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Weekly UpdatesTUPPERWARE BRANDS CORP. Chairman and CEO Rick Goings keeps a card in his wallet that reads, "Life's journey is not to arrive at the grave safely in a well-preserved body, but rather to skid in sideways, totally worn out and shouting, 'Wow, what a ride!
And what a ride it has been so far for the leader of Orlando-based Tupperware. Along with Warren Batts, he took the company public in 1996, when it was spun out of Premark Corp. (later acquired by Illinois Tool Works). Today Tupperware is a $2 billion NYSE-traded "global portfolio of direct-selling companies," as he describes the business that was always well-known for its durable serving and storage products. Its brands now include Tupperware in consumer and household items, as well as a blossoming collection of cosmetic, fragrance and toiletries products under such brands as Avroy Shlain, BeautiControl, Fuller Cosmetics, NaturCare, Nutrimetrics, Armand Dupree, and Nuvo. He not only grew the product portfolio but also the global scale of the enterprise, opening 24 international markets (all profitable), with business outside the U.S. now constituting 84% of sales. The company's independent sales force numbers approximately 2.3 million. Also growing in scale: the company's reputation, now rated among the top 5 most respected household brand names (GE is No. 7 and Martha Stewart is No. 20) and earning a place on Fortunes Most Admired Companies list for the second year in a row.
All this high-speed action at Tupperware followed a career path that started with an entrepreneurial burst. While in college Goings founded a company that became one of the country's first direct sellers of home fire and smoke detecting systems. The next 15 years, from 1970 to 1985, he spent rolling out this business into a nationwide franchise and then developing and launching another direct-selling business, this one for personal care products. Both of these firms found ready buyers--for the products, and then for the whole businesses themselves. In 1985 Goings joined Avon Products Inc. as director of direct sales development at Avon headquarters in New York. Next he led a turnaround as president of Avon Germany, then moved to Hong Kong as group vice president Asia Pacific, followed by a speedy ascent to president and senior operating officer of Avon USA. He was recruited to Sara Lee Corp. by famed leaders Cor Boonstra and John Bryan to spearhead expansion of household products and direct selling. He then joined Tupperware in 1992 as president of Tupperware Worldwide, and in 1997 was named chairman and CEO of Tupperware. He was on the board of Tupperware's parent, Premark, when the decision was made to spin off the unit, thus presenting the opportunity to take the reins of a newly public entity with a dominating brand to build on.
Where there is a company "on the move" there typically is a board that's helping propel that action. Indeed, that is the case at Tupperware, as DIRECTORS & BOARDS learned when we met with Goings to discuss his "brand" of governance. Publisher Robert Rock and Editor James Kristie caught up with Goings when he touched down in New York for a couple of days in early March while in transit to Europe for a round of meetings with his global sales and management team. Excerpts from the conversation follow.
Directors & Boards: Rick, let's start by getting a sense of your fundamental philosophy about board governance.
Rick Goings: The primary role of a board should be to ensure the perpetuation and growth of the enterprise. When I talk with my board, that's what we agree on as their role. There is just not enough responsibility put on boards for growing the business. The pendulum has swung too far toward governance alone. There needs to be a new balance.
D&B: Are you saying that boards are getting too enmeshed in compliance-related matters to the exclusion of adding value in strategic and operational matters?
Goings: Yes, but I would rather phrase it as "many boards are getting almost singularly focused on compliance-related matters." Let me tell you what I see as the priorities for a board. Number one is ensuring strong leadership and succession. You pick the right leaders and you get the right results. This is where you set the tone at the top. The second is collaborating on strategy and direction. The third is establishing and measuring of management's performance standards and monitoring progress. And the fourth is governance and oversight--the fiduciary responsibilities.
And yet, what do boards spend most of their time on? Number four. What that can lead to are companies that have strong governance but a business model that doesn't work any more. I've seen this happen with some boards--rather than have an attitude of play to win, the board's attitude is to play not to lose. You can't win by playing not to lose. So those are the four priorities of the Tupperware board, and that's what we look for when we interview for board members--to see how well they will match up on meeting those priorities.
D&B: What are the leverage points for your board to help you in growing the company?
