25. Collaborative Competition for the Win! with Lisa Gable

What do you get when massive competitors like The Coca-Cola Company, PepsiCo, Nestle USA, and General Mills walk into a board room? A 6.4 trillion reduction of calories in major household food products.

Tune in to hear the phenomenal story of how Lisa Gable, author of Turnaround: How to Change Course When Things Are Going South, along with a diverse group of food corporations, joined forces to identify a common denominator that would promote more health conscious food items. This led to the ultimate shattering of the organization’s original pledge of a 1.5 trillion caloric reduction, forever shifting the way that the country’s nutritional charts are made up in the marketplace.

Transcript

David Morris  00:09

Hi there. Welcome to the HiPERleadership podcast first episode of 2022. I am your host, David Morris, CEO and founder of HiPER Solutions. At HiPER Solutions our mission is to inspire and enable high performance leaders to deliver positive change. Leaders today are faced with unprecedented change. And yet even the best leaders have had to toss out their standard playbook and think outside the box. Our intent with the HiPERleadership podcast is to share best practices so that you, our listeners, can gain some actionable and practical approaches to your next big bet endeavor. To kick off the series for the year, I'm happy to introduce Lisa Gable. For more than 30 years, Lisa has been called to turn around failing organizations from Silicon Valley to Washington DC for businesses, teams, nonprofits, political campaigns, and government projects. And solve seemingly intractable problems. Under the Obama administration, Lisa helped the biggest competitors in the U.S. corporate food industry come together to remove 6.4 trillion calories from the American food market. As a mutual friend described, Lisa is drawn to solve the most difficult of all challenges. And Lisa's new book, Turnaround: How to Change Course When Things Are Going South, shares the learnings she's here to discuss with us today. Lisa, thank you for coming.

Lisa Gable  01:33

Well David, I really appreciate your having me.

David Morris  01:36

So many things in your background and what a terrific book. I want to go back to 2009. You reached out to join a role you weren't exactly sure though why you then got a follow up call from something different than you thought you applied for?

Lisa Gable  01:50

Absolutely, I had seen a advertisement for a role that talked about the need to carry messages forward around health and wellness. And emphasized a great deal of media activity. So I put together my bio as well as photographs and an assembly of different media interviews that I've done. And I sent it off. And it was weeks that went by as those things happen. And all of a sudden, I got a call asking me if I would have a moment to speak with the Chief Scientist from Campbell Soup Company, from Coca-Cola, as well as executive vice presidents from PepsiCo and other companies. And I said well, what is this about? And the answer was well, it's the job you applied for. And I said which job are we talking about? I don't remember applying for a job that involved those companies. And they said oh well we kept the announcement very broad, but you applied for this job. And we want to talk to you about a self regulatory commitment that we would like to make as an industry. And so I had the wonderful chance to meet with them and then meet with a group of CEOs of those companies and was brought on board to launch what would be the industry's largest self regulatory action.

David Morris  03:00

Can you help me understand 6.4 trillion calories? What does that like add up to? Like well, what does it look like if you were like pile that on top of each other?

Lisa Gable  03:09

Well, basically, what it means is that we removed calories from every food that was sold by the 16 companies that represented 35% of the foods sold in America. And we did that - you have to remember, these companies sell a lot of products. And so what we did is we reduced calories from each portfolio. And so in some cases it may have been five calories. And some that may have been two calories. And so by removing small amounts of calories across the food supply, it was easy to reach that reduction and add it up in total to be 6.4 trillion calories.

David Morris  03:46

Amazing. So if we sort of look at the challenge when you showed up. You had 16 or so of these organizations that had formed this collaboration. And these were competitors, right? In many ways.

Lisa Gable  03:58

They were fierce competitors. I had Coca-Cola and PepsiCo. I had Kellogg and General Mills. We had the Campbell Soup Company, which also competed with General Mills because they owned a soup line. So we're talking about 16 fierce competitors who made the decision to basically compete on lower calorie products. And that led through the essence of competition alone to a very significant change in the marketplace.

