Galli hops twice to land upon dream job No. 3

Great leap: Joseph Galli Jr. went through two dot-coms to lead Newell Rubbermaid, roughly twice the size of former employer Black & Decker.

January 14, 2001|By Kristine Henry | Kristine Henry,SUN STAFF

Joseph Galli Jr. earned a reputation as a master of brand development and product promotion during his 19 years at Black & Decker Corp. Now, with the additional experience of stints at two Internet firms, Galli is marketing himself as a new-and-improved executive.

He made the leap from Old Economy to New Economy with great fanfare and enthusiasm when he joined Amazon.com as the No. 2 boss. He felt like the "luckiest guy in the world" when he got the job in June 1999. He wanted to embrace the new millennium.

He had been afraid of becoming an obsolete executive in a traditional company.

Thirteen months later, he was trumpeting his new home, VerticalNet Inc., the business-to-business Internet company in Horsham, Pa., that tapped him as chief executive and president. He said he was addicted to the New Economy, that it was a dream job that let him move back East where his young children live.

Last week Galli reinvented himself again - planting himself squarely at the center of the Old Economy.

As the new president and chief executive of Newell Rubbermaid Inc., he's running a company that makes everyday goods people buy in stores and take home and use - not a company that creates solutions or provides channels in the ether.

"This was an ideal match with my background between Black & Decker and the Internet world," Galli said. "This is a dream shot, an opportunity to lead and build one of the premier consumer product companies."

Located near Chicago, Newell Rubbermaid is, with $7 billion in sales and 48,000 employees, substantially larger than Black & Decker, which has $4.5 billion in sales and employs 22,000.

Newell's wares can be found in most homes and offices with brands that are household names - Rolodex office products, Calphalon cookware, Pyrex glassware, Goody hair accessories, Levolor blinds and, of course, Rubbermaid containers.

It even has some hardware and tool concerns, including EZ Paintr (the company that invented the paint roller) and BernzOmatic, which makes hand-held torches.

"I went out and got an education in the technology world and the New Economy," Galli said, "and now I'm returning to my traditional roots with those lessons."

Experts are seeing more and more people take paths like Galli's - embracing exciting new technology-focused companies but then returning to the safety of firms with more traditional business models after Internet companies folded and the Nasdaq tanked.

"I think this kind of a shakeout is healthy," said John Putzier, a human resources consultant who focuses on high-tech firms. "A lot of people didn't have the stomach for dot-com economy employers and I'd be willing to bet that everyone who tried it and got burned never thought it would happen to them."

Kathryn Bartol, the Robert H. Smith professor of management and organization at the University of Maryland, said the momentum that was focused on dot-coms two years ago is waning.

"Now a fair amount of momentum is shifting to old-line companies that are very progressive and aggressive in taking advantage of the Internet," she said. "They learned from the dot-coms, and we are getting a merger of business methods."

That's exactly Galli's outlook and that's why at least two analysts boosted their ratings of Newell stock on news of his appointment.

He plans to use the Web to help promote Newell's brands, so consumers won't want just a random plastic container for leftovers - they'll want a Rubbermaid Servin' Saver.

Newell can also save money by changing the way it packages and ships products to online retailers, who have no use for fancy displays. And Galli wants to harness the Internet to link Newell to its suppliers and do reverse auctions for raw materials.

It's part of the "organic" - or internal - growth he plans to foster at Newell. The company is known for its success in making bolt-on acquisitions, finding cost savings and transforming them into more efficient operations - referred to within the company as "Newellization."

The process "has worked beautifully" in the past, Galli said (although analysts say the $5.2 billion that Newell paid for Rubbermaid in March 1999 was too steep). But to achieve the company's aggressive growth targets, Galli says Newell can't just rely on acquisitions. It needs to develop new products - one of Galli's strengths at Black & Decker - and boost sales overseas, he says.

"I believe all of their businesses would respond well to a strong dose of consumer brand strategy," said analyst Amanda Tepper of J. P. Morgan Chase & Co. who upgraded Newell stock to a "long-term buy" upon Galli's appointment. "The stable is ripe for brand development, and that's what Galli is saying he's going to do."

Newell itself is ripe for an overhaul or at least major tinkering. Prices for resin, the raw material used in many of its products, have risen sharply in recent years and the company has had trouble passing along those costs.

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