A Quick Bite with Mark Clouse: Keith McLoughlin

Welcome everybody. Great to be here today with my esteemed leader and Chairman of the Board of directors for the Campbell Soup Company, Keith McLaughlin. Welcome.

So I was born in Brooklyn. Parents, grandparents came through Ellis Island into New York, from Ireland. Large Irish Catholic blue collar family. And I can remember my father, like was yesterday, the mantra was God, family, country. Hard work and treating people the way you want to be treated. That's kind of how I grew up.

Yep, so Catholics, right? So six kids. Three boys, three girls.

Yeah, we get together actually, we have a little summer home, a little north of Charleston on a barrier island. We get them all together at least once a week in the summer.

I mean, not once a week, a full week, once a year.

For sure. Not once a week.

Once a year, but a full week of 26 Irishmen telling stories you can imagine. Those are great memories.

So I have two sons and a daughter. So a daughter starting a bakery business. And my son works out of Atlanta for a pretty good size consulting firm. Both went to University of Chicago, so. Okay. Really smart kids. We're not sure where they get that from.

Sure. I would say probably the most significant event for me, trajectory wise, career wise, was actually going to college. Okay. Cause again, large blue collar family. No one actually on either side of the family had gone to college. And, you know, put me on a different trajectory in terms of career. Started with DuPont as an engineer coming out of the service. Once I did my service. Right. 22 years later... went into an appliance company, and then connected with Campbell's. Now military played an important role in that.

So to be honest, I wasn't sure I was going to college. And so West Point actually became the way to get there because it was a full ride as you know. Right yeah. So I actually got there, recruited to play football. Okay. So you'll relate to this as well playing basketball. We have a lot in common. And, you know, I had a partial scholarship to Cornell and URI, but no full ride, so... That was how I was going to go to college.

Sure. At the end of the day, it's all about people. Doesn't matter whether it's business, military, athletics. It's all about people. It's all about the team. It's all about leadership. You know, it's all about character. It's all about principles and values. So that was big learning through Academy, of course, and that carried through my professional career. You know, they teach you that you actually can do a lot more than you think you can do. True. Yeah. You get to the point where you actually say, okay, I just can't go another step... Right. And then they force you to do two and a half times more, and you say, wow, I actually did that. So I mean, just that mental toughness of saying perseverance, you can do a lot more than you think you can do.

So of course, you have a Board of Directors and of course the management team. So as the Chairman, you're trying to facilitate the entire engagement of all the directors. And you have to kind of lead it sometimes. You kind of get to steer it so that you move along the agenda. So getting that right, the balance between leading and facilitating is an important part of the role.

I think a couple of things. One is, you know, the individuals around the table bring a very diverse set of experience. Two, a very I think, relevant set of experience, because we got a lot of people who, you know, have been around CPG, have been CEOs or CFOs. So a lot of relevant experience. It's a relatively refreshed board so that, you know, in the last since I've been here, probably 60, 70% of the board has turned over. So it's a relatively current board of directors. They're certainly engaged. I would say board directors, you know, they have to have a certain amount of capability and experience, which they all do. Right. But they have to have a certain amount of curiosity in terms of wanting to learn. Sure. And then the third, I would say, critically important, which I feel like our directors have is self-awareness. You have to kind of be self-aware, when you're in that dynamic of a group of people, so that how you're impacting the conversation and the output of the work, is important. I think we've got a really good set of directors around that. The other thing I would say that's unique to this board is actually the combination of the dynamic between the board and the management team. Right. You know, you guys have confidence enough and the board has trust enough in you that you're willing to bring ideas that may not be 100% done because you want the questions. Yeah. You want the questions to say, okay, what else should we be thinking? Well, you know, as you know all too well that, you know, when you really value and benefit from the input is while you're in the development process. When you're done and dusted, that can be sometimes a little bit difficult. So better to get the insights in. And I think the board does bring just a unique set of past experiences that complement one another, but really help us.

Sure. Actually, you know, you have to obviously appreciate that ownership. So we have, you know, three direct family descendants that own over a third of the company shares. So, very, very large shareholding. They have a unique perspective. You know, much longer and deeper than you and I combined, right? Yeah. There are many times I think I have a new idea of informed that I actually do not have a new idea, which does make it interesting. Yeah, but they have, you know, they've got a long history of experiences that they know the company obviously incredibly well. They bring unique sets of skills themselves just as individuals. And obviously, you know, you can't be more committed to the success of this company than those family directors. And I think that can be helpful for a board.

