A woman's work
Eleven years after R.J. Reynolds died in 1918, they completed the building that bears his name. It stands 22 stories in downtown Winston-Salem, a monument to the dark-eyed, bearded man who set out to make plug chewing tobacco and wound up creating what’s now Reynolds American Inc., the nation’s second-largest tobacco company.
On a gray morning, four executives cluster around a speakerphone in an upstairs office. Stock analysts are on the line. The company, created by the merger of No. 3 Brown & Williamson Tobacco and No. 2 R.J. Reynolds Tobacco Holdings, had net sales of $6.4 billion in 2004, but its market share slipped to about 31%. How, New York-based Smith Barney’s Bonnie Herzog asks, are you going to halt the slide?
“I’ll take a shot at that,” volunteers Susan Ivey, who unfolds a plan to remake the 130-year-old company and its mix of brands. Tense times lie ahead. Soaring taxes, lawsuits and regulatory terrors stalk cigarette makers. “We anticipate a 6-to-8% volume decline as we recalibrate the portfolio,” she tells the analyst. “Our goal is to make sure the lines cross as soon as we can.”
A trim woman with auburn hair and angular features, Ivey has scaled the ranks. At 47, she has a reputation as an innovative, freewheeling — free-spirited, some say — globetrotting executive. She got into this business, she once quipped, because she wanted to sell something she was passionate about: booze, makeup, cigarettes. Formerly head of Louisville, Ky.-based B&W, a subsidiary of giant British American Tobacco PLC, she became president and CEO of Reynolds American after the merger in October 2003 and now stands squarely in the shadow of Richard Joshua Reynolds. But as a woman, it’s lonely there.
Ivey is one of a handful to reach the pinnacle in North Carolina. Among the state’s 14 Fortune 500 companies, she’s alone. Only three of the top 75 public companies based here have female CEOs. The North Carolina 100, Grant Thornton’s yearly ranking of the largest private companies, lists but two. Some experts say corporations will soon spout a new generation of CEOs rife with Susan Iveys, women recruited into management-training pipelines laid decades ago. As Sam Cooke sang in the ’60s, “A change is gonna come.” But the reality, right now, is vintage James Brown: “It’s a man’s world.”
Why so few so far? “Women who came 10 years before me literally had to fight their way to the top,” Pamela Lewis, 47, recalls. Now, says the president of Queens University — once a women’s college — in Charlotte and former dean of its McColl Graduate School of Business, “there’s very little overt gender discrimination left.” True, few have achieved the fame of her business school’s namesake — retired Bank of America Chairman Hugh McColl: “You rarely see iconic women leaders because, among other things, we haven’t been in top leadership positions that long.”
The enemy, more times than not, is inertia. “It’s the old boys’ club at work,” says Lissa Broome, banking-law professor at UNC Chapel Hill and director of its Center for Banking and Finance. “People in power feel comfortable around people who look and act like themselves.” She cites a 2003 study that found nearly 90% of directors of North Carolina’s 50 largest public companies are men. Ivey, for example, is one of two women on her 13-member board. But five of Reynolds’ top seven executives are women. “The old school — the ones who created these glass ceilings — is retiring,” she says. “You now have a generation that grew up in a more diverse management structure.”
Nature and nurture, as well as timing and tradition, play their part. “For ingrained social and biological reasons, women have a stronger sense of responsibility for staying at home with their children,” says Crandall Bowles, 58, a Charlotte resident who is chairman and CEO of 15,000-employee Springs Industries Inc., based in nearby Fort Mill, S.C. “That’ll be a difference for a long time to come, until men feel like taking that level of responsibility.”
Ivey didn’t have children. Her stepsons were nearly grown when she married their father in 1997. She’s usually up before dawn, working out at 5 and at work by about 7. Her normal day lasts 11 hours or longer. “If you’re going to take these jobs on,” she says, “it’s 150%.”
When Capt. Thomas Bullitt surveyed what would become Bullitt County, Kentucky, in 1773, buffalo still gathered at the big salt lick — Bullitt’s Lick. Ivey probably knows the county, just south of Louisville, as well as he did. A New York native, she grew up in Fort Lauderdale, where she graduated from high school in 1976 — Most Likely to Succeed — then briefly attended the University of Tennessee. She graduated from the University of Florida in 1980 with a bachelor’s in business.
Ivey moved to Louisville to be with her boyfriend, who was there in a General Electric training program. She sold office equipment for about six months, then landed a B&W route in Bullitt County and adjoining Jefferson County after she complained she couldn’t find her favorite cigarettes — Barclay menthols, a B&W brand. “I called them up and told them they needed a sales rep in the area. A week later, I had the job.” She still smokes menthols, but now it’s Reynolds’ “smokeless” Eclipse brand.
Soon after starting the job in 1981, she enrolled in an evening MBA program at nearby Bellarmine College. By the time she received the degree in 1984, she had been promoted to district sales manager. She was B&W’s marketing vice president in 1990, when British American Tobacco moved her to London as its brand director. Ivey says she would have been content to stay in England, where she had met husband Trevor, but B&W offered her the job of senior vice president for marketing — and a seat on its executive committee — in 1999. Not long afterward, Earl Kohnhurst resigned as pre- sident. BAT named her as B&W’s president and CEO in November 2000.
