Photo: Getty Images/krblokhin
Bed Bath & Beyond’s CEO cleans house
On Tuesday, Bed Bath & Beyond announced the departure of six members of its executive team. The exits follow the hiring on Nov. 4 of Mark Tritton, Target’s former chief merchandising officer, as CEO.
Those leaving include the heads of merchandising, marketing, digital and legal. The embattled retailer’s chief brand officer resigned last week. Three of the executives had been at Bed Bath & Beyond for more than 20 years. Only the company’s CFO and Mr. Tritton remain on the executive team.
“This is the first in a number of important steps we’re taking,” said Mr. Tritton in a statement. “Balancing our existing expertise with fresh perspectives from new, innovative leaders of change, will help us to better anticipate and support our customers in their life journeys and shopping needs.”
The retailer appointed interim leaders and launched a search for a permanent executive team, including a combined chief marketing and brand officer.
The moves were particularly surprising because they came eight days before Christmas, but shares of Bed Bath & Beyond climbed $1.70, or 11.2 percent, to $16.88 Tuesday on the news. Since the announcement of Mr. Tritton’s hiring on October 4, shares have catapulted about 70 percent as investors bet his hiring drives a turnaround.
At Target, Mr. Tritton launched over 30 private label brands in a two-and-a-half year period — some of which have surpassed $1 billion in sales — and helped the discounter deliver its best two-year same-store sales performance in over a decade. Prior to Target, he served as EVP president of Nordstrom’s Product Group.
Bed Bath & Beyond’s comps have declined for the past 10 quarters, attributed to heightened competition from Amazon, Wayfair, Walmart and Target.
In a note Tuesday, Cristina Fernandez, an analyst at Telsey Advisory Group, said Bed Bath & Beyond is “not an easy turnaround” given its market share losses. But she is hopeful Mr. Tritton will be able to bring in new exclusive and private label brands, add self-checkout and take other steps to improve the in-store experience, and speed online delivery to make the chain more competitive. Ms. Fernandez described the quick exec exits as “decisive and bold actions to execute a turnaround.”
- Bed Bath & Beyond Inc. Announces Extensive Changes To Leadership Team – Bed Bath & Beyond
- Bed Bath & Beyond Cleans Out Its Executive Suite – Wall Street Journal
- Bed Bath & Beyond’s new CEO just laid off nearly his entire C-Suite – CNN
- Bed Bath & Beyond’s new CEO just blew up his executive circle — in the midst of the holiday season – CNBC
Discussion Questions
DISCUSSION QUESTIONS: Do you see more pros than cons in a fast versus slow overhaul of senior management when executing a challenging turnaround? Do you have any advice for Mr. Tritton as he assembles his team, such as hiring trusted former colleagues or those with turnaround experience?
Poll
BrainTrust
Mark Ryski
Founder, CEO & Author, HeadCount Corporation
Jeff Sward
Founding Partner, Merchandising Metrics
Not surprising at all. BBY has been the topic of discussion here for years, as well as the recommendations on where to go next to fit into the changing landscape of retail. New management to require radical changes in conducting business requires a radical change in management — fresh ideas, new directions. I am looking forward to seeing where BBY goes. My biggest issue with the current BBY B&M stores is what it has been for years — way too much product crammed on shelves. I always feel like product is going to fall on top of me when I walk the aisles.
A wise turnaround expert once told me that the kindest — and most efficient — thing to do in a turnaround or post-merger integration is to take the entire executive team out, stand them against a wall, and shoot them. Better for them, better for the company, better for the analysts he argued. Plus, he added, it has two other benefits: eliminates “us versus them” thinking; and makes the surviving leadership team fully accountable. Based on history, it’s hard to argue with him.
As for advice, the best counsel is to always pick people people skilled in addressing the problem at hand — today and tomorrow’s — not yesterday’s. Importing your old team is OK, provided you’re playing the old game.
I see this as a positive, if not inevitable, move by Mr. Tritton. Bed Bath & Beyond needs a major overhaul, and that’s exactly what they’ll get with Tritton, but in order change the game, he’ll need to have a leadership team that fully supports his new vision – cleaning out the executive suite was required in order to do this. Given Mr. Tritton’s extensive previous experience, I’m sure he knows what talent he needs to bring in and where to find it. It will take time to get a new team in place and moving the company forward, but I like Mr. Tritton’s decisiveness and early changes.
Merchandising, marketing, digital and legal. As predicted, Tritton went scorched earth. Was this the plan from the start or did intransigence hit him in the face upon arrival? Either way, the overhaul sends a clear signal that half measures won’t define his tenure. Replacements will (and should) most likely focus on digitally-savvy talent. It will be interesting to see who Tritton entrusts with the brand-building side of the house in particular. Will he pick a powerhouse with a real POV or someone(s) who will yield to his direction? The answer will speak volumes.
There’s never a good time to launch a turnaround. But when the barn is on fire, someone has to step in to save it as they see fit. And by the way, it’s never a simple solution.
The business has been struggling for quite some time, so Tritton needs to move quickly and get a team he creates himself to reinvent BB&B. This holiday season is essentially over, so it makes sense to clean house now versus wait until the next earnings call. Time is of the essence here!
In life or death situations, drastic and decisive actions are a must. Energetic change of a strategic direction with speed and commitment necessitates a new mindset that ejects and rejects any legacy heel-dragging cement-anchored opposition. Far less risky to start with a clean slate rather than fighting ghosts of legacy’s long gone glory days. Mr Tritton is simply increasing the probabilities of success.