David Morris  04:23

So they really had a common goal and what essentially were they most concerned by? I mean why did they have to come together in the first place?

Lisa Gable  04:30

They were facing an incredible amount of regulation both in the United States as well as in foreign markets. They also were facing taxes on sugar. You saw major cities were advocating that they would tax companies with the primary focus on beverage. Uh for the sugar quantity of their drinks. And they were also facing a anti-sodium movement led by Mayor Bloomberg in New York City. And so this was an industry that was under attack and it was one that was representative of 100 year old well loved brands. And so they needed to win back the consumer. And they also needed to protect themselves.

David Morris  05:08

And where was the President at on this topic?

Lisa Gable  05:11

The President was right in the process of advocating for the necessity of ACA. Basically a change in how we handle health insurance. And what the First Lady, as we know, she took on the area as something that was important to her. Uh Michelle Obama through her Let's Move campaign. And they were looking at data that showed that obesity really was one of the five driving health care costs. And the reason why is you had hypertension. One of the top reasons people's health care cost went up. You had overweight. You had issues of heart attacks. And so when they analyzed what were the five drivers of cost in America as it related to health care, all related to someone being overweight. That's one reason the First Lady took the issue on. The numbers weren't great and it wasn't a good position for our country to be in.

David Morris  06:02

So there's a common goal. You know, you've showed up, they've already tried to make progress. But what was really the fundamental challenge that you root caused in this turnaround?

Lisa Gable  06:12

Well, when I showed up, they had been meeting for 18 months. And they'd had CEOs locked in, you know, the Ritz Carlton boardrooms and hotels. And they would meet and they would go through trying to figure out what they were going to do to meet this threat that they were getting both from regulators as well as from the public health community. And the companies' product portfolios are very diverse. And so you know, you have people who are selling peanut butter and coffee. And people who sell bread. And you know, you had Pepperidge farms. You have soup, you have cereal, you have candy, you have chocolate. And there are different regulations for those. Chocolate, as I learned is is defined by an international standard. And so there's not a lot of wiggle room in making a change to the recipe of how chocolate is made. Secondarily, cereal is governed by USDA and has certain restrictions around how cereal is calculated. And so all of a sudden, General Mills and Kellogg couldn't go to shifting a great deal of the way that they made the recipes of those products. And so the companies had these huge sheets of paperwork. They were trying to come up with a common denominator that would enable them all to make a commitment as a group. And to make what I call a pre-competitive investment. They would have to invest money. Ultimately, they invested $52 million over an eight year period of time to make this happen, and for our organization to be able to operate. But they kept running into barriers because they didn't make the same food. And what occurred is that the McCormick Spice Company after we'd sat through tons of meetings. I tell people I took more migraine medicine than I'd ever taken before. There's a lot of acrimony between public health and government officials in the food and beverage companies. We have this effort called our idea lab. And what we use is we have a bunch of former McKinsey folks who come in, and they basically facilitate a conversation that enables our customers to reformulate products and come up with a new line of products that will be successful in the marketplace. Let's try that. And so we literally packed up the carnival, we went down the northeast corridor to Baltimore and we sat in a conference room. In this idea lab at McCormick and the companies and the public health officials were going through all the ways that the products were formulated. And in the corner you had an epidemiologist, Claire Huang, who was an avid and excitable conversation with -"unintelligible" - who is at Campbell Soup Company. And they both leaped up - people are like sitting with heads down, big pieces of papers, calculators, trying to figure out a way forward. And they yell - they go it's all about calories. And you may have thought that was obvious, but we hadn't really thought about calories as a common denominator. And what we realized at that moment is that if you reduced calories. And every food has calories in it, unless it's a zero calorie product. That we would be reducing sugars and fats. And that each company would have the flexibility to transition their product lines in different ways but against a common denominator.

