulligan, Sharon Prince, Molly Reiss, Robert Reiss, Shelly Lazarus, Cindi Bigelow, Henrietta Fore, Kate Gutmann

people who might not feel that they’re quite ready family, company, community, country and world. for the next step, but you feel they have the potential. Pushing people is a good thing. Sharon Prince: Women should think less of the “or” and more of the “and.” I’d advise women to move ahead Cindi Bigelow: It is very important that you do not even when you’re not 100% ready. Don’t just trust the ex- define yourself as a woman. You need to have the perts. Test your own thinking and ask a lot of questions. confidence that within a very short period of time, Questions build engagement. So when you’re asked if your talent will speak for itself and those typical defi- you’re ready to do something, chances are you’ll never be nitions go away. Your sex, your color, your look, your 100% ready, just take it on. You can use what you have to religion fade away and they see the real you because succeed. You always have something to offer. your true skill sets will and do become evident. Al- ways push to be the best at being you, and all the …In summary, this meeting emerged from a conversation other stuff will disappear. I had months back with Carolann Grieve, senior family wealth advisor for GenSpring Family Offices, who shared, Henrietta Fore: Know that your life and career “I have found highly successful women are often more in- will have various seasons, and that you can always clined to give back to the global community and society. be bold and aspirational, no matter what the season. To them, it’s not just about profit, it’s about people. ” There are times when you simply have no time and so you choose a smaller passion. And then there are That comment inspired me to think about what I could times when you have more time and you can choose do to open the door of opportunity to help more wom- a much larger passion. No matter what the season, en achieve success and significance and build a stronger focus on your impact for the good, and for creating America. success not only for yourself, but for others in your

www.ceoforum.ceo The CEO Forum 23 Marc Kidd CEO Captivate

Robert Reiss: Captivate has a unique position, “We change the content every 15 dominating elevator programming across 10,000 seconds and we’re exploring a screens in the U.S. and reaching over 10 million people. Talk about your model. future rotation that may be closer Marc Kidd: The Captivate model is to bring life to work to six seconds.” for upscale business professionals by connecting them to the world outside their office through relevant news, information and entertainment that adds value to their What was your most memorable survival job? workday. Working in Harrods’ packing department in the ’70s How do you determine content? when I was a student for no money a week, packing up Our team of editors work with over 150 world-class con- very expensive pieces of elegant crockery to be sent to tent partners to program the network according to the very exotic places. time of day, market and viewers’ interest. Each quarter we survey over 6,000 professionals in our buildings via Office Pulse (our proprietary panel) to gather feedback How do you typically prepare for an audition? on previous stories published and we improve our edito- rial calendar accordingly.

With 55% of class A office buildings in New York City for example, how do you determine where specific content and advertising goes?

24 The CEO Forum www.ceoforum.ceo Marc Kidd CEO Captivate

“It’s a very captive audience: you have a chance to be in the elevator with fellow CEOs, marketing and business professionals. We can get really specific and target the advertising message to the latitude and longitude of the building, based on the type of companies that are located there.”

We produce the content specific to the market and ad- and understood that if there was something for people to vertising can be targeted to the individual building. Each focus on, they would immediately look at it. According building has its own unique content and advertising mix to Nielsen, 94% of people that get in an elevator with that is updated daily by an algorithm unique to our net- Captivate will look at the screen and 91% enjoy watching. work. Each day that data is transferred to our screens according to the latitude and longitude of the building. People always say, “But aren’t you concerned about cell phone usage?” and I reply, “Not at all.” All the informa- You have top name advertisers like Amazon and tion you could ever want is in your hand with a cell phone, IBM. What is the value proposition to advertisers? but when you get into an elevator, at times it doesn’t work. The elevators are moving vaults because of the way The value proposition is we are reaching a light TV view- they’re constructed and modern buildings are built with ing audience at work where they’re spending more time transacting and living their lives. It’s a very captive audi- “We know who 80% to 90% of all of our ten- ence: you have a chance to be in the elevator with fellow CEOs, marketing and business professionals. We can get ants are and which brands are headquartered in really specific and target the advertising message to the our buildings. We’re also Nielsen rated and avail- latitude and longitude of the building, based on the type able for media comparison in Nielsen Fusion.” of companies that are located there.

How would you know that there are millennials in construction techniques that make it almost impenetra- a specific building? ble. You can get cell signals in some if there’s a communication line, but we’ve developed Captivate Mobile to Research -- we have tons and tons of research. We com- retarget our viewers in their office and provide multiple mission data providers like Hoovers and Infogroup for touchpoints for advertisers to engage this on-the-go au- up-to-date reporting as well as consistently communicate dience throughout their path to purchase. That has been with our Office Pulse panel who are verified tenants in very effective for us. our buildings. This allows us to know who 80% to 90% of all of our tenants are and which brands are headquar- Let’s talk the other side of the equation which are tered in our buildings. We’re also Nielsen rated and avail- the real estate companies. able for media comparison in Nielsen Fusion. Nothing we do is done casually and without attribution. They are our first customers. The commercial real estate community has allowed us to be in business for 20 years. What if elevator rides are short? We focus on them and try to support their business objec- tives with top of the line hardware and software products Our programming model is based on a 15-second inter- for their communal spaces. action. We change the content every 15 seconds and we’re exploring a future rotation that may be closer to six sec- What the research says and we have nearly 10 years of onds. While the ride is short, the founders of Captivate re- data to reference, is if Captivate is installed in your build- alized the elevator environment is an extremely awkward ing, you have higher tenant satisfaction levels. Tenants are social space. Without Captivate, you will likely look at your happier in the Captivate office buildings by an average of feet to avoid eye contact. However, our founders decided about 40%.

www.ceoforum.ceo The CEO Forum 25 Marc Kidd CEO Captivate

“94% of people that get in an elevator with Captivate will look at the screen and 91% enjoy watching.” 40% higher customer satisfaction? I worked in college boards and for a company that was the largest television production partner for ESPN. What People that are in Captivate buildings say they have a I discovered when I started looking at Captivate is they higher satisfaction level than if they’re not in a Captivate reached more people in the daytime than we ever reached building, and I’ll give you a great story. When I was ap- on any of our shows in primetime. I started looking at proached with the opportunity to become CEO, my very which national networks you would use to reach business first reaction was, “Who cares about elevator advertising professionals. When you look at the aggregate numbers, and why would anyone pay attention?” I was then in a they’re not very big. Captivate reaches over 10 million discussion with my son, Seth, who at the time was 27 viewers every month and two-and-a-half million people and living in Chicago. I explained to him that I had been every single day. In my mind, this was a television net- approached with this opportunity. Unprompted he says, work in office buildings, and when I started looking at “Dad, are you talking about Captivate?” I said, “How do buying consumptions, I found more people were making you know the name?” He said, “It’s in my building. It’s purchases online between 9AM and 5PM than they were been in the two buildings that I’ve worked in.” I asked between 5PM and 9PM. him, “What do you think about it?” He said, “I like it. It provides information that I didn’t know and always has My view was this was a fabulous opportunity to reinvent tidbits that I can use in my daily life.” I asked him to name the Captivate messaging, branding and culture. five advertisers and he could. Let’s talk about 2013 when you became CEO and All of a sudden I’m saying to myself, “Well, maybe I the challenges you were facing and how you over- should pay attention to this thing.” If a 27-year-old in a came them. top market like Chicago knew the brand, then I thought there really must be something here. I had been in the The biggest challenge we were facing was how to change media business for almost 30 years before I took this job. the culture and create a sense of urgency for partner re-

26 The CEO Forum www.ceoforum.ceo Marc Kidd CEO Captivate

quests. Captivate had been a small part of a big public “Tenants are happier in the Captivate office company so the brand didn’t receive a great deal of attention. buildings by an average of about 40%.”

When we changed the culture, we focused on the employ- What are the keys to successful customer experience? ees and laid out a vision for their professional future because growing companies create opportunities for upward When I came in, I met with several customers on the ad- mobility. We put a straight-forward, easy-to-follow comp vertising side because the first thing you have to do is lis- plan in place and encouraged a “win” mentality compa- ten. What I found was they weren’t happy with the sales ny-wide. force. So, we now instill in our sales team not to waste people’s time. To listen to what they need and only offer We also changed the comp structure for our salespeople a solution if we’re capable of doing that. Captivate is not and introduced a profit sharing plan for all employees. for everybody, but for those people that it does make sense We explained that we make revenue from our relation- for, we work hard because we want to develop long-term ships with the real estate community and the advertising partnerships. We want to be in business with brands for marketplace. We organized the whole company in sup- a lifetime. That’s really the objective here -- to create an port of those businesses and that made the difference. institutional relationship between Captivate and the companies we do business with. And for those customers, we Let’s talk leadership. Describe your leadership develop customizable solutions to reach their business ob- philosophy. jectives year-over-year versus a one-time buy.

My leadership philosophy is really to empower the em- If you had a mulligan in life, something you could ployee base. We focus on hiring diverse individuals who do over, what would that be? reflect the audience we deliver and encourage them to evolve their own brands inside the Captivate brand. Since this was my first time as a CEO, the one thing I’ve

Captivate 20th Anniversary Conference, Eastern Team named Region of the Year.

www.ceoforum.ceo The CEO Forum 27 Marc Kidd CEO Captivate

“My dad taught me that you don’t treat every- The most profound thing that I’ve seen is artificial intelligence voice technology, for example things like Alexa and one the same but you treat everyone fairly.” Siri really coming into mainstream. Over the next five years or so, you’re going to see that happen a lot and it’s learned is I would have come into this business with a going to come into everyone’s business at a certain level. I more complete team. I came in by myself, and therefore can see coming into office buildings and instead of having needed to really understand and make quick judgments a directory that you touch, you’ll be able to simply ask the on what people we could keep and those we could not. At directory and it’ll give you the information that you seek. the time I came in, I knew the things that I was not good We’re experimenting with voice, facial recognition and all at. I recruited people that would complement me, but if types of technology in our lane today. This allows us to I had all those people when I came in on day one versus have a better understanding of our audience and what having to assemble the team over what took probably six adds value to their day. In turn, we can also help property months to a year, I would have been further ahead in the owners and advertisers reach this audience in an impact- process. ful way to make a difference in their business.

