Connecting the Dots Through Culture, with Nutrisystem's Former CEO Dawn Zier

Mo Fathelbab:

Welcome to today's episode of People and Strategy. I'm your host, Mo Fathelbab, President of International Facilitators Organization. People and Strategy is a podcast from the SHRM Executive Network, the premier network of executives and thought leaders in the field of human resources. People and Strategy is the podcast delivering in-depth conversations with HR executives and people leaders to advance the field of human resources by providing engagement and thought leadership to senior executives.

In today's episode, we'll be devoting time to the topic of connecting the dots through culture. For this conversation, I'm excited to be joined by Dawn Zier, executive coach and board member and former CEO of Nutrisystem. Dawn is also the editor of the Directors Roundtable, a section in our quarterly People + Strategy Journal. Dawn, welcome to the People and Strategy podcast.

Dawn Zier:

Great to be here, Mo.

Mo Fathelbab:

Let's dive into your story. You've been the CEO of Nutrisystem and involved in the company turnaround. Can you tell us more about that?

Dawn Zier:

Sure. I joined Nutrisystem back at the end of 2012. I spent my career at Reader's Digest and started out as an electrical engineer, moved into marketing, but was tapped to join Nutrisystem back at the end of 2012. Interesting, because most people don't think of a weight-loss company and a publishing media company as having a lot in common, but what they did have in common was a focus on the customer and a focus on data. Nutrisystem was an eCommerce company delivering weight-loss solutions to the public.

So I joined there in 2012 and it really was a turnaround situation. I put in place the right team, and I think that's one of the most critical things to a successful turnaround is having the right people in the right seats. Got the right people there, and it was a group of people that were some Nutrisystem veterans as well as some new people that we brought to the table. Very careful not to create an us-versus-them culture.

We got down to business very quickly. It really was a classic turnaround where we had a return to the fundamentals, the basics of running a company, get back to really strong disciplines, and quickly we were able to improve even our margins to get revenue moving in the right direction. The stock was at a low of 7, and then five years later in 2019, after many years of success, stock was trading around 42. We sold the company to a strategic. So that is a real quick summary of my Nutrisystem journey. It was a fun one. It was fun because of the right people.

Mo Fathelbab:

And an impressive journey nonetheless. That's quite incredible, the turnaround and the change in stock price. But you said something that really caught my attention, and it's something that I hear in a lot of companies, is this us-versus-them. How did you combat that?

Dawn Zier:

I think it was important to, again, recognize the value that the people at Nutrisystem brought to the table. We weren't looking to throw the baby out with the bathwater, so what we wanted to make sure is that we retained top talent in the company as well as brought in new talent that could help bring together the best team possible. One of the things I did that I think is a little unique is I brought back people who had been at the company in the past under prior management. My CFO, for example. Brought him back. He had been in the finance organization. He left to become a CFO at another company and I was able to woo him back, and he was a tremendous add to the team, again, bringing both new thoughts since he had left the company, but also had the history of the company at play.

I also had a really supportive board of great directors that understood the company, gave me a lot of room to maneuver, but also gave me some really good guidance along the way. And it was important for me that I surround myself with people who complemented me, but also brought additive skills to the table. And the complement part is important because I wasn't trying to create a culture of yes-people. What I wanted to make sure of as I was stepping into a new role coming from a traditional marketing and general leadership background was that I brought in a really strong CMO who I knew thought similarly to the way I did, but could run it on her own, and that was really important to free my time up for the things I needed to focus on as a first-time CEO.

Mo Fathelbab:

I love that. And you mentioned the word culture, and I recall hearing you at some point saying something along the lines of, "Culture is the underpinning of success for any company." I'd love to hear more about that.

Dawn Zier:

I'm a firm believer in that. I think culture sets the foundation. It sets the tone for how the company operates. It separates winning companies from failing companies, and it's something that if you can get the whole team to align on your operating principles and how you're going to operate as a company and how you're going to value talent, it makes a big difference.

