Hershey CEO Michele Buck on Empowering Internal Change Agents

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1:02Hi, welcome to the New World of Work, Harvard Business Review's show on the future of work, how we will work, how we will collaborate going forward. Each week on the show, we have a CEO or a big thinker to talk about some of these big ideas, and we have a great guest today. I will introduce her in just a second, but first we will hear from our friends at Unisys. When you think about how the cloud can help your business. Are you thinking big enough? We can help you drive more value from the cloud. We're Unisys, and we do cloud really well.

1:41All right, so our guest today is Michelle Buck. She's the president and CEO of the Hershey Company. These are roles that she's had for the past five years. She previously held senior positions at Frito-Lay, at Kraft Foods, and at Nabisco. She is the first female CEO of the Hershey Company, which was honored by Forbes last year as the world's top female friendly company. We will talk about that and more. Welcome, Michelle. Thank you very much. All right. So it's really it's really great to have you here. I'd love if you could start. Just tell us a little bit about your personal journey that took you to the top of the Hershey Company.

2:20Absolutely. So I would say, interestingly, I think there are some parallels between my personal journey and the journey of the Hershey Company, because both are really rooted in strong values being at the core of what led me to where I am and the company to where it is. You know, I give a lot of credit to where I am from the influence that I had on my family, my friends, and my environment growing up. And I was instilled very early with several key values by my parents. And that was in the approach of the value of hard work, being nice, appreciating that everyone has something to contribute, being humble and taking great satisfaction in personal achievement.

3:07You know, I came from humble beginnings. My mother grew up on a farm with no indoor plumbing. My grandparents dropped out of school in seventh grade and were taken care of by their older siblings. My dad was the first person in his family to get a high school diploma. He then went in service and actually went on to get a college degree on his own. Early on, I think I leveraged some of that value of hard work, and I started doing jobs very early on. First, a paper route, babysitting, waitressing, selling Avon door-to-door, working in retail, working in banking. And what I found out about myself was I loved to learn.

3:47I loved all of those different experiences. And each one taught me something very new and different. I learned through those firsthand the value of hard work and the independence that it gave me and the sense of achievement. I was always a good student. When I went to think about college, I needed to pay for my own undergraduate education. So I went to a local state school, Shippensburg University, and worked 20 hours a week to pay for that. I worked a few years coming out of college, and then I decided to get an MBA, really to open doors to have more options. And I chose UNC Chapel Hill, a top 10 school, but one that was very focused on teamwork as one of its core principles.

4:32And that was a lot about what I am all about. And so it was a really good fit. Following that, I've had a long history in the blue chip consumer pack. Propel Fitness Water with Gatorade electrolytes, zero sugar, and vitamins. Propel hydrates better than water to help you get the most out of your workout and get back to your best self. What propels you? Propel with Gatorade electrolytes. When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications and more.

5:12Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a$75 sponsored job credit at Indeed.com slash podcast. That's Indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed Sponsored Jobs. packaged goods companies, starting at Frito-Lay, going to Kraft General Foods, Nabisco, and then Hershey's. And if I think about all of those years, I would say that there were two things key to the assignments that formed me to be who I am. One was I always went after an assignment where I could do something I had never done before.

5:52A little bit scary, but something that was really exciting. I also, in each assignment, focused on how I could leave it better than it had been in the past. And a lot of times I found that meant transformation, transforming the business or the opportunity. And a few examples of some of those experiences very early on in brand leadership. If I first worked on a low margin business, I would then work on a high margin business. I created a new season on the Co-Whip brand, 4th of July, based on some consumer insights that I learned about the head of household, female head of household, who was using that product and wanted a hero impact, but with not much effort.

6:37My first general management experience, I was given a plant that was a Teamsters Union plant, not performing well, was going to be shut down. And my challenge and opportunity was, could I accelerate that business by turning around the plant? And it was an amazing experience because I had no technical manufacturing knowledge, but through being resourceful and through being a good leader and a good listener, I was able to work with the plant employees, put in place participative management and turn the plant around. And that was one of the greatest rewards I ever got in my career was an award the plant workers gave me, which was a plaque they handmade, you know, congratulations on your promotion.

