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When beauty and personal care executive Rod Little joined personal care conglomerate Edgewell as CFO in 2018, the company’s core businesses of shaving and feminine care were seeing mid-single-digit declines. Competing with giants like Procter & Gamble and DTC disruptors like Billie, the company was in need of a transformation.
Rising to president and CEO in 2019, Little identified the areas that needed to change at the company, which owns household name brands such as Schick, Banana Boat and Playtex.
“We had gotten into a rhythm of being too technology-focused, and we had been led by technology, as opposed to being led by the consumer,” he said on this week’s episode of the Glossy Beauty Podcast.
His turnaround strategy included not only moving the focus to the consumer, but also adopting a startup mentality and embracing new acquisitions in growth categories. While the company’s attempted acquisition of Harry’s was blocked by the FTC in 2020, the company has made four acquisitions in the past five years: men’s grooming brands Bulldog, Jack Black and Cremo, and razor startup Billie. With its new brands driving double-digit growth, Edgewell’s shaving and feminine care categories have moved up to “mid-single-digit” growth this year, while its sun-care category is going strong. On this week’s episode, Little shares details on the company’s acquisition strategy, his thoughts on the FTC decision and ways brands can stay innovative while scaling.
On creating a growth portfolio
“We had a portfolio that, in my view, was not set up for success. We had too much exposure to categories that were either flat or declining.
We sold things that weren’t core in the categories where we wanted to play and thought we could ultimately be successful. At the same time, we’ve done four acquisitions in the last five years, all in categories that have been growing double digits.
Getting the portfolio right and going after acquisitions in this grooming, sun, skin space and more startup disruptor space was very intentional.”
Setting up an acquisition for success
“I’ve been at other companies that have acquired businesses and brands and done it poorly. And I’ve had a front row seat to seeing it done poorly.
My own personal experience has led me to a place where, if you’re going to acquire a company or a business, the people that are running that business are as important, if not more important, than the brand you’re acquiring.
If you start with the [mindset that] people are the most important thing in that acquisition, you’re going to treat them differently, you’re going to speak to them differently, you’re actually going to work to maintain what they’ve built and what they believe is special.
For whatever reason, historically, bigger scaled companies, when they’re buying small things, they have good intent. But … they just slowly start to eat away at the things that are special in the smaller brand. And the smaller brand can never compete for leadership, mindspace or resource allocation over time. Over time, you start to have less resource allocation going to that brand that was new, and [within a few years] maybe the company gives up on it.
We’re trying to create the nice middle ground where we’re operating more like a startup and disrupter, and [founders] can have that experience here. And you can also have some of the safety net here; if you fail, you still have a base salary that we’re paying you. You’re not just playing for the payout three to four years down the road.”
On keeping the disruptor mindset in corporate
“We woke up one day and said, ‘We need to be just like the disruptors.’ And so, then you start to focus on the consumer, you start to focus on the messaging, the marketing, what you’re putting into the innovation pipeline, even the value statements you say you have as a brand. Because ultimately, particularly the millennial set, they’re looking to buy brands that line up with their values as much as what that brand or product will do for them in their bathroom or in their kitchen.
I’ve got disruptors now on my team that we’ve acquired. And I’ve got teammates, who are on legacy brands, who in many cases are new, young, hungry, have a learning orientation and want to [drive] change.”