The first thing we did was establish a performance-based culture. It had been a culture where mediocrity had been accepted for many years and we said, "No, we're going to reward for performance." It's not that new thinking, but it's something that actually worked, and we started delivering results and rewarding for performance and those that didn't perform didn't get rewarded.

But one of the first things that I did was put in place after listening to a lot of my team... We listened to what were the cultural disconnects within the company. We noticed there was a lot of finger-pointing. There was a lack of accountability. There was silos in places where they never should be. And we were an eCommerce company, but we were dealing with hypotheses and not facts. So I put in place what I call the FACTS-based culture, which sounds like an engineer, which was my background, but it was much more than just saying, "We're going to set the table with facts and then we can have a conversation about what matters," and then we could share our different points of view around how we wanted to think through different issues. But we really hadn't set the table with what the facts were, so we were all starting from commonplace.

Then when I looked at FACTS-based culture, it was much more than that, because the acronym actually stood for something. So F was to be focused. We were focusing on too many priorities. We really had to limit them to the things that would really move the needle. A was for accountability. Nobody had clear roles or responsibilities. Supply chain was pointing their fingers at marketing. Marketing was pointing their fingers at supply chain.

C was for customer focus. We had a contact center on the second floor of our company. They knew a lot about what was happening to the consumer, but the marketing team really didn't speak to them. That was a huge disconnect and a huge missed opportunity. We actually made sure that the contact center, the customer-service people, the sales reps, had a real seat at the table, and that just gave us million-dollar moments of knowledge on a daily basis. That was one of the things that I think most fundamentally helped change the company.

T was for that team focus, breaking down the silos, and S was come with solutions. Come to me with solutions. Don't come to me with problems. That didn't mean you had to have a fully baked solution, but at least think about it.

Mo Fathelbab:

Love it. Love it. So Dawn, you are the resident SHRM expert on all things boardroom and the editor of the Directors Roundtable section of our quarterly People + Strategy Journal. Can you share the story of how you joined your first board and what resonated with you about that experience?

Dawn Zier:

Sure. I'm a list-maker, so I had a goal. After I was the CEO of Nutrisystem for two years, I thought it was time for me to get on a public company board, so I made it part of my New Year's resolution that by May of that year, I would join a public company board. And then I reached out to everybody that I knew and said, "Hey, I'm interested in joining a board. Who do you know?" Reached out to the search firms, reached out to other people that could advocate for me. And a lot about joining a board is about networking. It's super important.

Well, I got a call from one of the search firms and was asked to interview for Spirit Airlines, and that was the first public company board that I joined. And I remember thinking, "Wow, what do I bring to the table for this company?" The airline industry is capital-intensive. That wasn't my area of expertise. I actually was running an asset-light business. But what they were looking for was somebody that really understood the consumer and the consumer experience, and that's what I was bringing to the table.

And at that moment, I became very interested in the ability to connect the dots across different industries, and I think since then, that's been my focus as I've joined other public company boards, as I've gotten involved in executive coaching, working with different Fortune 100 companies. And for me, it's very interesting just to get knowledge from different places, realize how things are different, but very often, things are very similar at different companies.

Mo Fathelbab:

Yeah. I couldn't agree with you more, just from my experience. So how have things changed is also something I'm curious about as it relates to how much boards were involved in shaping the culture, maybe back when you first joined the board, as compared to what you're seeing today.

Dawn Zier:

Since the pandemic, things have moved at warp speed and the ways of doing things have changed so much. First, when the pandemic happened and everybody was shocked, didn't know what to do, boards and management teams came together in a way where they really hadn't before. Management teams were really tapping into their boards. We were trying to learn together, work together, having meetings on a biweekly basis in many places. I was on one board, the airline industry, Spirit, as we talked about earlier, that was completely dislocated from the pandemic. Stock dislocated, business dislocated. Flying stopped. I was on another board, Hain Celestial, where people were pantry-loading. It was good for them.