7:22Our loss is their gain. I had a second journal manager job that was running a business when I was at Kraft that was pretty much disconnected from most of Kraft's main systems of sales channels or their manufacturing network. So that gave me a lot of responsibility. I was given responsibility to run a divestiture early in my career of a business, all on my own, working with the investment bankers, something I had never done before. And then here at Hershey, when I first came, I had the opportunity to be one of the key architects of transforming our business model to be a brand building model, taking our advertising from 2 % of net sales to about 9%.

8:03And all of these situations really led to, I'd say, breakouts on those businesses and also breakouts in my skill sets that I think led me to

8:20am today, which is a focus a lot on thinking about transformation and disruption as an opportunity, really setting clear vision, taking bold, courageous decisions, listening to people, and learning as I go and adjusting. That is a great answer to that question. I feel like I know you a lot better. I feel our audience does as well. I encourage if viewers have questions for Michelle, please put them into the chat. We'll try to get to some viewer questions later. So talk a little bit more. Okay, so about five years ago, you become present CEO of the company. Talk about, you know, you started to talk in general terms about transformation, but talk more about like, what did you want to accomplish?

9:06You come to this, you know, very successful, long running company, but you want to bring your own stamp to it. You want to change, you know, what did you set out to do? Yeah, so I believe the world is rapidly changing. And I think we see that every single day. It is changing faster than ever. And I believe that to continue to thrive, even if you have many great things you're doing as a company, you can't stand still. Propel Fitness Water with Gatorade electrolytes, zero sugar and vitamins. Propel hydrates better than water to help you get the most out of your workout and get back to your best self.

9:41What propels you? Propel with Gatorade electrolytes. When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications and more. Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a$75 sponsored job credit at Indeed.com slash podcast. That's Indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed sponsored jobs. That will not be success.

10:17And so I really looked at where's the opportunity for us to transform to accelerate top line growth and also to create a sustainable future for the company. So as I looked at that, I set out a vision for us to be an innovative snacking powerhouse. So Hershey was already number one in confection, and confection is the second biggest category within snacking. And by virtue of that, we were actually the number two snacking player. We had a number of core capabilities, including taste science, ubiquitous distribution, consumer insights that could transfer much more broadly than to just our confection business.

11:00So, and could actually take our confection business to the next level as well. So I set the vision, Innovative Snacking Powerhouse. I decided there were really four key strategies that we needed to focus on to deliver that. First of all, I wanted to accelerate growth on our core U.S. confection business, the bread and butter of our business. It was responsible for most of our sales and definitely all of our profit at the time. But we needed some new thinking to really accelerate growth and take it to the next level. And we focused on a few things within that business, including better balancing the core and innovation, implementing new pricing levers, et cetera.

11:42We expanded our portfolio by really dialing up mergers and acquisitions to play more broadly across snacking. So over the past five years, we bought Skinny Pop popcorn, Pirate's Booty, more recently, Dot's Pretzels. So really expanding our portfolio. The third strategy was to make our international business profitable. International had always been a growth engine for us. We had gone from a pretty nascent position. And so the first goal was really to drive top line. But we had now gotten to a sizable business that just was not making money. And so the real focus there was to become profitable, which required some big changes.

12:22It required changing our business model in certain markets. It even required some bold decisions like unwinding an acquisition that we had made that had not turned out so well for us. And then my fourth strategy in the vision was to further accelerate our culture. Hershey has an amazing culture. It's one of the things I love about the company. Great people, hardworking, salt of the earth, values, integrity, people who want to make a difference both in the company and in their communities, very team-focused and people-focused. But I saw an opportunity for us to dial up our agility and our risk-taking so that we could better seize opportunities.

13:05And that last strategy really involved some changes in thinking about leadership and what we valued in our talent. And at Revolt, leaning upon looking for some of the influencers in our organization who were disruptive thinkers, who were bold risk takers, and really leveraging on them on some of these key initiatives that were big and bold to really help get the momentum going to execute them. And I'm pleased to say that we had very strong results over the past five years in executing against the strategies, really accomplishing each. And as a result, we've been able to double our market cap in the past five years.

13:49So very pleased with where we've landed on that and the capabilities that we built along the way. So I'm interested in what you said about trying to tap into the bold thinking of some of your employees. Can you talk a little bit more about that? What you mean exactly? How do you identify those people and how do you empower them to have more agency in the strategy? Yeah. Propel Fitness Water. With Gatorade electrolytes, zero sugar, and vitamins, Propel hydrates better than water to help you get the most out of your workout and get back to your best self. What propels you? Propel with Gatorade Electrolytes.