Tying into that, if there was a challenge you had in Final question. Your dad, Roy Kidd, is in the col- life, work or personal life that you overcame and lege football Hall of Fame as a coach with over a learned a lesson from, what would that be? .700 winning percentage and even has a stadium named after him. Talk about your dad, the influ- Never give up. I learned that from watching my dad coach ence he was to you and what you’ve really learned on the football field. Similar to sports is in business you from him. will get knocked down but you can never doubt yourself and you can never, ever give up. You have to continue to I grew up on a college campus. I learned about life on stay true to what you believe in and to your values. If you a football field and in locker rooms. I remember having do that, good things will happen. That’s what we’re trying distinct conversations with him. One in particular was on to do here. a blustery day. It was cold and rainy, and I said to him, “What are you going to do at the flip of the coin in these Talk about technology today and tomorrow. weather conditions?” He said, “You know Marc, I don’t

Captivate Summer 2017 Outing

28 The CEO Forum www.ceoforum.ceo Marc Kidd CEO Captivate

The Kidd Family with photo of Roy Kidd in background. Marc Kidd and Robert Reiss – Interview aired: 8/20/2017 worry about stuff like that. We can’t control the weather. Throughout his 30-year career, Marc has demonstrated success All I worry about is what we can control and react to what as a marketing, media & entertainment executive. As a sales happens.” That made an impact on me. leader at organizations such as Host Communications, Winner- comm, and Outdoor Channel, he has developed communication Another thing my dad taught me is that you don’t treat platforms that provide advertisers the opportunity to connect with everyone the same but you treat everyone fairly. We would engaged consumers via branded content that builds market share get into discussions about how do you treat a running and sales. back who is a superstar versus someone that may just be a blocking and tackling athlete. What are the things that Marc’s creative passion and enthusiasm to help companies reach you do to motivate them? He taught me that you have to high value consumers on the go, combined with his in-depth sales understand what makes everybody tick. Some people you knowledge, drive Captivate’s ongoing business strategies. have to love and hug, others you have to challenge and you have to understand that nuance when you’re working with people. You have to create an environment of ac- countability and also celebrate their successes.

Finally, the simplest thing that my dad taught me was every day when practice would start, the first thing they would do is go out and do the center quarterback exchange, from the very first practice in the spring to the very last practice in the fall. I asked him, “Why did you do that?” He responded, “If you can’t get the center quarterback exchange, you can’t get anything done. So you always stay focused on the fundamentals and everything else will start to take care of themselves.”

On that inspirational note, it’s a pleasure having you on The CEO Forum.

It’s great to be here, and I really appreciate the opportunity. Thank you very much.

www.ceoforum.ceo The CEO Forum 29 Judith E. Glaser CEO Benchmark Communications, Inc.

Robert Reiss: You have had the opportunity to “When CEOs use pull conversations, work personally with hundreds of the top CEOs. they dramatically elevate wisdom Are there common challenges CEOs face when throughout the organization.” they first come in and try to change a culture? Judith Glaser: Many new CEOs come in and they think, “I am the CEO now, and I need to take charge.” When they start out with a strong ‘push style’ of leadership, they run into unintended consequences. This is what happens with about 60% of the newly appointed CEOs. They keep thinking, “It’s what I know. This is going to make the difference, so I have to make sure that I share everything I know with everybody – I have to have a vision that’s strong,” which we know is true, but then they make the vision and their knowledge about the business the most important part of what they give to employees.

But that sounds good. What’s wrong with that?

On the surface it makes sense to everybody of course, but that’s what I call a push strategy, which does not develop

30 The CEO Forum www.ceoforum.ceo Judith E. Glaser CEO Benchmark Communications, Inc. Judith E. Glaser CEO Benchmark Communications, Inc.

the organization’s intelligence. When CEOs use pull con- whole company during that time. What he did is he fortu- versations, they dramatically elevate wisdom throughout nately looked at the marketing data and realized that hair the organization. Push is telling people what to think, Pull color is what people wanted, not hair dye, so we successful- is developing people’s thinking. What creates great com- ly launched a company-wide transformation to hair color. panies, is when leaders engage their employees to think But the question is why did this transformation become so ‘with them’ about the key challenges facing the company, successful? In seven years, Clairol went from $250 million and then really listening to connect to their ideas. This to being puchased by P&G for $4.95 billion. You know approach elevates the Conversational Intelligence in the companies, you know leaders, you know transformation. whole company. The more you pull, the more employ- It usually takes a lot longer to go from the $250 million to ees learn because they love sharing what they know. They billions and also being purchased by Procter & Gamble for love contributing. They love being part of teams. So many that price. It is unbelievable what he was able to. things that we think are not true are true about employees and the leaders that know those secrets have the secrets for Here is the story that is so fascinating. His head of sales success, everything changes and exponential growth occurs said, “Hey, I know how we’re going to make this trans- every single time. formation. I’ve already figured it out. All you have to do is put me in front of the team, I’ll tell them how to do it What is an example of a CEO who really got and they’ll be onboard. No problem. Everything is great.” transformation of culture right? Steve came to me and he said, “We can’t do it that way. We have an entire company all over the United States. We Clairol was a hair dye company. People put dye on their can’t have somebody just telling people what to do and hair back in the 1960s up through the late 1990s. Steve assuming that it’s going to work.” Sadove became the CEO of Clairol and he wasn’t even sure the company was going to survive. His challenge was Steve had that bright insight to engage, to involve and to to decide to either get out of the business, or reinvent the innovate. He had me bring the vice president in front of a business. I was brought in as a consultant to work with the camera, and instead of having him tell people what to do,

www.ceoforum.ceo The CEO Forum 31 Judith E. Glaser CEO Benchmark Communications, Inc.

I used my pull strategy with this vice president and asked “What’s the difference between conversations and him, “What are the things that you have been thinking about that might be important for all of us to think about communication. People use the words inter- together?” He was thinking about things alone, and want- changeably but they’re not.” ed to tell his strategies to others. we have an opportunity. If you need lots of help from oth- I got him to share the big questions that were on his ers, you chart a red mark, and you will also get help from mind and we captured that as the beginning of what I your peers. If you need moderate help, you chart a yellow, called “The Clairol News Network” which became one and if you’re doing great, you chart a green.” of the vehicles that I designed to involve all the people in the company in pulling their success stories, pulling their He brought everybody together and said, “Let me see best ideas and sharing them with the whole company. your charts on how you are doing,” and everybody was Nobody had ever done this before. We literally created green. He said, “This is fascinating. But we all now know a news network! our forecast for profits this year is a $17B loss!” It’s all about people working together on a compelling vision I produced videotapes regularly with Steve and with his with a comprehensive strategy using a positive, relentless executive team, but most importantly with all of his reps implementation process with trust, transparency, humil- around the country who were bringing their new products ity, love, and service! out into the marketplace and experiencing amazing success. They became the storytellers creating the future of But everyone is giving green. There must be some what Clairol became. disconnect.

What’s an example of a CEO who did push instead Yes, there’s something that’s not working. He didn’t say, of pull communications? “You’re lying.” Nothing like that. He just said, “That’s fascinating. Okay, well let’s talk about what projects peo- What cascaded is the enthusiasm for people sharing, for ple are working on and even learn from each other.” people learning together. It’s creating these beautiful learn- He was so non-judgmental – he removed the judgment ing environments where peoples’ conversations became and he brought out people into the room to begin to feel innovative and transformative. They weren’t prescriptive comfortable saying, “I need some help.” It’s the hardest and that’s the problem. In 1999, Jacques Nasser, a highly thing for employees to do. They don’t want to look like regarded and successful Ford executive was promoted to they’re not smart because they were hired for a reason, the role of CEO of Ford. He took his vision around the which is their knowledge. country to tell everybody what the vision would be. Here is his mistake: he then came back three months later to Then, when people speak up and ask for help they real- see what had been done based on his vision. Nobody had ize, “Oh my goodness! Nobody’s making them look stu- done anything and Nasser got frustrated. He said, “Wait pid.” In fact, people are saying, “Thank you for saying a minute. I shared my great vision; everybody was so ex- that because that’s what I was thinking.” In other words, cited. Why aren’t you doing anything?” They said, “Well, it’s sharing the deep thinking that leaders have going on how do you get from this to that? How do you get from in their minds; it’s the conversations we have with our- vision to reality?” selves that need to become public.

He didn’t create the environment for those conversations It’s a great concept. Now, how about in a digital to support the development. He was in, had great ideas, world that is changing everything, how does this was a wonderful person, but the Board said, “He’s out.” pull versus push work for a CEO? Then you have Alan Mulally coming into Ford, who I’ve spent some time with recently to talk about what he did, It turns out that there’s a place in the brain when people and he did the opposite. Again, it was this pull behavior. talk digitally to each other. When we share information He brought the teams together and he said, “You know, digitally, we activate the temporoparietal junction. The

32 The CEO Forum www.ceoforum.ceo Judith E. Glaser CEO Benchmark Communications, Inc. Judith E. Glaser CEO Benchmark Communications, Inc.

more we teach people how to share technologically, the “In the State of Delaware, the government came more our brain starts to get excited and get flooded with dopamine and all these wonderful neurotransmit- to me and said, “We want you to teach our gov- ters that make sharing easy - like oxytocin. ernment of 10,000 officials how to have better conversations.” What is the first step for a CEO to create this pull versus push? their Conversational Intelligence. Use that language so people know it’s okay to do it. It’s not just about the I, it’s It’s to create a trusting environment. about the I’s inside the WE and how they work together to transform and build a vision for transforming the com- And the first step to create a trusting environ- pany. It’s fundamental and when that happens, people say, ment is? “Finally, this is what we needed. This is so much easier when we can be open and sharing, building relationships Transparency. and building visions with you and that we’re not in con- flict. We’re on the same page.” It’s beautiful. And transparency is about talking openly? Talk about your 2014 blockbuster book Conversa- About what’s really happening. tional Intelligence.

What’s your advice to a CEO who wants to trans- I have been writing books in the background, seven in form their organization? total, as well as animated films, and they were part of a trilogy in my mind. It was a trilogy of putting together Get people together to partner and co-create and elevate what’s the difference between conversations and com-

Judith being interviewed by NFL Hall of Fame quarterback, TV and radio host Fran Tarkenton for his radio show, and his live GoBiz TV Show. He was the best interviewer I’ve ever met and worked with!

www.ceoforum.ceo The CEO Forum 33 Judith E. Glaser CEO Benchmark Communications, Inc.

