A Visit from Denise Morrison and Maggie Wilderotter: Our Faculty Discusses
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Apr 18, 2014

A Visit from Denise Morrison and Maggie Wilderotter: Our Faculty Discusses

By Jessica Love

Markets are on the move, and firms everywhere are doing all they can to adapt. This past Monday, sisters Denise Morrison, CEO of Campbell’s, and Maggie Wilderotter, CEO of Frontier Communications, visited the Kellogg School as part of our Brave Leader Series. (Yes, Morrison and Wilderotter are sisters, a remarkable happenstance given that women lead only about 5% of Fortune 500 companies.) Before speaking with the broader Kellogg community, they sat down to talk with Dean Sally Blount and select professors about how their companies are responding to changing tastes and new technologies.

What did our faculty take away from the discussion? Hear Greg Carpenter, Eric Leininger, and Jen Brown’s thoughts on the relationship between growth and market focus, Campbell’s response to the new Millennial consumer, and Frontier’s “fast follower” strategy.

Professor Gregory Carpenter:

Greg Carpenter
Greg Carpenter, Professor of Marketing and Faculty Director for the Kellogg Markets and Customers Initiative

Both Morrison and Wilderotter raised a very important point about growth strategy and customer focus. Where some see a tension between growth and market focus, these CEOs see customer focus as leading to growth. This reflects an understanding of marketing as an approach to leading and management, rather than just as a function focused on advertising and promotion. Very simply, the view is that customers are the source of growth, so choosing the right customers and creating value for them will produce growth.

Both CEOs also spoke about the challenge of creating a more market-focused organization. Frontier has its roots as a monopoly provider of telecom services, and Campbell’s Soup has been a strong player in its markets for years. But markets are changing. Shifting to a greater market focus to respond to those changes is a real challenge, especially as the speed of competition accelerates. Doing so requires abandoning slow, deliberate processes in favor of experimentation and adaptability. Accepting failure, empowering people closer to customers, and modeling the importance of customers are important elements of that transformation for CEOs.

Professor Eric Leininger:

David Dranove
Eric Leininger, Clinical Associate Professor of Marketing and Associate Director of the Kellogg Markets and Customers Initiative

When reverse mentoring first gained currency 20 years ago, it was all about younger people teaching older people about the Internet. Campbell’s has wisely expanded the concept to younger employees bringing consumer knowledge about Millennials to more-senior managers. In return, younger managers are getting the benefit of stronger mentoring earlier in their careers.

Morrison also articulated a powerful thought process for building the business with Millenials. First, the company admitted what it did not know. It went back to the basics in terms of understanding how Millennials are eating, shopping, cooking, and interacting with one another, as well as their media usage. The company determined that it had to create new food offerings within its core categories, resisting the temptation to go too far afield from its competencies.

Finally, Morrison spoke with great passion about the need to see “around the corner” and anticipate the future. She persuasively argued that this is a personal responsibility, as well as an enterprise mission: it is important for senior management to take the time to look at the world on its own terms, not just the terms that directly impact the company.

Professor Jennifer Brown:

Jen Brown
Jen Brown, Associate Professor of Management and Strategy

On the first day of the core strategy class at Kellogg, we introduce three big reasons why creating good strategy is challenging. (1) There are trade-offs. Making one decision often necessarily means giving up the opportunity to do something else. (2) Context matters. The nature of the trade-offs and consequences of the decisions depend critically on the economic setting. (3) Good strategy requires a firm to say “No” sometimes.

Maggie Wilderotter’s comments about Frontier’s place—present and future—in the telecommunications industry highlighted exactly these challenges. One dimension of Frontier’s strategy struck me as particularly illustrative: Frontier takes the position of “fast follower” in the services that it provides to home users and business customers. That is, it does not develop new technologies in-house, but instead takes products or services from outside of the firm and fits them into Frontier’s existing set of assets and activities. For example, Frontier might use its network of technicians to provide installation services for a wifi-enabled thermostat (developed by another firm) that can be controlled off a dashboard installed remotely on a homeowner’s personal computer by Frontier’s technical support service.

One trade-off: Accepting a role as a fast follower necessarily means foregoing the benefits—the learning, the early market share, the headlines, the glory—of being a front-line innovator. Of course, it also means that the firm does not have to collect the assets and activities necessary for such innovation, and can avoid exposure to the early technical challenges, failed experimentation, development costs, etc.

Context clearly matters: Only some customers will value the network of services provided by the firm. A firm has to ask: Does the intense customer service provided by the firm align with the needs and wants of its existing customers? Moreover, does fast following fit in with the other activities of the firm?

Saying “No” is important: Frontier has rejected the idea of expanding their customer base to include highly technically, sophisticated users. They have also said “No” to direct technology development.