So we had a tale of two cities in corporations from the pandemic, and as a board, all of a sudden, issues that hadn't been in the forefront became really important as they became more important for management teams. Work from home. We completed that transition, as all companies did, in pretty much 30 days. How to help people think through political issues? If we think through the political climate that we faced since the pandemic, it's been a lot going on, and where do you share your voice? Where don't you? What are the guidelines? So all of a sudden, the board became a lot more interested in overseeing culture, where before, I think, in many cases, it was just something that happened. And we both know that if you're not intentional about your culture, it gets set for you.

So one of the things I always look for when I am working with a CEO and thinking about joining a board: is that CEO really focused on culture, and how does he or she define culture? I think it's a game-changer. I think it's really important for companies, and I think as a board, you really need to be very aware of the culture: the culture you're setting intentionally or not intentionally, because at the end of the day, when we read about Wall Street Journal headlines that go bad, when we look at the single common link, it comes down to a culture that was performing badly.

Mo Fathelbab:

Yeah. Yeah. I love that. If you don't set the culture, it will be set for you. I think that's just a good note to keep in mind. So Dawn, in your recent article, Rethinking Five Common Boardroom Norms, in the fall issue of People + Strategy, you bring up some interesting points. One of them is about social activism and how much boards should be involved, and I wonder if you could tell us what your thoughts are on that topic.

Dawn Zier:

I think when we think about social activism and politics and things like that, the company needs to think long and hard. Is it critical to who they are? Does their mission, vision and purpose tie to the topic at hand? So I don't think companies should be weighing in on every single issue. I think at times, companies should weigh in on the issues that are most relevant to their purpose, and there needs to be clear guidelines from the boardroom about how that can and should not happen.

We're reading a lot these days about celebrity CEOs and CEOs that grab the spotlight. It doesn't always work out well when somebody does that. So as a board, we want to be clear that we have an understanding about the issues that are relevant and important to the corporation and where we will and where we will not weigh in. The voice always is the CEO voice. It's not the board. The board doesn't get out there and talk about these issues, but we do set guidance and guardrails around what it is that we should be communicating on.

Mo Fathelbab:

Yeah. Thank you. Another point you discussed in the article was the feedback that board members are given, or the lack thereof. Do you think boards need to be held to a higher standard and evaluated more closely?

Dawn Zier:

I think boards should be held to the same standard as management teams. If we think about the rigor of the performance-review process for a CEO or for how the CEO evaluates his or her management team, a board should be held to that same level of accountability and responsibility. All board members are not created equal. Board member is not about lifetime tenure, and I think you can also outlive your board value, so we need to have candid conversations that are not confrontational. The board, by nature, tends to be collegial. You want to have these collegial conversations with board members, but you have to have candid conversations as well. And I think the best boards do regular board evaluation, do succession planning, and those are the boards that tend to be most effective. Also, over time, the needs of the board change. So if the company's going through one transformation and then moves on to a different agenda after several years, maybe your board composition needs to change, and that needs to be thought through as well. So there's a rigor to the process that I think could be improved.

Mo Fathelbab:

Thank you for that. So, Dawn, you've also talked about toxic culture. I'm wondering as to the board's role as it relates to toxic culture and just what you've seen in terms of how toxic culture has shown up in your experience.

Dawn Zier:

Yeah. I think the board has oversight for culture, and one of the things to make sure of is that the company that is under the board's oversight does not have a toxic culture, and sometimes this can happen just by one person or two people being bad actors, either intentionally or even unintentionally. I do believe it's management's responsibility to manage the culture, but often I've seen the case, and this happened to me early on in my career as well: you have a high performer, somebody that is delivering tremendous results, but they're not the right culture for the company. They're actually causing chaos behind the scene. So I think in those instances, you really need to look at the performance of an individual versus the performance of a company and make sure that if that person is causing a toxic work environment, an uncomfortable work environment...

