Abby’s job was to get control of the spending and the messages. I asked her to present a plan to the newly formed Worldwide Management Council at our conference center in Palisades, New York. It was a tough meeting, but she did a very smart thing. When the thirty-five WMC members walked into the room, they found every wall adorned with the advertising, packaging, and marketing collateral of all our agencies. It was a train wreck of brand and product positioning.

The Fortune 500 list did not include retailers. If companies had been ranked by sales, the list would have then been led by America’s three great shopping giants: Sears Roebuck, Montgomery Ward and JCPenney. Their fate was one of steady decline. In 2000, Montgomery Ward filed for bankruptcy. In 2019 Sears did the same and in 2020 JCPenney followed suit. The disappointing fortunes of these businesses are not the result of being in declining industries. Global demand for automobiles, food, oil, steel, chemical products and particularly electrical goods has continued to grow. Consumers still shop. But none of these 1955 companies is today the dominant firm in its industry. Cars are Toyota and Volkswagen; food is Nestlé; steel is ArcelorMittal, which took over much of the excess capacity located in the former Soviet Empire. Germany’s BASF is the world’s leading chemical company. And electricals – well, it depends on what you mean by electricals but, whoever you regard as market leader, it isn’t GE. Within America, cars are still General Motors – unless you look at market capitalisation and hence to Tesla. But food is PepsiCo and Tyson, steel is Nucor and Pfizer leads in chemicals. Retail is Walmart – and Amazon. Only ExxonMobil and some of the DuPont and GE subsidiaries remain among the global leaders in their fields.

Terry Lundgren ran into stiff resistance while executing his strategic plan in the years of his Reinvention stage. As noted earlier, he was appointed CEO of Federated Department Stores in 2003 with the express mandate to make bold moves to expand the business. After just three months at the helm, Lundgren faced a golden opportunity: purchasing the legendary Marshall Field’s chain. The acquisition would take the company a grand leap forward, and he would become the steward of another of the nation’s most beloved retail brands.

But then, in January 2005, a mere eight months after May bought Field’s, the May CEO resigned; Khan was under fire for vastly overpaying to cinch the deal. Lundgren immediately seized the opportunity to buy all of May— much bigger game purchased for a fabulous price. “After selling assets that were part of the bigger $11 billion deal, we ended with a net purchase price of $3 billion,” he recounted, “which is $200 million less than what May paid for Marshall Field’s. I got Marshall Field’s plus all of the May Company assets that we wanted in order to expand our brand.

What Lundgren intuited— which tool a good deal of persuasion to impress upon stakeholders, both within and outside the company, over the course of the next several years— was that the more online sales challenged brick-and-mortar retail, the more important a truly national brand following would become. Federated had launched a retail website back in 1998, when Amazon’s business model was still a matter of much dispute and Amazon hadn’t yet branched out into broader department-store categories.