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CHICAGO -- Brenda Barnes became CEO of Sara Lee last February, one day after Hewlett-Packard fired Carly Fiorina. Like it or not, the back-to-back headlines thrust Barnes into the hot seat as the CEO of the largest corporation with a woman in charge.
Fiorina didn't pass Barnes the baton, she passed her the lightning rod. As she marks her one-year anniversary at the helm of Sara Lee, Barnes says she's not sure she ever had a honeymoon. But if she did, she recognizes that it's over. Sara Lee stock languishes at $17.87 a share, down 23% since Barnes took over and during a stretch when the benchmark Standard & Poor's 500 index rose 7%.
The business world awaits a Jackie-Robinson-like woman, a wildly successful CEO who will take the heat off the rising tide of female executive talent to follow. Barnes will either be that trailblazer and right Sara Lee -- or pass the pressure to the next.
"I feel all the weight of the world. The clock's ticking, and I'm very aware of that," Barnes, 52, said last week in her first on-the-record interview since taking over. "It's been intense. It will continue to be intense."
Barnes and Fiorina have little more in common than gender. Fairly or not, Fiorina was known for an uncompromising leadership presence that had some, such as University of California-Irvine management professor Judy Rosener, dismissing her as too manlike in style to be considered a female failure.
Barnes, however, exercises eye contact and listening skills, though she divulges little personal information. She says she rarely angers. Members of her staff say she never shouts. She employs leadership qualities such as consensus-building that are often attributed to women. Two thousand employees offered feedback on Sara Lee's new mission statement: "To simply delight you ... every day."
Delight is one thing. But does Barnes have the fire-in-the-belly to run a Fortune 500 company against bigger food giants such as Kraft and London-based Unilever?
"Let me put it this way," she says. "I set a high bar for myself and others, and I think I help people get over that bar. That's my job."
No CEO, male or female, was known for giving more enthralling speeches and TV interviews than Fiorina. Barnes says she is shy by nature, dislikes speech-making and gives them only when there is an obvious benefit to Sara Lee.
One of seven daughters of a homemaker who died of cancer and an International Harvester maintenance man who died from the complications of diabetes, Barnes says she got her leadership foundation from her parents. Being humble was among their lessons, and it stuck.
She runs from anything that smacks of personal attention and says she agreed to an interview so that Sara Lee's 137,000 employees would feel good about their accomplishments. The timing, however, comes just as she delivers a presentation Wednesday to the Consumer Analyst Group of New York (CAGNY) conference in Scottsdale, Ariz., a group that could mount a bit of momentum behind the stock.
Those analysts are aware that Barnes has one thing in common with Fiorina: She's embarking on a strategy of risk. Fiorina was fired when HP floundered after acquiring Compaq Computer; Fiorina was the driving force for that deal.
Barnes similarly is in command of an aggressive line of attack. She is slashing Sara Lee's revenue by 40% as it divests some businesses and spins off its apparel division, which makes Hanes, Playtex and Wonderbra. That division will become a stand-alone company later this year. Sara Lee is focusing on three divisions: food (products include Jimmy Dean sausage and Ball Park hot dogs), beverages (Douwe Egberts coffee) and household and body products (Sanex shower gels and Kiwi shoe polish).
Company to shrink, focus
The transformation could bump Barnes from her throne as CEO of the largest woman-run company. Sara Lee's annual revenue will fall from nearly $20 billion to less than $14 billion, knocking it from its No. 114 ranking on the Fortune 500 and out of the top 150. Rite Aid (No. 128) with CEO Mary Sammons and Xerox (No. 132) with CEO Anne Mulcahy would then be bigger.
Barnes laughs at the suggestion that it's a ploy to get her out of the hot seat.
"I want to be running the largest company," she says in her 47th-floor office that looks out on the skyline of her native Chicago, the city to which her grandparents immigrated from Poland. "I'd like to grow it as big as we can."
She acknowledges that Sara Lee's transformation is risky but says safeguards are in place to apply the brakes if anything goes haywire. So far, nothing has, she says.