You can see this show up sometimes in Glassdoor ratings. You can see this show up in many different ways, and I've seen it at multiple companies. I think you need to, as a board, make sure that the CEO, that the management team, is not tolerating that sort of culture, because at the end of the day, one individual's remarkable performance can end up being actually a negative to the performance of a group of people that would be performing better with or without that person. Sometimes that takes a bold move for a CEO to decide, "This person's not the right culture fit for where we're going," even though that person is a high performer. Like I said, I made that mistake early on in my career where I didn't take action when I was much younger, and that's been something I learned from and encourage my teams to continue to learn from.

Mo Fathelbab:

Yeah, I've dealt with that myself, and boy, it was not easy.

Dawn Zier:

Right.

Mo Fathelbab:

I got it, and I was much younger as well, but yes, at the end of the day, the culture has to win. Right?

Dawn Zier:

Right.

Mo Fathelbab:

So on the flip-side of that, there's been a lot of talk about civility, and it is a priority at SHRM and at other companies and organizations. Can an organization's culture become too nice?

Dawn Zier:

I think nice is a good currency to have, but nice without being candid, or nice and being afraid to talk about what needs to be talked about, is a problem. So I think, like many things in life, it's a balance. I don't think there's ever a need to be nasty. So I think civility is something that should be the way companies are run. It's about mutual respect for each other, but that doesn't mean that you should be afraid to have the tough conversations. Conflict and debate does not mean that you're not being civil, that you're not respecting the other people. It's the way you do it. So I'm all for civility, but I think if you're a nice culture and don't talk about what matters and are afraid to address issues, that's problematic.

Mo Fathelbab:

I think that's a great way to nuance this conversation. Just because you're nice doesn't mean you don't speak your truth, and just because you speak your truth doesn't mean you should be nasty about it.

Dawn Zier:

Exactly.

Mo Fathelbab:

So this topic will be discussed further in the fall issue of People + Strategy Journal. So Dawn, to move forward, what are you setting aside?

Dawn Zier:

Well, if I think then from an HR perspective, I think some of it is setting aside and some of it is just moving forward, because there's so much new on the horizon that we have to be thinking about. One of the things that I set aside is I do not love PIP plans. So I don't love performance-improvement plans. I don't like if we decide somebody's not right for the company, that we have to go through this whole process, 90 days to decide whether that person stays or leaves, and then nine times out of ten they leave. I think that as a company with limited resources, as many companies today are faced with, that we need to be about elevating our leadership team, about elevating our talent, and investing in taking performers to the next level. So my focus always tends to be on the middle to top performance and less time-focused on improving poor performance to become adequate.

So I'm probably a little more firm in that than many leaders are, but I think it's really important, because you only have so much time to invest in people. I also think the same thing goes for coaching. So a lot of times people get coached for performance improvement, but what we're not doing is coaching the best leaders today to become even better leaders. I think the smart companies are doing that. The smart companies have made that shift from coaching for performance improvement to coaching for future leadership, and I think that makes a difference. It's one of the reasons that I actually joined The ExCo Group, where I do coach C-suite, C-suite minus one leaders on how to move from good to great.

Mo Fathelbab:

Love it, love it, love it. And just a reminder for everybody, this topic will be discussed further in the fall issue of People + Strategy Journal. So our last question, Dawn. This has been a great interview. Thank you for all your wisdom. What is one piece of advice that has shaped your work or life the most?

Dawn Zier:

There are several, but the one that I always go back to is to embrace change and don't be afraid to step out of your comfort zone. I remember being given an opportunity that I thought was the worst thing possible for me, and I went kicking and screaming all the way from a vertical P&L role to a staff role. And it was the best thing that ever happened to me, because it taught me how to not lead by direct authority over a business line, but to lead by influence, and I think that was one of the single most things that allowed me to become a successful board member and a successful CEO. So when change happens, embrace it. It tends to open the doors to new ways of thinking. And don't be afraid to step out of your comfort zone, because that, to me, is when the greatest growth happens, and that happened to me in my 40s.

Mo Fathelbab:

And I love the little gem of leading by influence rather than authority, to just throw in a little extra cream on top there. Wonderful.

Well, and that's where we'll end it for this episode of People and Strategy. A huge thanks to Dawn Zier for her thoughts on connecting the dots through culture.

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