Personal Growth

The Spectacular Rise and Fall of Avon’s Andrea Jung // Book Summary of Deborrah Himsel’s ‘Beauty Queen’

July 26, 2016 By Nagesh Belludi Leave a Comment

When companies do well, their CEOs are often heralded as outstanding visionaries and brilliant innovators. In particular, when macroeconomic conditions are favorable, these CEOs are sheltered from scrutiny because the spoils of their success deflect attention from their leadership shortcomings (see my previous article on how success often conceals wickedness.) When the tide turns, however, the leadership deficiencies are exposed for all to see. The CEOs are the first to get the blame, even if they may not merit it.

Deborrah Himsel’s Beauty Queen offers an insightful tale of the spectacular rise to the top and the tumultuous fall from grace of Andrea Jung. Beauty Queen divides Jung’s tenure as the CEO of cosmetics company Avon from 1999 to 2012 into two halves: Jung led six consecutive years of double-digit growth initially and then presided over a series of operational missteps that led to her resignation. Alas, Avon has never since recovered—its numerous restructuring efforts have failed, and its strategic and financial performance has severely deteriorated.

The Rise of Andrea Jung and Avon (1999–2005)

Promoted at age 41, Andrea Jung brought glamour, charm, and personal style to her CEO’s role. She quickly reshaped Avon’s image and articulated a powerful purpose for the company. She injected energy into a decaying cosmetics brand and pushed Avon into new profitable markets in China, Russia, and other countries. When Jung became CEO, 60% of Avon’s sales were in the United States; by 2011, only 17% of sales were in the United States and 70% were in developing markets.

Jung’s revival of Avon’s fortune catapulted her fame; she became one of America’s most recognized chief executives. Fortune magazine named her one of the most powerful women in the world. Jack Welch recruited her to General Electric’s board of directors.

Beauty Queen attributes this initial success not only to Jung’s inherent strengths in marketing and branding, but also to her right-hand person Susan Kropf. Kropf was a brilliant operations person, who balanced Jung’s acute lack of skills in running the day-to-day operations of a global company.

The Fall of Andrea Jung and Avon (2005–2012)

Avon’s sales started to slow down in 2005. And, Susan Kropf’s exit in 2006 corresponded with the dawn of Avon’s misfortunes. Andrea Jung never replaced Kropf; Avon was left without a chief operating officer.

As Avon started to struggle, Jung’s inadequate operations experience became a serious liability. A streak of self-inflicted problems resulted in strategic and operational disasters that took a huge financial toll and resulted in a flight of Avon’s top talent. Jung failed to deal effectively with failures of computer systems in Brazil, inadequate inventory and supply-chain management, poor management of working capital, and a staggering bribery scandal in China.

Jung’s lack of expertise to deliver results went up against her bold projections about the business’s future. Straying from Avon’s door-to-door direct selling roots, Jung experimented with a direct-selling channel, but quickly abandoned her strategy of running Avon retail stores. Her attempts to start baby-goods and other new product lines foundered after just two years. Avon’s many acquisitions failed; a silver jewelry company (Silpada) that Jung bought for $650 million had to be sold back to the original owners for $85 million.

Avon never recovered from the blunders that Andrea Jung presided over

Avon Beauty Products After Jung’s several turnaround efforts had failed to take hold, she resigned in 2011. Her replacement, former Johnson & Johnson executive Sheri McCoy, has since struggled to turn the company around.

The bribery scandal in China impaired Avon. In 2014, Avon settled the case with the Justice Department and the SEC for $135 million. To boot, Avon not only spent $350 million on legal fees, but also lost ground in the burgeoning cosmetics market in China.

Avon’s market value fell from $21 billion (1-Mar-2004) at the height of Jung’s success to $1.1 billion (15-Jan-2016). The company’s stock price fell from $44.33 to $2.50.

Lessons from Andrea Jung’s Leadership Style at Avon

Some of the most instructive leadership lessons from Beauty Queen are,

“Studying the trajectory of the Avon CEO is a great way to learn leadership. Andrea’s career … offers invaluable lessons about finding the right balance between substance and style.”
“Her story is a cautionary tale, one that suggests the critical importance of being aware of your weaknesses and how they can sabotage you.”
Leaders should know when to go. “If Andrea had departed in 2008, she would have left with her reputation and halo fully intact … CEOs that are successful early on often err on the side of staying too long.” [See my previous article on why leaders better quit while they’re ahead.]
Companies should pair up their leaders with deputies who have complementary skills to offset the Achilles’ heels of the leaders.