14:31When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications, and more. Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a$75 sponsored job credit at indeed.com slash podcast. That's indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed sponsored jobs. It's really interesting because I would say there are many people and maybe even most people don't love change.

15:06They don't love the idea of big transformation and taking big risks because obviously there can be downside. And what I did was I looked across the organization and I saw people who had shown evidence of having an ability to some combination of being able to see the future and see where trends were headed, to really think about what some of our greatest strengths were as a company and how we might fully leverage them. There were people who epitomized some of the greatest strengths in our culture and were really respected by the organization. And I looked at some of those folks, and many of them were not at the very top executive level.

15:49And I really pulled them up and then put them into a group. I kind of formed nine of them together and identified to them why they were chosen, and then put them to work on some of these big initiatives that we were trying to achieve, and made sure that we listened to their thinking on this, because I think a lot of times those really disruptive thinkers can get shut down. And then I also paired some of the folks who are disruptive with folks who are really amazing executors, because the power of having somebody who's a really big thinker and partnering them with somebody who's just an excellent commercial operator can be incredibly valuable in not only getting the great ideas, but then making sure that we have the right plans to execute them flawlessly.

16:35that's really interesting so um again i want to urge people i'm talking to michelle buck president ceo of the hershey company if you have questions for her please put them into the chat um you haven't really talked about the pandemic and i'm curious um how the pandemic the last couple years has affected your business for you know for for good or or for bad and in terms of supply chain in terms of of how you work how you innovate how you collaborate i'd love to hear how you think gets changed the company. Yeah. I mean, I'd say, wow. I mean, it was devastating, scary, and a real slap in the face when it happened, certainly, to our ongoing operations.

17:15You know, what I didn't realize and what I learned was all the work that we had done on our core culture of valuing people and the incredible muscle we built in the five years or the three, I guess, really the three and a half years leading up to it relative to being agile and taking some risks actually ended up serving us really well in the pandemic. So when we started out and the pandemic hit, we established two key principles. One was that we were first and foremost going to focus on the physical, emotional, and economic well-being of our employees. And that became the framework for so many decisions.

17:54The second key principle was we decided that we could either manage this as a risk or we could step back, look at what was happening and see where there were places that we could seize opportunity. Clearly, it was a huge tragedy from mankind. But in terms of being able to service consumers during this very critical time, there were opportunities that could help them. And so, you know, we first leaned in to safety and we did an amazing job outpacing our competitors relative to, first and foremost, making our manufacturing facilities safe for our workers so that we could continue to produce. And our customer service rates during the early days of the pandemic, especially the first year, far surpassed any of our competitors, which gave us a huge advantage.

18:44It also really enabled us to meet consumer needs, a time when they needed our category most and they were looking for comfort when the world around them was really crumbling. We also leveraged a lot of analytics to understand very rapidly in real time. Propel Fitness Water with Gatorade electrolytes, zero sugar and vitamins. Propel hydrates better than water to help you get the most out of your workout and get back to your best self. What propels you? Propel with Gatorade Electrolytes.

19:43this is a job for Indeed Sponsored Jobs. The changes in consumer behavior and what the biggest change that we saw were consumers who used to be mobile and therefore were consuming our single serve products, buying them in convenience stores or other places, were now at home. And we needed to totally pivot the focus in our portfolio. So we focused instead on Twizzlers, which are used at home when watching movies, s'mores, backyard s'mores, campfires, because everyone was told, stay home and be outside and be only with your family. And we were able to execute that pivot pretty well. One of the biggest decisions we had to make was around April 1st, we had to decide how to produce product for Halloween, trick or treat, one of our biggest occasions, a huge piece of our business and decide, okay, maybe there's going to be no trick or treat, in which case we should pull back.

20:40But we decided, you know what, people are going to want that connectedness, that togetherness. We heard from consumers that they would want something for their kids to be able to do. And we leaned in, produced Halloween trick or treat, and then worked to get messaging out there on how to safely trick or treat. So from a business perspective, that was, you know, those were some of the biggest impacts. Certainly we are still managing through all the supply chain challenges. But I think it, you know, it was a tragedy. It was a difficult and has been a difficult situation, but in many ways it made us better relative to risk-taking, relative to being agile because we needed to, and also relative to taking our people-centric culture to the next level because our employees needed us more than they ever had.

