Ward Klein
Sharon Fiehler
Welcome everybody to a new Possibility Podcast. Today we have with us Ward Klein. Ward has had a wonderful career, claiming many interesting things. I must admit, what I’ve always admired was the logo for the last company you ran, which was Energizer. The logo inspires me all the time – the bunny that never quits. Hopefully, you yourself have been able to use that logo in your career in many ways. I'd like to talk a little bit about your career. Just tell us a little bit about yourself.
Ward Klein
Sure! I grew up in the Midwest in Iowa, went to college at St. Olaf College up in Minnesota, a liberal arts college. It's about 3,000 students, independent, loosely affiliated with the Lutheran Church, ELCA. I was planning to go for two years to a liberal arts school and then transfer to a business school, because I always knew I wanted business. But I enjoyed St. Olaf so much, I stayed for the full four years and got an economics major, but a liberal arts degree. Back then, you could go straight into grad school. So I went straight from St. Olaf to Kellogg Graduate School of Management at Northwestern for a two-year master's in management degree. Then straight out of Northwestern, I came down to St. Louis and started my career as a marketing assistant on Meow Mix cat food for Ralston Purina Company.
Sharon Fiehler
Wow, Meow Mix! We all remember those commercials. They might still be on, but I'm not positive about that.
Ward Klein
They bring it back occasionally. I was in brand management. As I was thinking about business, I wanted to do accounting or finance or organizational development, or whatever. The enticement to me with brand management was really being a general manager early in your career. You were managing a brand. In this case, it was Meow Mix, $70 million in revenue. I was a marketing assistant, and there was a product manager who was basically CEO of that little brand. The two of us were making a whole range of general management decisions on the brand from the get-go. Perfect training for what I wanted, which was general management. I worked my way up through the brand management system of Ralston Purina. This started in 1979.
Sharon Fiehler
So you were working closely with CEO type of people.
Ward Klein
You would report, you know, early on in your career as a marketing assistant, then as an assistant product manager. Your exposure was to product managers and directors of marketing and the VP of the department. As you became a product manager, managing that little business, you'd start getting exposure actually to the CEO of Ralston Purina Company, the annual budget reviews and that sort of thing, which is great learning early on – intimidating, but great learning.
Sharon Fiehler
Of course, if it's not intimidating, it probably doesn't count.
Ward Klein
Yes, if it's not intimidating, you're probably not learning. In 1986, Ralston Purina acquired the Eveready Battery Company from Union Carbide. I was asked to come over to the new acquisition in marketing. I transferred over as a director of new products for Eveready. I spent one year commuting to Danbury, CT from St. Louis while we had a less than one-year-old baby in the house. My wife was a real trooper to handle that, because I would take off Sunday night or Monday morning and come back on Fridays. But we knew that was a temporary event because we were moving everybody to St. Louis to Ralston Purina. After that year, we moved the operation to St. Louis. I continued working in marketing as director of new products, and then I moved over as director of marketing for the main brand, Energizer. And in 1989, with me as a director of marketing, we introduced the Energizer Bunny advertising campaign – during the baseball playoffs.
Sharon Fiehler
Wow, that's a long-lived kind of memory.
Ward Klein
It's still going. My license plate on my car parked outside here says ‘keep going on.’
Sharon Fiehler
What a theme for a career, too – keep going!
Ward Klein
Well, you know, there is an aspect to it that I found appealing. At Eveready, we introduced the bunny, and then I was asked to go out of marketing and do some different things, different challenges that the company was facing. I created the trend marking department, a new discipline back then, which was kind of a hybrid of marketing and sales, helping the sales force manage customers in a more professional and financial manner. And I created the systems in the department and the methods and the processes to do that. I came back as VP of Marketing briefly, and then I was asked to become area chairman for Latin America. I ran the Latin American operations for a couple of years, and then I was asked to become the area chairman for Asia, Africa, Middle East. This is a territory that extended from Morocco to New Zealand and South Africa to Korea, Japan, and required moving the family – at this point in time two kids ages 10 and 13, dog and cat and wife. That was kind of a big lift to really decide whether to do that. It's obviously disruptive.
Sharon Fiehler
Where did you move?
Ward Klein
We moved from Clayton, MO to Hong Kong. The first six months were tough on everybody, but through toughness, you learn and grow a lot. Looking back, it was probably the best couple years our family ever had in terms of coming together, personal growth, watching the kids grow as international citizens, rather than just kids from the Midwest. We were in Hong Kong from '97 through 2000, and then came back to Energizer. I came back to a company that had spun itself off from Ralston Purina to shareholders. Energizer at this point, in 2000, was an independent, publicly listed company on the New York Stock Exchange. I came back and continued to oversee various international operations, became a chief operating officer in 2004 and became the CEO in 2005.