David Morris  09:14

Had there been other common denominators in your previous turnarounds? Or was this kind of a new thought in terms of how to get such different people, industries, interests all around something?

Lisa Gable  09:28

Well, I would say that you always have to make a decision as to what is the one thing you can do that's going to move the needle? And it's not always obvious. And one thing I tell people - and I learned this term in the pharma-biotech area from doctors. Is they say you need to understand what's the underlying cause of the disease. When I was at the World Expo, it was formerly known as the World's Fair in Japan, I took over an organization that frankly hubris and a desire to spend a lot of money had resulted in my predecessor being indicted. And it had also resulted in FBI investigations and the US Congress making the decision to not allow government funds to be used for US participation in future World's Fairs. And so I had to figure out how I was going to put on what was basically a entertainment and Disney-like Epcot experience in a foreign country. And do so in a manner that allowed me to not run into the issues that my predecessors had run into. Simultaneously, for our contributors, we ended up having a 100% privately financed operation. The first one in 150 years. We had to find a reason why they would want to do that. And we had to do it within a lot of restrictions around branding. One thing about World's Fairs is they don't allow overt branding. So you can't have a logo popping up anywhere. And so somebody needs to get a benefit from their engagement with you. And so that was a conundrum. We had to find what was the underlying cause of the disease? I.e. why had my predecessor been indicted and why had previous people in my position had significant Inspector General reports. And why Congress had gotten so angry about poor use of US government funds. So that was one issue. But secondarily is we had a obligation to our host country and to the participants in the fair to have an entertaining area that people would want to come to and learn more about the United States. But third, I had to come up with a solution that would enable our donors - private sector donors to get some benefit. We all might say we love apple pie and motherhood, but you don't as a company give somebody a million dollars for apple pie and motherhood. You should give it because you get them to solve a problem for you. And so what we did is we focused on using these private funds to drive foreign direct investment into the United States. And since we were doing this in Japan, we were working with Toyota Corporation. What we designed was a process of opening up factories across the United States as well as the supply chain that supports those factories. People that make tires, oil producers, paint makers, manufacturers. The element is you have to dig dig, dig, dig, dig to understand why something's not working. And then you have to coalesce everyone around a solution set that has market value to it.

David Morris  12:17

So then going back to calories that was not a word they were using. They were talking sugar, sodium, etc. You got to delve to calories.

Lisa Gable  12:26

Right, exactly. They were - they had nine different things that they could change within the products. But when they would attempt to - again, let's take sugar, for example. When they looked at reduction of sugar across product lines, or reduction of fats, or trans fats, because products are made differently, you couldn't have a common denominator. You know, like if you said everybody has to take exactly the same amount off, you might have bread that was - well not rising so well. Or you might have ice cream that tasted really bad. And then you would run into a problem with those standards holders for chocolate that are sitting in Belgium. So we had to have a common denominator which was calories. It had the greatest flexibility to allow people to make changes in a coherent fashion that would actually solve the problem.

David Morris  13:14

In terms of that moment where you needed to calibrate the level of buy-in of the 16 organizations around calories. Like did the idea merge with everyone around the table? Or do you have to go back to each of them? I mean what was sort of the buy-in process?

Lisa Gable  13:27

Well, the buy-in process originally, which was the thing that was causing the rise in Lisa's consumption of migraine medicine, is that we would gather all these industry people together. Some of the greatest minds, right? We're talking about amazing scientists that make food that we all love to eat. And we were trying to get them to work with, you know, some of the most brilliant people in the public health industry. And so we attempted a great deal of facilitation. But what I would say and what I loved cause it's actually something I've done before. Which I can speak to in a second. Is using process to solve a problem. And what I have learned, as you know, throughout my career, it's the essence of my book. Is that I've been able to apply manufacturing processes to solving complex problems in government philanthropy and business. And so that's what we did in this case. Is we made it all about process. We brought in people that were process focused to break down all the component parts and see if we could identify that common denominator.