Profits were sliding. The company had been hit by several lawsuits. There were already rumors that Reynolds was eyeing B&W. It needed a merger partner to bulk up for battle with bigger archrival, Richmond, Va.-based Philip Morris — now Altria Group — maker of best-selling Marlboro. She would soon move from the No. 1 job in the No. 3 tobacco company to, after a transition period following the merger, No. 1 at No. 2.
It was her performance — not her sex or an effort by directors to soften the company’s face — that got her the job, she says. “I’d spent 23 years in the industry and been successful as CEO of Brown & Williamson. In no way was it a gender-based decision.” Citing its other women executives, Ivey says Reynolds is a meritocracy. It’s a word women in similar situations use often.
One is Theresa Stone, chief financial officer and executive vice president of Greensboro-based Jefferson-Pilot Corp. A director of the Federal Reserve Bank of Richmond, she also is president of Jefferson-Pilot Communications. Several general managers of its broadcast stations are women, as are her controller and chief planner. “The evolution here has been very organic: Women demonstrate they’re good at what they’re doing.”
In Charlotte, Ruth Shaw, a former community-college president, is president of Duke Power Co., the Carolinas’ largest electric utility. She came to the company, started by Dick Reynolds’ rival James B. Duke and run by male engineers and lawyers for most of its first century, during a time it was willing to see women advance. “I’m not naïve, but clearly something has changed,” Shaw, 57, says. Parent Duke Energy Corp. recently named Martha Wyrsch president and CEO of its second-largest operating unit, Duke Energy Gas Transmission.
Shaw says other companies are following suit. “I rarely find myself the lone woman in the room now when companies gather to weigh in on powerful decisions. I find women like Anna Spangler Nelson or Linda Hudson there.” Nelson is president of family-owned C.D. Spangler Construction Co. in Charlotte and a venture capitalist. Her father is C.D. Spangler Jr., a billionaire investor and former president of the University of North Carolina. Hudson, an engineer, is president of General Dynamics Corp.’s 2,500-employee Armament and Technical Products Division, which she moved to Charlotte in 2003.
When it comes to closing the gender gap, such women rarely speak of sacrifices they’ve made to advance their careers — the preferred word is choices. Many have had to alter what were once considered conventional lifestyles, but some companies make those choices easier for them to bear.
Charlotte-based Bank of America, repeatedly named one of the top 10 employers by Working Mother magazine, has aggressively pushed women to top positions. Three of its executives rank high on USBanker magazine’s recent list of powerful women in American finance. Amy Brinkley, its chief risk officer, was third, just ahead of Cece Sutton, Charlotte-based Wachovia Corp.’s head of retail banking. Fortune magazine ranked Brinkley 19th among the nation’s most powerful businesswomen, citing her as a potential future CEO of the nation’s third-largest bank. Cathy Bessant, BofA’s chief marketing officer, was 14th on USBanker’s list, and Barbara Desoer, its chief technology officer, was 17th.
Desoer describes herself growing up as a bookish girl who once wanted to shroud herself in the anonymity of numbers. She was withdrawn in high school and college — she earned a bachelor’s in math from Mount Holyoke, followed by an MBA from the University of California at Berkeley. “I thought being an actuary would fit my style, which was shy and inwardly focused.” Going to work for the bank in 1977, she was coaxed along. Its aggressive culture honed traits she already had, and she soon found herself itching to influence the big picture. “I’m very competitive,” she says. “From a young age, whether it was a game of Monopoly or competitive sports — basketball — in high school and college, it was all about the winning. I had to win.”
Desoer, 51, has an 11-year-old daughter. “That was an explicit trade-off on my part,” she says. “I was trying to differentiate myself and get on a track that could lead to senior management, but it limited my ability to have children to one. In fact, I wanted more than one.” Bessant, 45, had the first of her two children when she was 36. Brinkley, 48, has two, ages 12 and 14.
Jefferson-Pilot’s Stone, 59, has a 20-year-old son “Flexibility has to be a characteristic of our careers. We had a son later in our marriage than some might have, but it has turned out wonderfully.”
These choices can even result in new ways to define a family. “I structure my time to be with my children,” Bessant says. “They get several hours a day when I’m in town. I don’t multitask — it’s real, directly focused time. And the capacity of children to love is boundless, so I think of my husband, my nanny and me as raising a family.”
Ivey made different choices. “Women actually carry the children, as opposed to men. I look forward to having grandchildren, but having the children was not for me.”
Some women are wary, worried that a tide of political conservatism and religious fundamentalism will roll back the advances they’ve made. She is not one of them. “There are choices and women who don’t want this path. We should all respect that. But we’re never going backwards.”
A few weeks before the analyst call, Ivey had laughed about Fortune naming her the nation’s 36th most-powerful businesswoman. “People ask me how it feels to be a woman CEO. I say I don’t know, because I have no idea what it feels like to be a male CEO.” It might, for the most part, still be a man’s world, but this woman is sure of her place in it.