"All of us in the room here who want to 'fess up will tell you that these products have not met consumer expectations, and that category will not be very big for very long," Mr. Baum said. Then, in a similarly straightforward fashion during a January conference call with analysts, he described the futility of Dial's trade promotion spending: "We spent $400 million on trade promotion last year. That's a quarter of our sales, and our sales went down. ... I want to be standing on a ledge when I say that."
Mr. Baum's frankness can be like a spritz of springtime freshness amid the not-so-fresh scent that often hangs heavy during analyst briefings. Of course, the truth can hurt. His frank discussions of the company's future prospects, including the possibility of ultimate sale, caused unease at Dial, prompting an internal company meeting in January. Mr. Baum, 63, has signed on for a three-year term as CEO, helping to show he isn't necessarily looking for a quick exit.
"I think our people are coming to expect that they may not always like what we have to say," Mr. Baum said, "but it will be the truth, and they'll hear it from us first."
STEPPING BACK FROM THE LEDGE
Analysts and industry watchers were skeptical that Dial could make good on Mr. Baum's plans to control trade promotion and invest more in advertising. But while far from swearing off trade deals, Mr. Baum and Dial appear to be coming in off the ledge. Dial has trimmed quarter-end trade-loading deals made in years past to hit quarterly earnings targets. For the first quarter, trade spending was down about $10 million, while sales rose 7.6% to $401.5 million as the company shipped new products for its key Dial, Purex and Renuzit brands, including Dial Complete, a new foaming anti-bacterial hand soap backed by a $20 million ad campaign from Omnicom Group's DDB Worldwide, New York. Earnings were still down
"With Herb Baum, what you see is what you get," said Gary Moss, senior VP on the J.C. Penney Co. account at DDB Worldwide, Chicago, and a former VP-marketing at Campbell Soup Co., where he was hired by Mr. Baum-who himself started his career at DDB forerunner Needham Harper & Steers in Chicago.
Mr. Baum spent 15 years at Campbell, leaving as exec-VP North and South America to join Quaker State Co. as chairman-CEO in 1993 before joining Hasbro Corp. as president in 1999. "In Herb, you have intuitively a very creative thinker. He's a superb balance-sheet manager. And he's just a terrific, supportive leader to work for," said Mr. Moss. "Part of me wonders what the course of Campbell Soup might have been had Herb not left and ascended to the chairman-CEO position."
Mr. Baum isn't about to speculate on that, but he is glad to be back in package goods, even in a difficult turnaround story. "I spent all those years at Campbell. We had a lot of success in that period of time. I'm most comfortable in a package-goods environment. So this is less difficult for me than either motor oil or toys."