By: Kate Ryan

July 3, 2006, Crain's Chicago Business

If Irene Rosenfeld, tapped last week to jump-start Kraft Foods Inc., is looking for advice on turning around a lumbering Chicago company, she might want to schedule lunch with Edward Zander or Brenda Barnes-or both.

In the past two years, those CEOs replaced company lifers at Motorola Inc. and Sara Lee Corp., respectively, charged with injecting some marketing juice into organizations struggling to connect with customers. Kraft emulated that strategy last week, hiring Ms. Rosenfeld, 53, from PepsiCo Inc.'s Frito-Lay division to replace Roger Deromedi. His 30-month reign was marked by sliding marketshare, stagnant sales growth and horizontal stock movement.

Ms. Rosenfeld must reverse those trends by finding new products and marketing them effectively while keeping costs down.

That mirrors the predicament Mr. Zander walked into at Motorola in January 2004 and the one Ms. Barnes has faced since taking over Sara Lee in February 2005.

Based on the results so far, Mr. Zander looks like the better role model.

the razr effect

Mr. Zander, 59, who came to Motorola from Sun Microsystems Inc., pulled the Schaumburg electronics giant out of the doldrums with souped-up advertising and the mega-smash Razr cell phone. As of last month, the company expected to have sold 50 million Razrs, the most ever for a Motorola phone. Earnings have rebounded sharply, including a 200% increase in 2005. Mr. Zander was unavailable for comment.

Sara Lee, meanwhile, has gone from bad to worse under Ms. Barnes, 52, another Pepsi veteran. Eighteen months after she arrived, promising a sweeping restructuring and better innovation and marketing, the company's stock has fallen by a third. Divestitures didn't raise as much cash as expected, a spinoff of the Hanes division still hasn't happened and innovation has been spotty. Sales fell 1.4% last quarter from the year-earlier period.

"What we have said from the get-go is that our divestitures, combined with the spinoff of Hanesbrands, will generate in excess of $3 billion in proceeds. We are confident that will be the case,'' says a Sara Lee spokeswoman.

kraft's `Icon' brands

A Kraft spokeswoman says, "I can't speak for what other people were looking for in a CEO, but we were clearly looking for someone who could accelerate our growth and enhance shareholder value.''

Ms. Rosenfeld, who worked at Kraft for 22 years before her two-year stint at Frito-Lay, will face many of the same obstacles Ms. Barnes has encountered-single-digit industry sales growth, competition from store brands and intense price pressure-although the situation may not be as dire.

"Kraft is in much better shape than Sara Lee was when Brenda took over,'' says Kenneth Harris, managing director at Cannondale Associates, a marketing consulting firm in Evanston. "Kraft has very strong brands that are icons in the industry, and Sara Lee didn't have a stable of those brands.''

And while Motorola has little in common with a packaged food company, Mr. Zander contended with a risk-averse culture much like Ms. Rosenfeld must overcome at Kraft. In the end, any consumer products company can learn from Motorola's cell phone revival.

"The Razr is a wonderful story about the power of innovation,'' says Tim Calkins, a marketing professor at Northwestern University's Kellogg School of Management. "Kraft and Motorola are very different companies, but a lot of the pressures are the same."