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When Joseph Galli Jr. was tapped to head Newell Rubbermaid last week, the news made big headlines. That wasn't only because the consumer-products company had found a new CEO to try to improve its recent sluggish performance. Galli's career path was also a factor. In June, 1999, after a much-lauded 19-year tenure at toolmaker Black & Decker, Galli joined a number of Old Economy executives who decided to cast their lot with Internet startups.
Galli, who had accepted a top post at PepsiCo but never took the job, quickly jumped aboard that symbol of the New Economy, Amazon.com. He served as president and COO of the online bookseller for 13 months, then left last July to fill the CEO seat at VerticalNet, an online B2B exchange. Now, only six months later, he's back at an Old Economy stalwart -- the maker of such household products as Levolor blinds, Pyrex cookware, and Rolodex files.
Galli is a graduate of the University of North Carolina at Chapel Hill,
where he was once captain of the wrestling team. He also holds an MBA from Loyala College in Baltimore. He began his career at Black & Decker in sales and marketing, climbing to the post of president of Black & Decker Worldwide, and is credited with helping reinvigorate the company through, among other things, the launch of a highly successful line of industrial power tools.
On Jan. 12, Galli spoke with BusinessWeek Online writer Pamela Mendels
about his journey from Old Economy to New Economy and back again (see "Job-Hopping: Exercise with Caution"). Here are edited excerpts of that conversation:
Q: Many people might consider a rapid succession of jobs to be a risky
career strategy. Did you?
A: I didn't implement my last three moves because of a career strategy. I did it because, at the time, each decision made a lot of sense. I spent 19 years at one place, at Black & Decker. I had many chances to leave, but I decided to stay there. The only reason I left is because of one issue with the chairman [Nolan D. Archibald]. Otherwise, I would still be at Black & Decker. The fact that I've had opportunities at other companies is a direct result of [my ability] to build a track record of success at Black & Decker. I delivered consistent results, and we were fortunate to build a great team.
The last three years have been a time of incredible change and rule breaking in terms of classic career progression. The New Economy erupted on to the scene and presented all executives with a new set of decisions. There was no rule book to go to. My decision to go to Amazon.com was a result of my interest in learning about e-commerce and the New Economy. I feel very fortunate, even though I was there for 13 months, to have learned so much from [Amazon CEO] Jeff Bezos. Jeff continues to be an important friend of mine and a very helpful adviser.
When I decided to move to VerticalNet, I did want to make the step to a CEO role, but I also wanted to put myself in the middle of the business-to-business arena, which is filled with technological advances and opportunities for traditional companies to take cost out of the equation on the supply-chain side.
Q: When you interviewed at Newell Rubbermaid, were you asked about the job-hopping?
A: The Newell Rubbermaid search committee and board of directors were
extremely impressive to me. They conducted a thorough search [with] extensive background checks and a very intensive interviewing and questioning process. What they quickly found was that my track record is not built on changing jobs. My 19-year Black & Decker experience is what I am. The last 18 months I went to Amazon and VerticalNet, [but] before that, I stayed at one place for almost 20 years. They talked to many people in my past who gave them a high level of confidence that I'm looking to go to one place and stay and build.
I've known Bill Sovey, who's the chairman at Newell Rubbermaid and led the search committee, for 10 years. He knows exactly what I'm all about. Bill is a mentor. He understands my DNA.
I'm not interested in job opportunities outside of the company or talking to recruiters. I'm interested in building Newell Rubbermaid, and talking to our customers, investors, and employees and building a great company.
Q: What did you learn from your experiences in New Economy companies
that you think will help you at Newell Rubbermaid?
A: No. 1, at Amazon.com, we were very good at marketing online. We're
going to purvey that throughout Newell Rubbermaid. I believe we can build Web sites that are interactive with the consumer [and] trumpet our brands and products.
No. 2, I learned that selling products in an Internet model is different from selling products in a store. Newell Rubbermaid has an opportunity to become a leader in the way we serve Internet-based retailers. Now, that can be Walmart.com, BlueLight.com, Homedepot.com, or Amazon.com. We're going to work really hard to support both our bricks-and-mortar retailers and also our clicks-and-mortar partners. Products that are prepared for sale in a retail environment have a lot of expenses that become superfluous when you sell online. For example, the packaging that a product is in is critical in retail but irrelevant when you're online. You can save a lot of money and reduce the cost of products by being thoughtful and responsive to online marketing.
At VerticalNet, I learned how to use Internet-based procurement solutions to reduce costs. Instead of the classic client-server IT structure, the Internet provides unbelievable opportunities to enhance procurement, conduct reverse auctions, strip out costs of all kinds, and reduce bill-payment expenses.
Q: Are the management challenges at New Economy companies different from those at traditional companies?
A: Some management challenges are identical, and some are very different. In a traditional company, you have the benefit of an infrastructure, of systems in place, generally of [having] a lot of accumulated experience in the company. You can build on that, and it becomes a great foundation. In a New Economy company, many of those infrastructure components need to be built. You end up spending a lot of time creating the infrastructure necessary to run a well-managed company.
I've got to tell you, when I studied Newell Rubbermaid, I was very impressed. The nerve center in Illinois that runs Newell Rubbermaid is world-class. And I can assure you, I have an even greater appreciation for that infrastructure after the last 18 months.
Q: Did you always aspire to be a CEO?
A: I always aspired to do the best job that I could and make a difference wherever I went. I always thought that if I did an effective job, I would have a chance to be a CEO. But the goal for me is to be an effective leader for my people so I can help them achieve their goals. I want to create the environment where Newell Rubbermaid can maximize its growth potential and its stock-price potential. I never worried about my career -- I just worried about results. That's what I intend to continue to do.
Q: You received a $4 million bonus when you went to VerticalNet last July. Have you returned it?
A: A large part of it was returned. I have an amicable agreement with the VerticalNet team. I did decide to return the prorated portion of my bonus. The bonus was designed to be a one-year compensation before stock options became vested. And I returned the prorated portion happily.
Q: You accepted the position as [head of the Frito-Lay division] at PepsiCo, then switched to Amazon. Did Newell Rubbermaid question that move?
A: PepsiCo is a world-class company. I think the Newell Rubbermaid team felt a sense of comfort that a company like PepsiCo presented me with an opportunity to join [it]. The fact that I decided not to pursue it was a question answered simply by the fact that Jeff Bezos and the board of Amazon shared with me additional details about the strategic plan for Amazon in the final hours of that discussion. I was very excited and impressed with what I saw at Amazon.
I still think PepsiCo is a fabulous company -- I consume the products, I own the stock, and I think [PepsiCo CEO] Roger Enrico is one of the best CEOs in the world. But sometimes in life you're faced with a tough decision. I made a decision, [and] I learned a lot from it. To be honest, part of the specification of the Newell Rubbermaid team was to find a CEO who had e-commerce experience and experience running a large multinational company. The Newell Rubbermaid team was very pleased that I decided to go to Amazon.com because I learned from the very best people in e-commerce for 13 months in a very intensive way.
Q: Where will Joe Galli be 10 years from now?
A: At Newell Rubbermaid, with an energized team of people who are in the
process of perpetuating a leadership position in the consumer-products industry.