Speaker 1:
From the library of the New York Stock Exchange at the corner of Wall and Broad Streets in New York City, you're Inside the ICE House, our podcast from Intercontinental Exchange on markets, leadership and vision and global business. The dream drivers that have made the NYSE an indispensable institution of global growth for over 225 years. Each week we feature stories of those who hatch plans, create jobs, and harness the engine of capitalism, right here, right now at the NYSE and at ISIS exchanges and clearinghouses around the world. And now, welcome, Inside the ICE House. Here's your host, Josh King of Intercontinental Exchange.
Josh King:
If you go back to our very first episode, which we posted back on February 5th, 2018, you'd hear me explain why we started the podcast, including the genesis of our somewhat peculiar name. "Why call it Inside the ICE House?" I began rhetorically, adding, "Almost five years ago, in 2013, Jeff Sprecher, the founder, chairman, and CEO of Intercontinental Exchange or ICE as it's known, led the company's acquisition of the New York Stock Exchange. The marquis name now among a global family of exchanges, clearing houses and data solutions that ICE operates around the world." That's what I said back then.
Now, so much has changed over our 330 episodes since I first sat down here Inside the ICE House. The acquisition that I spoke of is almost 10 years ago now. And ICE now offers mortgage solutions as a third full segment of the business in addition to exchanges and fixed income and data services. The ICE name appears in public far more often, bringing with it less confusion with the same acronymed government agency. And you even see it every day on the New York Stock Exchange logo, which now features the graphic lockup wording of an ICE exchange, along with those familiar NYSE letters.
Earlier this year, ICE unveiled its first global brand campaign, Make The Connection. Over the course of 2022, this podcast and our sister content platforms covered every angle of the multichannel, multifaceted campaign that was, when you really think about it, 20 years in the making. The campaign set out to solve two seemingly contradictory problems of name recognition. While the ICE name is well known to industry insiders and clients, few people know how deeply the firm touches every aspect of the financial world. But at the same time, most people don't realize that the New York Stock Exchange, one of the most recognized institutions in the world, is an owned and operated subsidiary of ICE, not just a generic term for the U.S. markets at large.
This is something that our guests today, Kimberly-Clark Chief R&D Officer, Robert Long, and Chief Growth Officer, Alison Lewis, are very familiar with. Their company may have only limited name recognition at a corporate level but owns many brands that long ago became nearly universally adopted descriptors for widely used consumer products. From Kleenex to Pull-Ups to Depends. Our conversation with the company's Chief R&D Officer, Robert Long, and his Chief Growth Officer, Alison Lewis, on Kimberly-Clark's Commitment to Better Care for Better World. Its celebration of 150 years of purpose-led innovation and the disruptive innovation that is leading that growth is coming up right after this.
Speaker 3:
Connection to opportunity is just part of the hustle.
Speaker 4:
Opportunity is using data to create a competitive advantage.
Speaker 5:
It's raising capital to help companies change the world.
Speaker 6:
It's making complicated financial concepts seem simple.
Speaker 7:
Opportunity is making the dream of home ownership a reality.
Speaker 8:
Writing new rules and redefining the game.
Speaker 9:
And driving the world forward to a greener energy future.
Speaker 10:
Opportunity is setting a goal.
Speaker 11:
And charting your course to get there.
Speaker 3:
Sometimes the only thing standing between you and opportunity is someone who can make the connection.
Speaker 12:
At ICE, we connect people to opportunity.
Josh King:
Our guests today are executives with Kimberly-Clark Corporation, that's NYSE ticker symbol KMB. Alison Lewis was named the company's chief growth officer in 2019. She previously held executive roles at Johnson & Johnson, that's our ticker symbol, J&J, and Coca-Cola, that's NYC ticker symbol KO. Of course, Alison is joined by Robert Long, Kimberly-Clark's Chief R&D Officer. And prior to joining the company in 2020, Robert held senior positions at Coca-Cola and Procter and Gamble, NYSE ticker symbol PG. With all those storied names of American Commerce behind you, welcome Alison and Robert to this Consumer Products Palooza edition of Inside the ICE House.
Alison Lewis:
Great to be here.
Robert Long:
Happy to be here, Josh.
Josh King:
Kimberly-Clark is one of those companies that people know and interact with without realizing it. Let's listen to some of your colleagues talking about that.
Speaker 15:
150 years.
Speaker 16:
Kimberly-Clark is celebrating 150 years and they've taken care of me and my wife and my family, and I'm very proud to say I'm a Kimberly-Clark employ.
Speaker 17:
The products that we make, the tissue, the baby care, the child care, the wet wipes, all of those things go to make the world a better place.
Speaker 18:
I believe in Kimberly-Clark.
Speaker 19:
And our people make the difference.
Speaker 20:
My hope for Kimberly-Clark is that Kimberly-Clark will continue to invest in people, to continue to be successful and have another 150 years.
Speaker 21:
So what I hope for is a better tomorrow and everybody around the world having access to our products that make their lives a little bit easier.
Josh King:
Hearing that, Alison, can you explain for the audience the reach of the company and some of the brands that have become such industry leaders, that their very names represent the sector?