Judith doing one of two keynotes for Baptist Health in Florida. In attendance were the top 2,000 executives and leaders eager to learn C-IQ and bring it to their health care facilities across the US. Fol- lowing the event, the leaders attended C-IQ sessions to learn to take C-IQ to their patients and teams.

“Australia educators want to team up with educators in the U.S. to figure out how to bring conversational intelligence into education starting off when kids first put words into their mouth.”

munication. People use the words interchangeably but world. That’s the beauty of this whole story about conver- they’re not. Conversations are something different; we are sation. It’s really quite fascinating. designed for conversation at the cellular level. If you can believe this, cells talked to each other. They send chemical What’s the story of how your organization has signals to each other allowing them to work together as grown to 2,500 consultants in 75 countries? “good neighbors.” That is the chemistry of conversations at the cellular level. Ben Croft had me speak two years in a row and both of those years, I was the top speaker in the program. Ben Fascinating. But that’s why when you were diag- is from an organization called World Business Executive nosed with stage 4 cancer, you actually solved it Coaching Summit where he had 50 well-known thought because your cells are talking to each other in a leaders speaking, I being one of them. conversation. He came to me and he said, “You have to bring your work That’s right. around the world.” I said, “No, I don’t want to give away my secrets” and he replied, “No, you do want to give them Or am I crazy thinking this? away because then you’ll do more and more and more.” He was right and I was wrong. I was hiding all these great No, that’s exactly right. ideas that I had been writing. I had all sorts of materials

What I was looking at in conversational intelligence is from the cellular level up to the human level, what do “I see conversational intelligence grafting into healthy and unhealthy conversations look like cellularly every part of the world. Every discipline that’s and culturally? By the way, for 10 years my husband’s re- important, whether it’s sports, education or search has been in cancer and he has studied that. That’s how we developed our C-IQ model. We put his work and business, people need to know this because it’s my work together which is why we say co-creating - people transformative. It opens up the gifts that they putting their ideas together, inventing new things in the didn’t know they had.”

34 The CEO Forum www.ceoforum.ceo Judith E. Glaser CEO Benchmark Communications, Inc. Judith E. Glaser CEO Benchmark Communications, Inc.

“I’m not going to focus on dying, I’m going to fo- to figure out how to bring conversational intelligence into education starting off when children first put words into cus on learning what is pancreatic cancer teaching their mouths. my cells and teaching me to do differently.” On that note, what advice do you have to parents that I hadn’t shared. They were my creative ideas that I to get their kids to communicate better? was developing, not sharing. All of the sudden, he had people hear me and we had 12,500 coaches listen, of Asking questions and exposing them to technology. All my which 10% joined up the first year. Then, the next year, little grandchildren sat on my lap between the ages of one even more joined and all of the sudden we have 2,500 and two, learning how to use technology because that’s leaders, and coaches who are studying with me from 75 how their brains are going and that’s how they learn how countries around the world who are bringing this into to communicate and intuit and connect better than I’ve their teams and their business, and into coaching senior seen. I mean they’re brilliant! executives. For instance, in the State of Delaware, the government came to me and said, “We want you to teach our Regarding better conversations, what’s your vision government of 10,000 officials how to have better conver- for the world? sations. Then we’re going to bring it down into our organizations and then we have 300,000 people in Delaware I see conversational intelligence grafting into every part being impacted. We’re going to touch the lives of all these of the world. Every discipline that’s important, whether people through being more conversationally intelligent.” it’s sports, education or business, people need to know this That’s a new research project that we just launched this because it’s transformative. It opens up the gifts that they year along with others. didn’t know they had. Why shouldn’t we become smarter? People used to say when I went to school, “You stop learn- This morning, I talked to Australian educators. Austra- ing when you’re about 19 or 20.” That is not true. Every lian educators want to team up with educators in the U.S. time I heard that, I said, “That’s another thing I have to

Launch of the HSE (Health Services Executive) Program for 100,000 Health Care Executives in Dublin, Ireland. Tony O’Brien, Director General (center) and Rosarii Mannion, National Director for HR (right of Tony) head up the HR part of the program. Judith was the keynote and plans to return for expand- ing the partnership of C-IQ and the “The Compassionate and Effective Leader: Making a Difference” Program.

www.ceoforum.ceo The CEO Forum 35 Judith E. Glaser CEO Benchmark Communications, Inc.

Angela Ahrendts, then CEO of Burberry, receiving the highest award ever given to any executive by Drexel University – for Innovation, Design, and Technology: The Westfall Award. Judith interviewed Angela as part of the all-day event. Judith was Angela’s coach and they worked together at Donna Karan International, Liz Claiborne, Bendels’ and then when she became the CEO of Burberry. Angela’s meteoritic rise – was her talent, wisdom and insights about business and people! transform in the world, these are beliefs that hold us back. that wisdom and it was a brilliant insight. There are more centenarians living now - people that live to be over a hundred years old. They live longer now be- All of a sudden, I started to bring people into my world cause their brains are healthy, their minds are healthy and to help me. My best friend is a doctor and she comes over their conversations are healthy. every day and we talk about what foods to eat, what things I could do differently, what exercise I should be doing. I Let’s go back. You went through an unbelievable time couldn’t eat. I lost 40 pounds when I was going through being diagnosed with stage 4 pancreatic cancer. the first part where I had the big metastatic tumor, but my doctor at Weill-Cornell Presbyterian gave me the right Yes. Metastatic is what it was, meaning that it wasn’t just mix, eight different chemo ingredients together. That in my pancreas; it was in every cell in my body. shrunk the pancreas tumor down to nothing. I have to say it’s an unbelievable story, coupled with having 2,500 But somehow, it’s no longer in your pancreas. coaches and leaders around the world in conversations with me. Knowing that I had this, deciding to do prayers When I was diagnosed, I was told by the doctor I had two for me at nine o’clock every morning in every country was weeks, two months, or two years to live, and the doctor amazing. That, plus the great conversations we were hav- said that in front of my children. We all made a pact as a ing in our webinars, I know that was as important for my family to go onto the web and find out what people were healing as was the chemotherapy. I knew it and I’m writ- doing that would counter everything that the doctor had ing another book about it, book number eight. told us, and we found people that were living 20 and 30 years, so I said, “That’s it. I’m not going to focus on dying, Final question. Let’s now talk about an inspira- I’m going to focus on learning what pancreatic cancer is tion for you, your father. teaching my cells and teaching me to do differently.” All of a sudden, I learned that I was good at helping people Yes. My dad had a speech disorder and was a stutter- learn, but I wasn’t good at taking learnings from people, er, and until he was in 10th grade he didn’t speak very which is what leaders need to do. It’s like my own thing, well. What I learned is that he had a drama teacher who you know, the shoemaker without shoes. I had to listen to coached him how to step into a role in a play and his stut-

36 The CEO Forum www.ceoforum.ceo Judith E. Glaser CEO Benchmark Communications, Inc. Judith E. Glaser CEO Benchmark Communications, Inc.

tering disappeared. As a result, I read my first medical book to find out how his life was changed by her coaching. Years later, he became a dentist and went to the government and said, “I’m want to bring dentistry around the world.” He became the first U.S. dental ambassador, and he lived in 21 countries. He was the first dental ambassador in China, in Saudi Arabia and talked with the Shah of Iran. I watched him use this challenge as a gift and to bring dentistry around the world. He inspired me to study conversations. Where in the brain did that take place? How was his disability healed and his life changed from not able to have conversations to communicating in seven Judith E. Glaser and Robert Reiss. Interview aired: 8/13/2017 different languages in 21 countries? Judith E. Glaser is an Organizational Anthropologist. She is Judith, a pleasure having you on The CEO Forum. one of the most pioneering and innovative change agents, consultants and executive coaches, in the consulting and coaching Robert, great to be here with you. industry and is the world’s leading authority on Conversa- tional Intelligence®, WE-centric Leadership, and Neuro-In- novation, and is a best-selling author of 7 business books including her newest best seller - Conversational Intelligence: How Great Leaders Build Trust and Get Extraordinary Re- sults. Through the application of ‘the Neuroscience of WE®, to business challenges’, Judith shows CEOs and their teams how to elevate levels of engagement, collaboration and innovation to positively impact the bottom line.

Judith is the founder and CEO of Benchmark Communica- tions, Inc., and the Chairman of The Creating WE Institute with over thirty-five years of business experience working with CEOs and their teams in establishing WE-centric cultures poised to strategically handle business challenges in the face of moving targets. Her transformational approaches using neuroscience and anthropology enable leaders to raise their Conver- sational Intelligence® and build agile and higher performing individuals and teams poised to impact the bottom line and top line results in their organizations.

In 2017 Marshall Goldsmith’s Top Coaches Project selected Judith as one of the top 15 Coaches in the world. In 2014 Judith was selected by Ben Croft, CEO of WBECS, to launch Conversational Intelligence® for Coaches, a coaching certification program attended by over 2,500 coaches and executives globally. Judith’s clients include: AIG, Donna Karan International, Citibank, Chase, Verizon, Burberry, Pfizer, Sie- mens Medical, Textron, American Express, KKR, Weil, Got- shal & Manges, Time Inc., Warner Brothers, and News Corp.

www.ceoforum.ceo The CEO Forum 37 Book Review The Amazon Marketplace Dilemma

Sell TO Amazon vs. Sell ON Amazon

Brand executives face two key questions in addressing the Amazon marketplace: 1. Will the brand be sold on the Amazon Marketplace? 2. If yes, then what distribution approach makes the most sense for the brand?