David Morris  14:22

Powerful. And then once you had that common denominator, what was your gap at that point between sort of where you're at and you know, the ultimate goal?

Lisa Gable  14:30

Well, we did an estimate. When we got the common denominator, we actually worked with the Council of Economic Advisers, OMB, and First Lady Michelle Obama's office, as well as the Robert Wood Johnson Foundation. Where we ran numbers on existing food in the food supply that was sold by the companies that I represented. And we did it across multiple different product portfolios. And we did it around the fact that you would have to have a reduction of 100 calories per person per day in order to achieve the objective and in running those numbers our original calculation was that we needed to withdraw 1.5 trillion calories out of the marketplace. And so when we did our announcement in May of 2010 at the White House, we announced that we would withdraw 1.5 trillion calories from the marketplace. And everyone across the board had an agreement that that would at least be something that would cause a shift in the marketplace. But what happens is when you put 16 fierce competitors together, they compete. And when I tell people, it's like, when you have Michael Phelps swimming in one of the lanes. Everybody ends up breaking a record across all the other lanes. Right? Because he's breaking records beyond what anyone else can achieve because he's Michael Phelps. But the guy from Germany who's next him just broke a record too. Everybody swimming and changing their pattern to compete with the number one player in the space. And so we had Pepsi and Coke and Nestle. We're talking about three of the largest food and beverage manufacturers in the world. And then you had the other 13 companies. Everybody was competing. And so what occurred is that we were blown away where we reached our goal three years in advance by 400%, when we actually found out that we had decreased calories by 6.4 trillion calories. And some people came to us, especially in the media, and they go well, did you just underestimate? Did you, you know, were you just doing this so that you can blow through a number. And we honestly could say we had no idea. We had no idea about the capability of the companies to make that reduction across all the food lines. And this is an initial thing that's so important if anybody's involved in public policy. Everybody needed flexibility to make the changes in the manner that suited their business the best. We were not trying to put people out of business. We were trying to make people more competitive. And by not giving them a rulebook on you have to change X amount of sugars, X amount of fats. You know, X amount of sodium. You have to do it these specific ways. We said here's our ultimate goal, make the changes in the way that's going to work for your product portfolio. That's gonna allow you to be competitive. And we were beyond successful. And that was the critical factor in the success of this entire operation.

David Morris  17:16

So freedom within constraints.

Lisa Gable  17:18

Absolutely freedom. Freedom to make the changes. And I think that's one thing that we're seeing today. While you're getting so much of a backlash across the different states is we need to start thinking about giving people - in the COVID conversations, we need to give people the flexibility to make certain changes in the manner that fits for the community that they live in. The manner that fits for the environment in which they live. That fits within the company structure that they live in. We need - big goals are critically important. But and - and I've pulled people together around big goals. But the number one area that allows for success is freedom in how you make whatever change you're going to to fit with your profile. We ended up driving 99% of salesl, over a five year period, were driven by lower calorie products. We were able to prove through that competition that the consumer actually wanted lower calorie products. That they wanted them to be tasty and affordable.

David Morris  18:14

Remarkable. So as we think about other industries that this could be applied to. Both regulatory but just in nonprofit, for profit, etc. When a game changing CEO comes in and you have a board of directors with perhaps different timelines of you know, their goals and objectives. And you got team members with different viewpoints and remote work now. Someone will work remote. Some - I mean, you just think about your various constituencies with different viewpoints. What would you sort of recommend as protocols for developing that common denominator?