Alison Lewis:
Sure. So we're a company that operates in over 175 countries around the world. We're number one or number two in most of those companies that we operate, so we play a very leadership role. I think some of the most iconic brands we have are brands like Huggies, brands like Kotex, brands like Kleenex. And what I love most about our brands is they come from very purposeful places. And I think that aligns beautifully with our company purpose, which is, Better Care For a Better World. But we're inventors at our heart and Robert will probably talk a little bit about that. But these brands were sort of first in the industry. These are brands that created categories.
So Kotex is a great example where women on the front lines sew together, sell you cotton that we were providing to make the first Kotex pad, so that they could keep serving the soldiers in the war and take care of them. Or Kleenex was the first disposable handkerchief because that was more hygienic. So very purposeful places and reasons for being. And so even though we're 150 years old, I still feel like that idea of inventing and being pioneers is at the heart of what we do and makes these brands great every single day.
Josh King:
Just to digress a bit and geek out a little bit on innovation and inventing, how does Kleenex get thinner and thinner and get more compact and more compact as it's going into its package?
Alison Lewis:
Well, that's something I'd almost ask Robert to talk a little bit about because that is material science at the heart of, how do we make a thinner diaper that is as absorbent but more comfortable and more movement? That's, again, part of that we're inventors at heart and we keep making things better and better so that consumers value us more and more, which is ultimately my role, which is to get consumers to love us more.
Robert Long:
When it comes to thinness, there are two dimensions. One is the material you use itself, but then how you put it in the package and how much air do you squeeze out? Because thinness is mostly driven by the air in the pack, the product itself hasn't necessarily lost that much in terms of its... I have to be careful with technical terms. I wanted to say caliper, but I won't say caliper. So when you need the function of the product, it's the caliper, the thickness, and that doesn't change so much, but when we distribute it, it's more effectively distributed when you squeeze the air out.
Josh King:
And we'll get into a lot more of that later. But Kimberly-Clark has spent decades continuing to innovate where you operate, beginning with those earliest days in Nina, Wisconsin. Innovation can mean so many things to so many people. How does Kimberly-Clark define purpose-led innovation, and how did that journey start back in 1872?
Alison Lewis:
Well, I'll jump in first and say purpose led innovation, I think, starts with really understanding consumer needs. So what are those needs or demand spaces, and where are the gaps that exist or maybe even dissatisfaction? And then let's go after that. A great example of maybe a gap is in Kotex Overnight is a huge opportunity in an area where we've seen significant growth with Kotex Overnight, or Dream Wear as we call it. And it's because it's a high point of dissatisfaction. So if I leak during the night, that's actually a really bad thing. But with science and technology, we can improve the experience and make sure that we have something that really is dream wear because that woman sleeps through the night.
So that's really where we focus, starts with the consumer. What are the problems? What are the demand spaces? Where are the points of dissatisfaction and marry technology to that and then market it with a little bit of art with a great naming called Dream Wear. And that's where you have the real magic, advantage technology married to winning ideas and all based on what consumers actually want and need.
Josh King:
What was the process for developing the word Dream Wear?
Alison Lewis:
Well that was actually... This is the beautiful thing about Kimberly-Clark is that we are really a company that prides ourselves on global scale but local agility and the word Dream Wear came out of, I believe, a market, I'm not sure exactly which one. But Asia Pacific and it's somewhere where I know the process that they always use for naming is spending a lot of times talking to consumers. And my guesses on Dream Wear is that consumers said, "I just want to have my dreams throughout the night and not be interrupted." So it leads you to something like that.
Josh King:
Kimberly-Clark began expanding in Canada, both in manufacturing and advertising in the 1920s. Alison, you've described yourself in the following way; "I'm a born and bred CPG junkie." And before people who are listening to the audio of this start confusing CPG with CBD or LSD, it does stand for Consumer Packaged Goods. Do you remember the first time you encountered a Kimberly-Clark product and where your interest in marketing came from?
Alison Lewis:
So the first time I recall encountering a Kimberly-Clark product was when I had my first child. And there was something that was very attractive to me about just the name Huggies. The name Huggies conjures up, I will wrap that baby in a hug and also give you protection for all that stuff that leaks out of baby's bottoms. And so that's what I first remember. And I do recall that I tried the product, it worked very well and the rest was history. I'm not going to change from there on in. So that's my first memory of Kimberly-Clark products.
Josh King:
Robert, what was your first intellectual thought about package design and putting that product in a container that would be useful to a consumer?
Robert Long:
Well, that was from the very beginning and being curious and probably getting in more trouble than I needed to taking things apart that I couldn't put back together. And mostly in the electronics-
Josh King:
Your parents gave you grief for that?
Robert Long:
... They did, but there were seven kids, sometimes it was hard to figure out who broke the record player. But yeah, taking things apart and trying to put them back together was my entry into product design.
Josh King:
So Alison, you began your career with Kraft Foods in Canada. Do you remember the first product that you work on? And how did your career develop from there eventually leading you to becoming CMO of North America for Coke?
Alison Lewis:
Yeah, I absolutely remember the first product that I worked on at Kraft because I had just graduated from college.
