Sara Lee Reshaping Announcement
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Sara Lee Reshaping Announcement

Sara Lee Corporation approached Burson-Marsteller in April 2000 seeking counsel as it prepared to launch a new corporate vision and to announce several acquisitions and dispositions.

Paul Holmes

Sara Lee Corporation approached Burson-Marsteller in April 2000 seeking counsel and assistance with a major announcement: the company was preparing to launch a new corporate vision and to announce several acquisitions and dispositions.  Burson-Marsteller already had begun conducting a brand equity analysis with Sara Lee’s key stakeholder groups and was analyzing existing data from the agency’s proprietary corporate reputation and BrandAsset® Valuator research.  This research highlighted several core issues that would help guide the announcement, including:
  • Analysts could not consistently identify a strategic vision held by Sara Lee management; most found the corporation’s role as a huge conglomerate confusing and a possible drain on earnings potential.
  • Media were discouraged by a perceived lack of access at the corporate level; many also were not aware of the company’s full portfolio (i.e. strengths in the marketplace).
  • Many employees did not identify a clearly articulated vision or cohesive voice at the corporate level; communication from corporate senior management to all employees was minimal.
  • A considerable percentage of participating stakeholders noted lack of innovation as a major weakness.
 
With these issues in mind, Sara Lee and Burson-Marsteller identified three stakeholder groups: employees, the investment community and media, and developed messages tailored to these audiences.  Communication needed to be powerful, compelling and believable to influence stakeholder perceptions.
 
PLANNING (STRATEGY AND CHALLENGES)
 
Burson-Marsteller’s team, comprised of client leader Bryan Oakley and ten other team members, worked with Theresa Herlevsen, Sara Lee’s vice president, communications and public relations, to develop a strategy to communicate Sara Lee’s new strategic focus to the three priority stakeholder groups.  We stressed the need to position the transactions as strategic steps toward significantly reshaping Sara Lee’s business portfolio and to highlight the narrowed focus from five business segments to three.  The announcement was used as an opportunity to position        Sara Lee’s incoming CEO, Steve McMillan, as an innovative leader with a bold vision for        Sara Lee’s future.  Additionally, we designed media relations activities to allow Sara Lee, traditionally reactive in its communication with the media, a chance to establish or further develop relationships with reporters/editors.
 
The strategy also needed to address several challenges: Sara Lee would be announcing disappointing earnings guidance on the same day; the company didn’t possess the internal infrastructure for communicating on a companywide scale; and, due to timing and confidentiality issues, Burson-Marsteller had only one month to plan and prepare for the announcement.
 
Tactics were designed to reach as many people as possible around the world within the first 24 hours of the announcement.  A press briefing was held in New York for top-tier media, and dial-in phone access was given to select media unable to attend the briefing in person.  Subsequent print and television interviews were scheduled for the remainder of the day and the following day.  For online audiences, a special section about the reshaping was created on the Sara Lee Web site, explaining the announcement and its impact on stakeholders.  In addition, a password-protected Web site was created for managers worldwide, enabling them to download employee
communication materials.  Finally, incoming CEO Steve McMillan held a first-ever conference call with individual company presidents to discuss the corporation’s new vision.
 
CAMPAIGN EXECUTION
 
  • Analyzed Burson-Marsteller research regarding Sara Lee’s perceived strengths and areas for improvement.
  • Developed key messages for all communication documents using the research findings.
  • Developed media materials, including press release, media alert, fact sheets, Q&A guides and biographies.
  • Developed employee letters and presentations for employee meetings.
  • Developed tool kit for sales force communication with customers including:  letter, key messages, talking points, Q&A guide and presentation.
  • Designed and drafted content for a special section of Sara Lee’s Web site devoted to the announcement.
  • Conducted media coaching session with Steve McMillan.
  • Created comprehensive media list.
  • Contacted media and coordinated attendance for the press conference.
  • Coordinated post-press conference interviews for Steve McMillan.
  • Distributed media alerts, press releases and media kits to media.
  • Pitched reshaping story to national and financial media outlets.
  • Organized and scripted conference call hosted by Steve McMillan with approximately 150 individual company presidents.
  • Monitored for media and analyst coverage and analyzed for message delivery.
 
RESULTS SUMMARY
 
In many ways, this announcement marked a first at Sara Lee Corporation and was viewed as a major success by the company’s senior management.
 
Media relations activities were extremely effective and generated positive results.  Reporters focused on the reshaped portfolio rather than the negative financial news.  The announcement was the main financial story of the day, covered by virtually every major cable financial news program and major business print outlet.  The messages effectively shaped media and analysts’ perceptions of Sara Lee related to both business strategy and accessibility of management/executives.  Subsequent coverage of Sara Lee often refers to the new vision or reshaping announcement as a positive first step in a series of proactive change.
 
The significant amount of favorable coverage generated by the announcement – more than 30 wire stories, 80 print articles and reports on more than 145 broadcast news programs – far outpaced any previous corporate announcement. 
 
Wall Street’s reaction was positive – most analysts noted that Sara Lee’s initiative was a “step in the right direction,” and Sara Lee’s stock rose despite the lowered earnings guidance.
 
Sara Lee company presidents reported that materials posted on the secure Web site were clear, comprehensive and helpful in employee communication efforts.  The conference call with company presidents was also a success with participants reporting that it was informative and worthwhile.  As a whole, internal communication efforts were well-received and such positive feedback has led to the development of a broader employee communication program. 
 
Another indication of the announcement’s success is seen in the corporation’s stock price.  Since the reshaping announcement in May 2000, the stock price has risen more than 15 percent from 18.75 to 21.70 (as of 2/21/01). 
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