Lisa Gable  18:46

You need to understand what the metric is of your true success, right? What is the metric of your true success. And stop thinking about how it happens? Start thinking about what you need to have happen in order to achieve your business objectives. And give some flexibility in how its measured. I ran a company for 15 years where we had women who had all been Harvard and Wharton MBAs and vice presidents of big companies like Oracle and Apple. And they wanted flexibility to maintain their financial value. I.e. how much they charge for their work. But they needed flexibility and how they did that when their children were younger. We are the ultimate sandwich generation, right? The women of my generation were having children later in life. So they were in their 30s. And as a result, their parents were older. So you had that need for flexibility, but nobody wanted to decrease their financial value. Nobody wanted to have to stop after investing so much in who they were. And so by giving them metrics based performance requirements to finish and identifying what was most important to our clients. And then building out schedules that they could achieve those objectives in a manner that allowed them to take care of aging parents and young children in elementary school. We were very, very successful. And I think that's the key for what we're talking about with COVID right now is start putting barriers because you think that's how someone should do something. Start putting yourself in the point of view of the other person and understanding what's going to inhibit them and what's going to inspire them and what's going to allow them to be successful.

David Morris  20:16

But just building on the whole remote work topic, which I know is so top of mind, for CEOs across the board. Putting yourself in the shoes of let's just say a governor for a moment. A governor of one of the top five largest states. How would you come up with a policy around remote work?

Lisa Gable  20:34

I don't think the governors need to place the policy in remote work. I think what you need - instead need to do is the governors need to sit down with the employers in their state and come up with what are the success criteria that is going to enable us to employ as many people as possible in our state. And allow them to continue to have the value of a paycheck. And government can be very top down, but what it's not taking into consideration is even in states the communities are so very different. The population of people in those states are very different. The businesses in those states are very different. You can't have a one size fits all policy. It's the thing we all try to do. And one size all fits policies don't work because you need to understand that it may work for one person, but it's not going to work for another person. All the businesses aren't the same. Again, let's just take the food. I had people making ice cream, candy, chocolate, bread, pizza. They're really different. You can't solve the problem the same way.

David Morris  21:32

And then if you zoom in on that governor example, just to state agencies. Essentially people reporting up to the governor, but across the state agencies. Would you do a similar thing where it'd be department rather than a universal thing?

Lisa Gable  21:44

I would, but I would also put myself in the shoes of the consumer. I've been in conversations recently - it's an area of great passion for me about access to health care. Equity and health care. And what we've been doing is breaking down the actual barriers to an individual getting the health care that they need. One example is that the states that were able to, in communities that were able to give shots 24/7, allowed people who worked at different times of the day to go and get their shot. You know, it's funny, I have - my vet is a 24/7 vet. I can take my dog to go to the vet for her regular checkup at 10 o'clock on a Friday night. And when I was traveling 70% of my time, that dog never got her shots and checkups on time. Once I found a vet that was willing to give me that service at 10 o'clock at night, my life changed. It was so much easier. And right now we operate on an eight to five, nine to five schedule, for all of our goods and services. And that's problematic when people - my daughter's a teacher in Texas. She can't make phone calls during the day. She can't go see a doctor during the day. She takes care of children. So who's going to take care of her classroom when she's gone? She can't go get her blood test during the day. We need to think about how we provide a system that allows people to get the services that they need in a cost effective manner. And really businesses are better capable of thinking through those options, and then working with policymakers on standards that must be applied. Right, like you're working towards a standard. There must be a performance standard that's involved, but not necessarily the rules on how you do it.

David Morris  23:27

Yeah. And I think that's really a terrific example across all industries. If you think about your various stakeholders. Zooming again into the stakeholder of employee. Whether it's a state agency or Fortune 500, is that where your mind again goes in terms of what - what do the employees really want? What do they need? How do we create, again, the freedom for the various constituencies? Or does it change at all if it's an employee constituency in your mind?