I see Campbell's Soup Company in top tier performance in the food industry. Right. Just right up there with the very best in all regards, in terms of financials, in terms of quality of product, in terms of innovation, in terms of people. We are poised to get there. Yeah. So in five years I'm quite confident we'll be in that top tier in five years.

I would say one, you know over whatever it's been, 45 years, it probably took me way too long, 15 to 20 years to figure out the whole financial system, right? Right. You have to grow the revenue, you have to expand the margins and you have to increase the asset turnover. And when you peel that apart, to grow revenue, you got price and volume. To expand margins you got price and volume and cost. Right. If you got asset turnover you got assets. There's only four knobs in the whole damn thing, I wish I knew that much earlier. So... it seems so simple, why.... All I got to do is turn four knobs? Well that's the point, as you know. Yeah I know. It is incredibly simple. It doesn't mean it's easy. Not easy. It's not at all easy. But it is, to get through the financial lens it's a very simple game. Right. So that's one thing I would learn. The other is, you talk about leadership, as you know, there's two sides of that, right? You have what I would call business leadership. You know, a leader of business and a leader of people. And the kind of the business leadership side is acumen, right? So skills and capabilities and financials and strategy and operations and you know, M&A and how do you just run businesses and do that well. But equally important of course, is being a leader of people. Right. And the character side and the care for people, the authenticity. Working on both sides of those leadership elements are critically important. Yeah. The second. And probably last thing I would say in learning is just around M&A, around mergers and acquisitions. Most companies look to acquire other companies that help them achieve something, right? Right. Growth or a new channel or a new segment or a new product. And I think that's an important lens, but it's necessary but not sufficient. You also have to ask the question what can you do to help that company? And of course, it's that second lens that tells you how close they are to what you really know how to do. Right. That's a good point. Because if you only do the first, you know what happens... You get that chase the shiny object thing. And then you're left with it. And what do you do? Yeah. So those are three.

Something outdoors. Okay. All right. Outdoors... hopefully some physical activity, you know. Yeah. Doesn't have to be hard exercise, but something physical. Probably something spiritual, to be honest. Yeah. I mean, just some connection. Ideally something with my family. It could be fishing with my son or baking with my daughter. Yeah. Those are both fun. Yeah. And then maybe if I could learn something during the day, that would be a pretty awesome day if I get all those. They don't all happen every day, but... Yeah!

Okay I get it. I said outdoors, that doesn't exclude beer.

It's warm.

So, yeah. Movie... Probably The Great Escape, which is an old World War II movie, but with Steve McQueen. Steve McQueen, yeah! Album? Because I know your music guy. Yeah yeah yeah yeah. Actually, I might have to flip a coin on this, so it's either the Layla album by Derek and the Dominos. Yep. Or Europe 72, which is a double live album by the Grateful Dead. Yeah, so for those that don't know, I know that you may find this hard to believe Keith and I both are Deadheads, so I don't know what to make of that. We both went to West Point! That's even more confusing. But yeah, I would say, definitely high up on my list.

Yeah, we might be brothers by different mothers. Oh, we could be. We seem to have wandered onto the same road. I don't know how that exactly happened. Campbell's products. So I guess it would depend on whether I thought I was going to survive or not. So I thought I had a chance for survival. I'd probably go for, you know, a good, healthy, Chunky, high protein... Yeah it's good idea. Yeah. And if I didn't think that, I'd just load up as much Goldfish as possible.

Absolutely! All right, let's go do it.

So, Keith, I don't know if, you know, we actually bought a pasta sauce. Oh, really? Yeah. It's so funny, I feel like we've been talking about it for so long, but I really, truly could not be more excited to add this to the family. I mean, you really do look at our portfolio now, and, I mean, it is a collection of iconic winners across the board, and this is going to fit in perfectly. So let's try a little bit now. Let's do it. Yeah. Some amazing pasta, I mean underrated I think actually is their pasta. Their dry pasta, also from Italy. Absolutely excellent. No it's fantastic for sure. I appreciate the chef bringing us vegetables. I'm not eating any of them but I do appreciate... Yeah, I think it's awesome it's there, but you know, let me just get to the pasta and the meatball. Pass the parmesan. Yeah. Oh of course. Yeah. Let's finish it appropriately. But it's great to have a snack with you.

And just in case you were wondering. Yeah? I'm not going to change the sauce.