21:34So the pandemic and some other trends have, you know, created this moment we're in now, call it the great resignation, call it the great reshuffle. I'm curious your perspective on that. What are the challenges that you're finding in terms of bringing in and retaining talent? And, you know, what are some of the solutions you're trying to bring to that? Yeah, I think I'd first kind of start with the backdrop of what the pandemic led to was a total change in people's relationship with work and what they wanted in terms of how they would work, where they would work, what kind of perks or benefits they want from their employers.

22:15And I think in this war for talent, understanding what's important to our people is the key to success in being able to retain them. So let me start by saying so far, the facts would indicate that Hershey is navigating the challenge pretty well. Our attrition rates are just about comparable to 2019 pre-pandemic. And what we've really done is focus on listening hard to what our employees want and then pivoting as we go. We know that they want even greater care systems than ever before. They have a lot going on in their lives. Their lives are more complicated than ever before. That includes financially, emotionally, physically.

23:02Well-being is even more important to them. Flexibility is everything. And we've learned a lot and continue to learn about how to best master that. We, like some other companies, have gone to a two, three kind of framework in terms of flexible work. So Mondays and Fridays, we focus on focus time where people can plan, do big thinking about what needs to be done. And Tuesdays through Thursdays, really much more focused on collaboration. That's our overall very loose structure. You know, there's been a big debate with, I think, a lot of people about, I call it mandate versus motivate. I think everybody started saying, but we're going to mandate people come back to the office.

23:46And I think what we quickly learned was people aren't going to be mandated. They have other options. They can work remotely. And we quickly switched our focus to how do we motivate people? What is it that they want when they come in in the office? And it's very different than before. We've really heard them say there were three key things. It was about this is their time to engage, to really be deeply engaged with their coworkers. So they want to make sure they have the opportunity to do that. This is their time to be connected. When they're at home, they're isolated. Even though they like the flexibility, they want connectivity and they want the office to be fun.

24:21And we've put in place a lot of different things to try and create that, whether it's, you know, free pizza Wednesdays, which started getting people in on one day, let's get together for lunch. People would build around it. You know, breakfast networking sessions, a lot of different things that can informally bring people together. We focus for our manufacturing employees on much more flex time. I think our manufacturing employees previously were more interested in overtime, and now we're hiring more employees so that we can provide less overtime. We're improving training, and we're looking at optimizing our employee value proposition for them.

25:01So I think all of those things are important. How do we help our employees to be their best whole self so they can live their best whole life, but also bring their best whole self to work. Yeah, great. I talked at the top of the show, I mentioned that you're the first female CEO in the history of the Hershey company, and that you were named by Forbes as a top female-friendly company. Talk about what does that mean? Talk about the progress Hershey has made in making the company female-friendly, if you think that's a fair designation, and any advice you have for people who might be watching, who women who might be watching who would like to achieve some of the success that you have.

25:43Absolutely. You know, I'm very proud and humbled to be Hershey's first female CEO, though I would say on a day to day basis, I don't think about being a female CEO. I do think about just being a CEO and being the best CEO that I can be. And I hope that people see me as a leader who sets vision, is courageous, is very focused on our people and what's best for them, inspires and has the work ethic to be respected by all. I do think we've made some really great progress, and it's been very intentional. We have about 48 % gender diversity globally. We have a board that is 42 % gender diverse, and we've worked really hard to get to one-for-one aggregate gender pay equity.

26:34So we've put a real focus. And I think making progress is really about having focus and setting goals. We increased the gender diversity of our board over the past, I'd say, maybe eight years, but it was a very focused goal. And we remain focused on that. We try and be flexibility relative to what the needs are of women in our workforce, as we do with other folks who have specific needs. So we're really trying to focus as well on driving visibility and also acceptance of different leadership styles. I think that that's also really important in terms of being a diverse and inclusive company, whether it's with women or with people of color.

27:23So I have a question. This is an audience question. This is from Rachel from Cambridge. And there are a few questions really that are about sustainability. And this is specifically in terms of climate sustainability. You know, how has Hershey's responded to investor pressure, to SEC pressure, to disclose more and to, you know, get on a path of climate sustainability? Yeah, so I'd start by saying Hershey's in a unique spot where we, going back to our founder over 125 years ago, have been a company really grounded in corporate social responsibility. Our founder, Milton Hershey, when he built this company, took great care to build a community for all of his employees with everything that they needed to live a good life.