Andrea Jung will soon reach a decade as CEO of Avon Productsavp. She's the most-tenured female CEO in the Fortune 500, having outlasted such notables as Carly Fiorina of Hewlett-Packard and Anne Mulcahy at Xerox. Jung, who at 50 may have another decade or more to go, spoke to USA TODAY corporate management reporter Del Jones about the challenges of leading a company through an unusual recession. Following are excerpts, edited for clarity and space.
Q: Hard decisions are being made daily by companies to stay afloat. How do you order layoffs, save every possible dime and maintain morale?
A: Communicate, communicate, communicate frequently and face to face, not in an e-mail. Communicate the purpose of the vision and the reason for tough decisions. Whether it's a layoff or pay freeze, they must understand the rationale and why it will make the company healthier. It's more than morale, it's trust and respect. In 2005, we announced a delayering of our organization, and a third of our managers left. We started fixing the roof when the sun was shining.
Q: What else has this recession taught you?
A: Reinvent yourself first before you reinvent your company. This is one unusual environment, and I'm lucky that I didn't have to go through this my first year. There are pros and cons of experience. A con is that you can't look at the business with a fresh pair of eyes and as objectively as if you were a new CEO. Fire yourself on a Friday night and come in on Monday morning as if a search firm put you there as a turn-around leader. Can you be objective and make the bold change? If you can't, then you haven't reinvented yourself. If you can, then you can have a decade of tenure that is like having different jobs. I'm not the same leader I was even last year, because those skills have rendered themselves not as useful. I've had to reinvent myself every year.
Q: Cash conservation seems to be the only strategy now. How is Avon conserving without hurting the company long-term?
A: Don't touch market share or the consumer. We've not pulled back on advertising or philanthropic efforts, even though that is the natural tendency. We've spent too many years laying the foundation.
Q: Wouldn't this be the time to take some risks when others are playing it safe?
A: Leaders on the offense, not the defense, will come through this recessionary period. In terms of acquisitions, strategic rationale has to trump all. Obviously, there are some great financial opportunities now. But acquisitions are for medium- or long-term value creation, and you have to have extraordinary strategic rationale.
Q: What signs will tell you the economy has turned?
A: We study the number of (Avon) sellers who are active. If that's growing, it's an indication that things are starting to improve. But for us, unemployment is not always a negative. It provides an opportunity for us to recruit people. We ran an ad that said: "I can't get laid off because this is my own business." Consumers say that they don't foresee that things will be different a year from now, and only 13% say they will resume their old buying patterns. The psychology on saving and spending has arguably changed forever. The indicators will be different. You don't have a crystal ball as a leader. But if you rely on the history of past recessions, you could be caught off guard.
Q: Sounds like you fear a dead-cat bounce? Should companies dig in for a Japan-like lost decade of no growth?