Recommendation: Skim through the first six chapters of Beauty Queen for an informative quick read on Andrea Jung’s rise and fall at Avon. Thumb through the next five chapters for an uninteresting discussion of broad leadership lessons and action lists in dry PowerPoint style.

Lessons from Sam Walton: Learning from Failure

March 29, 2016 By Nagesh Belludi Leave a Comment

Sam Walton (1918–1992) experienced failures and setbacks. And, like all successful people, the iconic founder of Walmart and Sam’s Club prided himself on learning from those experiences.

Walton’s Initial Success … and Then, in a Heartbeat, Failure

By 1950, a 32-year-old Sam Walton had established himself as a successful retailer in Newport, Arkansas. In 1945, Walton had purchased a Ben Franklin variety store and set up a five-year personal goal to make it the most profitable variety store in the region. By 1950, Walton had a record $250,000 in sales and $30,000 to $40,000 in profit (some $2.5 million in sales and $300,000 to $400,000 in profits in today’s dollars.) His success had attracted a lot of attention.

Not only that, the young Walton family—Sam, his wife Helen, and four young children—had firmly established itself in Newport. Sam and Helen were very active in the community and had taken up prominent civic and church duties.

An innocuous legal oversight cost him this success. When he had signed the lease on the property rental for his Ben Franklin variety store in 1945, thanks to inexperience and excitement at becoming a merchant, Walton had agreed to give back the landlord 5% of sales. He later discovered this was the highest any retailer had paid for rental.

More significantly, Walton had also neglected to add a clause in his lease that would give him the option to renew the lease after five years. Therefore, in 1950, when the lease on Walton’s Ben Franklin store expired, his sneaky landlord knew there was nowhere else in town for Walton to relocate his store. The landlord refused to renew Walton’s lease at any price! The landlord bought Walton’s well-established store along with its fixtures and inventory and transferred the store to his son. Walton was devastated; he had no choice but to give up his successful store. In his best-selling autobiography Made in America, Walton recalled this as the lowest point of his business life:

I felt sick to my stomach. I couldn’t believe it was happening to me. It really was like a nightmare. I had built the best variety store in the whole region and worked hard in the community, done everything right, and now I was being kicked out of town. It didn’t seem fair. I blamed myself for ever getting suckered into such an awful lease, and I was furious at the landlord. Helen, just settling in with a brand-new family of four, was heartsick at the prospect of leaving Newport. But that’s what we were going to do.

Sam Walton Was Not One to Dwell on Disasters

All the hard work he had put in to build a successful store and the earning power he had established over five years had become worthless because of an innocuous mistake. Nevertheless, Walton didn’t let this disaster get him down.

I’ve never been one to dwell on reverses, and I didn’t do so then. It’s just a corny saying that you can make a positive out of most any negative if you work at it hard enough. I’ve always thought of problems as challenges, and this one wasn’t any different. I don’t know if that experience changed me or not. I know I read my leases a lot more carefully after that, and may be I because a little wary of just how tough the world can be. Also, it may have been about then that I began encouraging our eldest boy—six-year-old Bob—to become a lawyer. But I didn’t dwell on my disappointment. The challenge at hand was simple enough to figure out. I had to pick myself up and get on with it, do it all over again, only even better this time.

This Newport experience turned out to be a blessing in disguise for Walton. His family relocated to the relatively obscure Bentonville, Arkansas, for a brand-new start. Walton started over and established himself as a retailer again—only in even bigger and better ways. In 1962, Walton decided that the future of retailing lay in discounting. His strategy of buying low, selling at a discount, and making up for low margins by moving vast amounts of inventory, made Walmart the most successful retailer ever. From 1985 until his death in 1992, he was the richest man in the world.

Successful People Learn from Failure and Get On

Walton’s was a typical entrepreneurial response to failure—successful people take risks, fail sometimes, but pick themselves up, ask what they can learn from the experience, and try again, even harder the next time.

On a related note, Bill Gates, the most successful entrepreneur of his generation, once said, “Success is a lousy teacher. It seduces smart people into thinking they can’t lose.”

Complement this lesson on failure with J.K. Rowling’s reflections on the benefits of failure in her famous 2008 commencement address at Harvard: “Failure meant a stripping away of the inessential. I stopped pretending to myself that I was anything other than what I was, and began to direct all my energy into finishing the only work that mattered to me…The knowledge that you have emerged wiser and stronger from setbacks means that you are, ever after, secure in your ability to survive.”