Joseph Hansen and I wrote “The Amazon Marketplace tions, sloppy representation of the brand, and the ease Dilemma” to help brand executives make sense of the with which unknown/unauthorized/undesired sellers challenges, options and tradeoffs of various distribution are able to sell the brand’s product, it is critical for every models successfully used by brands selling on the Ama- brand executive to develop and manage actively an Am- zon marketplace channel. We provide executives with a azon channel strategy. clear path to addressing concerns on how to grow profitably on Amazon while maintaining control of brand For far too many brands, the brand executive team un- content, pricing and distribution. covers a cacophony of unknown resellers offering the brand’s products through sub-optimal product listings at “Unlike traditional sales channels, Amazon prices usually much cheaper than any other sales channel in which the brand so carefully manages its pricing is an open marketplace where multiple and branding. Yet with proper attention and resources, resellers compete for the same customer sale, this channel can be controlled effectively by the brand resulting in aggressive price cutting aimed team to ensure proper branding, consistent pricing, clear identity of distributors/resellers, appropriate catalog seat winning the sale over all other resellers.” lection and inventory levels, as well as advertising driving high-converting product listings. Unlike traditional sales channels, Amazon is an open marketplace where multiple resellers compete for the Solving the “Amazon channel problem” starts with three same customer sale, resulting in aggressive price cutting important activities. First, the brand leadership team aimed at winning the sale over all other resellers. Unless controls distribution not only for Amazon but through- the brand is proactively managing what is happening to out all channels, usually in conjunction with a proper- its product listings, literally any seller can create product ly developed online reseller policy that incorporates listing content that will be used to represent the brand anti-diversion restrictions [Remember – the “Amazon on Amazon – content that may get indexed higher on channel problem” is usually a consequence of an inad- Google than the brand’s own website content. To ad- equately managed / incented sales and distribution ef- dress the ugly challenges of unwanted retail price reduc- fort]. Controlling distribution often means making the

38 The CEO Forum www.ceoforum.ceo choice between selling wholesale to Amazon (first-par- nels, the Amazon channel offers the CEO a significant ty) or becoming the seller of record (third-party). While sales channel (one usually growing faster than most any first-party sales may be a more familiar B2B experience other channel), a channel that can be very effectively used for brands, the third-party sales opportunity typically to experiment and collect consumer data, while offering gives the brand more opportunity to control pricing, in- the brand the opportunity to make retail margins. ventory levels, and catalog selection. Second, the brand leadership team ensures high-quality, accurate product listings are in place to ensure limited customer confusion and superior customer conversion. Even if the brand is not in favor of its product being on the Amazon channel, the open marketplace almost certainly ensures someone will have inventory of the brand available to sell at some point on Amazon. Finally, the brand leadership team rolls out an advertising strategy aimed at both top-funnel and bottom-funnel efforts to drive higher than fair share traffic to the brand’s product listings, while generating superior customer conversion on the now-optimized product listings.

The first step that we recommend a brand’s CEO take to developing a profitable and controlled Amazon channel is to bring together leaders from sales, marketing, distribu- James Thomson is Partner with Buy Box Experts, an agency sup- tion, finance, operations and legal – teams that may need porting online brands. He co-founded PROSPER Show, an educa- reinforcement from the CEO to appreciate that the Ama- tional conference for Amazon sellers. James co-authored “Amazon zon channel is not just another sales channel, but one that Marketplace Dilemma,” a book for executives seeking brand control can highlight the brand company’s own shortcomings. If on Amazon. James is formerly head of Amazon Services, recruiting properly managed in conjunction with other sales chan- 99% of all sellers to Amazon.

www.ceoforum.ceo The CEO Forum 39 Alex Robbio President and Co-founder Belatrix Software

Executives need to create new business strategies to enable them to compete successfully in a world where their customers engage with them and their brands via digital technologies.

Robert Reiss: Belatrix is a true American Dream “For entrepreneurs to jumpstart and story, where you and your family bootstrapped secure major enterprise clients, to become an important American company. Be- fore we tell the story, define what Belatrix does you have to check all the boxes.” differently in the highly competitive technology landscape?

Alex Robbio: While Belatrix plays in the space of Software Outsourcing, we’ve differentiated ourselves by simplifying the usual process of outsourcing, and provide what we call “Innovation Services on Demand.” Specif- ically, we partner with our clients to help them get great digital products to market more quickly, with better quality and at a very competitive cost. In other words, we help our customers create incredible digital experiences.

What is an example of the type of work you do?

Basically what we do at Belatrix is help companies reach their business goals faster, by tapping into our technolog-

40 The CEO Forum www.ceoforum.ceo Alex Robbio President and Co-founder Belatrix Software

ical expertise. We help CEOs get their organization to dition, the individuals at Belatrix are characterized by where they want it to be. being entrepreneurial and creative. They enjoy working on new and innovative projects. Many organizations today are going through a very tough journey of digital transformation. This has become crit- Ultimately it’s about helping CEOs and their organiza- ical for success. What this means is executives need to tions to get to market faster, with better products, at a create new business strategies to enable them to compete lower cost and with less complexity than has traditional- successfully in a world where their customers engage with ly been possible with offshore providers. them and their brands via digital technologies. Give me an example of a client you worked with, However, not every company is ready to achieve digital what was the challenge they faced and how you excellence on its own. That’s where Belatrix comes into helped them overcome that challenge. play. We help organizations become digital by providing expertise in a variety of disciplines such as user experi- One of our clients is the leading provider of Fintech ence, mobility and software development. We simplify solutions worldwide. It has about 1,000 of the larg- the process to become a digital company. er banks in the U.S. using their technology, with over 15,000 global corporate users and millions of end users.

“Executives need to create new business strat- As an aside, the way we got to them, which is a great egies to enable them to compete successfully lesson on the sales process, is through acquisition, where a in a world where their customers engage with lot of our clients are start-ups that we help build great them and their brands via digital technologies.” products for and then they get acquired by larger companies. Some are Fortune 50, Fortune 100 companies, and that means that we’re already there. If we continue doing a good job, Why would this be important to CEOs? they keep us and not only do they keep us, but actually grow.

Organizations cannot ignore the impact of digital any- In that particular example, we engaged with this very more. Leading companies in this new world use new cool start-up that was doing mobile banking solutions. technologies to create powerful experiences that will They were having challenges, scaling up their operations keep customers happy and engaged. And this is no lon- in Silicon Valley. It was too expensive and they couldn’t ger just the case of consumer-focused companies, but find enough people. They tried the traditional Indian also those focused on business-to-business. outsourcing model which didn’t work because the time difference was a killer. They needed to collaborate. But becoming a digital company can be a complex and difficult undertaking. It requires not just a new vision, That’s a good point because of the time differ- but also new skills, processes, culture, and the right ence -- in Argentina you have the same time zone. manpower to do it. What Belatrix does is simplify this journey. You can think of us as plug and play experts Correct. Latin America has a geographic advantage, in digital transformation. By working with us, executives as it’s the same time zone. They said, “We’ve been able don’t need to hire and then train multiple individuals to find great work in other places, but we actually need with differing skill sets. It simplifies management and more innovation, more creative kind of work.” For ex- costs are contained. ample, they would say, “I want people that will push back when needed and we’re not getting that from the The fact that our Delivery Centers are based in Latin existing partners.” America has the tremendous advantage of timezone alignment – that means our people can communicate more easily, and in real-time, with our customers. With “Latin America has a geographic advantage, as today’s speed of business, this is a critical factor. In ad- it’s the same time zone.”

www.ceoforum.ceo The CEO Forum 41 Alex Robbio President and Co-founder Belatrix Software

Belatrix’s offices are located in the modern business district of Buenos Aires, and have a great view of the city.

I knew that was something that we being from Lat- We were able to work through that, and this is actually in America could provide. Latin American technology something that has happened several times. There’s an- workers add additional value because innovation is in our other client in the digital advertising space with a similar DNA, and we repeatedly help clients uncover new and story; we engaged, helped them create a great product, innovative solutions to technology challenges. great acquisition, and we’re still there helping them grow further. Our people are not shy about raising their hands and saying, “You know what? That’s a great idea. But, I’ve done Share the incredible story of how you got start- it that way and it didn’t work that well, so here’s another ed. You’re 20 years old, you already have a child, idea.” And that was kind of new to them. They were used you’re married to a wonderful woman. Talk about to having to throw very detailed requirements over the the challenges you had that built you to come to fence and then not getting any feedback. What they were America to build this company that has superior getting wasn’t exactly what they expected, and wasting value. a lot of time and resources when you’re ramping up a company is bad. If your product is delayed because you’re It’s an unlikely story really because I was a computer going in the wrong direction, that’s also bad. geek growing up. My dad taught me the basics of computers, which I was very interested in. I was like a little We collaborated, they came to market, and they actually engineer when I was a teenager. Then I decided to go started causing a lot of pain to their biggest competitor, into psychology, against my dad’s wishes, and he wasn’t which led them to being acquired. We were so pleased too happy. When I graduated, I had a young child and that we helped this start-up succeed, helped create a great I couldn’t find a job as a psychologist. I wanted to be in product that is used by hundreds of banks, and helped our human resources, but I couldn’t find a job, so I started client get acquired. And we stayed involved. It makes us my own company in Argentina, a small start-up soft- feel great because when clients get acquired, it’s a tough ware company, which didn’t work. Then, I went to work time because what happens is that all of a sudden, you in sales for another software company and I was doing were used to dealing with the CEO or even the owner, the well. I liked that job and I was doing okay. founder, and then the bigger player comes and you have what seems like ten layers on top of the organization you Then I saw the economy was not going well. That’s the were used to working with. beauty of being in sales, as you can see the econotrends

42 The CEO Forum www.ceoforum.ceo Alex Robbio President and Co-founder Belatrix Software Alex Robbio President and Co-founder Belatrix Software

“Latin American technology workers add additional value because innovation is in our DNA, and we repeatedly help clients uncover new and innovative solutions to technology challenges.”

happening. I remember chatting with my wife and saying, “You know, it’s getting harder and harder. Sales are not closing. I’m being pushed back.” Also, I had a very old car that was leaving me stranded all the time.

This doesn’t sound like a good start.

Right. I was able to get a personal loan to buy a new car and I told my wife, “Hey, I got this loan. The organization Great Place to Work recognized Belatrix as the 4th best place to work in I put the money in the bank account. Tomorrow Argentina, and the 12th best place to work in Peru. we’re going to go and see if we can get a car.” What my wife, Carolina, did is she took that money that rants. Then I got a job at a call center and I thought, was to be used to buy a car and instead bought plane “Wow! I’ve done it.” tickets for us to move to the U.S. You’ve arrived. You have a real job. What were you thinking when she did that? Exactly. I had an office where I could sit down and do It was scary. We complement each other quite well be- work, and the great thing about that job was that I had cause even though I’m an entrepreneur, when it comes a lot of down time. Then I realized I wasn’t going to get to my family, I’m very risk-averse. I want my family to a job in sales because I had a strong accent. I said, “I have a very stable life, not having any needs, etc. I knew have to find another way.” That’s when I realized I had it was a huge risk, but she’s always the one that pushes something of value which was my technical knowledge me a little bit to get outside of my comfort zone and then from being a computer geek. stabilize it again. I went back to my books, read up, studied and started A month later, we’re moving to the U.S. and what I did interviewing for developer jobs. In the back of my mind, was I lined up an interview to work for Oracle but be- I always wanted to go back to being an entrepreneur. cause of September 11 they had a hiring freeze. I had a My brother and I started companies when we were very five-year-old, we moved, I had no contacts or money and young. The three of us, along with my dad, have started I started doing odd jobs to put food on the table. other companies, so we were very entrepreneurial, and it’s something I’d always wanted to return to. I knew, Like what kind of odd jobs? though, that I needed support and I needed money. I said, “Okay, I just have to find a job and then we’ll see I cleaned a supermarket and my wife worked at restau- what happens.”

