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Levi’s CEO: Biggest Mistake – Delayed Removal of Wrong People

Charles Bergh, the CEO of Levi’s Strauss, shared that when he took over as CEO of the iconic denim jeans company, he realized early on that a key step in turning the company around was to replace a significant portion of his executive team. He emphasized that changing the people within the organization was the most effective way to shift the company’s culture, stating, “The easiest way to change the culture is to change the people. I had 11 direct reports, and in the first 18 months, nine of them were gone.” Bergh, who joined Levi’s in 2011 during a challenging period when consumer demand for Levi’s jeans had declined, admitted that his biggest regret was not acting faster to remove individuals who were not the right fit for the company. He acknowledged that some great leaders were lost because he held on to the wrong individuals for too long.

Under Bergh’s leadership, Levi’s made a remarkable turnaround. In 2017, the company achieved 8% annual revenue growth, the highest in a decade, and continued to grow with 14% year-on-year revenue growth in 2018. However, despite these successes, the company still faces challenges. Levi’s had to adapt to shifting consumer preferences, particularly the demand for more comfortable and loose-fitting garments as the pandemic reshaped workwear. To address this, the company acquired the activewear brand Beyond Yoga in 2021 to bolster its women’s business, aiming for it to make up 50% of Levi’s total business.

One area of promise for Levi’s is its expansion in Asia, with a focus on China, where there is an opportunity for significant growth. While Asia currently accounts for less than 20% of the company’s total sales, Bergh sees it as a key market for expansion and anticipates that the “revenge spending” trend among Chinese consumers will present a significant opportunity for the brand.

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