Recharge Your Self-Growth through a “Plan of Conduct” à la Benjamin Franklin

October 16, 2015 By Nagesh Belludi 1 Comment

In Boston at age 12, Young Benjamin Franklin became a printer's apprentice with his brother James Franklin Young Benjamin Franklin’s formal schooling was incomplete. He pursued education through voracious reading. In Boston at age 12, he became a printer’s apprentice with his brother James. At age 17, Franklin ran away to Philadelphia seeking a fresh start and initially worked in several printer shops around town.

At age 18, Franklin traveled to London to acquire some equipment for establishing a new newspaper in Philadelphia. However, the sponsor soon withdrew from the project; so a disappointed Franklin remained in London working as a typesetter. In 1726, at age 20, he decided to return to Philadelphia to strike out on his own.

Benjamin Franklin’s Organized Action Plan for Efficiency and Success

At the threshold of adulthood, Franklin ruminated on the kind of man he wanted to be. During his time in London, he was deeply unhappy that his life had so far been disorderly because he had never outlined a design for how to conduct himself. During his 11-week voyage from London to Philadelphia, he applied his methodical mindset to develop some rules for self-improvement and called them his “Plan of Conduct.”

Those who write of the art of poetry teach us that if we would write what may be worth the reading, we ought always, before we begin, to form a regular plan and design of our piece: otherwise, we shall be in danger of incongruity. I am apt to think it is the same as to life. I have never fixed a regular design in life; by which means it has been a confused variety of different scenes. I am now entering upon a new one: let me, therefore, make some resolutions, and form some scheme of action, that, henceforth, I may live in all respects like a rational creature.

It is necessary for me to be extremely frugal for some time, till I have paid what I owe.

To endeavor to speak truth in every instance; to give nobody expectations that are not likely to be answered, but aim at sincerity in every word and action—the most amiable excellence in a rational being.

To apply myself industriously to whatever business I take in hand, and not divert my mind from my business by any foolish project of growing suddenly rich; for industry and patience are the surest means of plenty.

I resolve to speak ill of no man whatever, not even in a matter of truth; but rather by some means excuse the faults I hear charged upon others, and upon proper occasions speak all the good I know of every body.

Franklin’s “Plan of Conduct” was a precursor to his constant quest in self-improvement, as documented in his “Autobiography” (1791.) A few years later, he supplemented his plan with a “Moral Perfection Project,” 13 guidelines to motivate himself to be more virtuous and strive for moral perfection.

These first few pursuits of self-improvement and reflection weren’t a passing fad for Franklin—he adhered to these rules for the rest of his life. He was proud that he had the wisdom to develop and commit to them so early in life. He reflected in his “Autobiography” (1791,) “It is the more remarkable, as being formed when I was so young, and yet being pretty faithfully adhered to quite through to old age.”

Idea for Impact: Create Your ‘Plan of Conduct’

Create your own rules for living and commit to them for a life of success and wisdom. The values you establish for yourself will align your actions with your goals and dreams and so reduce regrets of overlooked opportunities.

Recommended Reading: For a great collection of the writings of Benjamin Franklin, including his “Autobiography”, see Walter Isaacson’s “A Benjamin Franklin Reader”.

Fear of Failure is an Obstacle to Growth

September 11, 2015 By Nagesh Belludi Leave a Comment

The fear of failure—atychiphobia—is such a significant psychological threat to motivation that it can instinctively cause you to sabotage your likelihood of success. If you fear failure and limit your activities, you are acutely impeding the knowledge and wisdom that comes from opening yourselves up to the new and the unfamiliar.

In “Self-Renewal: The Individual and the Innovative Society”, John Gardner (1912–2002,) an activist and a member of Lyndon Johnson’s cabinet, reminds us that openness to new experience is vital to learning and self-renewal:

One of the reasons why mature people are apt to learn less than young people is that they are willing to risk less. Learning is a risky business, and they do not like failure. … By middle age, most of us carry in our heads a tremendous catalogue of things we have no intention of trying again because we tried them once and failed. … We pay a heavy price for our fear of failure. It is a powerful obstacle to growth. It assures the progressive narrowing of the personality and prevents exploration and experimentation. There is no learning without some difficulty and fumbling. If you want to keep on learning, you must keep on risking failure—all your life.

Are You Ready for a Promotion?

September 29, 2009 By Nagesh Belludi 1 Comment

Promotions Can be Stressful

Last year, researchers at the University of Warwick found that the mental health of managers typically deteriorates after a job promotion. Part of this anxiety is attributable to,

the loss of the security of a familiar role and the established relationships around the role,
perceived cognitive inadequacies concerning demands of the new position, and,
the uncertainty of transition and the innate human resistance to change.