Lisa Gable  23:51

Well, you have to think about what the business needs to be successful. And the business is going to need to have some people who are at a certain place in time doing something. You know, we have a lot of manufacturers in this country. Now some manufacturers have moved to 24/7 manufacturing, which give people more flexibility on choosing when it is that they want to be standing on that line. So schools have a window in which children arrive. There are different employment requirements of a job. An individual can make a decision that with their current life constraints that perhaps they don't have that flexibility looking again at this access issue. And it really fascinates me - we look at how many buses does a person have to take? How far away is the doctor, the specialists, they need to see? What's the cost of parking? And then here's the question, they may work for a firm or a institution that requires them to physically be somewhere in order to meet the needs of their customer. Now small businesses, again, or school, they have a problem if somebody has to take off during that time period. And so what we're doing is we're breaking down at a very basic level, the true barriers of access. We have a lot of lofty conversations. But it is one reason why I do think that industry - and you see chambers of commerce and others doing this - need to work hand in hand with their local community to really understand what the barriers are in that community. Because together they can link arms and come up with solutions.

David Morris  25:22

It's amazing how many different problems out there, this model that you've refined over time applies to. You know in closing, if you put yourself in the shoes of a president. Um of a country, a governor, Fortune, 500 CEO, Fortune 500 let's say chair of a board, and you're looking to bring in a game changer. You know, to solve a big problem. Let's take homelessness. Trying to solve homelessness. Trying to solve any of these massive issues. And you want somebody who has this ability to run the playbook as you just sort of laid it out, Lisa. What are some of the things that you may look for in interviewing that candidate who's going to come in to tackle this problem?

Lisa Gable  26:02

You know, it's interesting, I'm actually helping a group of investors on a climate change project that's going to be quite significant. And the number one thing that we've been talking about is they don't want someone who's wed to a solution. They want a person who has very specific technical training. Because having technical training - actually having created a sustainable solution. Brought something to market. Brought something that can be utilized within a manufacturing environment to solve the climate problem is critically important. But more on top of that is they want someone who has the intellectual bandwidth, interest, and curiosity to dig into the other technical fields. And is not so wed that one particular thing is the end all be all solution. What we tend to do is we tend to go to specialist. And specialists have an advantage in that they obviously understand the ins and outs. Then in each of the cases, I was put at the bottom of the stack repeatedly. In fact, what happened is they'd already gone through a whole set of interviews. And finally, the storyline is that the woman who was in charge of the Bell Labs at General Mills, the scientists brought out my resume, and she goes okay, we haven't found anybody. We've interviewed all these people who are specialists. What about this person. She just seems like she knows how to solve problems. And it looks like she's smart enough to figure out different industries. And that's how I got the job.

David Morris  27:22

Yeah. And we have found that with game changing leaders you all have a consistent pattern of inconsistency in the zigzagging of the career. From problem to problem as opposed to just up the ladder.

Lisa Gable  27:32

I think so. And I think that today we are dealing with a level of consistent complexity that we have never had. We have never had the world be this complex on a consistent basis. And so the rule books that we've created in the past. We're seeing them break down. They're no longer applying. And so it's really important for us to really visualize the future. What we want it to look like and break down what are the inhibitors. The exact inhibitors. It takes a granularity of analysis that are keeping us from solving that particular problem and stay away from lofty rhetoric. Instead, just break it down, audit it, and then figure out what are the pieces of the puzzle that are going to help you get to where you need to go.

David Morris  28:14

Lisa, this has been amazing. And I hope you'll come back and visit us after your next challenge that you're working on.

Lisa Gable  28:20

Well, great. I would love to come back and visit and hopefully we'll have solved some of the climate problem questions by then.

David Morris  28:25

I have no doubt and I look forward to what the common denominator is.

Lisa Gable  28:29

Thank you.

David Morris  28:33

And to our listeners, thank you for your continued support and feedback. Be sure to subscribe to the HiPERleadership podcast on your favorite platform so you are the first to know of new episodes with exciting guests. And if you are tasked with leading a big change initiative, visit our website at hipersolutions.com to learn more about how our playbook can increase the likelihood of success while de risking the change initiative.