Josh King:
Where was that?
Alison Lewis:
Queen's University in Canada, Kingston, Ontario, Golden Gals go. But I got put on Kraft Macaroni and Cheese. In fact, it's called Kraft Dinner in Canada. And some of you will know that there's some band called the Barenaked Ladies that sang a song about Kraft Dinner. That's all you ate in college was Kraft Dinner, again, Kraft Macaroni and Cheese in the U.S. And so that was the first brand that I worked on. So what an amazing thing when you were 23 years old and working on something that you'd only eaten for the last four years of your life. So that was my first brand.
And from there I launched Super Mario Brothers Pasta, which was really fun. This was the early days of video games, so this was over 30 years ago. And that started my journey in terms of marketing. And what drove me to Coca-Cola was I always thought what's the highest order of marketing? Well, it's marketing a beverage where there really is no functional difference, forgive me Coca-Cola, but there really isn't a lot of functional difference between a Pepsi and a Coke. It's all in the brand. And you guys will know that well from the days of New Coke launch where they changed the formula and failed to remember that actually people like the brand and they didn't like the change to the brand more than what was in the bottle, because all the blind taste testing said New Coke was better than Coke Classic. So anyway, I thought the highest order of marketing was marketing functional. And I will say that I do feel like I got that from Coca-Cola, which is how to be a great marketer based on emotional benefits.
Josh King:
Alison, over your career, you've built this reputation for growing global brands and I've drunk my bottle of Coke in Israel and sacrilege ordered a Budweiser from a pub in London. Is there a playbook to take an American product like Coke or Huggies and translate them into something culturally relevant to a diverse audience?
Alison Lewis:
I don't know that there's a playbook. I think the most important thing is understanding those unmet needs of the consumer, and how do you bring that brand into a different country and really play up against that culture? So if you look at our Huggies brand in China is a great example, but our Huggies brand in China, skin health is a really high need in China, so Huggies and many of the variants that we have in China really play into that skin health need, even though it's Huggies. So that's what you've got to be really good at understanding. But in general, as we expand Huggies around the world, so we're moving into Nigeria, we're have more presence in India. We acquired soft techs in Indonesia a few years ago. The key thing is marketing to that local consumer in a context that they will understand.
Josh King:
Now when we were growing up, marketing to consumers was this one direction transaction in printer on the screen. And today brands are expected to interact with potential consumers across a variety of platforms. Have you had to develop and educate yourself over your career to stay up to date, not just on trends, but on the technology of marketing?
Alison Lewis:
Absolutely. I started in an analog world. It was not digital. And I've completely transitioned to digital first marketing is what I drive. The key to educating yourself is really immersing yourself and not being afraid to ask dumb questions. I think often people are afraid, well, if I don't know something, someone's going to think I'm not capable or competent in my job. And somehow I threw that notion out the window and just asked a lot of dumb questions. When new technologies were emerging, would go and spend a lot of time early days with Google or a lot of time early days with Facebook and just learning and asking them, "Who's doing this best? What are we not doing well? How do we try to get that going?" So that's really leaning into the technology that underlies the digital marketing side of things. But again, not being afraid to learn and have that growth mindset.
Josh King:
How is digital first marketing manifested in a brand like Huggies?
Alison Lewis:
So digital first marketing is really, today we have 70% of our investment in digital marketing. And it goes all the way from pre-roll on YouTube, which is really just old school television now done digitally. Pre-roll on YouTube all the way through to using data and first or zero party data and finding those new moms and sending them that introductory message on Huggies and why Huggies for their baby. And so that's a little bit more of where you think about the traditional funnel where top of the funnel is finding that consumer and then bottom of the funnel is bringing them all the way through to purchase.
So those are the two extremes of how we focus our marketing. The other thing I think we do from a digital first standpoint is we're getting into more value added services. And I talk about an app that we've launched in Australia that's a pilot for us, it's a poop scanner for babies. It's the Huggies Poop Scanner. And basically take a picture of your baby's poop in the diaper and if you're concerned, we'll immediately send you information on, is that something to be concerned about? Where you should go see your healthcare provider or is that normal? So again, trying to always help navigate moms and dads through the ups and downs of parenting and babyhood.
Josh King:
Robert, I'm not sure if you were acquainted with Alison during both of your Coca-Cola days, but you were with the Atlanta-based company for 17 years and that stint came after really a quarter century at P&G. How did a degree, and we were touching on this slightly earlier in chemical engineering, lead to decades in three of the most established consumer goods companies?
Robert Long:
I would say it's a combination of the last question you asked me, which is, when did I manifest the proclivity to creative kinds of things? And it starts by breaking things down and understanding how to put them back together. But it also, with the chemical engineering degree, it's a discipline where you are set up to answer questions, but not just answer questions, to find the problems to be solved.
Josh King:
Were all the siblings breaker downers or were you unique among them?
Robert Long:
No.It was clear that it was me.
Josh King:
Did you take after either mom or dad in that way or was that gene somewhere else?
Robert Long:
I think my father had a little bit of that. He was in the Navy and I think he was in World War II. And in situations like that you learn how to make do with what's available, so some of that came from him.
