This week Avon CEO Andrea Jung was released from her position and stock prices soared. The company is trying to find its footing and the CEO was the unequivocal target. Is that a bad thing? Is there anything that Jung can take from this experience?
No woman is an island
The first thing that jumps out at me is the fact that Jung had no COO. I believe that this fact alone could have predicted this outcome. She’s got experience and pedigree, but the lack of a COO is a lesson in business acumen. As much as we women want to believe we are great multi-taskers, the reality is that we cannot do everything well. We may be able to divide our attention adequately, but doing something well requires focus. The best way to be successful is to surround yourself with an executive team that you can depend on. A strong support team could have alerted Jung to challenges before they became shareholder problems.
Business objectives should be consistent
In an international company like Avon the need for a consistent business message is so important. Different sites are going to require different tactics, but the over arcing message should be consistent with the company’s core business objectives. This consistency makes it easy to implement upgrades to systems and changes in management structures.
Don’t lose sight of your core business
Growth is a key performance indicator for many businesses and it is a great measure of success; the problem comes when that growth doesn’t tie into your core business. Avon began as a cosmetics company and in its rapid growth has made the foray into fragrance with famous spokeswomen and jewelry by acquiring Silpada. The problem is that Avon is known as a cosmetics company and it hasn’t communicated how these acquisitions tie into that brand. As a result the individual acquisitions have done well, but according to their annual report their core business has dropped by 6%. Customers have started viewing makeup as peripheral Avon business which means bad things for growth.
Stock what you sell
Customers have been very vocal about the inability to order items and as CEO, Jung should have been clued into that. When you ask people to spend money it is kind of important that you have the item on hand for them. In today’s environment customers are very impatient and I know that I personally hate going to a retailer for a specific item only to find that the item is perpetually out of stock.
As CEO you have a to be aware of the big picture and being a figurehead does not give you the luxury of burying your head in the sand. Jung had a big job no doubt, but it seems like she put the last nail in the coffin. Hopefully this post will keep you from doing the same.
“The best way to be successful is to surround yourself with an executive team that you can depend on.” — this is so true. Thanks for sharing these lessons. Very valuable.