Irene Rosenfeld and the art of making a big job smaller

At five o’clock on October 1, 2012, Kraft Foods completed a separation. Its North American grocery business went off with the Kraft name. The remaining corporation became Mondelēz International. Irene Rosenfeld, who had led the whole enterprise, would run the remaining business. A chief executive had helped draw a line through her own domain.

There is something pleasantly awkward about that picture. Corporate careers are usually told through additions: a larger territory, another division, a bigger office to accommodate the larger territory and the additional division. Rosenfeld’s most consequential decision requires subtraction. She had helped make Kraft bigger through the acquisition of Cadbury. Then she helped decide which pieces should stop sharing a roof.

The familiar brands made the change easy to underestimate. An Oreo remained an Oreo. A box in the cupboard did not announce that a legal and managerial rearrangement had occurred behind its label. For Rosenfeld, though, the split expressed a judgment about how the businesses worked. Knowing a company well can mean knowing when its existing shape has outlived its usefulness.

A psychology degree meets the supermarket

Rosenfeld was born in Westbury, New York, in 1953. Her childhood ambition was to become president of the United States. She eventually acquired a different kind of constituency, one whose members could cast a vote every time they bought something else. Consumer products offer a particularly brisk form of feedback. The customer need not write a letter explaining the result.

At Cornell she studied psychology, earning her bachelor’s degree in 1975, followed by a business master’s in 1977 and a doctorate in marketing and statistics in 1980. Three degrees suggest considerable tolerance for classrooms. Her interests also extended to sports. She played basketball, volleyball and tennis, and later credited team captaincy with helping develop her leadership.

That combination is more revealing than a tidy account of academic credentials. Psychology asks why someone behaves a certain way. Statistics asks how confidently you know. Team sport requires a group to act together before everyone has finished discussing the matter. A career in marketing and management gives all three habits something to do, often in the same meeting.

Her working life began at the advertising agency Dancer Fitzgerald Sample. She joined General Foods in 1981, initially in consumer research, and moved into operating responsibilities as the business evolved into Kraft. The route matters: she approached the company through the people who bought its products before taking responsibility for the people who made and sold them.

The return required some listening

By the time Rosenfeld returned to Kraft as CEO in June 2006, she had already spent more than twenty years with the company and its predecessors. In between, she had led Frito-Lay North America, becoming its chairman and CEO in September 2004. Her return brought experience from another snacks business as well as an insider’s memory of the organization she was being asked to run.

The chairman’s title followed in March 2007. A title, however, could not repair the business on its own. Kraft had sluggish growth and an innovation pipeline that needed replenishing. Rosenfeld went out to hear from employees. Her diagnosis included insufficient investment in familiar brands; the response involved different remedies for different products rather than assuming that recognition alone would carry them.

It is easy to confuse familiarity with affection. A customer can recognize a package from childhood and still choose the rival beside it. The work of running such a business includes preserving what people value while noticing what they have stopped valuing. Nostalgia is agreeable company. It is an unreliable purchasing department.

Rosenfeld also pushed authority toward local managers. She described the absurdity of German coffee pricing decisions arriving at her office and the usefulness of adapting Oreo to Chinese preferences. A less sweet formula and different formats and flavors helped illustrate her argument. Headquarters could own the brand without possessing every answer about the people buying it.

“Patience is probably my most challenged virtue.”

Irene Rosenfeld, 2010 interview

She described herself as having a strong sense of urgency. There is an interesting tension between urgency and listening: one asks for movement, the other asks for attention. Her public examples suggest an effort to reconcile them by giving people closer to the problem more room to act. Sending every question upstairs adds travel time to the decision, even when the question itself is quite small.

Cadbury made the map look different

The 2010 acquisition of Cadbury gave Rosenfeld a much larger strategic question. Cadbury brought confectionery brands, a stronger presence in developing markets and access to places where people bought products for immediate consumption. She saw opportunities to change both Kraft’s product mix and its geographic footprint. Buying chocolate was also buying routes to customers.

Those routes matter because a product’s usefulness is partly a matter of where it appears. The weekly supermarket shop and a purchase made on the way somewhere invite different habits. An acquisition can add factories and brands to a balance sheet while also adding knowledge about those habits. That was central to Rosenfeld’s explanation of why the businesses belonged together.

