THE OTHER SIDE OF THE MOUNTAIN

DAVID MERREFIELD

LOS ANGELES -- When Roger E. Stangeland assumed the chairmanship of the Food Marketing Institute two years ago, he and other board members faced a formidable looking "mountain."

The looming mountain appeared in the shape of challenges surrounding the board's task of continuing FMI's topside staff management without undue disruption.

Specifically, the issue two years ago was the retirement of FMI's founding president, and the question of who should pick up the reins. The job of orchestrating such a management search figuratively put FMI's board leadership on the "wrong side of the mountain," Stangeland told SN. Indeed, during the early days of his chairmanship, Stangeland recalled, the matter of FMI's continued management was considered important enough to lead a four-point list of goals; a "statement of intent" officers composed as a guide to their upcoming term of office.

The first goal stated the hope that the officers would "handle the transfer and transition of governance at FMI so that its second president [is] identified, engaged, installed and supported [in a way that is] 'seamless' to the staff, and transparent to the membership."

That goal outlined in brief the search for a successor to Robert O. Aders, who had been FMI's president since its inception in 1977. Aders had told the board several months before Stangeland assumed the chairmanship that he planned to retire, an announcement that sparked a months-long search for a successor. As it turned out, an exhaustive search conducted both outside FMI and inside eventually produced an inside nominee, Timothy M. Hammonds. Hammonds was introduced as president-elect during FMI's annual convention in Chicago two years ago. Several weeks after the convention, Hammonds assumed the presidency at a low-key ceremony in Los Angeles hosted by Stangeland. Hammonds continues in the presidency. A preconvention interview with Hammonds appeared in SN's April 24 issue, and in the show supplement accompanying this issue.

Stangeland said the selection of a new FMI president looks easy enough now, but two years ago it didn't look easy at all. "At the time we were searching for the president two years ago, it was a most important issue," he said. "Now, it's easy to look back and say 'that wasn't much,' but at that time we were on the wrong side of the mountain trying to figure out how to get over a mountain that looked awful tall. But we found a neat pass through the mountain."

Stangeland's remarks about issues faced during his two-year tenure as FMI's chairman came during a preconvention interview with SN. Stangeland's term as FMI chairman expired with the convening of the Chicago convention this week. Stangeland also retired as chairman of Vons Cos. here last week. Elected incoming chairman of FMI was Robert E. Bartels. (See related news feature, Page 40.) The chairmanship of Vons passed to Lawrence A. Del Santo, as planned.

The past two years were also marked by a more personal challenge, Stangeland told SN: "During this whole process, I got five new heart arteries, a repaired valve and two pacemakers, none of which I expected. "I certainly didn't anticipate as we were planning for all this two ago that this would happen, and it gives a different perspective on what I ought to do and what I ought not to do.

"Now, as I retire, I look forward to staying around the industry and remaining as active as I want to be and as useful as I can be in a changed role."

In that changed role, Stangeland will remain on Vons' board and as a consultant to Vons though 1996.

As for other aspects of his new status as a retiree, Stangeland said that "I will remain as immediate past chairman of FMI. That means I will chair a couple of important committees and stand in for the chairman if and when schedules conflict and he can't be in two places at one time. And I may do some other things if they don't conflict with Vons. "All in all, the past two years have been a great experience for me, and although I wish I hadn't got sick in the middle of it, I'm sure I got more out of the experience than I gave to it." But concerning his just-concluded chairmanship of FMI, Stangeland said he started the whole process looking toward three major objectives, apart from the search for the new president of FMI. They were: · To broaden membership in all classes, including emerging formats.

· To foster the moves toward systemwide efficiency that were already in the making. · To inspire continued diversity in the work force.

As for membership, Stangeland said he concludes his FMI term of office looking at "good news." "Despite all the turmoil in the industry, especially on the wholesaler side, which saw so many mergers, acquisitions and so on, we haven't lost membership," he said.

"The number of stores that were members are still members. "The reason why is that for the long term, we established the Independent Operator Committee as a board-level committee with the idea that providing more service, principally through research and the formation of share groups, we'll become more attractive as a trade association to independents."

Asked if the member-company count had declined because of acquisitions, Stangeland acknowledged there had been some attrition: "I suppose the company membership has declined by a few. We don't really watch those numbers very much. We have a list of who is out there that's not a member, but who ought to be a member, and it's a very short list right now."

As for the growing numbers of supercenters, and their relationship to FMI, Stangeland said all three discount-heritage operators are free to join FMI. They are Kmart, Wal-Mart Stores and Target. Kmart's supercenter side has been a member of FMI for more than two years, the only one of the three to join. "We're pleased that Ron Floto [president of Super Kmart Centers] is on our board," he said "We'll continue to urge Wal-Mart to join, but we don't know if they will change their mind and join or not. But either way it won't bother FMI, especially since Wal-Mart actually uses quite a batch of our research -- they are treated as a nonmember when they call, of course -- so they participate in their own way." Indeed, as an example of FMI's changing membership profile, McKesson Corp., the specialty wholesaler, joined in recent months. Turning to the efficiency quest that gathered such a head of steam during his term in office, Stangeland pointed out that Efficient Consumer Response is "alive and well." "ECR was really just getting launched when we were taking over. Our commitment was to support it as a process, since we thought it was so important from the technology standpoint, and from the industry cooperation and trust standpoint.

"We knew right away -- even before ECR had a name -- that it would either work in both ways, technology and trust, or it wouldn't work at all. There's no sense creating systems to handle information if different sides of the transaction don't trust one another to give the information. "Our job was to nurture and encourage that, so FMI became a huge financial supporter of ECR during the last two years. FMI did that even though there was no budget for it. We were able to find the resources -- actually many hundreds of thousands of dollars -- at the time ECR needed support most critically. "And our members put key people into committees and subcommittees to make it work. They did that because FMI encouraged them to do so.

"As we look at ECR now, we think that maybe it is not moving along as quickly as people thought it would initially, but it has transitioned into an ongoing mode. "It's important to see that a great deal of real progress has been made on both sides of the issue. It's the technology, the logistics and systems that get the headlines, but under it all I can't remember a time when I've seen so many really good things going on between the wholesaler-retailer side and the manufacturing side. "There's a different level of trust in the industry now. It's not that everyone now thinks everyone else is now more trustworthy; it's that there are so many projects now that involve all the levels that a different trust has developed."

As for the diversity goal, Stangeland pointed out that he sponsored the appointment of FMI's first woman board member, Carole F. Bitter, now outgoing FMI vice chairman of public affairs. Bitter is president and chief executive officer of Friedman's Supermarkets, Butler, Pa. The incoming vice chairman of public affairs is Bill MacAloney, Jax Markets, Anaheim, Calif.

Stangeland said that for the future, an "actionable plan of what can really happen in the workplace concerning diversity" is under development. And, he said, urban issues remain worthy of further work. "We also wanted to support the Urban Initiatives Task Force, a process which had been instituted during the previous administration. Jack Futterman [of Pathmark] was appointed in January as chairman of that task force and is just beginning with the process." The task force was previously headed by Bill Davila (retired from Vons) and Alan Bildner (retired from Kings Super Markets).

"The idea of the task force is to find ways to encourage the industry toward development of solutions in urban America instead of being one of its problems by abandoning it. I hope this process will continue into the next administration, and I expect it will."