One thing is certain; there are still many people in the C suite walking on egg shells, so to speak. This type of broom sweeping sends a clear message that there is only one person in charge, and don’t forget it. My guess is, in this case, he did not like what he saw and the pieces weren’t going to fit. So time to act and start bringing on your preferred team. You see this in sports every time a manager or coach is fired. The new person brings in their preferred staff.
Tritton should have the opportunity to take the best shot at a turnaround with the team that he wants to go to war with. The best way to do that is to make the change quickly, like they usually do with sports teams. In terms of hiring, given the urgency of the situation, I would recommend that he begin first with trusted associates who understand his expectations and how he works. That will reduce the number of cycles required in the change management process.
Cleaning house in this way is absolutely right. The previous management of Bed Bath & Beyond were negligent for years. They failed to anticipate trends, did not allow the company to evolve, and basically ran it into the ground. Mark Tritton is a talented retailer and he has an opportunity to change the trajectory. However, to do that he needs a strong and reliable team around him.
Clarity — probably the most important thing the new CEO can provide. And he did it in one fell swoop.
I have no doubt that there is enough skill and momentum in the layer below the departing execs for the business to go forward in the short term. In the meantime, it’s abundantly clear that change is afoot. And not slow, comfortable, evolutionary change, but immediate, sometimes painful, revolutionary change is now in motion. The most important thing about the new team is that it gels quickly into a true team with a well-prioritized action plan.
I don’t see this as a difficult turnaround in terms of knowing WHAT to do. The HOW and the time/action calendar could get a little tricky, but a year from today we could see a much different level of competition coming from a new and improved Bed, Bath & Beyond.
This is a tough question. Personally, I think that it’s too quick, too radical. From a business perspective, if the new boss thinks that the bad situation of the business is their fault, why would he want them there? In his opinion, they were already not helping the business when he got there.
I say “as expected.” In a tough retail environment with a failing retail brand, a new leader has to move fast. However, it is yet to be seen if a near total removal of an executive leadership team is the right thing to do in the short-term. I assume Mark Tritton has a plan, including new potential members for his executive team. In general, when a new CEO enters an organization, there are executive changes. Usually the changes result in the new CEO bringing in people the CEO is familiar with and trusts. We should watch for folks from companies Tritton has worked at in the past coming to the Bed Bath & Beyond leadership team.
Based on the tenure of some of the departed executives, I’m guessing that Mr. Tritton ran into plenty of “we’ve always done it this way” thinking. That sort of mentality doesn’t work in a successful company trying to keep on its toes — much less a company with broad challenges like BBBY.
If the next layer of management needed any evidence that there is a new sheriff in town, they just got it. The next key will be to retain talent among that group without instilling a culture of fear.
A lot of decisions like this happen at year-end. Unfortunately so does Christmas.
What is needed is an Executive Team gifted in turnaround leadership. No argument from me. BUT…the brutal reality is that if and when the turnaround is successful, the “turn-around” team should be let go en masse as well! As Dr. Peter Robertson says in his book by the same title: “Always Change a Winning Team.” Turn-around leadership styles are rarely capable of growing the organization after the turn. I’m just trying to give the company a heads-up.
Turnarounds are not easy. The failure rate is about 70%. That includes about 40% train wrecks. The challenge for Tritton is to recognize this situation is not Target. BBBY is a different animal. His background suggests he understands differences.
BBBY clearly needs new blood. It has to be big thinkers who understand what value BBBY has in a consumer’s mind and how to build on it.
BBBY has a lot of work to do to make it a viable and growing retailer. Obviously Mr. Tritton seems to think that a lot of cultural change is required, so he is going to give up on the current team to bring in fresh and different ideas and make them work. His challenge is to do it quickly enough to have the right products, do the right marketing, and establish BBBY as a fresh retailer that consumers will want to visit and buy from. He is embarking on an audacious journey, The challenge will be to find, hire, and onboard new executives in short order while also building a team that can work together and change the BBBY culture quickly. Look for him to hire executives he knows and trusts from Target and Nordstrom.
I am not an advocate for anyone losing their livelihood, however, some of these executives have been at BBBY for over 20 years. If these executives were capable, the turnaround would have happened already.
Mark has extensive experience in the retail sector and he understands what is needed to right the ship. I applaud him for ripping off the band-aid and addressing this issue. I am looking forward to witnessing his strategic efforts.
I’m sure the board had full knowledge of Mark Tritton‘s intentions to “clean house” and were in support of his decision. In addition, I’m certain Mr. Tritton already has key people in mind he wants to bring over and announcements of who said people are will follow soon.
Getting caught up in a restructure isn’t ideal for the person on the receiving end or the person making the decision no matter what time of year it is. The silver lining is, it’s always better to get let go at the end of the year because January is right around the corner with brand new budgets just waiting to be spent.
No surprise that he cleaned house. What will be more surprising will be if it leads to good things.
Firing people is, in many ways, easy — especially because it sends signals to investors.
Unfortunately, cleaning house like this just might also send the wrong signals to employees and drive an exodus of the best people if they feel that the claim for dominance by the new CEO means that good ideas won’t be respected — only his ideas.
That’s just the caution. We will see what happens. And we will see whether my old adage will be accurate: Revolution usually replaces the horribly mediocre with the truly terrible.