The takeover carried a public argument that strategic reasoning could not settle. In Britain, Cadbury meant jobs, places and an institutional history as well as confectionery. Kraft’s statements about keeping the Somerdale plant open were followed by its closure decision. The UK Takeover Panel censured Kraft’s conduct, and a parliamentary committee examined the company’s undertakings.

Rosenfeld declined repeated requests to appear before the committee. The resulting report recorded its criticism. That episode belongs alongside the acquisition’s commercial rationale. A transaction may look coherent from the buyer’s side of the table while producing a very different experience for the people whose employer, factory or community is being discussed.

There is no need to resolve those perspectives into a comfortable verdict. They describe different responsibilities. Running a business across countries means encountering attachments that cannot be measured solely through a proposed financial return. Cadbury enlarged Kraft’s snack portfolio. It also enlarged the audience entitled to ask what Rosenfeld’s decisions would mean for them.

Two businesses, two sets of instructions

In August 2011, Kraft announced plans to split. By October 2012, the plan had become two public companies. The North American grocery operation was spun off to shareholders. Kraft Foods Inc., the existing parent, changed its name to Mondelēz International and retained the global snacks and other remaining businesses. The distinction helps explain what Rosenfeld actually created.

Calling it a new company captures the new identity and managerial focus. It should also leave room for its inheritance. Mondelēz arrived with brands, operations and histories already attached. Its launch was closer to moving a crowded household into a newly defined arrangement than beginning with an empty room. The furniture had opinions, in the form of employees, customers and shareholders.

The distribution gave shareholders ownership in both businesses. One Kraft Foods Group share was distributed for every three shares of the remaining corporation. Trading under the separate MDLZ and KRFT symbols began the next day. The machinery of a corporate separation has little of the romance of a product launch, but the machinery has to work before the strategy can be tested.

Rosenfeld’s choice puts a useful question inside the usual language of leadership: what is the organization for? If two sets of businesses require different priorities, keeping them under one chief executive is itself a decision. Separation makes those priorities more visible and puts responsibility for them in different hands. It also removes the convenience of explaining one business through the other.

Her preference was the global snacks business. That choice connected to her recent work at Frito-Lay and to the Cadbury acquisition. Yet it also reduced the territory under her direct command. The interesting part is the willingness to accept that consequence. A leader’s judgment about the right shape of a company can conflict with the appealing arithmetic of having more of it.

A career leaves people behind it

The boundaries continued to change. In July 2015, Mondelēz and D.E Master Blenders 1753 completed the combination of their coffee businesses into Jacobs Douwe Egberts. Mondelēz received approximately €3.8 billion in cash and an initial interest of about 44 percent, subject to adjustments. The snacks company could concentrate its operations while retaining a stake in the coffee business’s future.

In November 2017, Dirk Van de Put succeeded Rosenfeld as CEO. She stayed as chairman through March 31, 2018, providing a transition between the leaders. Retirement from that role did not end her corporate work: Qualcomm appointed her to its board in October 2018. Its current governance roster lists her as a director and chair of the HR and Compensation Committee.

A semiconductor company presents a different product from a chocolate company. The move also makes visible how much of an executive’s experience concerns organizations rather than their merchandise. International operations, management and leadership development travel across industry boundaries. Board work offers a different seat from which to use them, with different responsibilities and a different distance from daily operations.

When Rosenfeld later reflected on her career, she spoke about preparing others for leadership and giving them experience with consequential decisions. Her own route had crossed research, operating roles, another company and a return. There is a practical generosity in letting someone rehearse responsibility while you still hold it. The difficult decisions arrive eventually; experience makes their arrival less mysterious.

Her public portrait includes less imposing details: piano, rollerblading, an affection for macaroni and cheese. These fit comfortably beside the degrees and the transactions. The person studying purchasing decisions was a purchaser herself, with preferences that needed no elaborate strategic justification. Even a chief executive may simply like what is in the box.

The Kraft split remains the clearest expression of Rosenfeld’s willingness to redraw the boundaries of her work. She had spent decades learning the business closely enough to change it. On that October evening, the corporation acquired a new shape, and her own job became smaller. The familiar products stayed on the shelf. Behind them, she had changed who was responsible for what.