Josh King:
Where did you steer yourself to college to get your degree in engineering, or did your parents help direct you?
Robert Long:
That was my college counselor, because I was a semi-decent tracks runner, so I was getting track offers. And I hadn't applied to any school for academics because I was tied up in all these track things and he forced me to apply to Princeton and they accepted me, which shocked me. So it was an easy decision at that point.
Josh King:
And at that point the CIA was certainly coming to the Princeton campus to recruit people, but was P&G a big recruiter in Princeton as well?
Robert Long:
Well, I wouldn't say a big recruiter. There was a National Association of Black Engineers, Society of Black Engineers, and that group sent a lot of companies to Princeton to look for talent.
Josh King:
What were you wrestling with in terms of what you're going to do with your engineering degree and how did that eventually bring you to Cincinnati?
Robert Long:
Well, I started in my sophomore year doing summer internships with P&G. And at that stage I had no idea what to do with a chemical engineering degree. All I knew at that time was that you get paid a lot if you're a chemical engineer relative to other degrees, after four years. And after doing that first summer internship, they asked me to come back a second summer. I came back a second summer, after the second summer, they offered me a full-time job and I never looked for another job because I had a job.
Josh King:
As you're an intern at Procter and Gamble, what kind of projects do they give an engineering intern from Princeton to work on for a summer?
Robert Long:
How to create a pilot plant for a new material was the first one I had. It was a new surfactant and they needed to figure out how to incorporate it into product. And I remember exactly it was a fluidized bid and I don't want to go too far, but that wasn't the way they made-
Josh King:
You can, I'm fascinated. Did you think it was the coolest thing you ever done?
Robert Long:
So it was the coolest thing I had ever done because I had the resources of a company to put these things together. I had lots of people with expertise to steer me in the right direction. And knowing how to leverage the wisdom of all those more experienced people and more importantly, getting them motivated to help me, was something that I carry over to this day, because people don't have to help you.
Josh King:
Your career is taking you all over the world since then, including stops I think in Tokyo, Caracas, Frankfurt, across the continental U.S. Growing up in Washington, D.C., did you have a travel bug or was movement just part of the engineering job?
Robert Long:
I would say from D.C., you get an international perspective. So you can't live in Washington, D.C and not get exposed to the world just in the daily news or even going out on the street and interacting with people from all over the world. So I think growing up there made it easy for me to see myself moving around.
Josh King:
I've spoken on this show about my interest in packaging a bunch of times. And while you were at Procter and Gamble, you worked on a project that brought my personal passion together with one of ICE's core businesses, and that's coffee. And we haven't talked about coffee much, but what does disruption innovation look like in something seemingly as rote as a coffee can?
Robert Long:
So I would say it starts with what Alison spoke to as the consumer insight. So coffee can was a two-handed activity in the past with the metal can.
Josh King:
Chuck full of nuts.Big 48 ounce can.
Robert Long:
One of the key insights is how do you make it a one-handed operation? So that was a consumer benefit. And then the other aspect of the coffee can, the metal can, is that the freshness wasn't always perceived as robust. So with the plastic canister, you ended up being able to suggest that freshness was enhanced because of Tupperware, the metaphor from Tupperware to this plastic canister. People just expect freshness to be a key attribute.
Josh King:
Expect freshness to be a key attribute, it's suggested, but let's again do a little geek out. So tell me how you go from two hands to one hand in a design or engineering process? And then, how do you actually do things that give a consumer some confidence that what is in that package is going to be fresher?
Robert Long:
So the metal canister, you have a can opener to open the top, so it's a metal lid and it's a cylinder. The plastic canister, you can put it in a mold and you have a space where you can grip it with one hand. And then when you open that package, you have a foil seal to keep the outside air from getting into the coffee because that was spoiled. And when you open that cover, you get this whoosh and a big burst of coffee aroma. So you're reassured that this was protected, whereas when you take a can opener and start opening a metal can, you don't get that.
Josh King:
So you were named Coca-Cola's Chief Innovation Officer in 2016, directly connecting the innovation in research and development to the top levels of the company. How had your career developed over your first 15 years with Coke, and what were some of the highlights of that role?
Robert Long:
The highlights were doing new to the world opportunities with Coke. One was an aluminum version of the contour bottle. So that was a first of its kind. And then I had a chance to go to Japan where I worked for three years. And one of the highlights of my storytelling of my career is, how do you differentiate water? One of the hardest things in the world is how do you make your water preferred versus somebody else's water? And we got into a product called Ilohas, which the fundamental basis of it was, it was good for the environment and it was good for the environment because the package was very thin. And as we know, thin packaging quite often is a turnoff because it's not as robust as thick packaging. But the insight for Japan was they had a high recycling culture. And when you have a thin package, you can twist it when it's done.
So you could put it in the recycle bin 2X the packages and for the Japanese and small homes with small garbage pills, that was a big delight. But also we learned in the consumer experience of actually doing this, they felt like they were doing their part to protect the environment and that became a billion dollar brand. The other thing I got to participate in is a ready to drink green tea. Green tea is the beverage of choice in Japan. And how do you get a more authentic green tea? We started with a premium proposition where we created a tea called Ayataka, and it had for the Japanese, they like turbidity in the tea, so you kept some solids in the tea. It wasn't crystal clear. All the other green teas in the market were crystal clear, whereas when you brew it authentically, you had these solids and it's like turbidity.
