Chip Bergh loves a challenge — like the one he faced when he joined Levi Strauss & Co. in September 2011.
“There’s nothing more exciting to me than working on one of the most iconic brands in the world inside a company that lost its way for two decades,” Bergh said, speaking at a panel discussion at last year’s EY Strategic Growth Forum®. “The opportunity to make Levi Strauss & Co. great again and make it the best apparel company in the world is what gets me out of bed every day.”
Prior to joining Levi Strauss, Bergh retired from Procter & Gamble after a 28-year career where he worked in brand management and a number of leadership positions with progressively increasing levels of complexity and scope. His last assignment at P&G was group president, Global Male Grooming.
Bergh came to Levi Strauss and found a company that was still an iconic name in the clothing world, but had lost a significant portion of its business at the turn of the century.
“Another CEO once told me that the most important thing a CEO can do is confront the brutal facts,” Bergh says. “And use the brutal facts as an opportunity to engage people. And so, when I got to Levi Strauss, there was a lot of denial about the state of the business. I mean, people thought we were doing great.”
As it turned out, the iconic nature of this company that was founded in San Francisco in 1853 and has grown to more than 15,000 employees around the world was making it difficult for some to accept that there was a problem.
“We’ve got a big foundation that gives back,” Bergh says. “We set very, very high standards. We’ve got very high principles and values and so people feel great about working for the company. We’ve got great brands. But they were in complete denial about the business and the state of the business over the past 15 years.”
So one of the first things Bergh did was host a town hall meeting where he asked the group, “How many of you think we’re successful?”
“Almost everybody’s hand went up,” Bergh says. “And then I showed a slide. And the hands went down really quickly. It began to get people to recognize that we needed to change.”
The company’s revenue is steady at $4.7 billion, but Bergh is confident even better days are ahead.
“Our issue was inconsistency, so we created the 20-mile march which is to deliver top and bottom line growth year in and year out, no matter what,” Bergh says. “No excuses. That’s what great companies do. And if you aspire to be a great company, which we want to be, we’ve got to grow the top and bottom line every year.”
Accountable leadership
The ability to be upfront and honest with people is crucial for any great leader and it defines the approach Bergh took when he was named president and CEO at Levi Strauss.
“When I joined the company, my very first board meeting, I told the board that I would always be totally transparent with them and give them the good, the bad and the ugly,” Bergh says. “I said, ‘You will always have the right to fire me, but you’re going to fire me based on the facts.’ It’s easy to do when you’re the new guy, to do the good, the bad and the ugly. But when you’ve been there for three years, you own it.”
If you’re not bringing bad news to your board or to others on your leadership team, you’re not doing your job.
“Those are opportunities for us and so I’ve got this format that I use in our shareholder meetings every year,” Bergh says. “The good, the bad and the ugly. I’ve told the board to hold me accountable to it.”
Core values are another key component to an effective organization. At Levi Strauss, the core values are empathy, originality and the consumer.
“It guides us,” Bergh says. “The whole concept of being original, empathetic and really being consumer-focused is what created the company and the values are a big part. I’ve worked for two companies my entire career. Procter & Gamble has been around more than 175 years and Levi Strauss has been around for 162 years. And what’s common between the two is a very strong set of values. That really is the guiding north star.”
The organizational values are a big piece, but leaders must also grow from within and use their experiences to shape the leadership style that fits them best. Bergh went to Lafayette College in Easton, Pennsylvania, on a ROTC scholarship and then spent four years in the U.S. Army after college.
“My platoon sergeant and all four of my squad leaders were Vietnam veterans and had fought with bullets flying over their heads,” Bergh says. “It grows you up really, really quickly. I was a 22-year-old right out of college. They had to salute me. They had to call me sir. The first thing I realized was I had to earn their respect and earn their trust and that required a certain kind of leadership. You couldn’t just order them around. That was the first lesson I learned in the Army and it stayed with me this whole way.”
Bergh also equates good leadership with being a good parent.
“It’s knowing when to be tough and when to draw the line,” Bergh says. “Knowing how to make tough choices, whether it’s business choices or people choices, but at the same time, serving. So there is the whole servant leadership concept. But I really do believe at the end of the day, it’s about people and empowering people and growing talent.”
