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Heinz's CEO is a lot like Tiger But Heinz's straight-talking Ceo Bill Johnson is a lot like the Tiger Monday, May 18, 1998 By Patricia Sabatini, Post-Gazette Staff Writer
At a surprise reception two weeks ago at H.J. Heinz Co. headquarters marking his first day as chief executive, Bill Johnson amiably accepted the accouterments of his new regal status:
A ketchup-red ball cap served as his crown, a dill pickle-shaped putter was his scepter.
Clearly enjoying himself, the 49-year-old Johnson sat back with about 200 staffers as friends and colleagues took turns offering their congratulations and good-natured jabs. Johnson's family was there, including his father, the former San Francisco 49ers center and retired Cincinnati Bengals head coach, Bill "Tiger" Johnson.
One notable absence: Johnson's predecessor, Anthony J.F. O'Reilly, the globe-trotting, charismatic Irishman who successfully headed the global food company for the last 19 years.
O'Reilly, 61, sent his best wishes by telegram from London. He will remain chairman at Heinz until September 2000 but now wants to devote more time to his other business interests, including Ireland's Independent Newspapers chain and renowned crystal maker Waterford Wedgwood.
Thus marked the beginning of a new chapter for the 129-year-old Pittsburgh company, one that already has begun to reflect Johnson's unpretentious, casual demeanor, as well as his hard-charging, detail-oriented management style.
Johnson, a 16-year Heinz veteran who made his mark as a voracious cost-cutter while running the company's Pet Products and StarKist tuna units in the late 1980s and early '90s, is now scouring operations worldwide for ways to boost efficiency.
One move being explored - relocating the headquarters operations of Heinz's major U.S. divisions to Pittsburgh - could bring almost 1,000 jobs to the city.
The boyish-looking, silver-haired Johnson, who rises at 5 a.m. to run four miles before heading off for a typical 12-hour day, is described by colleagues and former associates as a good-natured, but also demanding boss who sets a clear agenda.
"Some people talk around what they're trying to say. Bill says what he's trying to say," one former Heinz senior executive says. "You never have to guess where he stands."
It was this clarity, and an ability to deliver on ambitious goals, that won Johnson the top spot at Heinz.
As head of Heinz's StarKist tuna and Pet Products operations, which are based together under the StarKist banner outside Cincinnati in Newport, Ky., he managed a near-miraculous turnaround of two divisions that Heinz essentially had left for dead.
He did it by developing a process called "price-based costing," first determining what a consumer was willing to pay for a product and then working backward, slashing costs to sell the product at that price. Sales and profits soared, and the rescue maneuver is now legendary in the company.
Johnson describes himself as "incredibly intense," a quality he exhibited early while growing up in Palo Alto, Calif., watching his dad play, and later coach, professional football.
He remembers getting so "psyched" before games as a youngster that several times he ended up throwing up in the stands - once on a woman in a fur coat.
Growing up in a sports environment also nurtured a fiercely competitive spirit, and a passionate distaste for failure. "I despise quitters. Quitters lose," Johnson says. "You have never met a person in your life that hates to lose more than I do."
The desire to succeed is what drives him most, he says, "far more than money, far more than anything else."
A rabid sports fan, the passion pervades Johnson's life. Instead of collectibles and fine art, his Sewickley home is filled with football and basketball memorabilia. His collection includes thousands of sports programs dating back to the 1940s that he once showcased in a specially built room at his former home in Cincinnati.
Johnson also likes using sports analogies in talking to employees. One of his favorites is "putting points on the board," a phrase Heinz staffers savor as the ultimate compliment.
Johnson's also a big believer in teamwork.
"If you're sort of off on your own, and try to isolate yourself, Bill can have a very loud bark," says Ed Johnson (no relation), who heads up tuna operations and has worked with the new CEO for many years. "It's happened to me. I've been bitten a few times by the Big Dog."
Susie Johnson, his wife of 25 years, describes her husband as "fiscally conservative," recalling that early in their marriage he attempted to coast his way to work in the couple's Pinto just to save on gas.
"He was always a saver, always worried there wouldn't be enough," she says. Those worrying days are over now, and Johnson has loosened up considerably, Susie Johnson says.
Both Johnsons are private people, shunning big, late-night parties in favor of a quiet night at home watching videos or running out for a quick bite at Chili's or T.G.I. Friday's.
One of the only criticisms you'll hear about Johnson is that he's not as engaging as his predecessor.
"I would love to go to Ireland and have dinner with Tony O'Reilly. The odds of me going to Sewickley to eat with Bill Johnson are considerably smaller," one former Heinz senior executive says. "Tony could captivate you with his stories. (Johnson) just isn't as charming." Then again, he adds, "most people aren't."
Before coming to Heinz in 1982, Johnson rose through a variety of marketing positions at consumer products companies, starting with the former Drackett Co. in Cincinnati, maker of Windex and Drano.
After a brief stop at Ralston-Purina in St. Louis and an even shorter one at Frito-Lay in Dallas, he landed at Anderson-Clayton Foods, the now-defunct Dallas-based maker of Seven Seas salad dressings, where he quickly rose to vice president of the consumer products group.
Although he was young and didn't stay there long, he made a big impression, showing up on CEO Rick Avery's short list of potential successors.
"He was a terrifically likable person, and very results-oriented," the now-retired Avery recalls. "All I remember is the bottom line went up every year."
Avery also appreciated Johnson's direct, cut-through-the-bull manner.
"It's hard to have a straightforward conversation because everyone always has an agenda," Avery says. "It's not like that with Bill. He tells it like it is."
Avery says he hated to lose Johnson, and twice fended off Heinz's advances. The third time, when Heinz picked Johnson up for an interview in the corporate jet, the competition was over.
