Nevertheless, we went ahead, and the relevant NGOs praised our honesty. Getting praised by them had been a rare experience at Chiquita. Looking back, I think our decision was another manifestation of the Commit and Deliver policy. Having established integrity as a core value, we had to deliver on it. That meant reporting not just on our successes, but on the ways in which we weren’t so wonderful. And if we wanted to make it work over the long term, we would have to turn those red marks into green marks.
It took about 18 months for the Commit and Deliver strategy to pay off. Even some of the angriest investors, people who had hammered on the table at meetings, started to let me know they had decided to stop aggravating us. We had clearly impressed them by delivering on our promises — apparently something they weren’t used to from other companies. It was as if the provision of quarterly guidance, and the pressure to perform in that one respect, made companies less likely to deliver on their other, more strategic, promises.
By late 2003, the company was on a strong financial footing and had met almost all the three-year goals in half the time. We then came up with a strategy for the future. Chiquita would henceforth be a consumer products company, expanding its lines of branded fresh fruit beyond bananas and leveraging the extraordinary Chiquita brand. We then put a management team in place to take it forward. In January 2004, we announced a new CEO: Fernando Aguirre, a former global division president at Procter & Gamble. Chiquita subsequently acquired Fresh Express, a branded produce line. The stock has done very well. On my last day as CEO, it was selling at $23 per share, more than double the price it had been during our dark days a year before.
I believe the Commit and Deliver choice is viable for many public companies. But it takes a lot of energy. Most business executives have learned to resist being driven by their inbox. It’s easy to get trapped, spending your time dealing with everyone’s problems, the pressures of the day, and the insistence of squeaky wheels. But this strategy sets you up against the agenda of shareholders, who, after all, own the company; you represent them as a director and chief executive. You can’t ignore them, even if you feel they’re wrong. Instead, you must make the case that your agenda is the best one for everyone. I now understand more completely why some companies seem to act without mooring and purpose. In the absence of a strong agenda of your own, others will fill the vacuum.
Reprint No. 06101
Cyrus Freidheim ([email protected]) was instrumental in helping design the U.S. Treasury Department’s bailout of Chrysler in the late 1970s. He served as vice chairman of Booz Allen Hamilton from 1990 to 2002. He subsequently became CEO of Chiquita Brands International, a position he held from 2002 to 2004. He is currently a member of the boards of Hollinger International, Allegheny Energy, HSBC Finance Corporation, and SITEL Corporation.