Sharon Fiehler
Wow, and you kept that role for 10-plus years?
Ward Klein
Up until July of 2015, which is when I split Energizer into two companies. We had grown over those 10 years, but not in the battery business. The battery business delivered great cash flow, stable business, but not a growing business, as batteries as an overall category was starting to decline. We were taking the cash flow and acquiring personal care brands, like Wilkinson Sword razor products, Edge Shave preps, Banana Boat Hawaiian Tropic sun care products, Playtex infant care and feminine care products, and so forth and so on. And by 2015, the personal care division made up of all those brands was actually bigger in revenue and profits than the battery business.
Sharon Fiehler
It's so interesting to take a business that was kind of, like you said, not growing and realize that for shareholders, if we want to have growth here, we're going to have to diversify.
Ward Klein
And that relationship for the 10 years worked really well in terms of the cash flows from batteries delivering the growth on the personal care side. By 2015, however, we had this huge personal care portfolio or business that was being valued by the street at a lower multiple than it should have been. In the consumer product space, household products like batteries or household cleaning products carry a lower multiple, a lower value in the shareholders' eyes than personal care brands. And we were mostly a personal care business at this point, but being valued as a household products company, and the only way to unlock that value was to split the companies in two. The day we announced the split, we had a $1 billion of shareholder value that stuck all the way through the split and for years afterwards very. It's very traumatic to take an organization through a split, but we accomplished that, and it was my last act as CEO to actually split the company in two, which from a succession planning point of view is interesting, because I'm not looking just to fill my role as CEO. I didn't have two CEOs, two CFOs, two treasurers, two controllers, two organizations.
Sharon Fiehler
Opportunities and problems all at once.
Ward Klein
Exactly. But we had great management teams on both divisions and nationally, it was pretty straightforward. The legal split of a company almost down the middle across 45 countries – that was interesting.
Sharon Fiehler
So what do you think of your early background gave you the insight to be able to see a little bit of where the future was and how to create shareholder value out of Energizer?
Ward Klein
Well, first of all, a lot of great training from Ralston Purina management and Bill Stiritz, who at the time and for many years was Chairman and CEO for Ralston Purina. He was a leader in the US industry in unlocking shareholder value. He came in to Ralston Purina at the tail end of what was popular back in the 70s, which was building conglomerates of disparate businesses. Well, that made no sense, and Bill saw that before anybody else. He took Ralston Purina, which was a conglomerate that had everything from Horace Chow to mushrooms to Jack In The Box to hockey teams to ski resorts. And he boiled it back down to a consumer products business called Ralston Purina and added a tremendous value. So I had, early in my career, a front row seat in terms of what it really means to add shareholder value and how to do it and how to be courageous about it. It was very successful for Ralston Purina shareholders. One of the major shareholders is the Danforth family, being some of the major most generous contributors to the St. Louis region, Washington University, of anybody. A lot of that wealth the Danforths were able to donate came from what Bill Stiritz did at Ralston Purina. It was not just a new and innovative and courageous way to add shareholder value, but in the end, doing so for what turned out to be some very good purpose. It was a great learning ground for me so that when I became a CEO, we took shareholder value very seriously, not lip service. There are different ways to create it, and interestingly, one way not to really create it is to focus so much on quarterly earnings. And so early in my CEO realm, we spoke very rarely to the street. We very rarely would go do the investment presentations in New York. We didn't do an earnings call every quarter.
Sharon Fiehler
Well, you were a leader in something that's becoming much more of a theme among companies today.
Ward Klein
Well, we actually started to institute some of those more common shareholder management techniques or investment management techniques because today is a different environment with all the activists and activism. But I still am more a believer that your goal as a CEO is to maximize shareholder value. The question always is, which shareholder? It could be the day trader. It could be the person that's in your stock for the month or for the quarter or for the year, or it could be your long-term shareholder. And to me the answer was always long-term shareholders. So why worry about the stock price? If anything, if the stock tanked because of an earnings report, that was a great opportunity to buy, and we bought probably close to half of Energizer during (...) and before. Almost half the equity we took out of the market over the entire time was the weighted average price of $42 a share. The day we spun the company off, it was $100 a share. That's a lot of shareholder creation on top of what you're doing with the business, then you turbocharged it with share repurchase. And we did share repurchases, again, unlike most companies today. They will announce: We're going to go buy 10 million shares coming here. The reason a CEO would do that is because maybe they had a bad quarter and they're trying to placate the street so they can say, hey, look straight, we're going to go buy all the shares. Well, that may be fine to manage those shareholders for that quarter. That's a lousy way to go into the market and buy shares for long-term value. You don't want people to know when you're buying shares, you know. We would have a public authorization, all the legal rules criss crossed. But we would go buy when the stock tanked or when there was a weakness in the overall market, because we just had that confidence in our long-term value. And this was going to be creative for the shareholders we cared about, which were the long-term shareholders.
