Galli, Joseph Jr. 1959–
Joseph Galli Jr.
President and chief executive officer, Newell Rubbermaid
Born: October 9, 1959.
Education: University of North Carolina–Chapel Hill, BA, 1980; Loyola College, MBA, 1987.
Family: Son of Joseph Galli Sr. (automotive scrap yard manager) and Lucille (maiden name unknown); married (wife's name unknown; divorced); married (wife's name unknown); children: three.
Career: Black & Decker Corporation, 1980–1987, various positions; 1987–1989, director of marketing; 1989–1991, vice president of marketing, Accessories and Fastening Group; 1991–1993, vice president of sales and marketing; 1993–1999, president of Worldwide Power Tools and Accessories Group; Amazon.com, 1999–2000, president and COO; VerticalNet, 2000–2001, president and CEO; Newell Rubbermaid, 2001–, president and CEO.
■ Joseph Galli became president and CEO of Newell Rubbermaid in January 2001; he was the first outsider to be named to that position at Newell Rubbermaid or any of its precursor entities in the company's 99-year history. He proved himself to be a marketing champion capable of launching brands, dominating market share, and enriching the bottom line. The charisma that he mastered in sales paid off in management, where he recruited teams of salespeople who viewed him with the utmost reverence and the fiercest of loyalty. But Galli's intense leadership style earned him numerous enemies, many of whom were threatened by his accomplishments and viewed him as a corporate liability.
A CHILD BORN TO SUCCEED
The child of first-generation immigrants, Joseph Galli Jr. inherited both his father's name and his work ethic. In a tough, blue-collar environment the elder Galli routinely worked six days a week into his late 70s at the automobile salvage business he operated in Pittsburgh. Like many new Americans the Gallis made success their number-one priority and sacrificed accordingly. The younger Galli's mother was hospitalized with an infection when Galli was four; when she suspected her son was picking up the broken English of her Italian in-laws, the ailing woman persuaded her doctors to release her ahead of schedule. Throughout Galli's career his mother pushed him to improve his English and sent him e-mails when she encountered erudite words that she thought he should add to his vocabulary.
Galli found early outlets for his competitive drive in athletics. A fierce wrestler in high school, he would immediately run three to four miles if he lost—no matter how late the hour. In college he was a four-year starter on the varsity wrestling team and ACC Champion his senior year, dominating in more than one hundred matches. Whenever he lost, he turned the defeat into motivation to attain victory in the future. As de scribed in BusinessWeek, he once ran 10 miles and jumped rope for an hour by an indoor pool in order to make weight. Said his coach, "Those he couldn't beat, he outworked. If you told him it couldn't be done, he'd say, 'Watch me!'" (December 11, 2000).
A NATURAL SALESMAN
After his 1980 graduation Galli took a job as a sales representative with Black & Decker, the leading manufacturer and marketer of power tools and accessories. He visited customers in his North Carolina territory in a van he personally outfitted with a wall of power-tool accessories—not unlike the kind one would see in a Wal-Mart store. Within a year he built the fas-test-growing sales territory in the United States.
Galli held a variety of positions with Black & Decker, culminating in his being named president of the Worldwide Power Tools and Accessories Group in 1993 at the age of 35. His work ethic was unmatched: he spent more than 75 percent of his time traveling and would routinely show up on weekends at a Home Depot to assist salespeople in giving demonstrations to customers.
MARKETING GENIUS, MEGALOMANIAC, OR BOTH?
Galli built his reputation in marketing, pushing sales of saw blades and drill bits by assigning them catchy names like Piranha and Scorpion. He was credited with developing and launching the DeWalt brand, a $1.5 billion global business that led the power-tool industry. Galli personally crafted a plan to launch the DeWalt brand as Black & Decker's high-margin entry for skilled tradesmen and consumer do-it-yourselfers. Remembering his own youthful drive, he recruited legions of college students, dubbed "swarm teams," who trumpeted the DeWalt brand at store openings, union halls, and NASCAR races.