The greater part of this anxiety is a common career mistake. Often, professionals take up new responsibilities for which they are not entirely prepared. Even when management judged them as qualified for the new role, without thinking through a new role before accepting the promotion, these professionals unintentionally position themselves for stressful transitions, bitterness, or eventual failure.

When Is It Time to Move On?

Do not assume that you are ready for a promotion just because you possess the right academic background, you look the part, you have the right contacts within the company, or, you have impressed your management with your capability to develop a few good ideas and articulate them well.

Here are a few questions to reflect on and assess your chance of a successful promotion or a horizontal transition.

Are you enthusiastic about taking on a new role? Does the new role fit into your medium- and long-term career plans?
Have you been performing your present duties well enough to justify a promotion?
Do you have a successor in mind for your current role? Have you made yourself replaceable? Are you willing to entrust your current responsibilities to a successor without a significant interruption in pace of work?
Are you qualified or experienced enough to do no less than, say, 40% of the new role reasonably well?
Have you demonstrated eagerness to gain knowledge of the new responsibilities?
Are you familiar with the responsibilities, autonomy, challenges, opportunities, and deliverables of the new role? Do you know how to get things done in the new role? Do you know where to get help?
Are you proficient with the communication, networking and interpersonal skills needed to make it in the new role? Will you get along with your peers, subordinates, and management at the new role?
Are you at ease with the demands on the new role: time, travel, pressures, and challenges? Can your family (or other aspects of your personal life) support this transition?
Can you swallow your pride if you are rejected for the new role? Are you ready to seek honest feedback about how management values you, listen, and make yourself more promotable in the future?

The more questions you answer with a “Yes” to, the better your chances for a successful promotion. Reflect on the questions you answer with a “No” to. Create a growth plan, improve your professional profile, and, ask for feedback from management on what you can do deserve a promotion.

Who’s Responsible for Your Career

June 11, 2008 By Nagesh Belludi Leave a Comment

A large number of professionals continue to mistakenly subscribe to the notion their organizations are responsible for managing their careers. They suppose that their Human Resources departments or their bosses would create their career paths and guide them at each stage.

Predetermined Job Ladders?

Certain organizations–the military, the police force, for example–may offer predetermined job ladders. It is customary in these organizations to award promotion based on length of service, training completed, or, to a lesser extent, on-the-job achievements.

Other organizations offer ‘development programs’. (Refer to this list of Leadership Programs offered by General Electric.) Essentially, these programs comprise of a series of rotational assignments across diverse functions of the corporation. For example, the manufacturing-leadership program at a capital goods company may involve four six-month assignments–one assignment each in supply chain management, shop-floor operations, production capacity planning and manufacturing finance. These development programs enable an apprentice to be exposed to a broad range of functions and gain valuable experience. Even with these programs, though, you are expected to pursue a longer-term assignment in one of the functional areas at the end of the rotations. Beyond that, employees are expected to manage the rest of their careers.

You Manage Your Career

Your career growth is solely your responsibility– it not the organization’s or your boss’s duty. You should be responsible for planning your own career, continually evaluating goals and implementing initiatives for your professional growth.

Here are a few suggestions to help you establish a roadmap for the skills, expertise and experience you need to get where you want to be.

Research for job opportunities at your company and in other organizations. What skills are recruiters looking for in potential employees?
Study the profiles of successful people in your industry. Why are they successful? What are their academic backgrounds? What are their career paths? What professional associations do they belong to?
Reach out and network. Meet as many people as you can by joining professional associations and maintaining regular contact. Studies have shown that 70-80% of all executive jobs are found through professional networking.
Seek a mentor’s help. Request a member of your management team or industry association, a retiree or a local business owner to help you understand your strengths and interests and develop a career plan in your chosen industry.
Volunteer and be known. When you volunteer on cross-functional committees for product improvement or professional development, the decision-makers can get to know you, your skills, abilities and career interests. Such exposure will help them consider you for challenging assignments.

« Previous Page

Personal Growth

The Rise of Andrea Jung and Avon (1999–2005)

The Fall of Andrea Jung and Avon (2005–2012)

Avon never recovered from the blunders that Andrea Jung presided over

Lessons from Andrea Jung’s Leadership Style at Avon

Wondering what to read next?

Walton’s Initial Success … and Then, in a Heartbeat, Failure

Sam Walton Was Not One to Dwell on Disasters

Successful People Learn from Failure and Get On

Wondering what to read next?

Benjamin Franklin’s Organized Action Plan for Efficiency and Success

Idea for Impact: Create Your ‘Plan of Conduct’

Wondering what to read next?

Wondering what to read next?

Promotions Can be Stressful

When Is It Time to Move On?

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Predetermined Job Ladders?

You Manage Your Career

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