Sharon Fiehler
So how do you translate some of that knowledge into how you would advise young people today who are maybe going to start their college careers or even while they're still in high school? What is it they can learn that's going to prepare them for this possibility of maybe someday running a company the way you did? Is there anything that translates?
Ward Klein
I think there's a lot. As a CEO, I spent a lot of time in training for early entry management, general management, and so forth. Some of what I would share with them, first of all, is that you learn more when you listen and when you talk. So by observing Bill Stiritz and how he ranted, I just learned a lot. You don't presume you know everything. And you just, especially in those early years, listen and learn. At least that helped me. I would say another lesson that came out of that early on is, don't just buy the convention of the day. Really think through what you're trying to do. What is the real objective here, whether it's popular or not? And what are the different ways you can achieve that objective? And again, Bill Stiritz demonstrated that with his approach to share repurchases. It might have been uncomfortable to do that as a CEO. You're not necessarily popular with the street. But in the end, you shouldn't care if you're popular based on how well you do that sort of interface. They will hold you in esteem if you actually deliver the shareholder value.
Sharon Fiehler
So do you think having an economics degree followed up with an MBA was important for you, too?
Ward Klein
I would say yes, and for me, four years of liberal arts. I majored in economics, but it was a liberal arts curriculum.
Sharon Fiehler
So how does that interplay with why you think it helped you?
Ward Klein
In liberal arts, you're discovering who you are, as well as what the world is like. You're not immediately just tunnel focused on a particular vocation, whether it's accounting or whatever. You learn some of the basic skills for that. But you improve your communication skills through the English and speech courses that you take, you improve your analytical skills through the courses on art history and astronomy; you improve your view of the world through the American history or world history courses you take.
Sharon Fiehler
A lot of the traits that become important to becoming a CEO.
Ward Klein
Exactly. Over the course of my career, I traveled and worked with management teams in 45 countries, and I was always comfortable with that. It was foreign, but it was something I wanted to learn more about. And I think all that came from just a general genuine curiosity that our liberal arts spark.
Sharon Fiehler
So when did you first think about becoming a CEO?
Ward Klein
What's interesting is that was never my goal. My goal was – I enjoyed leadership positions. I've been a leader on swim teams, a leader on water polo teams, a leader in sports environments, and I felt comfortable in that. I learned skills and how to handle discomfort and work with people that were self-confident about that. But in a big organization, the size of Ralston Purina Company, which is actually between Purina and Eveready, that was my entire career. My focus was more in managing the area of my responsibility really well. And so whether I became the VP of Marketing, having the best kick-ass marketing department in the consumer goods industry, whether it was running Latin America and getting Latin America running better than it had been ever before.
Sharon Fiehler
So it was always doing the best in the job you were in.
Ward Klein
Doing the best in the job I was in and, you know, let fate and other things sort out where I end up.
Sharon Fiehler
But it was a little bit being open to anything that came your way like the relocation.
Ward Klein
Exactly, and there were times in my career where I would take an assignment that my peers would view as a lateral at best, and maybe even a demotion. One specific example is when I moved off of Meow Mix, I had been on Meow Mix early in my career as a product manager, brand director, had worked my way up for three years at that point, and even though we had done really well at Meow Mix, and I was enjoying that responsibility, I was ready to do some other business, some other challenge. They needed someone to take over Rye Crisp snack crackers and Ralston Hot Cereal in the human foods division, as we call it. These were brands that were a fraction of the size of what I had.
Sharon Fiehler
And you wondered, why would I do this?
Ward Klein
They had major challenges, and I found it interesting, and I was going to learn. I moved over onto those brands. And we turned both around in short order, and I was learning a whole different industry, human food versus pet food. It was a ton of learning, and I went for the learning. Maybe that's another thing in preparing for CEO. Always go for the learning.
