Here’s an interesting fact for the day: There are eight Fortune 500 companies that currently don’t have a permanent CEO, and half of them are retail companies.
Is that a coincidence? Fortune’s Phil Wahba doesn’t think so. Retailers of all sizes are clearly struggling to get it right these days. Gap CEO Sonia Syngal abruptly ended her two-year tenure last summer after chronic sales declines. (Her predecessor, Art Peck, was also ousted abruptly in 2019.) The RealReal’s founder Julie Wainwright stepped down in June, following a drop in profitability, and was only replaced eight months later. Steve Rendle of VF Corporation left unexpectedly in December, under investor pressure. Stitch Fix brought back founder Katrina Lake to rescue the company—shades of Starbucks? Rite Aid has an interim CEO after Heyward Donigan’s exit last month. You get the point.
In his piece for Fortune, Phil explores the reasons. But you don’t have to look too far. Digitization plus pandemic-fueled ecommerce plus global supply chain upheaval has put the industry through massive disruption in a very short period of time. And leadership development hasn’t kept up with the pace. Time was when retail was the playground of iconic merchandisers—think Mickey Drexler of Gap, or Les Wexner of L Brands, or Stanley Marcus of Neiman Marcus. But today, you need to be a tech wiz, a data geek, a supply-chain champion and a brand-building black belt to make the whole thing work. It’s a new game, and grandmasters of that game are in short supply.
I’d argue that change is not unique to retail. Retail just got there a bit earlier than everyone else. I’ve yet to find a Fortune 500 CEO who doesn’t believe that his or her business is changing faster today than ever before. (Still looking—if you are one, ping me.) And more disruption is coming, with A.I. and the energy transition driving much of it. The challenge: how to lead through disruption.
Worth noting that not everyone is a victim. I’m a big fan of Target’s Brian Cornell, who seems to be navigating it very well. And of course, Walmart is the master player. Who would have thought a decade ago that it could give Amazon the run that it has?
You can read Phil’s piece this morning here. Other news below.
Ford is cutting around 11% of its European workforce, with 3,800 jobs set to go—Germany and the U.K. will bear the brunt. Ford is in the process of slimming its European lineup, due to trouble turning a profit there, and says the electric cars it’s planning to launch require less product development than their fossil-fuel predecessors. Financial Times
Regulators vs. crypto
In the wake of the FTX debacle, U.S. regulators are increasingly cracking down on the crypto sector, with those in New York yesterday stymying issuance of Binance’s BUSD “stablecoin”. The SEC also recently fined the parent company of the Kraken exchange. Blockchain Association CEO Kristin Smith: “It certainly feels, from an industry perspective, like there’s a crypto carpet bombing going on right now.” Wall Street Journal
Zoox, Amazon’s self-driving car unit, has tested a robotaxi on a public road in Foster City, California. The robotaxi shuttled employees between two Zoox buildings. CEO Aicha Evans said the successful test was “a big step and we would not have done it unless internally we were already looking at the line of sight for going commercial.” Reuters
AROUND THE WATERCOOLER
Walmart takes the return to office one step further by asking hundreds of employees to relocate to an entirely new city, by Nicholas Gordon
Larry Summers warns now is not the time for investor ‘euphoria’—markets are headed for a ‘turbulent period’, by Will Daniel
‘We’re in a frenzy to be more agile’: How Kraft Heinz’s CEO is reviving Jell-O, Kool-Aid, and other famous longtime brands, by Geoff Colvin
Salesforce CEO Marc Benioff says his rambling 2-hour all-hands meeting about layoffs was a bad idea: ‘We were trying to explain the unexplainable’, by Prarthana Prakash
The high price of being single: ‘It’s all on one person’, by Megan Leonhardt
This edition of CEO Daily was edited by David Meyer.
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