Lessons from a Twinkie


Screenshot (81)As Seen in CFO Studio Magazine 2015 Q3 Issue

The miraculous resurrection of Hostess Brands is proof positive that, if acquired at the right price, and approached with the right vision, almost any business has the potential for rehabilitation. Billionaire C. Dean Metropoulos and Apollo Global’s Andy Jhawar performed just such a corporate miracle. How? Forbes reports that it was a scorched-earth approach involving a complete liquidation of the former company, unbundling brands, severing ties with dead-weight subsidiaries, and washing away a staggering debt load. However, Metropoulos made the important decision to remain sensitive to the history of the Hostess brand.

By nurturing top assets, pruning away dead ones, and modernizing manufacturing and distribution, Metropoulos streamlined and transformed Hostess into one of the most efficient food companies in the business. Now, two years after its acquisition, Metropoulos and Apollo are poised to make $2 billion on a $180 million equity investment.

Forbes quotes one banker saying, “What they’ve done at Hostess should be a Harvard Business School case study on how to turn around a business.” Call the class Twinkie 101.

Hiring Outside the Box


As Seen in CFO Studio Magazine 2015 Q3 IssueScreenshot (80)

Recent trends have shown that C-suite executives increasingly recruit talent from industries outside their own. Executives often find that people from varying sectors can have an excellent handle on best practices, more so than those with deep experience in a single field. One example is the former CEO of Louis Vuitton who, according to the Harvard Business Review, hired executives from Toyota to improve supply chain management and IT integration. Thanks to input from experts outside of the luxury-brand field, today Louis Vuitton is ahead of most of its competitors in sharing with suppliers real-time information about customer demand.

Career mobility often helps transfer best practices across different sectors and products. A skill set that at first glance may seem irrelevant to a particular field, may actually help inject new life into a management or design team. For example, an executive formerly with Apple, a company known as much for its design and style as its technology, may have excellent ideas for the development of high-tech clothing or jewelry lines, or to run a luxury watch brand that looks to meet precise performance benchmarks. The possibilities for this type of cross-pollination are endless once C-suite executives expand their views of what comprises a valuable skill set.

The X.Q. Factor


As Seen in CFO Studio Magazine 2015 Q3 IssueScreenshot (79)

Can companies achieve the perfect workforce by analyzing the psyche of prospective employees? The big-data companies designing these tests say yes, and more and more employers are inclined to agree. Everyone from the Chili’s restaurant chain to the world’s largest hedge fund, Bridgewater Associates, administers personality tests to prospective and current employees looking for the correlation between people’s answers and their job success rate.

Relying on equal parts psychological assessment, New Age questioning, and mathematical algorithms, this fast-growing $2 billion industry purports to define and measure the behavioral, cognitive, and cultural traits that make up a successful employee.

But can these tests really predict job performance? Like the I.Q. (Intelligence Quotient) and E.Q. (Emotional Quotient) assessments, the X.Q. test is supposed to match the best people to the jobs at which they will most excel. However, algorithms cannot always account for the human factor. People have the capacity to learn and take on new skill sets, even becoming extremely successful doing jobs that go against personality type. (Case in point: We are all charging our iPhones right now thanks to Nikola Tesla, the ultimate loner and recluse. How would Tesla have fared on an X.Q. test?) Until the effectiveness of “people analytics” passes the test of time, a good vetting of the resume and face-to-face interview may still be the best ways to find successful employees.

Copyright 2017