The DeWalt team caused sales to balloon from practically zero to $1.4 billion in only seven years. By age 38 Galli was the second-highest paid executive at the company, overseeing the business that provided 64 percent of company revenues. Additionally he played a pivotal role in reengineering Black & Decker's European, Asian, and Latin American operations. Gary DiCamillo, the former chairman and CEO of Polaroid Corporation, understood Galli well. Both were Italian American and held top roles at Black & Decker in the early 1990s. DiCamillo noted in BusinessWeek, "Galli was the best sales and marketing executive who ever reported to me" (December 11, 2000).
RESULTS ORIENTED, UNDETERRED BY CRITICS
But Galli's hard-charging attitude did not appeal to everyone. Some executives accused Galli of penalizing employees who did not emulate his management style. Galli, aware of the criticism, said he cared only about one thing: performance. As he remarked in BusinessWeek, "It boiled down to results. People said I didn't like them because of style. And I said no, it was because you missed your numbers" (December 11, 2000). By age 37 he had a falling out with his boss and left abruptly in 1999. Depending upon which source one might view as most credible, Galli either was fired or quit; all agreed, however, that the departure was fast and furious.
NOT AFRAID TO TAKE HIS LUMPS
Galli accepted and then quickly reneged on a job offer from PepsiCo in order to take a job with the Internet start-up Amazon as president and COO. The dot-com sweetened its initial offer with a $7.9 million signing bonus. Galli noted in Forbes magazine, "I felt terrible about letting Pepsi down. It was a hard decision, but had I not done what I did, I would always have wondered what that life was like" (October 1, 2001).
Still in its infancy, the dot-com industry desperately needed executives from traditional, corporate environments not only for credibility but also to demonstrate that Internet firms could deliver real numbers. Despite his efforts to breathe new life into the company, Amazon's share price plummeted during Galli's 13-month tenure. His cost-cutting measures, barring software developers from buying $50,000 workstations without prior approval and eliminating a free-aspirin program, did nothing to soften Galli's image. He ultimately quit, as all his efforts had failed to push Amazon closer to a profit. While his swift exit suggested tension with the Amazon CEO Jeffrey P. Bezos, Galli contended that he was simply eager to run his own business.
WILLING TO SURF THE NET AGAIN
Galli said that he learned a lot from his brief stint at Amazon, including the ideal manner in which to make decisions in a quick-paced business environment. Galli remarked in the Philadelphia Daily News, "It's better to make one hundred decisions with 70 of them right than to make 10 decisions and get nine of them right" (September 18, 2000).
Galli next jumped to VerticalNet, an Internet business-to-business company, but lasted only 167 days as its chief. Arguably more comfortable in bricks than clicks, Galli accepted a job as president and CEO of Newell Rubbermaid. Around that time an ugly cartoon in the Philadelphia Business Journal took a direct shot at Galli. The satire portrayed him as a rat fleeing a sinking ship in a Rubbermaid tub. Galli stated in Forbes, "I went through some things I don't ever want to do again. I'm a stronger and less naive manager than I ever would have been" (October 1, 2001).
TAKING THE TOP JOB AMIDST A SALES SLUMP
In January 2001 Newell Rubbermaid's financial picture was bleak. The $6 billion acquisition of Rubbermaid by Newell had yet to prove its worth. Newell had been generally profitable while Rubbermaid had been financially beleaguered, yet Newell had had a much lower public profile than Rubbermaid. The merger meant instant access to the consumer cachet attached to the Rubbermaid name and entry into new sales channels like supermarkets and Amway distributors. Upon Galli's arrival sales were off 2.4 percent and net income was down 42 percent. The combined entity's shares had fallen 53 percent from Newell's high of $49 in 1998.
Most alarmingly for Galli, Newell Rubbermaid's sales force seemed dangerously out of touch with its customers. As reported in Fortune magazine, one employee told a shocked Galli that it was a bad idea to visit retail customers because "they might ask you for something" (December 30, 2002). Not surprisingly, customers interpreted that complacent attitude as an invitation to take their business elsewhere. Lowe's removed Rubbermaid storage containers from a Pennsylvania distribution center comprising 110 stores, exchanging them for the products of the competition. Wal-Mart eliminated $75 million in Rubbermaid home products from its shelves.
