.pquote { background: url('http://www.industryweek.com/site-files/industryweek.com/files/uploads/2014/08/openquote-iw.png') no-repeat!important; color: #000000; font-style: italic; margin: 10px; padding: 10px 1px 1px 50px; font-size: 24px; } .article-image .image-description p { margin: 0; font-size: 16px; line-height: 1.9; } .image-description { background: #F8F8F8; font-size: 11px; padding: 5px 5px 3px; color: #000; font-weight: normal;!important; } .pcaption { padding-left: 20px; padding-right: 20px; font-size: 12px; line-height: 1.9; padding-bottom: 2px; } We never stop. We're always constructively dissatisfied, and I feel that same energy within the Jarden team. That's an asset. - Michael B. Polk Title: Chief Executive Officer Organization: Newell Rubbermaid Inc. Previous Position: Prior to joining Newell Rubbermaid as CEO in 2011, Polk was president of global foods, home and personal care at Unilever. The IndustryWeek Manufacturing Leader of the Week highlights the manufacturing leaders, executives and stars who are driving growth in today's industry and helping to shape the future of manufacturing.

Newell Rubbermaid CEO: The Right Time for a Big Transaction is Now

Dec. 14, 2015
Newell Rubbermaid CEO Michael Polk offers insights into the proposed acquisition of Jarden Corp., a deal that sets the stage for Newell Brands, a $16 billion consumer goods leader.

Slightly more than two months ago, Newell Rubbermaid Inc. (IW500/187) announced plans to acquire Elmer's Products – whose brands include the orange-capped glue found in elementary schools across the nation – for $600 million, as well as its intention to divest its wall coverings business.

Not satisfied to conclude 2015 on that acquisition note, Atlanta-based Newell Rubbermaid on Dec. 14 joined with Jarden Corp. (IW 500/139) to announce a far bigger deal – one that will see the two consumer-goods companies combine and emerge as $16 billion Newell Brands when the deal concludes. Among the well-recognized brands among the two companies are Sharpie, Calphalon, Graco, First Alert and Rawlings. Completion of the transaction is anticipated during the second quarter of 2016, according to both companies.

Heading that new company will be Michael Polk, chief executive officer of Newell Rubbermaid, a position he has held since 2011 (He's been a member of the company's board of directors since 2009.). Under Polk's leadership, Newell Rubbermaid introduced what it called its "Growth Game Plan" in 2012, a corporate strategy that revolves around achieving growth and profitability through sharper portfolio choices and aligning the organization around "Five Ways to Win." Those are, in brief:

  • Make our brands really matter.
  • Build an execution powerhouse.
  • Unlock trapped capacity for growth.
  • Develop the team for growth.
  • Extend beyond our borders.  

High-impact innovation and a brand-led strategy continue to drive the Growth Game Plan, a point Polk reinforced during a recent appearance on CNBC's Mad Money, where he said: "It's all about ideas. It's all about creating commercial value from them. And our operating model does that. We've created these two focused capabilities, one focused on brand development and innovation, and one focused on commercialization and creating value from those ideas."

On Dec. 14, Polk joined Jarden leaders Martin E. Franklin, founder and executive chairman, and James E. Lillie, Jarden CEO, for a joint conference call with investors to discuss the creation of Newell Brands. Below are excerpts from Polk's comments to the investor community.

On reconciling the differences between the Newell business model and the Jarden business model: "In any transaction of this sort, you have to respect the differences before you can think about what you want to do with the business, and we clearly respect the differences in the two models. In the very near term – 2016 – we'll manage both Newell Rubbermaid and Jarden as they are designed and constructed today. Both businesses have aggressive business plans, and the teams on both sides need to focus and deliver their committed outcome."

"Job 1 in the near term is to deliver the outcomes that we both committed to and then play for the synergies that come from combining two large corporations, and then think deeply about the portfolio priorities and where the revenue synergies can potentially come from over time."

On why now is the right time for Newell Rubbermaid to pursue a big transaction: "If I look back at what we've done at Newell over the last four years, I think we've got a proven track record as a management team of being able to unlock a tremendous amount of value by tackling what was arguably an even heavier cost structure at Newell than this combination provides, and releasing that money and putting it back into our brands and into capabilities and having some of it flow through to margin for accelerated performance."

"That track record and that experience over the last four years positions us well for the type of work ahead in this combination."

"The question of 'Why now?" I think it's always wise to play for, to take bigger swings from a position of strength. You really never want to do this when your business model isn't performing, and the beautiful thing about this combination is both companies are performing at leadership levels within the industry with respect to value creation and performance, and have very clear and focused plans for next year."

On the advantages of scale in a difficult retail environment: "I think this combination and the scale we get at our No. 1, No. 2 and No. 3 customers will allow us to have more strategic conversations about how we develop these categories and how we reshape the aisle architecture to ensure that our retail partners are capturing greater productivity out of the assets that they've got."

On shared ambition: "We never stop. We're always constructively dissatisfied, and I feel that same energy within the Jarden team. That's an asset. That's not an easy thing to build in a team."

On e-commerce and direct-to-consumer strategies for the new company: "We [Newell Rubbermaid] have a very strong pure-play dotcom and bricks-and-mortar dotcom business growing really rapidly. We've invested to create a capability that in fact unlocks that opportunity for us. We've been putting real money behind a group of people and capabilities in that area that’s really driven a good chunk of that growth over the last couple of years. Jarden has done the same. But Jarden has done more than Newell has, in that they've built out this B-to-B platform leveraging the brand sites … and a hook around customization that I think is quite bright and clever."

"We have a lot to learn from our colleagues on the Jarden side with respect to that."

On portfolio management: "We don’t have a preconceived notion as we come into this on what exactly we would choose to bet on or not bet on. And we have the time, given the value release and the combination, to really do that work in the proper way. Our goal is not to shrink to success. Our goal is to grow disproportionately and competitively versus [others] in the consumer goods industry such that you get leading returns relative to them.

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