Josh King:
And is Ayataka something that you drink cold or you heated?
Robert Long:
Either, but it's mostly cold. So what ended up happening is we took away that premium positioning because it was not really growing. We did the R&D to get almost the exact same sensory and experience with the tea, which made it more affordable as a mainstream tea. And that then became a billion dollar brand. So for a multinational company in Japan to have a leading green tea was like something to be proud of. But the last thing I think that probably got me highly perceived in Coke was diversifying the North America business. After Japan, I came to North America and I was struggling with a couple of things that I saw in Japan that I thought could come to North America. They didn't work. But one thing that was happening in North America at that time was protein as a nutrient from beverages. So Muscle Milk was... And we were like, How do we get some of that value? So, how do we get more protein into consumers?" Became an area of focus.
As I came to the U.S., I realized the dairy competency wasn't so high. In Japan, it was much higher because we sold coffee, but in the U.S., we didn't have the right R&D capability. So I went out looking for what could potentially get us into the protein beverage space. Long story short, uncovered a dairy cooperative that had a technology called Microfiltration and it yielded a brand called Fairlife. And Fairlife really struck a cord with me personally because Fairlife was lactose free. So I'm lactose intolerance, so I immediately gravitated to it, but it also gives you 50% more protein and 50% more calcium per glass. And it decommoditized dairy, because why would you get into dairy as a commodity? And it became a premium offering in the dairy ale. I don't know if you've heard of Fairlife?
Josh King:
No, I was going to ask next, what's the status of Fairlife now?
Robert Long:
It's a billion dollar brand. It is one of the fastest growing dairy products in the U.S. and it expanded into China, so it worked.
Josh King:
So according to LinkedIn, Robert, which never lies, you were retired for exactly one month, which is even less than Tom Brady's infamous six weeks of hanging up the pads. Why didn't that retirement stick? And how did you quickly find yourself embarking on this next career chapter in March 2021?
Robert Long:
It really came from a conversation with our CEO, Mike Hsu, and he was sharing with me the company purpose, which is Better Care For a Better World. And I had previously competed against Kimberly-Clark when I was at P&G, full disclosure, and I admired the technology prowess of Kimberly-Clark as a competitor. So I had a high level of respect, but the whole purpose of Better Care For a Better World and some of the challenges that the paper industry, the Kimberly-Clark businesses had to face, I had a lot of thought ware and experience with both from my P&G days and my Coca-Cola days where sustainability in particular was a key area of focus.
So I saw a good marriage between what I had capability to do and what I thought that business would need. Now, as I was going through the interview process, I had no idea what was actually on the other side of the process, but I've been delighted since I've joined Kimberly-Clark that the better care for better world is the rallying cry for our technical team. And how do you delight the consumer, improve the environment, and make products accessible in doing that? Because sometimes when you solve those two things, the cost is too high. So how do we do it and make it scalable by making sure we have economics that are affordable?
Josh King:
But given this history that you and I have just talked about, all your siblings, your time at Princeton, your athletics, moving up through P&G and Coca-Cola and getting to that point where you must have said, "I've got enough squared away to have a happy retirement," what was the plan? What were you planning to do at that point that you just got pulled right back in? What'd you leave on the table?
Robert Long:
In full disclosure, I was looking at being on boards and my wife was giving me long to-do list. Neither those were very appealing to me. I don't like to just advise and not do. If you talk to my team, I have to strike the right balance of directing and doing, so I'm still anxious to do more than I should. And what is the doing? It's coming up with the right technical insights and testing the hypotheses and working with people like Alison to see if there's a value proposition in the science that we're creating.
Josh King:
Talking about the value proposition, Alison, you joined Kimberly-Clark two years before Robert did. What attracted you to the opportunity? And how did your experience introducing the discipline of global marketing to the comparatively young 136-year-old Johnson & Johnson prepare you for the role that you were about to take on when you came to Kimberly-Clark?
Alison Lewis:
What brought me to Kimberly-Clark was really Mike Hsu's vision on the transformation that he wanted to drive. So how do we, from a strategy standpoint, elevate and expand our current businesses but do that in a way that has a commercial transformation, which is a big part of what I lead, cost transformation and culture transformation? And Mike is a guy with very low ego, one of those good to great leaders that's almost somewhat understated, but what he says he will do, he does do. And he believes strongly in Better Care For a Better World, as Robert talked about. And we do everything with the idea of serving consumers better, serving our communities better, and serving our employees better.
And so that's what really attracted me, and I've been able to drive the right level of change where we're driving more growth, we're really hunting for growth and new growth opportunities, working closely with people like Robert. And then at the end of the day, translating that into the results where we've seen our growth definitely accelerate. We've seen our ability to grow market share. Things have been a little bit bumpy in the last year, but this too shall pass. And so that's what really got me here and keeps me here. It's a company full of people that want to do the right thing and want to make this world a better place.