STICK TO YOUR GUNS
Galli cleaned house in the company, firing members of upper management and bringing in new—that is, unspoiled—talent in entry-level sales positions. The focal point of his strategy to turn around the company and make an indelible mark as CEO was a management initiative known within company confines as "Phoenix"—a reference to revival. After a brief training program, groups of young, overly ambitious future sales superstars were sent to the front lines, spending long, intense days in retail locations, doing whatever they could to win back customers. Galli told Fortune, "This is the single most important thing we're doing" (December 30, 2002).
The initiative was somewhat successful. After six consecutive quarters of declining sales the company posted sales increases in 2002. In a later particularly successful quarter, sales in the company's eight key retail accounts—including WalMart, Home Depot, and Lowe's—spiked 19 percent. Again recalling his own precocious drive, Galli went to college campuses to recruit "green reps" who would be responsible for continuing to enhance sales figures. Perhaps choosing those with whom he could most identify, Galli scouted out charming jocks and go-getter sorority presidents.
When asked about his hiring strategy by Fortune, Galli said he looked for "achievers—and more often than not, that's outside the classroom" (December 30, 2002). Despite the fact that most of the Phoenix charges were 23-year-olds, they were treated like seasoned, savvy employees. Galli encouraged them to take ideas to the company's corner offices, arranging for them to give presentations to upper management. Many were promoted to midlevel sales, marketing, and other positions, and a generation of Galli believers began infiltrating the company. A lover of Napoleon who read 10 books on the French leader and was fascinated by the rapport he created among his followers, Galli relished the loyalty he inspired from his own troops.
LEADING CHANGE WILL NOT PLEASE EVERYONE
Further cost-cutting measures instituted by Galli included the closing of more than 80 facilities, including Rubbermaid's flagship plant in Wooster, Ohio, and the firing of 12,000 employees. But few measures created more resentment than his decision to cancel the company's annual Lake Geneva golf retreat, which cost $1 million and took two hundred top executives away from their offices for a week. As Galli told Forbes, "Some don't like my style, but guess what? We're not running a country club here. We're going to win. We're going to be a company that makes our numbers" (October 1, 2001).
Not surprisingly, some of the executives that Galli fired turned against him and vented their resentment in Internet chat rooms. Attempting to exploit Galli's perceived weaknesses, they called him "Little Joe" and sharply criticized his use of corporate jets and the company's $20 million NASCAR sponsorship. Someone went as far as to send an anonymous warning package to Forbes ; included was a letter purportedly from a 20-year company veteran demanding that Galli be stopped before he ransacked the company.
A "DIFFICULT JOURNEY"
Galli's strategy to cut costs and reenergize sales failed to yield the quick turnaround for which he had hoped. In 2003 Wall Street slashed Newell Rubbermaid's stock price by 25 percent. BusinessWeek named Galli one of the worst managers of 2003. Hoping for a symbolic new beginning, he moved the company's headquarters to Atlanta. But even Galli acknowledged the tough road both behind and ahead; in a letter to stockholders quoted in the Atlanta Journal Constitution, he wrote, "Make no mistake, it has not been an easy journey" (April 18, 2004).
See also entry on Newell Rubbermaid Inc. in International Directory of Company Histories.
sources for further information
Barrett, Amy, "He Pours Gas on the Fire," BusinessWeek, December 11, 2000, p. 52.
Bond, Patti, "New Start for Newell," Atlanta Journal Constitution, April 18, 2004.
Boyle, Matthew, "Joe Galli's Army," Fortune, December 30, 2002, p. 134.
Hinkelman, Michael, "VerticalNet B-To-B Boss Galli Is a Risk Taker with Bricks-and-Mortar Know-How and New Economy View," Philadelphia Daily News, September 18, 2000.
Upbin, Bruce, "Rebirth of a Sales Man," Forbes, October 1, 2001, p. 94.