Sharon Fiehler
I like that.
Ward Klein
And I did. You know, just continue to build my toolbox of experiences, in this case successes, which keeps you in the running for your directors and VPs and executive VPS, who are looking for people who work well in the organization, and who get stuff done. And maybe that goes back to working well in an organization because we went through some eras of chaos and dysfunction within the company, especially after Ralston acquired Eveready and moved a bunch of Ralston Purina young MBA types into an Eveready culture, which was a Union Carbide global production management autocrat system. We were a young MBA democrat systems culture. And in those first four years, from '86 to '90, major warfare was taking place within the company.
Sharon Fiehler
So what would you do differently?
Ward Klein
Well, what was interesting was, first of all, what we actually did. At that point, I'm just a director of marketing. We found like-minded people in the Eveready culture and in our culture, who actually really just wanted to kick Duracell's butt. We were competitive, but we realized it wasn't amongst ourselves. It was this outside force that was taking market share away from us. So you almost kind of put your head low on the political stuff taking place between the VPs of marketing and sales and production and try to work at your level. We're getting stuff done. And many of the people who ended up surviving and rising up to run Energizer went through that, with that approach. Ever since then, I would preach to my organization, because a lot of young competitive people want to do well and want to move up the pyramid. I would give examples of people who were doing that, but leaving destruction in their wake, other departments and people and so forth. And they did not survive in our culture. I don't care if you're the best performing individual in a sales group. If you're causing all these problems elsewhere, you're bringing down the whole boat, and you're out.
Sharon Fiehler
It is a contagious thing.
Ward Klein
Well, and people are really watching. What does it take to succeed? And what are you looking for in success? So I would preach, if you're in production, your enemy is not the finance guy. If you're in finance, your enemy is not the sales guy. If you're in sales, the enemy is not the marketing guy. Your enemy, in this case, at that point in time, was Procter and Gamble, who owned Duracell, and your enemy is practically 20 times our size, 20 times bigger than us. No doubt who your enemy is. It's not the guy in the cubicle beside you. People who understand that are going to do well, and people who don't understand that will be invited off the bus. And to preach that in 45 countries in different cultures – everybody's sitting there shaking their heads, but then they have to wait and see: Is that really what you do or not?
Sharon Fiehler
So you have to prove it.
Ward Klein
When you prove that, when you live that, you will find a very high performing organization.
Sharon Fiehler
You've been a great supporter of women in business. You're on the board of Caleres, run by a woman. And I think you're also on the nominating committee for bringing in new directors?
Ward Klein
Yes, actually, I'm the lead independent director for Caleres. And my responsibilities there include governance and nominating – nominating being the function of a board, replenishing its own ranks with board members. And with Diane Sullivan's leadership, I really give Diane credit. I've worked with her, and we ended up with a board of directors – keep in mind, this is Brown Shoe Company, now called Caleres. Primary consumers are women, primary decision makers are women. And at this point in time, a majority of our board of directors are women, with a female CEO and chairman.
Sharon Fiehler
But there are a lot of companies that are also about women, and maybe don't have that kind of leadership.
Ward Klein
Absolutely. We are actually, unfortunately even today, the exception. I think there are very few Fortune 1000 companies that would have a majority of women on the board.
Sharon Fiehler
Having worked with a lot of women, what advice would you give? What have you seen women do that is right for their career path, or maybe not the best move that women can make – things that might hold them back? What advice would you have that you've seen for women who rise to the top versus those who maybe could have, but did something to change their career path, didn't get the right experience?
Ward Klein
I think it's hard to pine on this from a male point of view, first of all, but some of the characteristics that I described about myself aren't unique to men. For women to be good listeners, to be committed to doing the best they can with the area that they manage, to be effective at working with others throughout the organization, to be effective at rallying the troops around what the real issues and goals and objectives are, and to get buy-in on that so you have a high-performing organization. Women can do that. I've seen them do that. My first boss back when I was in marketing at Meow Mix was a woman. First of all, it's my career.
Sharon Fiehler
So it transcends gender.
Ward Klein
I think it does. Now, I will say that what does get in the way is maybe when you get into family formation and you start having kids, and many women do it. But oftentimes, we know the burden of raising those children and running a household disproportionately falls on women. That's tough. I admire the women who persevere through that and do great things, Diane Sullivan being an example at Caleres. That didn't hold her back. With couples – if you're talking about CEO-track high performance executives – if you have a couple with children involved, there has to be some real agreement on how to balance that. I know a number of cases where the guys step back from a career path. It's hard for both to pursue those career paths and still do a responsible job with children. I don't say it's impossible, but I don't think anybody would disagree: it's tough. If you have a spouse that is willing to maybe back off whatever career they're pursuing, I think that's a big plus. But to your opening question on what holds women back: I think it's just a reality of family formation and how you manage that. It doesn't have to be, but you have to plan for it, and that is very much you and your spouse, your partner, would have to plan for that.