Wall Street, however, is unimpressed. "It's a deeply troubled company," and still guilty of "financial engineering rather than operational excellence," says analyst Timothy Ramey of brokerage D.A. Davidson, who was a vice president of strategy and new ventures at Sara Lee from 2000-02, and is the former president of CAGNY. He says the stock is headed down to $14 a share, largely because the businesses Sara Lee is selling provide more earnings than it will gain from reduced debt and stock buybacks.
Ramey says Barnes is a likable person who is providing better leadership than Steve McMillan, whom she replaced, "but she has chosen a difficult path."
Barnes says she "understands how it works," and that the stock won't go up until revenue and profit growth are consistent for a few quarters. "I'm even-keeled. I'm not panicked, because I really feel we have a plan. Our history is not fantastic. In the end, the numbers have to demonstrate the change."
Still, she says she will remind analysts this week that Sara Lee has done precisely what she said it would a year ago, and that the results have come in almost precisely as she forecast.
"We've gone through a lot of one-time changes. Selling and spinning off 40% of our revenue is a massive undertaking," but Sara Lee is at the point where it can focus more on innovation and "driving the merchandise," she says.
Barnes realizes the depressed stock makes the company an attractive takeover candidate. "Why wouldn't someone want to buy us? I can't imagine people not thinking about us."
Is Sara Lee courting a bidder? "No, no, not at all. I'm just emphasizing what a great company we are. The best way not to be acquired is to get our stock price up. We're doing this brick by brick."
Brick-laying is back-breaking and Barnes insists on maintaining a sense of humor. Her laugh is hearty and it grows louder when she decides that it's all up to America to make her successful.
"Tell them in your article to go out and buy Sara Lee products," she laughs. "Tell them America needs this. Help her out."
Of course, consumers rarely take such pleas into account, and Sara Lee is hoping for more breakout products such as its Soft & Smooth bread with a "stealth health" combination of white bread made with whole grain. Launched last July, it has become the top-selling fresh bread with a 5.7% share, according to Information Resources (IRI). Sales are about $2 million a week.
Barnes has been married 25 years to Randy Barnes, 54, a onetime PepsiCo executive, who serves on the board of Claymore Mutual Funds, plays golf, and is a day trader in the stock market.
He married someone who doesn't like attention but keeps finding it. She first made the media rounds in 1998 when, at 43, she resigned as head of Pepsi's $7.7 billion North America division to be with her children. Sons Jeff and Brian and daughter Erin were 10, 7 and 8 then. Jeff, now 18, is a freshman at Stanford; Erin, 17, a high school senior and editor of the yearbook and captain of the golf team; and Brian, 15, a sophomore who is mathematical and plays golf.
Barnes says she resigned at Pepsi not so much because her children needed her but because she needed her children: "I was selfish; I did it for me. They would have survived, they would have been fine, they were fine. They're great students, they have good hearts, I think they're grounded, they work hard. I'm a bragger, but I have fantastic kids."
She says it's "definitely a myth" that she made it back to CEO from traditional homemaker. Between Pepsi and Sara Lee she:
*Served on seven corporate boards.
*Chaired the trustees at her alma mater Augustana College.
*Taught a leadership class at Kellogg Graduate School of Management.
*Served as interim president of Starwood Hotels and Resorts from November 1999 to March 2000.
When Sara Lee hired her as president in July 2004, promoted her to CEO a year ago and to chairman in October, Barnes was held out as proof that women's careers can be interrupted without consequences.
But she says few ambitious women will choose to follow her path, and if she is proof of anything, it's that "women don't lose their brains or capability."
Would she consider a run for office? Never. She says she would want to do what's right, and therefore couldn't be elected. "That's the tragedy of politics." Even worse, she says, would be all of that media attention.
Her goal?
"I would love to demonstrate to the world that a woman can run a company well," she says.
But when the interview ends, her last request is that the article "focus on Sara Lee, not me."
Unlikely. If the company had a male CEO, Sara Lee's performance, or underperformance, would remain relatively unnoticed.
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