“What my wife, Carolina, did is she took that I found a job and became a developer. It’s kind of second nature to me, so I was pretty good at it. This com- money that was to be used to buy a car and instead pany landed a really big project that they just couldn’t bought plane tickets for us to move to the U.S.” find enough people for. So I said, “You know what? I’ve

www.ceoforum.ceo The CEO Forum 43 Alex Robbio President and Co-founder Belatrix Software

“We were so pleased that we helped this start-up larger companies, and that gained us experience. That got us to see how they work, what they look for, what succeed, helped create a great product that is used kind of requirements they had and it elevated our game by hundreds of banks, and helped our client very quickly. get acquired.” We realized, for example, they needed certain types of had this project with my dad and my brother, a small insurance, they needed certain types of certifications. company in Argentina. We were doing some engineer- For a very small company, we actually got all of those ing work locally. I know a lot people in the space. What if very quickly in our history. For example, we got an ISO we help you?” I convinced him to fly down to Argentina 9000 quality standard certification. We were able to get and that’s how we got started. That was our first client in some of the best insurance you can get in terms of pro- this space and we grew from there, very organic, never fessional liability which was maybe overkill for a com- taking any outside capital. pany our size. That opened a door so that when we got opportunities in the bigger companies, we could actually You bootstrapped everything. You told me your check all the boxes. That’s my expression, for entrepre- dad was actually building the desk with his hands. neurs to jumpstart and secure major enterprise clients, you have to check all the boxes. You learn what they look Correct! Whatever it took... In the early days, in addition for so that when you go through the procurement office, to my dad and brother actually building our first desks you can say, “Yes, yes, yes!” Then it’s only a matter of, to save money, it got to the point where we didn’t have can you actually do the work, and that’s where your ref- money for the first computers, so we convinced our first erences come in. developers to bring their computers. We jokingly say we actually invented the idea of bring your own device. How do you get the references early on?

I was lucky to be able to count on my two great partners, You get the references by doing really good work. The my brother, Federico, and my father, Luis, who despite truth is that even if it’s a small company but they’re pas- their having advanced studies and having come from im- sionate about the work you’ve done for them, they will portant corporate positions were willing to roll up their be a great reference and they will be respected even by a sleeves and do whatever it took to make this succeed. larger player. Something I had to learn and reframe my They both have very interesting personal stories, as well. mind and realize that even if it’s a billion dollar company, or a Fortune 50 company, at the end of the day, it’s a Let’s talk more about how you built Belatrix, and person making decisions and a person relates with a per- were able in the early days to start working with son. So even though they’re referenced by smaller com- Fortune 50 clients. pany, if they’re super passionate about what you’ve done and they’re willing to share that experience very strongly, I wish there was a secret formula. In reality, what hap- it will still count. Everything about growth starts with pened for us is initially, we got the clients that we got, but one idea – great work. we realized very early on what an ideal customer profile was. We realized that we wanted companies whose software wasn’t just a side expense. We wanted companies “In the early days, in addition to my dad and that saw software as an asset – those that actually de- pended on software. We started targeting those compa- brother actually building our first desks to save nies but it was very hard to get to them as a small com- money, it got to the point where we didn’t have pany. At that time, we had no presence in the U.S., so money for the first computers, so we convinced we were going directly from Latin America. The way we our first developers to bring their computers. got the chance to work with those clients was by going through resellers. There were companies that already We jokingly say we actually invented the idea had the approval by the procurement offices of those of bring your own device.”

44 The CEO Forum www.ceoforum.ceo Alex Robbio President and Co-founder Belatrix Software Alex Robbio President and Co-founder Belatrix Software

Give a snapshot of what’s different about your culture.

We started in this very small city in Argentina in early 2002. For talent, we had great schools but we didn’t have experienced people. We realized that we had to re- cruit for potential and train for the technical knowledge. Very early on, we created a group of people dedicated to providing great professional development. What I’m proud of is that most companies put all of their effort into recruitment and in our case, we’d put most of our effort into development. We wanted to create incredible opportunities for professional development. We provide Alex Robbio and Robert Reiss. Interview aired: 8/27/2017 over 120 hours of corporate training in the company annually for each individual. One of Belatrix’s three founders and a member of its Board of Directors, Alex Robbio currently serves as the firm’s President. Our training runs the gamut. It’s from soft skills like Alex has played a pivotal role in transforming Belatrix from a leadership or agile program management to very tech- small Argentinean IT services firm to a specialist global inno- nical topics; the latest technologies, whether it’s artificial vation firm enjoying year over year, double digit growth. In his intelligence, big data and so on. It runs the gamut. capacity as President, Alex drives the firm’s strategic planning efforts. Finally, what advice do you have for entrepreneurs? Prior to Belatrix, Alex held several high-ranking positions at What we’ve realized as a smaller company and family important software companies both in Argentina and the U.S. business is that you have to treat it as if it was a pub- Alex earned a bachelor of science in psychology with honors lic company. What I mean by that is being more formal from National University of San Luis, San Luis, Argentina. than you really need to be with board governance and He has also completed graduate-level programs at Kellogg documentation. PwC has been a great partner to au- School of Business, Harvard, Stanford and MIT. dit everything. It gives you peace of mind. It makes you know that what you’re building is real and solid. As I said Alex lives with his wife and two children in Fort Lauderdale, before, make sure you check all the boxes! Florida. A pleasure having you on The CEO Forum.

Thank you so much. It was a pleasure for me as well.

www.ceoforum.ceo The CEO Forum 45 CEO Roundtable Corporate Ethics

Top CEOs Place High Value On Corporate Ethics And Social Responsibility To Drive Business

By Robert Reiss, The CEO Forum

Remember Gordon Gecko from the movie Wall Street? Dan Amos: “Ethics is a mindset, not an option.” There Little did we know then how closely life could imitate art is no alternative in today’s highly skeptical culture and when the likes of Enron, Bernie Madoff and a worldwide when you do it right, consumers will respond in a posi- financial crisis lambasted the world’s economy a few years tive way. ago. But it also vaulted companies like the Ethisphere In- stitute, which since 2007 has annually compiled a list of Tim Erblich: “Good Ethics is Good Business.” In fact, World’s Most Ethical Companies, into the foreground of there is a growing body of data, including our own, that discussions involving the corporate ecosystem in the Unit- shows that the financial return of ethics (ROE) is signif- ed States and abroad. Today, several studies illustrate the icant. cultural changes that have elevated ethics and corporate social responsibility (CSR) more than ever. Rodney Martin: Ethics is a reflection of our commitment to doing business the right way. We emphasize trust To further explore this, I contacted leaders from various and transparency — and we reward our people based on industries to discuss the state of corporate ethics and re- not only what is achieved, but how it is achieved. sponsibility. Via email, I spoke with: Reiss: What is the relationship between social • Dan Amos, Chairman and CEO, Aflac, 11-time re- corporate responsibility and ethics? cipient of Ethisphere’s World’s Most Ethical Companies award and the leader in voluntary insurance sales at Martin: Corporate responsibility includes key aspects the worksite in the U.S. of a company culture, such as ethics and transparency; diversity, inclusion and equality; environmental sustain- • Timothy Erblich, CEO, Ethisphere Institute, a global ability; governance; and volunteerism and philanthropy. leader in defining and advancing the standards of ethical It has been invaluable in defining and building the char- business practices acter of the Voya brand. Corporate Responsibility, high- lighted by the commitment of our people, demonstrate • Rodney Martin, CEO, Voya Financial, a leading com- the authenticity of our culture — and help to deepen pany that helps Americans plan, invest and protect our relationships in our communities and with all of our their savings; and a 4-time World’s Most Ethical Com- stakeholder groups. panies honoree. Erblich: Corporate Social Responsibility is a critical component of the overall ethics quotient. As is gover- Robert Reiss: What phrase defines ethics and ex- nance culture, transparency, risk management and em- plain why? ployee, customers and community relations. At the same

46 The CEO Forum www.ceoforum.ceo time, company culture, diversity, gender equity, philan- Martin: A culture of ethics and integrity starts with thropy, keeping a healthy workplace environment are all leadership and the example that leaders set for the rest traits of a socially responsible company. It is all com- of the organization — through their actions every day. It bined to build trust. must be part of your core values that serve as the foundation of your ethical culture, your strategies and your Amos: I believe ethics is a subset of corporate social actions — they define who you are. At Voya, one of our responsibility. Ethical companies will always display five values is: “We Do the Right Thing.” Building an strong governance and compliance. Socially responsible ethical culture must be centered on doing the right thing companies are ethical but also understand their overall — in a safe and open environment — where anyone can obligation to make the world a better place. You cannot speak up and identify behaviors that are not aligned with be responsible on one hand and behave unethically on a culture of trust and integrity. the other. Erblich: Empower your managers at the local level as Reiss: What are best practices in building an eth- they provide immediate guidance to employees. In addi- ical culture? tion, building an ethical culture requires:

Amos: Understanding these three concepts will help 1. Commitment: Corporate cultures are not built build an ethical culture: overnight.

1. Your culture begins at the top. Building a culture of 2. A focus on Integrity ethics will not work if leaders are not providing the moral compass. 3. Tone from the top. The c-suite must be all in.

2. Communicate and celebrate responsibility regularly. 4. Measure and communicate results.

3. Understand that you cannot be partially ethical be- 5. Incorporate culture into regular activities and cause that means you are partially unethical. not only during annual survey times.

www.ceoforum.ceo The CEO Forum 47 Forbes Corporate Ethics

See more, do more, experience more!