Susie Johnson also remembers the jet.
"It was our first time on a private plane," she says. "All we did was sit and look at each other and laugh."
Still, Johnson says he's never been consumed with getting ahead.
"When you start thinking about that, you get yourself in trouble," he says. "You become risk-averse and focus on trying to do what everyone thinks you ought to do as opposed to what you really ought to do."
He prides himself on having an approachable management style, preferring face-to-face conversations to e-mail or the telephone.
"Leadership is most effective when it's up close, personal and human," he says. At StarKist/Pet Products headquarters, he was known for walking the corridors, popping in on people to hear their views.
His informal, family-oriented style was evident in other ways. StarKist was one of the first companies in the region to allow casual dress on Fridays. And Johnson implemented flex-time to allow workers to go home early on Fridays during the summer, a practice later adopted in Pittsburgh.
Johnson says he learned by watching his father and other coaches that the key to motivating people is knowing how to treat them.
"Some people need to be handled gently. Other people you can kick in the rear end ...," he says.
Johnson remains extremely close to his father and still looks to him for advice on handling people.
At StarKist, Johnson's ability to connect and inspire engendered a fierce loyalty.
When the announcement came down two years ago that he had been tapped as president and chief operating officer and would be transferring to Pittsburgh, the StarKist folks packed the cafeteria to bid their boss farewell.
The clapping went on and on, recalls StarKist's communications manager, Debbie Bolding. "There were tears all over."
Now, with the changing of the guard at the top, Johnson is making his presence felt in Pittsburgh.
He's begun centralizing decision-making at headquarters, and is increasing headquarters' role in tracking the performance of Heinz's far-flung operations.
Over time, the changes will mean more jobs for Pittsburgh as more functions are transferred here, Johnson says.
And in a move that could be a major boon for local employment, Johnson is exploring the idea of transferring the headquarters operations of Ore-Ida Foods Inc. in Boise, the Weight Watchers International diet class business in Woodbury, N.Y., and StarKist to Pittsburgh.
Such a step, still in the earliest stages of review, would fit with Johnson's goal of working smarter by reducing travel costs and bringing senior managers closer together to better share ideas.
Johnson says the key to driving Heinz profits is to continue expanding globally and to keep cutting costs.
Even though the company initiated a major restructuring last year that included about 2,500 layoffs, major divestitures and the shuttering of 24 plants worldwide, Johnson says there's more to do.
"You can continue to take substantial costs out of this company," he says. "It's something we're adept at."
Without inflation to underwrite price increases, and in an industry that only grows at about 1 percent a year, that two-pronged strategy will be essential for Heinz to continue to deliver on its promise of double-digit earnings growth.
Many analysts have urged Heinz to shed its Weight Watchers unit, a long-standing drag on earnings. Johnson says he wants to allow more time for the new simplified "1-2-3 Success" weight-loss program to catch on as it has in Europe. But he says he's put the unit on notice.
"By this time next year, we'll give a definitive answer about whether we're putting it up for sale," he says.
So far, he says, there's been a dramatic upswing in attendance, the business is profitable and "on its way" to being fixed. But if it doesn't improve even more, he'll cut it loose.
Johnson says he's committed to keeping Heinz's pickle business, a laggard that some have speculated would wind up on the chopping block.
He says the pickle business has too long a history with Heinz, and getting rid of it would "'make too many people mad."
Even though the business isn't particularly profitable, "it pays its way."
Heinz also has been working on beefing up the performance of the Weight Watchers foods division.
Johnson's candor is apparent when he lets it slip that his wife prefers Stouffer's Lean Cuisine frozen entrees to many of the Weight Watchers meals.
Heinz hopes to change her mind, and many others', with a new lineup of repackaged and tastier entrees set to roll out this summer.
"You have never met anybody as stubborn as me," Johnson says of his plans for Heinz's future. "If we set our mind to something, we are going to do it."
It's clear though, Johnson has a tough act to follow.
Under O'Reilly's stewardship, Heinz was transformed from a stodgy ketchup and pickle maker to a global food giant with operations in more than 200 countries and territories and $10 billion in sales. At the same time, the market value of Heinz stock soared from $900 million to more than $19 billion.
O'Reilly was richly rewarded for his efforts. Over the years he became one of the highest-paid executives in the country -- peaking at a cool $75 million in 1990 by exercising stock options -- a distinction for which he drew frequent criticism.
Along the way, O'Reilly gained near-celebrity status, owing to his charming personality and larger-than-life persona: He hobnobs with heads of state, entertains executives at all-night parties at his 18th-century mansion in Ireland and retreat in the Bahamas, and two years ago spent $2.6 million to buy Jacqueline Kennedy Onassis' 40-carat diamond ring for his shipping-heiress second wife, Chryss Goulandris.
"I don't think anyone's up to filling his shoes," Donaldson Lufkin & Jenrette analyst William Leach gushed two years ago when O'Reilly first signaled that Johnson would be his successor. "But I guess you have to choose another human being to run the company sooner or later. O'Reilly's a pretty neat guy. His history is pretty remarkable."
For his part, Johnson says that following in O'Reilly's footsteps doesn't concern him.
"I don't think about it at all," he says flatly. "I will fail or succeed on my own merits, not on whether I follow Tony or not. If I do the job I'm capable of doing, it won't be an issue."
On Wall Street, Johnson's appointment has been well received.
"There are great expectations surrounding Bill Johnson," says Bear, Stearns analyst Terry Bivens. "The Street is keenly aware the two businesses he ran at Heinz were among the two worst (when he took over) and now are two of Heinz's best."
Still, one tough critic remains skeptical.
"He's at the top now," Bill "Tiger" Johnson says of his son's appointment.
"Now we'll watch and see."
Related information:
Fast facts: William R. Johnson
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