How Albertsons and Kellogg CEOs Are Guiding Their Businesses Through Major Changes

What happens when two CEOs who have been in the spotlight for their respective high-profile organizational changes sit down for a Q&A session on dealing with change? As it turns out, they share some frank insights and good-natured humor.

During a session on “Navigating Transition with Strategic Change Management” during the first day of the 2023 Food Marketing and Supply Chain Conference presented by Western Michigan University (WMU) in Kalamazoo, CEO Vivek  Sankaran of Albertsons Cos. and CEO Steve Cahillane of Kellogg Co. talked about the impact and potential of their pending structural changes. Albertsons, of course, is expected to merge with The Kroger Co. following a review by the Federal Trade Commission. And on the same day as the leaders’ sit-down with moderator Dr. Russell Zwanka of WMU, Kellogg revealed it is separating its cereal and snacks business into two publicly-traded entities named WK Kellogg Co. and Kellanova, respectively.

“Both of us have a couple of things going on,” said Cahillane in an understatement that drew laughs from the crowd of about 650 retail, CPG and supply chain professionals.

He shared that since last summer’s initial announcement of the spinoff of its legacy cereal business, the Battle Creek, Mich.-based company has been working to meet the needs of its business, stakeholders and consumers. “It’s not every day that you rename a 117-year-old household name. It was done with great care – and some level of trepidation,” Cahilllane said.

On that note, both Sankaran and Cahillane got candid about entering into change in an already-charged decade marked by a pandemic, supply chain shortages, labor gaps, inflation and, with the fresh banking crisis, further economic volatility. Sankaran, for example, said that he and others had to accept that there would be a period of uncertainty. Cahillane acknowledged that until the transition closes in the fourth quarter of Kellogg’s fiscal year, many team members will feel anxious about the impact on their personal circumstances.

That said, Sankaran’s and Cahillane’s leadership styles are shaped by a passion for the industry that serves as a foundation for steering their businesses through transformations. “I think in time, it [the merger] gets to the back of the mind, and you have to fill the front with something. We are making changes that are exciting and ambitious. The merger will take time, but there is also plenty of time to do fun work with people we love,” Sankaran said, underscoring the proverbial point that a rising tide lifts all boats. “At the end of the day when the companies merge, good leaders look for best performances.”

Cahillane shared a similar outlook. “You are really going to transition into this opportunity if you think about every day as an ‘audition’ day – to do the best work you can and collaborate. When great changes happen, it causes disruption, but those who keep their eye on the ball and come with passion and enthusiasm are well-rewarded.”

Transitions, when accompanied by predominantly positive guiding principles, are ultimately intended to spur a better future – another thing to keep in mind during times of change, these CEOs noted. “I learned a long time ago that if you are growing faster, you are a tailwind and if you are growing slower, you are a headwind. It’s much more constructive to be a tailwind,” Cahillane declared.

Added Sankaran; “What we believe is that through this merger, customers will see better pricing and better assortments. Each of us [Albertsons and Kroger] have strengths in different areas and those are things that shoppers will see in improvements in the experiences they have.”