Josh King:
So Mike was ringing our opening bell today, and you both brought up Mike's Hsu's efforts to pull two really accomplished industry experts into what must be a senior leadership team of consummate experts. So I'm curious more about Mike and thoughts on the culture that he's created. But what he said at the time of your hiring, Alison was, and I'm going to quote him here, "This appointment demonstrates our commitment to drive growth and excellence on the way we invent, market, and sell our products across the world."
So back in 2017, you wrote about the rise of the term chief growth officer and how marketing is growth, but in the same way that Robert and I have geeked out a little bit on innovation in his work in the engineering sector, let's geek out on what a CGO is actually responsible for and how you do your job?
Alison Lewis:
So I have always believed that marketing is growth. I think all marketers need to think with growth at the heart. But at the end of the day, this job sort encompasses the totality of what drives growth, which is that invent, market, and sell. Those are the things that ultimately if they hit the market in the right way, we'll actually make a difference in of the results that you see in the marketplace. So at the end of the day, I think a chief growth officer holds that big flag on, "Let's make sure we're serving more consumers, more often, with value," which means they're willing to pay more because we're building value into our products and into our brands.
And so that's what the role of a chief growth officer is, and it's really breaking down the silos between innovation and marketing and selling, which got built up over many years with more matrix organizations. So this is tearing that down and having everyone work together and gun towards that same ultimate goal.
Josh King:
After the break, Kimberly-Clark's Chief Growth Officer, CGO, Alison Lewis, and its Chief R&D Officer, Robert Long, and I are going to talk about how Kimberly-Clark is committed to Better Care For a Better World, and the innovation that allows their products to make all that happen. That's coming up right after this.
Speaker 22:
When you hear the word sustainability, you think, "Too big." When you feel you have to do something you think, 'Too complicated." Hold on, think about your decisions, get closer. Those that are big or small for you, your decisions and other people's decisions, those that have to be made every day. Step back a little, think of the decisions that add up to many more. There are millions of decisions that change everything, little by little, for the better.
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Josh King:
Welcome back. Before the break, I was talking to Kimberly-Clark's Chief Growth Officer, Alison Lewis, and its Chief R&D Officer, Robert Long, about the company's celebration of 150 years of purpose-led innovation and also their career arc that brought to that point. Alison, after less than a year in the seat, the company saw major growth in the sales of some of its products for strange reason. Let's listen to NBC's Savannah Sellers.
Savannah Sellers:
You've probably been hearing, talking, and thinking about one particular bathroom item a little more than normal lately.
Speaker 24:
Getting 100 rolls of toilet paper, that really don't make a whole lot of sense.
Savannah Sellers:
That's exactly what most Americans are doing with toilet paper sales up more than 100% from this time last year. Believe it or not, this isn't the first time a crisis has created a TP frenzy.
Josh King:
Probably not surprised Alison. That report was from 2020. So in addition to the runs on toilet paper that I certainly experienced, how did COVID affect Kimberly-Clark?
Alison Lewis:
COVID accelerated a lot of trends that were already out there. If you look at the health and hygiene trend, that had been moving up over quite a few years. If you look at the growth of e-commerce, that had been accelerating. But those two areas went on steroids and basically took off like never before. So that plays beautifully into our business when you think about health and hygiene is really what a lot of our brands and products do. So we've been able to accelerate that and some of the innovation that we've done, moving more into wet wiping as it relates to our Kleenex brand or when it comes to health, really leaning into things like antimicrobial or antibacteria in things like feminine care pads on Kotex. So that's been us leaning into where are the trends going, and how do we innovate against those trends?
On e-commerce, that's another great example where we as a company have tended to always follow the growth. And so we had pretty good e-commerce infrastructure in most of our major markets. All that COVID did was force us to make sure we were getting all of those fundamentals of e-commerce in place, in particular in a supply chain, to make sure that, again, our share in e-commerce could be equal or better than our share in traditional bricks and mortar. So again, leaning into the trends that were already happening, COVID accelerated them, and then us jumping on that bandwagon and then following the growth, as I like to say. Hunting for growth every day and going to where the growth is heading is really how you drive growth and turn a crisis into something that is a positive for the business overall.
Josh King:
Robert, can you innovate if the engineers can't get together in the lab?
Robert Long:
Well, a lot of our engineers ended up looking like essential workers because they had to go to the lab. So we would stagger participation in the lab and we would keep people who didn't need to be in the lab out of the lab, so the people who went didn't have to worry about high traffic. So we'd still had to go to the lab in the pilot plants during the pandemic.
Josh King:
And yet were there any aspects of working remotely that you discovered to yourself, "Hey, innovation can work this way." Or, "I'm getting stuff done even if they can't be in the lab"?
Robert Long:
I would say the global collaboration went to a new level because we were all used to getting on monitors and you could do that where instead of being in a conference room and some people not being part of the conversation, it was easier to get more people into conversations.
Josh King:
So coming out of the pandemic and confronting crises like climate change, a lot of people are now reassessing how they're selecting and using products. How are you guys re-imagining Kimberly-Clark's iconic brands to reflect a mission of growing for good as it were?
