Loida Nicolas Lewis’s keys to good leadership

Yes, it’s possible for a woman to be a good leader,” says Loida Nicolas Lewis. At the recently held Giuliani “Leadership in Times of Crisis” forum, Loida was the guest speaker who addressed the challenges of being a female leader.

“The first key of leadership is knowing and setting your objective,” Loida declared. To give a background on how she realized the importance of having a clear objective, it is important to recall the feats of her husband, Reginald Lewis.

In October 1987, Reginald was a 44-year-old African-American New York City attorney who was gaining a reputation for his skills in making deals. In a move that impressed many Wall Street financiers, he purchased the international division of Beatrice Foods, a manufacturer of processed meats, dairy products and beverages with holdings in 31 countries (later renamed TLC Beatrice International).  At that time, the $985 million deal was the largest leveraged buyout of overseas assets by an American company.

As chairman and CEO, he moved to reposition the company, pay down the debt, and increase the company’s worth. By 1992, the company had sales of over $1.6 billion annually and Reginald was jetting between his company’s offices in New York and Paris, with most of the company’s businesses in Europe.

In 1993, Reginald Lewis died of brain cancer. His death rocked TLC and made the business community nervous. His half brother, Jean Fugett, briefly served as CEO before Loida Lewis took over as chairman and CEO of her husband’s business.

Loida had often heard her husband say, “Maximize the value of the company by increasing the profits and reducing the debt.” However, when he died, profits plunged. Europe was suffering its worst recession since World War II. Half of their business was in ice cream and that summer, it rained in Spain and everywhere else in Europe, so when Loida took over a year after her husband’s death, TLC Beatrice was losing millions of dollars.

So Loida did what many women try to do: cut costs. She sold the made-to-order corporate jet, the lavish limousines, the luxurious apartments and the French chateau that her dearest husband had embellished his life with. “No matter how painful, we reduced drastically the office space and office personnel. We sold unprofitable companies and fired ineffective managers and most important, we tied up the bonuses of the executives to the good performance of the company.”

Throughout these traumatic cost-cutting exercises, Loida’s mantra remained the same as her husband’s: maximize shareholder value and increase liquidity.

Letting Go Of The Ego

The second key to good leadership, as discovered by Loida after an expensive experience, is: Do not let your ego be involved in making major decisions.

It happened that when she took over the company, the former executives of Drexel Burnham Lambert, who were shareholders of TLC, sued the company. The lawsuit claimed that a $22.1-million compensation package paid to TLC Beatrice’s late chairman and CEO before his death in 1993 for five years’ service was too much.

Naturally, his widow was upset. “I was gravely offended that these executives would question Mr. Lewis’s fees. The company had become very valuable during the five years of his management, so I vowed that we would fight to the very end.”

But the court case became very involved and took much time from the TLC executives. “We were paying tons of fees to our lawyers and were distracted from our objectives,” Loida said.

To the surprise of their lawyers, the Lewis estate made the decision to return about $15 million to the company. This settled the lawsuit brought on behalf of the privately held food company against the Lewis family “and the company proceeded to have the most profitable years since 1987.”

Back To Objectives

By 1997, the value of their French supermarket business went up because the French Parliament passed a law that prohibited foreign supermarkets in France. Quick to seize an opportunity, Loida decided to sell their 450 French supermarkets and with the proceeds, the company paid back all their debt. There was still substantial cash left over, so the question was whether to buy another company or to liquidate the company and distribute the gains to the shareholders.

“We had to go back to our objective, which was to create wealth for our shareholders.” It was not to build an empire or to perpetuate TLC Beatrice International. “We decided to liquidate; we sold every business in our portfolio and by the year 2000, we had distributed a 35-percent return on investments to our shareholders.”

The Assets Of The Filipina

Before every important meeting, Loida would lead her executives in prayer. “I maximized my strengths as a woman,  focused on teamwork and developed a consensus-builder attitude.” When it came to making decisions, Loida depended on the abilities of her managers and business partners, all the time encouraging them to contribute to the profits of the company. “I never cursed.”

“I have this theory that if you go about looking for discrimination and bigotry against you, then you will surely find it.”