With Collette’s century of guided touring experience, perfected travel itineraries, and world-class Tour Managers, traveling has never been more fulfilling. Our guided tours to all 7 continents take you to the most awe-inspiring locales to experience the must-see attractions and eat the most delicious cuisine, all while staying at luxury accommodations. Make the most of your travel experience by letting us take care of all the details. 6. Lean on third parties to help alleviate employee con- other industry leaders to see where we measure up. It is cerns over speaking their mind in an open and honest the trust of our stakeholders that enables us to help our fashion. customers to make important financial decisions — and achieve a secure financial future. Reiss: What insights do you have on measuring ethics? In summary, the customer experience is one way to drive business, but on top of that is the affinity that people Amos: First I would stress that you do have to measure, have with your brand. In short, do they like you; do they otherwise you are just guessing. We use our annual sci- respect the work you do for the community and do they entific corporate social responsibility survey to measure believe you play by the rules? Successful companies like what people expect from companies they do business Aflac and Voya have figured out that what used to be with and then we act on that data. We also work with afterthoughts in the business world, are now table stakes Ethisphere and Reputation Institute to validate the di- for any business looking to thrive. rection of our ethics and CSR programs.

Erblich: Measuring ethics is challenging. But you can measure through peer-to-peer analysis and networking.

Another obvious, yet often neglected method is to directly engage with your employees. Our experience shows that companies often focus on measuring broader employee engagement while failing to go deep enough on specific compliance, ethics and values-related topics and risks. Routinely surveying customers, shareholders and employees can also produce insights of how your company is perceived. You can also measure through Robert Reiss founded the company in 2007 with a radio peer-to-peer analysis by joining exclusive networks like show, The CEO Show, which today is nationally syndicated the Ethisphere’s Business Ethics Leadership Alliance on over 25 AM radio stations with 600,000 weekly listeners. (BELA), which focuses on the impact of business ethics. He also is a writer for Forbes.com since 2009 specializing in Reputations and trust are built over time, Martin: transformative CEOs with focus on: the customer experience, but they can be lost in a moment. Our participation in culture and digital transformation. The CEO Forum publishes For reservations, contact your Travel Professional, the Ethisphere Institute’s annual World’s Most Ethical The CEO Forum Magazine, a quarterly received exclusively Companies® process enables us to benchmark Voya with call Collette at 800.528.0351 or visit collette.com by the top 10,000 CEOs in America. CST#2006766-20 UBN#601220855 Nevada Seller of Travel Registration No. 2003-0279

48 The CEO Forum www.ceoforum.ceo See more, do more, experience more!

For reservations, contact your Travel Professional, call Collette at 800.528.0351 or visit collette.com

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www.ceoforum.ceo The CEO Forum 49 Scott McNealy 22 Year CEO Sun Microsystems

Robert Reiss: You were the co-founder and 22- “ In this digital world, CEOs have to year CEO of Sun Microsystems, and most people keep people thinking about getting don’t know what that stands for. retrained every five years.” Scott McNealy: It stands for Stanford University Net- work. It was a spin out from an engineer who was tired of sharing time on a minicomputer so he invented a desktop computer that he could do his engineering work on On whom do you have an acting crush? and connected it to the Stanford University Network, hence the Sun Workstation. Mark Rylance, Cate Blanchett, Meryl Streep, Toby Jones, Adrian Lester. And, of course, Jim Norton. What made Sun the right company at the right time which enabled it to grow so significantly?

What was your most memorable survival job? It was sort of like Uber. Uber didn’t invent anything new, but used the fact that you could know where a phone Working in Harrods’ packing department in the ’70s was, the geo-capabilities, the touch screen, the Cloud ca- when I was a student for no money a week, packing up pabilities, the websites and all the rest of it, and decided to disrupt the whole taxi world. We did something sim- very expensive pieces of elegant crockery to be sent to ilar on the desktop -- we used high-resolution desktops. We gave everybody their own microprocessor instead of a shared one. Costs were down, ethernet had happened, so there was a way to network it and TCP/IP was a new open source protocol that allowed everybody to share files and connect all the rest of it. It’s the confluence of

50 The CEO Forum www.ceoforum.ceo Scott McNealy 22 Year CEO Sun Microsystems

“There is another saying I like about golf: Those who don’t cheat at golf might cheat at life, but those who do cheat at golf will cheat in life. You can definitely learn more about someone from 18 holes of golf than you could learn in any interview.”

a bunch of things we got from the main frame, then the minicomputer and it was time to move to desktop com- puting.

You really had a different background than most people who start a tech company. Other than ethics, are there any other things you could learn about someone’s character from golf? More of a golfer, yes. I was captain on the Harvard Golf Team, which is like being the Florida State Snow Ski You will learn their personality. There is no question that captain. I minored in economics and took two years a missed putt, a great drive or a bet that they win or lose off to play golf and study at Stanford. It was a different will surface their core personality no matter who they background, non-technical, but I had worked in manu- are. They can’t help, but it just surfaces in golf. It’s such a facturing so that was kind of how I got started. My fa- mentally and emotionally embarrassing game that you’ll ther was president of AMF and had run an ad agency, learn about someone very quickly. so I have some pretty good home training in terms of business. There is the saying “the way you do one thing is the way you do everything.” What can people learn from golf that could help them in business? There is another saying I like about golf: Those who don’t cheat at golf might cheat at life, but those who do You can probably learn how to throw a club or tell a cheat at golf will cheat in life. You can definitely learn bad joke, but the most important thing is you can learn more about someone from 18 holes of golf than you about somebody else. You can learn more in a round could learn in any interview. of golf with someone than you can learn anywhere else except maybe living with them for a week or so. For ex- Talk about when you first became CEO. ample, somebody calls me up and asks for a reference on an executive and I started the interview off by saying There are four 27-year-olds that took over the start of “Well, I played golf with them and what they put on the the company and I had three years’ business experience, score card doesn’t resemble anything that happened on which was more than the other three founders com- the golf course.” The interview should have been over. bined, but they were very smart and very intelligent. I If you’re a golfer and you know what I just said, you thought I was smart and I did manufacturing sales for will say “Alright, that’s somebody I’m going to steer clear the first two years, but then the CEO and the president on.” The company ended up hiring him and basically both left on the same day and they asked me to take over blew up within three years of the hiring, although I had temporarily. tried to steer them in the most simple way I know which is telling them that the person doesn’t write down the I didn’t want to lead. I wanted to be number two. I had correct score. seen my dad work hard and I wasn’t going to work that

www.ceoforum.ceo The CEO Forum 51 Scott McNealy 22 Year CEO Sun Microsystems

“I operated with a huge inferiority complex. At times, it was as though I didn’t know what I was going to do so it was going to be very participative, but not a consensus. We were going to delegate and create an architecture for managing and decision making.” hard, so I said “I will do this until we find a real CEO.” There you go, another golf lesson. You have told Long story short, over the next ten months, the company me about leadership and management and ev- got fixed. The product started with very high quality, we eryone here as the new one says, but just walk did some basic management maneuvers and we also had through what the differences in your mind are a new CEO from HP that we were going to bring in. between leadership and management. Kodak, who was our big customer and potential investor, said “No, we won’t invest and we’re not going to buy The first thing you have to do is make sure that you have your stuff if you bring that person in. We know about enough people reporting to you. If you have five peo- him.” They said “We’re going to cancel the big $20 mil- ple reporting to you, you’re going to micro manage. Ask lion investment in Sun.” I got this phone call at 6:00 AM what they’re doing and bother them. If you have 11, 12 one morning, it woke me up and I thought, “Oh, wow!” or 13, you don’t have time to even find out what they’re We had a CEO lined up, we had $20 million lined up, doing or where they’re going. You can set goals and tell we had a big customer lined up and it all went away. everybody to go after them and then bring your team in once every week or two and say, “How’s it going? What We flew in the gentleman from Kodak and an operations do I need to do?” Leadership is asking your direct re- person did the interview. My staff voted 11-0 to keep me ports, “What do I need to do to make your jobs success- as CEO and to not bring in the new person. The gentle- ful?” not “What are you doing to make me successful?” man from Kodak told the board, “Either you keep Scott That’s a very, very different perspective and attitude. in, and we have a five-year veto on him or his replace- ment or we’re not going to invest.” The board folded “If you have five people reporting to you, you’re going very quickly, I went home and said to my mom, “I don’t to micro manage. Ask what they’re doing and even know if I want to this.” She said to me, “Just do it bother them. If you have 11, 12 or 13, you don’t for a year or two.” The rest of history and that’s how I became CEO, purely by accident. I didn’t have any have time to even find out what they’re doing.” vision for being the CEO, I was just trying to save the company at that time. I operated with a huge inferiority Leadership is destroyed by a thousand cuts and so you complex. At times, it was as though I didn’t know what I have to just fundamentally delegate, trust, coach, ask was going to do so it was going to be very participative, questions, all the rest of it -- and I give very few direc- but not a consensus. We were going to delegate and cre- tives. I get the team together and say, “What do you think ate an architecture for managing and decision making. we need to have as a goal? What should be our revenue goals? How much money do we want to make? How I would always threaten with,“Hey, gang. Do you want much money do we need to raise?” You ask those ques- me to make the decision or do you want to make the tions and let the team come to the answer, because then decision?” That was usually a good and effective enough it is their answer as opposed to a person who doesn’t threat for them to make the decisions on their own. It have a clue and isn’t in the business. turns out if you lead people as opposed to not leading, and don’t manage them, they have a ball. People are in- I know you have what you call the Rule of 11. herently responsible if you give them responsibility and it created a very, very nice culture. It was very differ- Very simply, you want a flat architect -- a flat org chart. ent from Steve Jobs or Larry Ellison, Bill Gates or Steve I tell every manager, “You ought to have at least 11 peo- Ballmer and all the rest, but it was effective in its own ple reporting to you. When you add up the total envi- way. There’s more than one way to sink a putt. ronment, there should be no more than 9% managers.

52 The CEO Forum www.ceoforum.ceo Scott McNealy 22 Year CEO Sun Microsystems

Scott and his son Maverick McNealy, the #1 ranked amateur golfer.

