Secrets of the Successful Turnaround CMO

After years as the butt of other people's jokes, RadioShack spent $4 million on a Super Bowl ad earlier this month to make fun of itself, opening with this line: "The '80s called: They want their store back." Developed on the recommendation of agency GSD&M late last year and never copy tested, the ad risked reinforcing an image RadioShack CMO Jennifer Warren had heard countless times from shoppers since she took the job nine months ago. But it was really about announcing to as many people as fast as possible that RadioShack is remaking its stores, merchandise and image. Getting to take big risks on marketing's biggest stage points to why being a turnaround CMO can be so attractive, according to marketers, consultants and recruiters. The job calls for bold moves that draw major attention, and higher-ups are more willing to take risks because the risk of inaction or half measures is bigger. "I'm someone who kind of always runs to the fire and likes a good challenge," said Ms. Warren, "because with that are the big rewards if you succeed at it." The immediate feedback from the Super Bowl ad has been highly positive, with favorable reviews (including in Advertising Age). Nielsen found it the most likeable ad on the Super Bowl based on social-media buzz. RadioShack's stock opened up more than 8% the day after the game and closed up 3% on a day when broader market indices fell more than 2%. Of course, it will take more than one ad to change things for RadioShack, whose sales were down 10.3% in the third quarter, the most recent reported. Despite recent gains, the stock is still down more than 26% the past year as its turnaround remains a show-me story on Wall Street. Ms. Warren realizes all that. In one of her first meetings with CEO Joseph Magnacca last year, the former GSD&M executive recalls saying: "If this is just about building an ad campaign I'm not interested, because you've got to actually rebuild the business and brand." That includes improving the merchandise, in-store experience and the rest of the operation. "To me, it makes the advertising easier, because we have real things to talk about," she said. And by working closely with other company leaders, she said they're so well versed in the marketing strategy they can deliver her brand-transformation presentation on their own. "You have to be a cross-discipline leader," said Jim Stengel, former Procter & Gamble Co. chief marketer and now a consultant, who faced a turnaround of his own in 2001 after P&G's stock had plunged more than 50%, leading to CEO regime change the prior year. He compared RadioShack's strategy of admitting "We're tired of that and so are you, so we're changing" to that of Domino's CEO Patrick Doyle and CMO Russell Weiner more than four years ago when they admitted its pizza used to taste bad as it contended the new stuff was better. Virtually every turnaround starts with a deep dive into what the brand is about and by talking extensively with consumers, Mr. Stengel said. The insights needed often come from extensive data and analytics in what are often financially driven turnarounds, said Carlos Cata, managing partner with recruiting firm CT Partners, so turnaround CMOs have to be able to "manage complexity" and lean heavily on data, even as they draw on strong people skills to attract and develop talent. "I've always believed the data will set you free, because it really empowers an organization to see where its strengths and opportunities are," said Jeannine Haas. Ms. Haas became CMO of Avis Budget Group in 2011 as it was struggling to come out of a recession that had led to bankruptcy speculation for the company. Relying on data also helps "take the emotion out" of what can be some difficult conversations, she said. After she brought in brand consultancy Interbrand and new agency Leo Burnett Business, Avis focused on positioning its lead brand as a premium offering for business travelers and Budget as more of a "smart shopper" choice for leisure travelers. While Avis is still No. 3 (a notch below the No. 2 of "We Try Harder" days) among the big car rental holding companies, sales and shares have both been improving steadily, with revenue up 13% last year to $5.2 billion according to Auto Rental News, boosted in part by acquisitions of Zipcar and deep discounter Payless. The stock has nearly quadrupled the past two years. And the Avis brand is an Effie finalist for this year, Ms. Haas said. Recruiter David Wiser, who has sat in on meetings with Ms. Haas and her team as she worked to tailor her organization and build her team, sees her as an empathetic leader who focuses on what people need to do without beating them up. "She's widely respected across functions, and people love working for her," he said. Some turnaround specialists may have a tough image, but Mr. Wiser said, "I don't think the table pounder and the f-bomb dropper is the one who's necessarily going to be the most successful at fixing something." So, besides the risk and reward, what makes marketers want to take on turnarounds? Like others, Wendy's CMO Craig Bahner mentions the opportunity to "work on an amazing, iconic brand." Realistically, iconic ones often need turning around. Wendy's was still growing when he arrived in 2012, if slowly and behind the market. And CEO Emil Brolick already had established its "a cut above" positioning at prices comparable to other fast feeders. Still, the brand hadn't had a consistent, recognizable ad campaign since founder Dave Thomas died in 2002. Mr. Bahner, a former P&G general manager, focused on better execution, menu innovation, marketing discipline and more digital and social media. And ads from Publicis Kaplan Thaler featuring Morgan Smith Goodwin as "Red" have run longer than any Wendy's ads since those with Mr. Thomas, producing some of the best awareness scores in the industry, Mr. Brolick said on a November earnings call. Same-store sales rose 3.2% in the third quarter and 5.9% over two years ago, the best two-year comps since 2005. And the stock has more than doubled to above $9 since October. Of course, even the best turnaround efforts may not ultimately save some companies. Such was the case with Eastman Kodak Co., laid low by digital technology even though it invented the first digital camera in 1975. As CMO there from 2009 to 2010, Jeffrey Hayzlett made a big splash, boosted sales, became a regular speaker on the marketing-conference circuit. He ultimately moved on to become a consultant and host of "C-Suite with Jeffrey Hayzlett" on Bloomberg TV. Despite his efforts, Kodak filed for Chapter 11 in 2012 two years after he left. Mr. Hayzlett still sees his work as a success that helped set the stage for the $2.5 billion revenue company that emerged from bankruptcy last year selling consumer printing, touch-screen technology and movie film. But he said the work would have been easier had the bankruptcy come years sooner. He added: "The CMO is not the CEO. You can impact a great number of business decisions and make some, but ultimately you don't control the decisions." The experience may reveal the most important trait for a turnaround CMO, an entrepreneurial spirit unafraid of failure, or even reluctant to admit it can happen. "You can't really fail," Mr. Hayzlett said, at least not personally. "You can fail because the organization is too far gone or really doesn't want to change or the market conditions are such that you don't have enough runway." But ultimately, it's like baseball, where the home run hitters also strike out the most, he said. "You're always swinging big."

Secrets of the Successful Turnaround CMO

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