Analysis: Five questions for Levi Strauss CEO Chip Bergh
Chip Bergh, president and chief executive officer of Levis Strauss & Co., center, rings a ceremonial bell during the company's initial public offering on the floor of the New York Stock Exchange. By Jena McGregor Jena McGregor Reporter covering leadership issues in the headlines Email Bio Follow March 22 at 11:36 AM It was casual Thursday — not Friday — at the New York Stock Exchange as traders were allowed to dress down in honor of Levi Strauss, the denim icon whose shares surged 32 percent in trading Thursday as it returned to the public market.
Ringing the bell and smiling through it all was CEO Chip Bergh, whose turnaround of the 166-year-old brand has reinvigorated sales, added partnerships with hip brands, and focused more on female consumers. A longtime Procter & Gamble brand executive, Bergh took over in 2011 and has overseen a growth in annual revenue to $5.6 billion, up 13 percent from the year before. The Washington Post checked in with Bergh at the end of IPO day about his turnaround, running a public company, and why it’s better to wear your jeans in the shower than put them in the washing machine. The conversation below has been edited for length and clarity.I don’t think it fundamentally changes anything. I think what investors have invested in, and what they’ve bought into, is that our strategies are working. They’ve bought into the executive team and to me as a leader. I think there’s a degree of confidence that we’ve built in our ability to continue to sustain profitable growth. There’s going to be the inevitable quarterly pressures, but don’t kid yourself: Even as a private company, we had commitments to our board and to our shareholders that I took just as seriously as I’m going to take our commitments to the public investors. There’s always been that quarterly pressure and the pressure to deliver. I think that’s healthy.Bad things happen to companies that don’t grow, and this is a company that had a very steep decline for a five-year period of time, and then it kind of bumped along for about a decade. When companies aren’t growing and creating value and paying bonuses and people [don’t] see their compensation growing over time, the good people leave. Now to be clear, there were still a lot of good people inside of the company, but they lost a lot of talent. I didn’t expect it when I joined, but I had to turn over almost my entire executive team. In my first 18 months, nine of 11 of my direct reports were gone. If you want to change the culture, you’ve got to change the people.What’s one of the best pieces of advice you’d offer for leading a turnaround? I’m not the smartest guy. I just ask good questions and can kind of connect the dots sometimes. It would be humility, and being really clear about expectations, giving people responsibility with accountability, and setting a really high bar for people. A big part of the culture that we’ve got now is one of trust and transparency. I do something we call “Chips and Beer” — kind of cute, right? — we do it late in the afternoon. We actually serve beer. It’s basically open mic. People can ask me anything. Sometimes I can’t answer everything, but it’s good to know what’s on people’s minds. I’ve been doing this for six years now, and over time people recognize I’m approachable, I’m real. [Levi Strauss takes a side on gun control: 'It’s inevitable that we’re going to alienate some consumers’] You’ve asked customers not to bring firearms into your stores and been vocal about gun control. Did your business take any hit after that? That quarter and the ensuing quarter, our business grew double digits. I don’t think there was any negative impact. Maybe more consumers were coming to the brand, but it’s hard to prove that in either direction. I do think as governments back away from some of their responsibilities to society — and I’m not just talking the United States; I’m talking globally — I do think that as leaders we have a responsibility to step up and not be afraid to take on these important issues. When the [Trump administration’s travel] ban was put in place here in the U.S. — which I fundamentally believe was almost anti-American and a fundamental human rights issue — we took a stand on that almost instantly. You said a few years ago that you don’t put your jeans in the washing machine and it went viral. Why, and how often do you really wash them? That is still a true statement. In fact, I regret that I didn’t wear my 10-year-old 501s today. What I do is I will spot clean my jeans, so they’re not totally gross. If I spill spaghetti sauce or something I will spot clean them and if they get really dirty and they need to be washed, I hand wash them in cold water. [A washing machine] uses a lot of water. That’s number one. Number two is if you talk to denim aficionados, they will tell you — and I believe it’s true — that if you put denim in the washing machine, it destroys the fabric over time. A good pair of jeans — if you never wash them, they will basically mold themselves to you and that’s what makes them so unique and so special. So don’t put them in the washing machine, don’t destroy them, don’t put them in the dryer. Wash them by hand. Or hop in the shower with them on and soak them down and rinse them off — I do that too. It’s probably going to go on my tombstone when I die. Nobody’s ever going to remember what I did for the business — they’re just going to remember me for that crazy quote.Like On Leadership? Follow us on Facebook and Twitter, and subscribe to our podcast on iTunes.
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