The rest ought to be direct contributors to the business.” The only thing that I thought you could do with really It becomes tough too, because people want to become great leaders to develop them was to give them more wis- managers because they can make more money, they feel dom and the way you do that is you give a new job that more powerful, they feel like they’re moving up in the they have no idea how to do, which I call “dunk them organization. Often you will take a great salesperson and under water.” Let them doggy-paddle to the surface and make him a lousy sales manager or you’ll take a great then once they have figured that out, have gotten a cou- engineer and make him a lousy engineering manager. ple of breaths, you take them somewhere else and you You have to be careful how you do that. The other prob- dunk them again in a new job and you can actually ac- lem is when you downsize a company, you ask all of the celerate the process of becoming wise very, very quickly. managers to reduce head count. They cut all the leaves off the tree and they leave the manager trunk with the When I look back on it, I was in eight schools by eighth branches and you end up with a destroyed tree that has grade and maybe that was part of the dunking process no chlorophyll-generating leaves on it and all that is left that helped develop me and made me comfortable with is the bark. It’s a constant pruning of the branches, not change -- okay with the fact when I walk into a room of the people, that you need to focus on. people I don’t know. It’s a very important process, especially nowadays when disruption is coming, and it’s very One of your leadership principles we talked about different given all the technology changes. Humans are in the past is, “Dunk people under the water.” struggling with that a little bit. If you look back anthro- pologically, we didn’t have a lot of change. Things are I was on the board of General Electric when Jack Welch sort of the same generation to generation, even a couple was there and he made a comment that I totally agree hundred years ago. However if you look at the rate and with at this point which is, “You don’t create leaders, pace of change now, it’s pretty stunning and people need you can only identify them.” People are born the way to get used to that. they are. They’re very hard-wired and yes, you can teach them some skills and some tricks and they can get better Talking about change, we are in a volatile digital at it, but some people have managerial courage, some growth path. How do you view this digital market? people have integrity, some people have charisma, some people have the intellect and some small number of peo- You know the phrase “you’re going to get Ubered” is ple have the right combination of all of these to be a pretty accurate. Everybody is getting slapped around by good leader. When you find them, the only thing they’re the disruption that networking causes and there’s a lot lacking typically is wisdom and wisdom is something you of people running around saying there is going to be a get over time and through experience. huge dislocation in jobs. If you think about what could

www.ceoforum.ceo The CEO Forum 53 Scott McNealy 22 Year CEO Sun Microsystems

things. I just like to make things happen and do things. I’m a capitalist.

Maverick, by the way, is the top amateur golfer in America?

Yes, currently. The greatest meritocra- cy in the world is the golf course thing, but I wanted to change advertising. I grew up with my dad as a Group Vice President of North American Mar- keting for American Motors, running the ad agency, and we can never tell whether TV ads work. With Wayin, we wanted to go in and drive digital advertising, but make digital advertising actually work. The first digital ad that AT&T ran in 1994 had a 43% click- through rate. The click-through rates now are less than 1%. 20% of people have ad blockers so that they can’t even happen in transportation with the driverless car and the see ads now and more would have them if they knew Uber app, the number one job title in America is truck how to put an ad blocker in. The guess is that as much driver. That goes away and what happens to all of the as half of the clicks on digital advertising are accidental. autoworkers when auto usage goes from 3% because So, this is clearly a broken industry. There have been your car is being used only about 3% of the day unless scandals about media buying and the advertisers are you’re a driver and it’s going to go to 70 or 80%. You very upset about -- did they really get what they spent? don’t need very many cars. You aren’t going to care if your driverless car looks nice. Facebook announced that after two years they had figured out that they overstated the amount of viewership What should CEOs do to succeed in our digital of videos on their ad network by 80%. Oops! These are market?

I used to tell my employees that there is a 20% skills ob- “The only thing that I thought you could do with solescence every year for all of them and if they didn’t really great leaders to develop them was to give get themselves retrained within five years, their skills them more wisdom and the way you do that is would be totally obsolete. I tell my employees that you’re 51% responsible for staying skills-current, and we will you give a new job that they have no idea how to do everything we can to help you do that. In this digital do, which I call “dunk them under water.” Let world, CEOs have to keep people thinking about get- them doggy-paddle to the surface and then once ting retrained every five years. This concept of “I can go to high school or I can get a degree in college and I’m they have figured that out, have gotten a couple done” is over. of breaths, you take them somewhere else and you dunk them again in a new job and you Talk about why you started Wayin. can actually accelerate the process of becoming I named my first child Maverick and I just like to disrupt wise very, very quickly.”

54 The CEO Forum www.ceoforum.ceo Scott McNealy 22 Year CEO Sun Microsystems

supposed to be the best computer scientists in the world. There’s much to fix and we’re working on creating digital experiences as opposed to just repotting TV ads on your cell phone within a very targeted way, which isn’t working. There are a lot of opportunities to match buy- ers and sellers and there’s a lot of money spent there.

You’re also involved with something called “Flog- ton” which spelled backwards is “Not golf ” and you’re the commissioner of that. Scott McNealy and Robert Reiss – Interview aired: 6/18/2017 Yes. That started on the backburner because golf just Scott McNealy, co-founder and 22-year CEO of Sun Mi- doesn’t seem to want to get faster. If golf wants to grow, crosystems, is a leading figure in the world of e-commerce and it has to get faster. Probably my bigger passion is Curriki information technologies. Born on November 13, 1954, in Co- which is Curriculum Wiki which is my give back to those lumbus, Indiana, Harvard and Stanford alum Scott McNealy who much is given, much is expected and we have the co-found Sun Microsytems in 1982, going on to become CEO largest free and open source repository of K-12 curric- soon afterwards. The company went public in the mid-‘80s ulum. We have over 257,000 learning assets in a Lego and over time became a highly successful IT giant with its bucket ready to go. It’s like the Google or the Amazon of push for open network systems and JAVA software. Sun was free and open source text books, videos, worksheets and sold in 2010 for billions, and McNealy has launched another science projects and all kinds of learning assets. We’re start-up, Wayin. slowly putting that together into Legoland which will be a free, online, open source, web-enabled, real time- scored, self-paced, multi-media, internationalized, local- ized K-12 educational environment where you can just go at your own pace and have real time scoring gami- fication. We think this will totally change education as we move forward and “no child, parent or teachers held back” will be the mantra.

What advice do you have to entrepreneurs who want to become billionaires?

Don’t set that as your goal. Set your goal to get up every morning to work as hard and as long and in as high integrity as possible. It has to be a super high integrity. Just work as hard as you can and enjoy every bit of it. Somebody once told me, “If you’re going to be married, you might as well be in love. Love your job -- they don’t call it work for nothing and you understand that the more successful you get, it will be less fun, but more satisfying.” That’s very important to understand. Lead- ing is satisfying, doing is fun, and as you get more and more successful, don’t pine for the old days, enjoy the satisfaction of being successful.

www.ceoforum.ceo The CEO Forum 55 CEO Insight Board Governance

JABBERWOCKY By Nancy May, President and CEO, BoardBench Companies

In Through the Looking Glass, Alice’s comment on the forward analyses like Free Cash Flow and Net Income. nonsense poem, Jabberwocky, was: “It seems very pretty, but it’s rather hard to understand.” My point here? WE WORK TO MAXIMIZE SHAREHOLDER VALUE One can find many words and phrases that seem to mean Boards have long sought to define and articulate their something, but, on closer look, are hard to understand, at purpose and value. In the 1970s, two professors and a best, and dangerous to follow, at worst. Some are losing noted economist proposed that boards’ and companies’ their popularity, as more experts disparage them. Howev- primary purpose was to “maximize shareholder value.” er, some are still bandied about frequently in board and Following this misguidance has since led to disastrous financial circles. Here are my three favorites: economic and corporate consequences (e.g. The Great Recession). This was a very attractive concept: neat, con- THE COMPANY HAS GREAT EBITDA cise; could be stated quickly, and seemed to make sense. Earnings Before Interest, Taxes, Depreciation and Amor- But in reality, it is simplistic, and, where companies have tization (EBITDA). This term or “analytic tool” persists in many or varied shareholders, it’s a mantra that’s almost private equity, banking, and M&A circles. Boards, compa- impossible to execute. It starts to break down when one nies, and investors are still presented with this “indicator” asks: Who are our shareholders, what do they value, and as an enticement. Accounting and financial authorities too who else has wants or needs that can severely impact numerous to mention have, for some time, chipped away our company? Even though all shareholders buy and re- at its analytical value. Some refer to it as “the lazy man’s tain shares to derive some financial benefit, their reasons analytic tool,” as “Frankenstein math,” and as accounting and timing vary dramatically. Some shareholders look gimmickry (not being GAAP, it’s not even accounting). for income from dividends, some want predictable sus- Yet it’s still frequently used and spouted. Defenders point tained price gains to offset their obligations, some want to it as a way of analyzing and comparing profitability the company to be liquidated immediately for a quick between companies and industries because it eliminates pay off. Also, non-shareholders need to be considered. the effects of financing and accounting decisions. Customers who think the company’s products or service are shoddy or see scandalous activities can tank your Unfortunately, there’s no set way to calculate EBITDA, so business. Lenders who’ve lost trust can choke off access it has often been manipulated creatively (Kroger Co. bo- to funds. Regulators who perceive predatory practices nus awards) and sometimes fraudulently (see Enron, World- can hamstring or kill your future. How can all of these com, etc.). It’s come down to this: If you’re still spouting interests be considered and satisfied when a board’s fo- EBITDA, you will eventually be perceived as naïve. If cus is only on “maximizing shareholder value?” you’re touting it, you will likely be seen as a scammer. Go ahead, it’s your reputation. You can trash it if you like. Di- These seem to be pretty words but on closer look, may rectors, if you must use something, go for more straight- illustrate short thinking by boards. Instead, directors can

56 The CEO Forum www.ceoforum.ceo better serve everyone by seeking to “ensure sustained may be near worthless: incompetent ones rarely think value for all stakeholders.” they are, and those who know they are will never want others to know it. Also, many directors loathe criticizing EFFECTIVE BOARD SELF-EVALUATIONS peers for fear of retaliation or damaging “collegiality.” So Board self-evaluations are mandated by the NYSE and the real picture may be far less pretty (or understandable). are considered a good practice by Nasdaq companies and self-appointed governance groups. But are they re- Boards need to evaluate director performance – few ally as effective as they want us to believe? Several re- can find fault with that. They need to be more robust cent survey reports show cracks in the present state of and clear about it. Performance criteria should come board self-evaluations. This research draws from the from the real world, not from ideal director lists. Outside observations of numerous directors and highlights their opinions (360 degree exercises) show different perspec- concerns about the process. To understand it better, one tives and may provide more truth and deeper insights. must consider self-evaluation’s two sides: 1) the board’s Also, forced rankings of each director, from best to worst own estimate of its functions and structure, and 2) the in a number of areas, will highlight who’s first and who’s performance of individual directors. worst with each contribution.

