Suzanne Sitherwood had ambitious plans for Laclede Group Inc. SR 0.57 % after she took command of the public-utility holding company in 2012. Yet her overhaul of the slow-growing business began with the small matter of interior decorating.
Two months into the top job, Ms. Sitherwood turned her corner office into a conference room. She tore down dusty brocade curtains and replaced mahogany furniture with a round table, then moved into her assistant’s smaller office next door. “It sent the message we were going to have an open, transparent, interactive culture,’’ the chief executive recalls.
Directors increasingly pick outsiders like Ms. Sitherwood to be change agents through industry shifts or financial ills, recruiters and coaches say. In the past five years, boards have become more willing “to take risks on a new CEO who can make changes quickly,’’ says Peter Crist, chairman of recruiters Crist/Kolder Associates.
Ms. Sitherwood and fellow outside CEOs Hubert Joly of Best Buy Co. BBY -3.57 % and Scott Durchslag of Angie’s List ANGI 0.39 % earned credibility by tapping the power of minor actions to gain associates’ support for major transformations. “You have to do the small things or the big things won’t matter,’’ she says. These chiefs have led their employers for between 10 months and four years.
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Corporate makeovers don’t always succeed. Ron Johnson, hired to lead J.C. Penney Co. JCP -3.85 % , had bold plans to reinvent the retail giant. But the transformation quickly ran aground, and Penney ousted him in 2013 following a severe sales drop during his 17-month tenure.
Starting small sometimes backfires, too. “You can have a tin ear and pick the wrong small things to fix because they don’t reinforce the broader change needed,’’ warns Frank Blake, former head of Home Depot Inc. HD -0.62 % Here’s how Ms. Sitherwood and Messrs. Joly and Durchslag leveraged small early steps:
Ms. Sitherwood, a natural-gas industry veteran, found Laclede financially sound but “not growing’’ and smaller than most rivals, she remembers.
The new CEO says she couldn’t “just tell people what things will be like in three to five years.’’ To foster collaboration among executives who usually worked behind closed doors, Ms. Sitherwood kept hers open. Theirs soon opened, too.
She held critical management meetings around the newly installed round table, which conferred “a sense of unity and equality,’’ Ms. Sitherwood explains.
The CEO also traded Laclede’s drab St. Louis headquarters for an open building with an atrium. Ms. Sitherwood doesn’t call the latest location “headquarters” because “none of us is better than anybody else,’’ she says. She encouraged staffers there to chat face to face by banishing individual office trash cans to various shared areas.
Such small moves led to bigger ones. Ms. Sitherwood completed two major acquisitions by September 2014. Each deal, when completed, was the largest in the company’s history. Laclede’s market capitalization under Ms. Sitherwood’s CEO leadership had tripled by this March, weeks before the company became Spire Inc. SR 0.57 % The moniker “captured the idea of innovation,” she says.
“She has completely transformed the business from a sleepy, regulated utility to a midcap-growth company,’’ observes Les Csorba, a Heidrick & Struggles International Inc. HSII -1.94 % recruiter who helped Laclede find Ms. Sitherwood.
Mr. Joly arrived at Best Buy in 2012, committed to reviving the struggling electronics retailer. “We thought we were going to die,’’ and the business needed rebuilding from the ground up, recollects the chief executive, a turnaround expert.
Mr. Joly soon modestly expanded employees’ discounts—based on complaints that he heard while working in Best Buy stores during his first week. The improvement signaled management heeded and cared about employees, he says.
His decision to kill a program that let headquarters staffers work when and where they chose stirred controversy, but Mr. Joly calls that program “fundamentally flawed,” adding that some employees didn’t show up for meetings. “As the ship was sinking, all hands on deck,” he remembers.
Mr. Joly’s transformational push eventually included cutting $1.2 billion of costs and bolstering service in stores.
Mr. Durchslag, Best Buy’s former global head of e-commerce, joined Angie’s List last September. Keenly aware that fresh leaders often “try to do too much too fast,’’ he sought quick, small wins to “teach people the value of baby steps,” he notes.
Mr. Durchslag decided that Angie’s List, which connects consumers to service providers such as plumbers, could better compete with a stronger technology focus. Among his early victories: project engineers unexpectedly met their December deadline for a new online service. They stayed late and ate for free because the CEO inaugurated dinners at the company cafe.
Other staffers working late now also get free dinners. Many have embraced “the urgency for change required in a turnaround,” Mr. Durchslag says. He expects this attitude will benefit his radical revamp of the business model for the company, which posted its first annual profit in 2015..
Angie’s List typically charged consumers to access its ratings and reviews. The paywall, which Mr. Durchslag considers “the barrier that has limited our growth,” disappeared in June.
Joann S. Lublin at email@example.com