Sharon Fiehler
You have a daughter, and for parents listening to this podcast, what kind of advice would you have for parents of younger girls and teenage girls as far as how they might direct them in leadership?
Ward Klein
I think first and foremost, anything's possible. You teach your children, your daughter and your son, to do the best they can in whatever they choose to do. And whatever they choose to do is what they choose to do. Don't necessarily limit yourself. Don't say no to yourself. Whatever it is, just be the best at it. And early on when they're in school or in sports or in social situations, just give them opportunities to succeed. Whenever you find they succeed, recognize that. And whenever they fail, don't focus on the failures. Focus on the successes. With young boys or girls, I think that is important. That's how they get their own self-esteem. They know they could succeed, because I just succeeded. I just got recognized for it. And there are a lot of things that go into that. Give your children, give your daughters a broad array of experiences. I think sports have been a great equalizer in this generation of kids versus maybe when we were growing up, right? When Title IX or before Title IX came into place, women had much less opportunity to play team sports. Team sports are such a great environment. It's a development tool in all the things other than just how to shoot a basket in basketball. It is how to operate on a team, how to play a position, to know what a position is, how to take leadership. I'm going to show leadership.
Sharon Fiehler
How to be a leader, be a follower.
Ward Klein
My bias may be towards sports, but certainly you can do that in band, you can do that in orchestra, you can do that in the theater, and so forth. Push those daughters to pursue those opportunities and reinforce it when they do.
Sharon Fiehler
Great, a lot of good advice. Is there anything we didn't talk about that you think would be important for either teenage girls or girls who are getting ready to go to college?
Ward Klein
I guess there’s one last quick clip I will put out there, because again, I used this in general management, and it seemed to resonate. It was especially for people who are new in a management position. You've stepped in to manage a department for the first time. You are moving from that position of being an employee or colleague of the company to managing a group of employees or colleagues of the company. That can be very intimidating. A whole new set of skills starts to get called in when you're leading teams in a conference. One piece of advice I give – I do this in fireside chats with people who are going through one-week management training programs who are managers for the first time – I say, okay, you walk into that conference room to your department. The door closes, and you're there and you have 10 things to get through. You realize one thing: It's not about you, it's about them.
Sharon Fiehler
Very good, I love that. Ward, I thank you for your time today. I admire what you're doing with the Caleres board, recognizing how women on that board can make a difference.
Ward Klein
It’s a great board.
Sharon Fiehler
It sounds like it! With what you do for the community, I know you're on many, many not-for-profit boards. I'm surprised you had time for us today. But thank you.
Ward Klein
Thanks for what you're doing. I think it's important.
Klein served as Executive Chairman of Edgewell Personal Care Corporation from 2015 to July, 2016. During his tenure, he supported a new executive leadership team during transition into their first year of managing a newly spun-off publicly listed company. Klein served as CEO of Energizer Holdings Inc. from 2005 to 2015. He grew the revenue of this large multi-national consumer products company from $2.8 billion to $4.4 billion through both organic growth and acquisitions.Klein delivered a total shareholder return compound annual growth rate in excess of 11% during his more than ten-year tenure as CEO.
He began his career in 1979 with Ralston Purina Company in brand management. After working in marketing at Ralston Purina until 1986, he transferred to the newly acquired Eveready Battery Company. After introducing the Energizer Bunny advertising campaign in 1989, he assumed various general management roles including Area Chairman of Latin America followed by Area Chairman of Asia, Africa, and the Middle East based out of Hong Kong. Klein became President of the International Division in 2002 and Chief Operating Officer in 2004 before becoming CEO in 2005.
He is the current Vice Chair of the Missouri Botanical Garden, and on the boards of BJC Healthcare, St. Olaf College, Eden Seminary, and The Sheldon Arts Foundation. In the past he was President, and then Chairman, of the St. Louis Civic Progress organization as well as Chairman of the Board of the St. Louis Federal Reserve Bank.
Klein received a Master’s degree in Management in 1979 from the Kellogg Graduate School of Management, Northwestern University. He acquired a BA from St. Olaf College in 1977.