In the first instance, most directors (over 90%) rate their Double talk, obfuscation, and just plain nonsense are boards as either very or moderately effective. Sounds best left to children’s poems, not for business or boards. pretty good on its face, but effective as compared to what? Most boards use and reuse a fairly generic list of things they’re supposed to do, drawn from listing agencies, statutes, and governance publishings, along with spoonfuls of ISS criteria tossed in. Specific discussions on board interactions, culture, and leadership don’t seem to get much attention. To be effective, it seems one has only to check off whether the board is actually doing these things. Unfortunately, some think being “very effective” means exceeding their own expectations. If they can’t, it’s easy enough to just lower those expectations. After all a “D” is a reportable passing grade, requiring less effort than shooting for an “A.” So, are such assess- ments truly reliable? About the only thing outsiders can rely on is that poor performers will never rate themselves accurately.

What may be more understandable, and useful, is making such evaluations less self-driven. Regularly soliciting the Nancy May, President and CEO of The BoardBench Companies, opinions of others including management’s, employees’, has been cited in Forbes as one of America’s governance experts. even customers’ and industry analysts’, can reveal a clear- She has over 25 years’ experience as a strategic advisor to higher picture of what really is, even if it’s uncomfortable. growth, mid-cap, and Global 100 public and private companies. BoardBench is a corporate governance, director and CEO suc- In the second instance, directors seem to see things more cession, and board candidate advisory firm. darkly. Only half of boards surveyed evaluate individual BoardBench Companies, LLC directors, and only about a third say they do a good job. 5 River Road, Suite 245, Wilton, CT 06897 USA This report, while concerning, may not give a clear pic- Tel: (203) 493.0080 Email: [email protected] ture. It depends on what is used to evaluate performance www.boardbench.com – who does it, and how it’s done. Directors’ self-ratings

www.ceoforum.ceo The CEO Forum 57 CEO Library

“One of my favorite quotes on learning is from Julia Child, ‘You’ll never know everything about anything, especially something you love.’ My love has been learning about business models and success, where I have read over 1,000 business books; following are three of those which I believe can be of great value to today’s top CEO.”

Hesselbein on Leadership by Frances Hesselbein The woman BusinessWeek called the “grande dame of American management” shares her vision of leadership. Frances Hesselbein rose from a volunteer troop leader to become CEO of the Girl Scouts of the USA. During her tenure Hesselbein transformed the Girl Scouts and created one of the most vibrant and recognized organizations in the world. In the course of her brilliant career, she was recognized by Fortune magazine as the “Best Non- profit Manager in America” and was awarded the Presidential Medal of Freedom. Now, for the first time, Frances Hesselbein has collected her most incisive and stirring writings on the topic of leadership in one compelling book.

Branded for Life! by Ellen Looyen You already have a personal brand, whether you know it, or not! Personal branding is for anyone who wants to move ahead in their career, climb the corporate ladder or attract new clients. This book will help you redefine your personal brand, enhance your ability to influence and put you in a whole new league. Ellen Looyen, America’s Leader in Personal Branding, brings over two decades of branding expertise to her readers. She has branded divisions of major corporations, launched countless startups and has helped thousands of people (in over 60 countries) advance their corporate careers. Ellen is a frequent Brand Commentator for CBS News, The Wall Street Journal and KGO Radio; and some of her clients include: Goldman Sachs, Cisco, Hewlett Packard, eBay, Visa, Oracle and Camp- bell’s Soup Company.

The Executive’s Guide to 21st Century Corporate Citizenship: How your Company Can Win the Battle for Reputation and Impact by Dave Stangis and Katherine Valvoda Smith The Executive’s Guide to 21st Century Corporate Citizenship is a succinct and highly prac- tical guide for executives who want to understand how corporate citizenship can build reputation, deliver value to the bottom line and mobilize employees and customers. It provides an overview of how integrating sustainability and social impact to improve your operating context can also improve your company’s competitive position. The book navigates the field of corporate citizenship, providing actionable insights based on empirical research. While the tools and insights presented are valuable for every business person thinking about how to maximize business and social value, concepts addressed in the book are essential for executives leading B2B or B2C companies that are managing complex supply chains, integrated operations, and corporate reputation.

58 The CEO Forum www.ceoforum.ceo Escape to a Classic Connecticut Home

Welcome to Ridgefield, CT., a short one hour drive North from NYC. Founded over 300 years ago with a population of 25,000 Ridgefield boasts a unique historic Main Street, a highly rated school system and is rated the Safest Town in CT. Visitors can tour the Aldrich Con- temporary Art Museum, the Weir Farm National Historic Site or a visit at Keeler Tavern. Enjoy the intimate setting of the Ridgefield Playhouse that hosts hundreds of live shows by nationally acclaimed performers. Or catch a first release movie at the unique Prospector Theater, shopping the boutiques on Main Street and enjoy any one of our numerous restaurants from casual cuisine to fine dining. If you are seeking outdoor activity we offer a semi-private Fazio Designed 18 hole golf course Ridgefield GC, walking trails, lakes and miles of country roads that are enjoyed by bikers.

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For more information call Barbara:

Barbara Reiss Sally Hahn 203.526.9323 203.470.7685 [email protected] [email protected]

www.ceoforum.ceo The CEO Forum 59 CEO Roundtable Business Transformation Leaders Share Keys To Business Transformation By Robert Reiss

Michelangelo once said, “Every block of stone has a stat- can draw in new customers to the business or is able to ue inside it and it is the task of the sculptor to discover bring back lost customers. it.” Five centuries later Michelangelo’s insight on transformation holds true, as today’s business leaders seek to Enrique Lores: Transformation is about creating value discover new creations from their blocks of human and for customers and shareholders. The best way to create digital assets. value for customers is by figuring out how to offer them something they want before they know they want it. In seeking the wisdom of today’s leaders, on June 6, 2017 in San Francisco, I moderated a panel of five experts on Greg Bradley: The journey and process undertaken by transformation. They defined transformation, advised on an organization to reinvent some or multiple aspects of its best practices and shared insights from their company business that will yield a measurably different future. journey. The panelists were: Reiss: What advice do you have to those who • Julie Bornstein, Chief Operating Officer, Stitch Fix seek to transform enterprise?

• Greg Bradley, Global Head of Transformation, North Bradley: Don’t mistake activity for progress. Reorga- Highland nizing and doing a lot of “transformation” initiatives will only create the ‘illusion of progress’ and produce ‘confu- • Vanessa Colella, Head of Ventures and Chief Innova- sion’ if there’s not a clear and compelling case for change tion Officer, Citi with a strategy that has defined measurable results.

• Enrique Lores, President, Imaging, Printing and Solu- Colella: Rather than tackling everything at once, do a tions Business, HP little at a time and pay attention to what is already working in your business that should stay. It can be hard to get • Terry Jones, Founding CEO, Travelocity & Co-founder passionate about something that’s challenging to solve. and Chairman, Kayak Start your transformation with something that excites you and your team and make sure you know whether Robert Reiss: How do you define transformation? you’re disrupting or being disrupted.

Terry Jones: Redeploying the assets you have in a new Lores: Transformation requires you to give people the market or industry. opportunity to contribute, to add personal value and to feel invested in the change. You need to prove that trans- Vanessa Colella: A change required to do something formation is not about changing from the top down, but exponentially better. instead that it will benefit everyone — and to accom- plish this you must enable every voice to be heard. As Julie Bornstein: Creating a business opportunity that part of what I call a “Print Renaissance” at HP, we em-

60 The CEO Forum www.ceoforum.ceo June 6, 2017, San Francisco Transformative CEO Panelists: Greg Bradley, Vanessa Colella, Terry Jones, Julie Bornstein, Robert Reiss, Enrique Lores

braced the transformation of our business as a personal pathetic, do your best to bring in diverse perspectives, be brave. belief, which encourages everyone to consider it personal and something they are passionate about. Keep in mind, Jones: Travel distribution has been completely trans- transformation is not a substitute for leadership — they go formed by digital and travel is now the largest sector in hand in hand, and without strong and steady leadership, ecommerce. Mobile is transforming it again, with almost any transformation is at risk of failure. 50% of bookings coming via mobile. The next frontier is AI and it looks like that will reshape the buying process Jones: Companies need to act more like organisms than once again. machines, take everything in and adapt. In order to succeed in transformation, you need to turn the org structure Bornstein: At Stitch Fix, we believe that the combina- on its side and pour the Internet in. And be accepting of tion of machine learning and human stylists will trans- failure. If there’s no failure there’s no change. form the way people shop. By learning the taste, budget, size and fit preferences of our clients, we are able to shop Bornstein: It starts with talent and leadership. Those for them. 100% of our products are hand selected for who will drive transformation have to have a seat at the each client. We’ve created personal styling at scale, so top leadership table. The CEO needs to believe, and women and men everywhere can have a personal shop- make the tough choices, trade-offs and changes. And the per. incentives need to align to create change. Bradley: The management consulting industry has Reiss: How does transformation relate to your seen significant change in the last 10-15 years. At North business? Highland, we have been applying the advice we give our clients and transforming our business, particularly as it Lores: Transformation might not look exciting initially, relates to our operating model, our human capital, and so you have to find something that supports the idea of our technology. transformation and connects it back to customer emo- tions. For example, HP leads the industry in printers, so … In summary, like Michelangelo, the CEO’s job is how do you reinvent the old idea of what a printer should still uncovering the statue inside the stone. The secret be? The answer: Focus on the output instead of the de- of today’s Transformative CEO is first predicting how vice, shifting the concept from printers, paper and ink to the dramatic digital advances will change the physical the creation of memories and experiences. properties of the stone itself; then, the CEO can determine the correct business models to build the business Colella: At Citi we believe there are four characteristics to statues of the future that will positively impact, business, focus people on during a transformation: be curious, be em- the economy and society.

www.ceoforum.ceo The CEO Forum 61 B:17.75” T:16.75” S:14.5”

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