The Class of ’16: The Big Issues for Incoming CEOs
Come 2016, you’ll find new faces in many CEO offices. Organizations like Starwood Hotels, Owens-Illinois, LL Bean, and others have announced top leadership changes and their priorities for 2016.
You may think all CEOs have the same goals in mind—grow the company, grow profits, be leaner. Well, sure. But that’s just the broadest of strokes. Just as you may—mistakenly—assume that all CXO personas are alike, you’d also be wrong in thinking all CEO issues, drivers, and goals are identical. As you’re planning a conversation with someone new entering the C-suite, you need to know what exactly they’re up against and what their plans are to satisfy both customers and shareholders.
What kind of insight do you need to plan a business conversation with a CEO? We’ve compiled some examples here on some incoming CEOs who will be taking the reins in 2016:
George Sherman of Advance Auto Parts
Sherman’s challenge is to continue to integrate General Parts International into Advance Auto Parts. He says, “We are on a course to combine as one company, and we're on the right path. However, we must have a relentless bias for action and that means pushing forward and finishing the things that we've started. It also means focusing on doing fewer things better and measuring ourselves by the outcomes we deliver and expecting higher levels of accountability at Advance Auto Parts.” Among his priorities in consolidating the company are product alignment work and changing long-standing buying habits; focusing on systems and supply chain integration efforts, including a common catalog; and within core IT integration, deploying a new point of sale system for Advance Auto Parts’ stores.
Stuart Schuette of American Tire Distributors, Inc.
For Schuette, it’s all about innovation. “My goal will be to drive the innovation necessary to continue to grow the business and exceed our customers' expectations," Schuette says. “ATD’s focus on operational excellence in serving its customers across the U.S. and Canada has established a firm foundation for the business.
Saed Mohseni of Bob Evans Farms, Inc.
Mohseni sees many opportunities outside the company’s current regional focus and hopes to make “Bob Evans an iconic brand on a national level.” But he also intends to focus on “tweaking and improving rather than drastic change” because the company has a strong culture. And he indicated that performance won’t rely on opening new outlets, saying, “the growth has to come from our current restaurants." Bob Evans Farms is also implementing a new restaurant technology package in fiscal 2016, replacing its legacy POS system.
Bret Griess of CSG Systems International
Griess, promoted from his role as CSG’s President and Chief Operating Officer, will be facing a slowdown in software transactions but an increase in service providers desiring a managed services relationship. The company has built a strong pipeline of engagements in managed services, along with qualified opportunities. Griess’ predecessor, Peter Kalan said, “We're launching new content offerings and new content packages on behalf of some of the world's leading brands on a regular basis with our Ascendon content monetization solution.” As CSG’s new CEO, Griess will contend with a rapidly evolving business environment that creates greater challenges for them going forward.
Stephen Smith of LL Bean
Smith, a retail veteran who is new to LL Bean, said one of his biggest challenges will be to enter the tight-knit company on the right foot. Smith said he plans to act as both a student and steward of the brand, tapping the expertise of a team of veteran executives at the company. One of his immediate tasks will be to execute a goal to triple its stores in the United States to at least 100 by 2020. Smith said that the biggest challenge LL Bean faces is adapting to changing shopping habits as new technology gives consumers more ways to buy things. “The biggest risk as well as the biggest opportunity is to capture those customers,” he said.
Andres Lopez of Owens-Illinois, Inc.
One of Lopez’s first priorities is establishing stability across the company’s operations around the world. He explained that stability is a very critical aspect of its future strategy—and in two key areas: revenue and the end-to-end supply chain. “When we look at revenue, we're thinking about taking a very balanced approach to price and volume, so we avoid volatility,” Lopez said. “We are also thinking about generating stability in our operations, looking at the end-to-end supply chain. So it includes the entire supply chain and it is about project activity, but it's also our performance in terms of efficiency, asset load, everything that drives the performance of our operations. For us, stability is the basis for performance improvement. When we achieve a stability, we can give our management the time to be able to concentrate on elevating the performance of the company.”
Thomas Mangas of Starwood Hotels
In anticipation of Mangas taking over as CEO, interim CEO Adam Aron established a path for righting the struggling Starwood ship. It includes accelerating growth by adding hotels, sharpening focus on existing brand offerings starting with Sheraton, disposing of $3 billion worth of assets by year-end 2016, and placing a far greater emphasis on operational efficiencies—cutting costs but also freeing up millions in low-impact initiatives to focus on higher priority spending that more directly stimulates revenue growth. Starwood’s Chairman Bruce Duncan has said that he wants the next CEO—Mangas—to do more to “increase value for shareholders.” And, on top of all of this, Starwood has agreed to be acquired by Marriott for $12.2 billion, a deal which is expected to close in mid-2016.
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