Leadership continues to evolve and so does the consumer experience. Levi Strauss is no different than any other retail business that has had to take a very different look at how to reach consumers in the digital age.
“We talk about the importance of the omnichannel consumer experience,” he says. “They walk into our store at the same time they’ve got their iPhone open and they’re comparison price shopping. We’ve seen our digital sales, our e-commerce sales, have gone from almost zero to almost 50 percent on a mobile device in the last two years. So it’s taking off.”
“Social shopping” has become a buzzword for retailers, especially when it comes to clothing where shoppers will try something on, take a photo and send it to their friends to ask for feedback on whether they should buy it.
“We’re investing very aggressively in the whole digital e-commerce space,” Bergh says. “I’ve got two grown kids and they’ve got three or four devices going at a time. They’re not watching traditional television unless it’s a football game.”
Find the right fit
Another aspect of business that is changing by the day is the way in which employees work. Telecommuting or working outside of the office has become the norm in a lot of companies, but Bergh is not sure that’s the best way to get things done.
“We do let people telecommute,” Bergh says. “But I really do think there is something to collaboration in running a global business. Having people together really does matter, so being present is important.”
The other side of that is being present with your family and those outside your work circle.
“My wife is Chinese and I’ve got a 6-year-old daughter who is fluent in Mandarin and she’s like a little darling in my life,” Bergh says. “When I’m home, I’m present. I’m not multi-tasking or on the iPhone. I’m trying to really be there. I think it’s about the quality of the time that you spend.”
Finding the right people who can balance their lives and excel at work and at home is not always easy. At the interview stage, Bergh likes to know what drives an individual as that tells him a lot about the individual’s character.
“I like finding winners, people who are competitive,” Bergh says. “Not knife-you-in-the-back competitive, but that like to win. Winning drives them. They set a high bar for themselves, they set their own goals, they’re self-starters and they’ve got that drive and determination. They’re not afraid of a challenge.”
Culture is big for Bergh and he’s proven that he’s not afraid to shake it up if he doesn’t think it’s working right for his business. The culture at Levi Strauss was not where Bergh wanted it to be when he became president and CEO so he made some changes.
“People look at their leaders for the decisions that they make in the business and also on talent,” Bergh says.
“Somebody told me once the best way to change the culture is to change the people. And I had to do that. I had to replace nine of 11 people on my executive team in my first 18 months. It was important to send a signal around the importance of performance and delivering and hitting your numbers, and nothing says it more than your actions. You can talk about it, but you’ve got to back it up with your actions.” ●
Takeaways
- Establish your own leadership style.
- Don’t be afraid of bad news.
- Get your culture where it needs to be.
Name: Chip Bergh
Title: President and CEO
Company: Levi Strauss & Co.
Bergh on not washing his blue jeans: We did a life cycle analysis on blue jeans and where water gets consumed. Half the water gets consumed before the consumer buys the jeans, mostly in the growing of the cotton. We have very little to do with water in the production of jeans.
But the other half is what the consumer does. And the typical consumer habit is you wear a pair of jeans and you throw them in the washing machine. And half the water consumed by a pair of jeans is consumed at home, and it’s totally unnecessary.
And the comments sparked a huge debate, right? Denim-heads, people that really love denim and know denim well, will back me up completely. If you’ve got good quality denim, No. 1, you’re not going to be out mucking the stalls in it, and No. 2, you won’t wash them. You’ll spot clean them and if you absolutely have to wash it, you’ll wash it in cold water and line dry them. And so it was a provocative statement, and it went so global, it had 4 billion impressions in 30 days.
Bergh on the future: Last time I checked, we don’t have 100 percent market share. We have lots of upside opportunity in our core business. We are underdeveloped in our women’s business. We’re underdeveloped in e-commerce. Asia and Europe are areas of growth for us right now, Asia in particular. China and India are big, big opportunities for us.
Some people say, ‘When are you going to buy another brand?’ And it’s like, we have so much that we can do just with what we’ve got. Everything we need to be successful, we already have. We just need to go do it.