Alison Lewis:
So that's an area that both Robert and I are focused against, which is sustainability by design, and how do we make our products with less plastic? So plastic free wipes is a great example of something that's launched in the UK and Australia. Or in the case of toilet paper using alternatives to forest fiber. So whether that's Kleenex Eco in Australia, which is made with Bamboo, or some of the fibers that we use, eucalyptus in Latin America, great examples of driving alternatives that are sustainable by design. And that's one of the key focus areas that we have, which is reducing our forest footprint, our overall footprint by 50% by 2030.
Josh King:
Robert, what's your perspective on the sustainability story?
Robert Long:
Yeah, the technical team is really trying to make sure we solve for consumer delight against important needs as identified by marketing, but also how do we do that with less environmental impact? So that's the standard scope of our work. And if you can't solve it with step one, how do you get there in step two or three on a given platform? And then how do we do all that in a way that it's accessible by not just having premium price items with the green symbol? How do we make sure we innovate to make it affordable sustainability enhancements? And examples that we're bringing to market, some of them are fantastic in the spirit of solving the consumer need, solving for sustainability and accessibility. So one of the best examples is thin diapers, so the marketing team got everyone focused on, how do we make our diapering experience more comfortable for the baby and for the toddler? So one of the ways to do that was to make thinner diapers.
So one of the projects that we're launching as we speak has a 50% less thickness, 20% less weight. So it's more comfortable, more breathable, but it's also more sustainable because it's 50% less thick. So you get more in a truck, so less fuel to deliver it, it's 20% less weight and it performs acceptably. So that's the kind of inspiration we're getting from Better Care For a Better World and driving ourselves to solve those three things of good for the consumer, good for the environment, and affordable.
Josh King:
So let's geek out on that a little bit too. Moms and dads want to see what problems solved with their diaper? And so what do you have to put in that box and how does it need to perform as long as it's lighter and uses less material?
Robert Long:
They need to see skin health, which is a sign of absorbency, like, the product works because my baby's skin is healthy. And they need to see the fit and the wearing comfort. How you judge that for a baby? Maybe Alison can speak to, but technically we know that if it fits and it's thinner, it's more comfortable, coupled with breathability. And breathability is a sign of, are you going to be sweaty?
Josh King:
And that's the catch stuff.
Robert Long:
Believe it or not, you can have things that are breathable that catches stuff because you have so many layers in this diaper and all the materials have a function. It's an engineer's delight.
Josh King:
Of course, it is. Alison, communications and marketing often go hand in hand. How are you educating your employees on this development of the brand? And where externally are you most focused on the brand evolution for Kimberly-Clark?
Alison Lewis:
As we think about our brands, what I've really been driving our organization against is remember where our brands came from. So what's the purpose of our brands? And we have great brands that came from very much a founder's mentality. While we're 150 years old, we should think of ourselves at 150-year-old startup and go back to those roots of where these brands came from. So when you think about Kotex, the purpose of Kotex is, "ever let a period get in the way of her progress. When you think about Huggies, Huggies purpose is helping a parent navigate the ups and downs of parenthood. Those are two great examples of purposes that had us there at the beginning, because I think I explained Kotex was a brand that was invented on the front lines of World War I, the nurses sewing cellu cotton together so they could keep working.
Huggies was the first shaped diaper. It was the first diaper with elastic waistbands on it. So again, helping parents navigate those challenges of babyhood, which leaks are something that are a challenge of babyhood and parenthood. So what I'm really doing is driving the businesses and brands to focus on that purpose and then use that as a filter for everything you do, whether it's your communication. So on Kotex, here's a great example. In South Africa, we ran a contest to get people to submit lyrics for a song against period stigma and a very famous artist in South Africa saying this song with all these lyrics put together. And it made number 19 on the music charts in South Africa.
Speaker 25:
(Singing).
Alison Lewis:
Pretty cool as a way to of communicate the stigma and not letting a period get in the way of progress, but doing it in a fun, very relevant way. Or if you think about Huggies diapers and the parenthood, we do a lot with hospitals and we do a lot of education, particularly in developing and emerging markets like Nigeria where we do hospital education programs. And we teach people how to use diaper, how to care for their baby's bottoms. And that's a great example of parenting in a way that helps them navigate, because often these women in these developing markets don't have access to a lot of information and they don't understand what to do when they have their first child. And so again, that's the purpose-led part of what we do, which very much links to Kimberly-Clark's purpos.e
Josh King:
Growing for good is part of Kimberly-Clark's plans for what it calls Building Better Care for a better World. We've talked about that in the show so far, but what are the company's ambitions by 2030 for that? Better Care For a Better World.
Alison Lewis:
So Better Care For a Better World, we set the highest level objectives to be that we want to serve. We serve two billion consumers today, we want to serve another billion by 2030. And then the other part of our objective relates to sustainability where we want to cut our footprint in half. So that's footprint related to water, footprint related to energy, footprint related to forest, footprint print related to plastics. So that's what we gun against as a total organization, and that's really the ultimate measure of, are we growing for goods? Are we helping more people and are we treating the world in a better way than we were today?
Josh King:
So Robert, I want to listen to an ad introducing an innovation in Huggies. Let's have a quick listen.
