EXECUTIVE CHANGES 1999-08-16

David Merrefield

The way to the top of the executive heap in supermarket retailing used to be simple: Just start as a bagger or stocker while in high school, accept as much additional responsibility as possible, persevere when all others weaken, have unparalleled good luck, then, a generation or so later, emerge as a senior-level officer.

This model for upward mobility has produced loyal executives for food retailing, but is one that has produced limited executives too: Homegrown executives might ascend to the top of the ladder knowing only a single company -- their own -- or, almost certainly, just one form of retailing.

The upshot was that topside supermarket executives would more likely be skilled technicians than visionaries. Some might be very good at, say, orchestrating the logistical side of the business; perhaps in getting product on the shelf at the most favorable cost. Others might be skilled at merchandising, or what have you.

This could be the reason that some food retailers seem a little slow to accept new ways of looking at the business, such as meal solutions, or in reacting to non-supermarket forms of competition, such as mass and drug.

But the world of food-retailing executives is changing. No longer is there a lifetime sinecure to be had in the executive suite, and no longer is it insulated from reality. Now, reality is battering down the door, pulling executives from their leather chairs and ushering in executives from outside the industry. The reasons for changes such as these are described in a front-page news feature this week.

Chief among the reasons for change is consolidation, and it poses several hazards. Executives who fail to figure out how to do a deal when all others are doing so may be shown the door by their board. Others may succeed at making a deal, but fail to survive it. There are ample instances of the executive suite being swept at an acquiring company, although it's more likely that executives will be displaced from a company being acquired. And, should investment bankers be involved, all bets are off -- executives from outside the industry are likely to take the place of many who followed traditional career paths.

All this means there is a glut of executives on the street and the ranks of the wanderers aren't likely to do much but increase. And, at the same time, the number of high-level executive positions is decreasing, again owing to mergers.

The net effect is that top-level executives are facing danger on every hand, and those on the street have few prospects of continuing their careers in a linear direction. The answer is that executives, regardless of how they are positioned, would do well to broaden their skills so they have the greatest chance of pursuing opportunities of all types.

Ironically, employees positioned a little further down the ladder are more likely to survive an acquisition with their careers intact, even though their paycheck may bear the name of another company. Mergers don't generally reduce the aggregate number of supermarkets being operated.