Goings: They help me answer what I call the "three Rs": What do we retain, refine, or radically alter regarding our business model? After all, every successful business model works ... until it doesn't. So you've always got to be challenging your business model. The board helped us work through the first phase of our strategy, which involved four elements: 1) refreshing our core business, which meant examining what products we sold and how we sold them; 2) getting into emerging markets; 3) building our portfolio of direct-selling companies for beauty products; and 4) refreshing the image of our existing brands. Our next phase is more organic--focus, fix, and grow. The board is part of all this, helping us think through what gives us a sustainable competitive advantage.
D&B: Tell us a little bit about your directors.
Goings: We've got an incredible board. It is proactive. It is deeply involved. Everybody brings something to the party:
* Catherine Bertini was undersecretary general of the United Nations and, before that, head of the World Food programs, both positions that had her deeply involved in developing markets. So when the board talks about emerging markets, Cathy has "boots on the ground" expertise to bring to those discussions.
* Rita Bornstein was president of Rollins College. All of her doctoral work was on woman's issue. Tupperware sells to over 2 billion women.
* Kriss Cloninger is president of Aflac--an insurance direct selling business, with their biggest market being Japan. He's great on audit matters as well.
* Clifford Grum was publisher of Fortune, CEO of Time Life, and then ran Temple-Inland when that was spun off from Time Inc. He is so good on IR, finance, and capital structure matters.
* Joe Lee built Darden Restaurants, and was a creator of Red Lobster. He brings us special expertise in managing multilocal businesses.
* Angel Martinez was at Reebok, where he created their aerobic shoe, and then came to Deckers, which is doing a big business with a brand called Uggs. He was just named "Shoe Man of the Year" by the industry. He is incredibly knowledgeable about brands and marketing.
* Bob Marbut created Hearst-Argyle when that group of television stations was put together. He's 74 years old, still starting up companies, and when it comes to jogging I can't keep up with him!
* Bob Murray was No. 2 at Gillette. He ran the Braun business in Germany as CEO, and is fluent in German. He is also a strong financial and strategy expert.
* David Parker was the COO of a major corporation and now runs a fund of funds and brings an understanding of markets to the board. He's also our lead director now.
* Joyce Roche, president of Girls Inc., was my head of product marketing at Avon in beauty. Seven of Tupperware's businesses in beauty products--and remember all those women we sell to.
* Patrick Spainhour, now head of Service Master, previously was CEO of Ann Taylor and before that worked at Gap, where he was in charge of all sourcing.
* Anne Szostak was EVP of Fleet Bank, where she was involved in integrating its many acquisitions, so she brings us expertise with organizational development, HR, and compensation matters.
As you can see we've got expertise in finance, marketing, emerging markets, beauty businesses, women's issues. This is an energized, dynamic board. There aren't a lot of them out there. [Ed. Note: See accompanying exhibit for the board members' formal affiliations.]
D&B: And it's quite a diverse board.
Goings: Diversity for us is good, and we view it as a source of competitive advantage. Our directors are really smart people, whether they happen to be women, Hispanic, African-American, or whatever. And that's the way it ought to be.
D&B: Did some of these directors come with you from the Premark board?
Goings: Yes. Since I was on the Premark board I saw how each board member acted, so we selected certain of the directors who I thought would add value and have the right chemistry for what we wanted to do with Tupper-ware.
D&B: And after that, how have you found your directors? Do you use a recruiting firm?
Goings: Rarely. We've had mixed results with recruiting firms. One thing we always want to find out in a board candidate is how that person conducts himself or herself in a meeting. Most people don't even look into that. I would much prefer to get a referral from either somebody I know or one of my board members who is familiar with the individual in a much more holistic form.
D&B: How collegial should a board be?
Goings: I believe in a collegial board. We have a saying at Tupperware: "Relationships equal retention." These are people who I have a business relationship with and then it becomes collegial because you respect each other. These board members are my mentors. They have become close friends--not close friends like having my Sunday school teacher on the board. We have become friends because we are fighting a war together. They help me understand markets and competition. As far as I am concerned, it's like having Bain or McKinsey on your board.
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