Speaker 26:
Ladies and gentlemen. Ladies and gentlemen of the press. Kleenex, Huggies diapers announces the best Huggies ever. New Huggies with strong tapes and a tear proof front panel. See elastic waistband Huggies have strong tapes to stick and stay stuck, and a new front panel it won't tear, so you can fasten and refasten for an even better fit. Stop the presses, these happy from Huggies.
Josh King:
So that was from 1983 when Huggies introduced its refastenable tape to its disposable diaper line. While velcro and elastic were material innovations in the last generation, what are some of the materials that you're working on today that will have a chance to evolve both the utility and the life cycles of the products that you're working on?
Robert Long:
I would highlight three areas of primary focus. One is on what we call the garment like experience of wearing our products, that would be one. And that is going to be influenced by two specific dimensions. One is the absorbent core, so the part that catches the liquid, but the other part is the non-woven that creates the garment attributes. So how do we get thin cores with more efficacy in that garment-like non-woven with more garment-like features?
Josh King:
Certainly when I went on the website just now, I saw some of the adult products looked very much like the Calvin Klein you might buy them in the clothing department.
Robert Long:
Well, and we are trying to do that in a 10-year horizon where we can anticipate technology changes that get us closer and closer to that garment-like experience for our absorbing products. If I go to tissues, it's really how do we deliver less of an environmental impact with our tissue products by using less forest fibers? So minimize the use of really old trees. And we have some products, Alison mentioned already, but most of those products come with some level of trade off and performance or cost. So how do we break that performance/cost trade off for getting to more sustainable fibers? So that would be another one.
Josh King:
So last year, TE Connectivity CEO, Terry Curtin, was on the show. He talked to us about how his company is using 3D technology and the cloud to reduce his company's process from idea to implementation from years to just weeks. Are you leveraging similar disruptive technology to speed up and fuel your innovation efforts?
Robert Long:
I would say we're not as mature as that example. We are looking at a couple of things. One is, how we automate some of the quality control systems that we have to make sure that our designs are being executed consistently day to day. And we have some virtual lab work where we take historical data and take the new prototypes and compare them to the historical data and make a judgment on whether we need to run all the tests or just some of the tests that we would typically do. So that's more shortening the cycle of pre-market launch.
Josh King:
So as we wrap up this conversation and this journey through the world of consumer package goods, companies are preparing for an impending recession. But Alison, you recently spoke with Forum for the Future CEO, Sally Yuran, about the opportunities that come from uncertainty. And you said, I'm going to quote you here, "Crisis is the best time to make the biggest changes. So use this time to get management to bet on some game changers." How are you doing that at Kimberly-Clark?
Alison Lewis:
So I think everyone in the industry is facing a situation where profit has been challenged given some of the cost increases, and that obviously puts a tightening of belts around any organization. The reason I talk about never wasting good crisis is what it forces is focus. So you look at your portfolio of investments and you say, "What's the one thing, if I could do one thing, what would that one thing be that I double down on?"
So it forces an incredible prioritization and it forces all of us to focus on the thing that's going to make the biggest difference. And so that's something that Robert and I spend a lot of time talking about, which is, what are those things that are truly going to be the biggest breakthroughs? And that we want to place that one bet. And I think that some level of tightness or restriction forces those kind of dialogues in organizations that might not happen if it was a normal business environment.
Josh King:
And Robert, what are those things that are going to drive the biggest innovations for you, if you haven't mentioned them already?
Robert Long:
Well, I will talk a little bit about process and building on Alison's comment. We have to have a balanced portfolio. We need a three-year horizon, we need a three to five year horizon, but we need that 10 year horizon to all get some level of support every year. And what usually gets compromised is the longer term horizon. So one of the things we're changing is to make that longer term horizon work less about just R&D, because that tends to just give it to the R&D people that work on that. And we're bringing it out of the closet, so to speak, and asking the leadership team to govern that work.
And what does governing network? It's aligning on the pace of learning for those tenure horizon things, the prioritization earlier than we would normally do. Getting Alison's team to maybe think about, how would I sell this thing if it does work? And maybe that helps shape the technical. We haven't historically done that. So working in that balanced portfolio kind of way holistically and not leaving the R&D people on their own to do the five to 10 year work.
Josh King:
That sounds like a great aspiration for both of you and it's been a great journey through the world of consumer package goods. Alison, Robert, thank you so much for joining us Inside the Ice House.
Robert Long:
Thank you for having us.
Alison Lewis:
Thank you for having us.
Robert Long:
And that's our conversation for this week. Our guests were Kimberly-Clark Corporation, NYSE, tick symbol, KMB. It's CGO, Chief Growth Officer, Alison Lewis. And it's Chief R&D Officer, Robert Long. If you like what you heard, please rate us on iTunes so other folks know where to find us. And if you've got a comment or question you'd like one of our experts to tackle on a future show, email us at [email protected]. Or tweet us at Icehouse Podcast. Our show is produced by Pete Ash with production assistance from Ann Wolf. I'm Josh King, your host, signing off from the library of the New York Stock Exchange. Thanks for listening. Talk to you next week.
Speaker 1:
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