CEO, Henkel Consumer Goods (The Dial Corporation)
Consumers have been cutting back sharply on their purchases as a result of the recession. How has that affected Henkel Consumer Goods’ overall operations, such as vendor relationships, supply chain management, marketing, research and development, etc., and how has the company responded to those challenges?
The challenges have been significant in the past year. It hasn’t materially affected our relationships, but it has forced us to be much more nimble with both with our vendors who supply us, as well as our retail customers who we sell to. You cannot take things for granted in this environment, particularly with our retail customers. One day you think you have the merchandising support, you think they have their back behind you, only to find out that someone has come in and maybe taken your ad space or taken your display space. So that’s forced our organization to be very reactive, to be very sharp with our price points, because value during this recession has been really the operative word. Fortunately, we have a number of great brands that have done very well during this recession, like Purex laundry detergent, Dial bar soaps and body washes, even Right Guard and Renuzit have done excellent. We’re growing share in all of those businesses.
What signs is Henkel Consumer Goods seeing that the recession is abating?
We follow the consumer confidence data very, very closely, and we saw — just in February and March — just as we saw the Dow Jones start to pick up, we saw the consumer confidence (and) you can do a pretty strong correlation analysis between consumer confidence and (the purchase) of consumer goods. Now, they’re still looking for deals. The consumer is still looking for value and bargains, but we are seeing our market sizes that were more discretionary, like air fresheners, a year ago were declining, are (now) starting to grow slightly.
So those categories that I think consumers would classify as “I want, but I don’t need,” we’re starting to see purchases come back in those areas that are wants.
What are some sustainability initiatives Henkel Consumer Goods is undertaking both in its operations and its products?
Henkel has a rich heritage and history in sustainability initiatives. This isn’t something we do just because of the recession; it’s something we do every day. Even starting with the building that we are in, this is going to be a LEED-certified building. We’ve only been open eight or nine months, but we designed this with sustainability in mind. Within our organization we created a kind of self-promoting area we call Eco-mmitment. It was a campaign we kicked off internally because with thought that in order to be a sustainable company (we needed to have) sustainable employees. Eco-mmitment was an internal grassroots effort to create awareness of more sustainable practices that we have here in our offices, as well as in our homes. So we’ve rolled that out, so that all of our employees are a little bit more aware of that.
But when it comes to our innovations, we have a number of sustainability initiatives that are in fact being very successful in the market. More than two years ago we launched Purex Natural Elements — it’s a natural detergent — and it became a $100 million business within a year and we didn’t even have to advertise. It sold itself off the shelf with its natural surfactants. … Again, Henkel’s history in this goes back 40 years. Before most people in this country were talking about sustainability, Henkel was practicing it. And so we (Dial), kind of as the little sister who’s been part of Henkel for five years, we’re adopting these behaviors pretty rapidly.
You worked to make sure Henkel Consumer Goods remained in the Valley. Why was that so important?
It all begins with people. First and foremost, a company can be an accumulation of brands and buildings, but at the end of the day what makes it special are the people. And moving this from the Valley, whether it was just from the East Valley to the West Valley, there’s the risk that we would lose some of our valued employees. Add to that, if you were to take it out of Scottsdale-Phoenix altogether, the probability that we lose the majority of our intellectual property — that would have stood between us. Moreover, when I was offered this job, I was looking forward to moving to Scottsdale, and when I got here I didn’t want to move, I wanted to keep us here!
What skills do C-level executives need in order to succeed in a multinational, consumer products company such as Henkel Consumer Goods?
I think it begins with having a really strong strategic mind and framework. You really have to understand the markets in which you compete, where and how your competition is likely to try to defeat you, and then, kind of like a sports coach, you have to try to figure out how you navigate vis-à-vis them. So you have to understand your own strengths, weaknesses, opportunities and threats.
Business is about people … and therefore you have to learn how to tap those resources that you have. You surround yourself with the best people, but you have to motivate them … and that’s true both of a domestic company, as well as a multinational.
I think when you get into multinationals, we’re working across borders, we’re working across time zones. I’ve been on conference calls earlier this morning with our parent company in Germany as early as 7 a.m. You have to learn to work in a diverse environment, you have to be tolerant of differences, you have to try to leverage those differences to make you stronger. Sometimes that may mean being tolerant of what you thought might have sounded like rude or very straightforward behavior, and it just might be the cultural differences at play there.
Interpersonal effectiveness at the C-level is so critically important, and it’s not just because you’re a multinational; you’d fail, probably, if you weren’t effective in those areas.
- Named president and CEO of The Dial Corporation (Henkel Consumer Goods) in April 2005.
- Joined Henkel from Church & Dwight, where he served as president, personal care, since 2002.
- Spent 16 years at Procter & Gamble.
- Member of the Greater Phoenix Leadership Council and a board member of the Greater Phoenix Economic Council.
- Holds a bachelor’s degree in science degree from Virginia Tech University.