Third, the company was in trouble. It had not created any shareholder value in over a decade. Sales had plummeted, the company was highly levered with over $2 billion of debt, and the Levi's brand had become irrelevant. My own two boys never wore Levi's as teenagers. A far cry from my generation! Back in my day, if you went to Woodstock (I was still a few years too young), you were either wearing Levi's or you were naked.
So I took the job, wanting to turn the company and the brand around, and wanting to leave a legacy, to make a difference. This was one of America's greatest brands, and one of America's oldest companies. The chance to turn the company around, make the brand what it was when I was a kid, where I begged my mom to take me two towns away to buy a pair of Levi's before I started middle school. And, I believed one key to turning the company around was to lead with our values as a company.
That is to say, I had a purpose. I had a vision of what I wanted to accomplish and what I wanted to leave behind, and that has been crucial to everything that's happened since. What's more, I gave a lot of thought to what I wanted my legacy to be: to be more about how I led rather than just the results we achieved. That we could and would get great results not just because of WHAT we did, but because of HOW we did it. Always choosing the harder right over the easier wrong. Innovating in ways that could improve the business and our industry. Not being afraid to take a stand on tough issues of our day and, in doing so, putting the Levi's brand back at the center of culture.
Over the past seven years, we've delivered revenue and profit growth every single year, excluding the impacts of foreign exchange, and we've created significant shareholder value. The Levi's brand has arguably never been stronger. Sales last year were $5.9 billion, up from $4.6 billion when I joined. We successfully returned the company to the public markets in March 2019 with a very successful IPO, and at that time I recommitted that we were not backing off of our values even as a public company.
As much success as we've had as a company over the last seven years I am more proud of HOW we did it. What made us successful through the turnaround was our commitment to those values. Never have I been more convinced about the importance of leading with character. We doubled down on our values. We have innovated around sustainability and have not backed away from the Paris Climate Agreement and our commitment to reduce our carbon footprint. We are innovating with lasers and with new fibers, like cottonized hemp, both of which require dramatically less water than their legacy counterparts. In 2016, when the president banned immigration from seven Muslim countries, we were very quick to take a stand on this unprecedented unilateral Executive action. Not only did we speak out against it publicly, we also supported court cases with amicus briefs. And, importantly, we put our money where our mouth was and committed dollars from the Levi Strauss Foundation to support non-profit organizations around the country to support marginalized communities impacted by the Executive Order.
In 2018 after the Parkland shooting in Florida, we decided to take a stand to end gun violence in America. Every day, 100 people in this country die as a result of tragic gun violence. Every death is a sad one. Almost everyone knows someone who has died as a result of gun violence. Our children today practice lockdown drills at school, just like we practiced “duck and cover” drills to protect us from nuclear bombs from the Soviet Union when I was a kid. However, unlike the nuclear bombs from the Soviet Union, which never happened, our kids know that school shootings are a real threat – they see it on the news and they know that it happens. Their lives have been forever impacted by school shootings and lockdown drills. It is one of the most contentious issues of our day – but staying silent on the issue longer was not an option for us.
Our goal is not to repeal the Second Amendment. It is to end senseless, needless gun violence, which is possible. In January of 2019, we wrote a letter to the House of Representatives to support HR 8, which called for universal background checks, a proven measure that a majority of gun owners support, to reduce guns getting into the wrong hands. The legislation passed with bipartisan support. The letter to the House had three CEO signatures on it, besides mine. Later, in September 2019, we sent a similar letter to the Senate, to get the Senate to move on its counterpart bill. That letter had over 160 CEO signatures. By being the point of the spear along with three other CEOs in January, we have built a movement of business leaders to make a difference in ending tragic gun violence in this country. We are not done with our work – but election season is upon us, and we are not giving up.
I will end where I started. The COVID pandemic has wiped out much of the financial progress we've made as a company. As proud as I am of the turnaround, I now know that my legacy as a CEO will be around HOW we navigate the pandemic and residual crises around it. Our 3100 retail stores around the world and most of our wholesale customers’ stores have been closed for over two months. Our revenues, like many retailers, have taken a hit, and I suspect the recovery, and our return to $6 billion in sales, will take time. We are navigating the most uncertain time I've ever faced in my career. People have been working from home for nearly three months now. Uncertainty and volatility are our daily challenges.
But through it all, I continue to be guided to make the hard decisions in the grey area by following our values and committing to “do the harder right over the easier wrong” at every step. It's not easy, balancing all of the critical stakeholders in the business: shareholders (including family members – descendants of Levi Strauss), employees, retirees, partners, suppliers, and customers. It is a fragile ecosystem with massive uncertainty, and weighing it all requires a strong moral compass and a conviction, above all else, to do what is right.
I can draw a direct line from much of this to the time I've spent with Jim and the lessons and exercises he discusses in the pages that follow. They have been a fantastic resource for me over my career, and I know they can benefit you, too. Leading with Character can help you sharpen and define your potential legacy and in the course of doing that, will make you a better leader in all aspects of your life.
Chip Bergh,
President and CEO of Levi Strauss & Co
PREFACE
Eleven years ago, I was incredibly fortunate to be a student of Dr. Jim Loehr's, as I attended training he led at the Human Performance Institute (HPI), which he co-founded with Dr. Jack Groppel 25 years ago. The experience at HPI in Orlando, Florida, was life changing. Jim guided me through the difficult and important work of facing the truth about how I was managing my energy, and who and what was getting the best of it; and he pushed me to engage in soul-searching to define my purpose and life mission. I had to rewrite “my story,” identify strategies to become more physically energized and mentally and emotionally resilient, and lay out a plan to ensure that when I depart this Earth, I will leave a legacy I can be proud of, measured by my impact on the people who mean the most to me.
Since then, I have been blessed to call Jim a dear friend, mentor, and colleague who continues to profoundly impact my life. His work was foundational to the Premier Executive Leadership™ program, which I was honored to have the opportunity to build for the Human Performance Institute in 2016 and continue to lead. This first-of-a-kind executive development and well-being program takes a whole-person, whole-life approach to helping leaders thrive in an increasingly complex, nonstop, stressful world. It leverages an integrated three-coach approach (executive coach, exercise physiologist, and registered dietitian), 360 stakeholder interviews, family engagement and training to create an ecosystem of support, a comprehensive executive health assessment, and assessments in energy, well-being, resilience, and character strength. The assessment and training on building character strength is one of the unique components of this program. While other leadership training has focused on leadership authenticity (which is different from character) and the media are beginning to focus on the character of the company, few if any focus on the leader's personal character, which is the content of one's legacy. It is a “muscle” that can be strengthened and is arguably the most important component of this training.
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