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Leadership conference highlights global challenges, tough strategies

By Aubrey Henretty

11/1/2005 - When business is booming, there is rarely a shortage of people willing to take credit. But when the fiscal outlook is bleak for the fourth consecutive year, the glory hounds lie low and the real leaders emerge to take responsibility.

Phil Marineau '70 is a leader who has led his company through hard times, and he shared his experiences with Kellogg School faculty, staff, students and alumni during the Nov. 16 Kellogg Leadership Conference.

When he joined Levi Strauss & Co. in 1999, the company had been struggling to stay afloat against plummeting profits for years. As its new president and CEO, Marineau had to work hard and fast to keep the firm from going under. Chief among the problems the company faced at the time, he said, was the creation of U.S. free trade policies that had allowed competitors to cut costs drastically. Meanwhile, Levi Strauss had turned complacent, moving away from its earlier, successful strategies.

Despite the continued popularity of Levi's jeans with consumers, the company's relationships with retailers were brittle at best as the firm consistently failed to meet demand.

“Other than that,” Marineau quipped, “it was absolutely perfect.”

Marineau, who delivered the morning keynote address, joined other accomplished practitioners and academics for the conference, organized by the Kellogg School 's Business Leadership Club and hosted at the James L. Allen Center . This year's event, titled “Training Today's Global Leaders: Lessons Critical to success in the Changing Global Environment,” is one of the club's signature events designed to create a dialogue around the subject of leadership.

After several years — and several new product lines and a global marketing campaign — Levi Strauss is on track again. And Marineau prefers to look forward rather than back: “As a leader,” he said, “your role is to intercept the future.”

That is exactly what contemporary global business leaders must do — sometimes literally, said conference experts. If it's “tomorrow” in Japan , top executives must address tomorrow's problems today. Conference panelists discussed this and other challenges in the sessions titled, “New Leadership Challenges in an Increasingly Competitive Global Landscape” and “Leveraging Human Capital in an Off-Shoring Environment.”

When establishing a company around the world, said New Leadership panelist Linda Newborn, John Deere & Co. vice president and chief compliance officer, the power of simplicity to create an image and minimize cultural misunderstandings is great: “The message has to be clear, it has to be simple and it has to be repeated over and over and over again.”

Others on this panel included Target Corporation Director of Diversity Tamika Curry '99 and Deloitte Consulting Principal Jonathan Copulsky.

Laura Tibodeau, senior business operations manager with Hewlett-Packard, explored with her fellow Off-Shoring panelists the pros and cons of holding offices overseas. “The notion of having people where business is transacted is not new.” What is new, she said, is the idea that outsourcing is the answer to the global business leader's prayers. She disagreed, describing the practice of hiring third parties to run international branches of one's company as “a means to an end.”

The conference also hosted discussions “Leading an Organization into a New Market: Lessons Learned,” with panelists including Northwestern School of Law Senior Lecturer Steve Smith and DSM Desotech President Steve Hartig, and “Making Tough Decisions to Effectively Overcome Crisis” which included Flip Huffard, a senior managing director of restructuring and reorganization with The Blackstone Group, and Suzette Web, director of sales and new business development with Amphire Solutions.

The need for strong leaders is never more apparent than it is when global circumstances knock the wind out of the U.S. economy. The conference authority on that subject was afternoon keynote speaker Mel Bergstein, chairman and CEO of Diamond Cluster International. Bergstein chronicled the company's rise and dramatic, nearly devastating fall in the wake of Sept. 11, 2001.

Of his crisis-mode strategy, Bergstein said he was determined to save the company while causing as little harm to his employees as possible, adding that the things a leader does are sometimes not as important as the order in which he or she does them.

“At the end of the day, it's the sequencing that counts,” he said. “You can never say never to layoffs, but it's not the first thing you do — it's the last thing.”

Bergstein emphasized that when tough times befall a business — as they almost certainly will — a good leader leads by example, in his case taking a 15-percent pay cut before considering employee salary cuts or layoffs and eventually going six months without pay in an effort to keep as many employees as possible.

“The sacrifices don't start at the bottom,” he said. “They start at the top.”