Reference no: EM132199301

Andrea Jung's Rise and Fall at Avon:

Andrea Jung was Avon’s first female CEO until she left under a cloud of poor performance and legal troubles in 2011 (Nuyten, 2012). While CEO, Jung was an energetic and tireless spokesperson for her company, and with her outstanding retails credentials, her winning personality, and her big smile, she was the darling of the media throughout her tenure as CEO. Avon has been a global company for longer than many other companies have been in existence. It has served and employed women before diversity became an issue; and it was customer focused before the concept became an organizational mantra. For more than 10 years, Jung successfully undertook the daunting task of reinventing a whole organization and moving a traditional, door-to-door sales company to the high- tech Internet world without alienating its loyal sales force—the “Avon Ladies” (Sellers, 2000b). In the process, Jung reinvented herself by rethinking what her role was and what was most important to her customers and stakeholders. Referring to the 2008 recession, she stated: “Leaders on the offense, not the defense, will come through this recessionary period” (Jones, 2009a). Jung undertook the makeover of Avon by pouring money into research and development, expanding the overseas markets, and focusing on jazzy marketing that included celebrities such as Salma Hayek. “Jung practically reinvented the company. She united its disconnected international operations into what she called a global ‘company for women’” (Global Influentials, 2001). Her strategies paid off. Soon after she took over leadership, Avon’s sales jumped from $5.7 billion to over $10 billion in 2009 (Forbes, 2010). She also increased Avon’s visibility and credential as a responsible corporate citizen by raising mil- lions of dollars for causes such as the children affected by the September 11, 2001, attacks; “Race for the Cure”; and by joining the campaign to end violence against women with Reese Witherspoon as its global ambassador. Helping women advance was one of Jung’s personal passions. She believed that women were the answer to many economic and social challenges. She was also proud that during her leadership, Avon had more women in management than any other Fortune 500 company and that almost half of the company’s board are women (Reilly, 2009). Jung bet on the 5.5 million independent Avon Ladies and demonstrated her commitment to them by increasing the number of and incentives for the direct sales representatives and providing free training online and gas money. She involved them in the decision making rather than forcing the necessary changes from the top (Menkes, 2006). Kurt Schansinger, a financial analyst, described Jung as having a “strong vision, high standards, deep knowl- edge of the business, and enough confidence to delegate key tasks” (Brady, 2002). Birdie Jarworski, an Avon representative who met Jung at a company convention, described her as “the rock star of Avon”(Chandra, 2004). Allan Mottus, editor of a cosmetics newsletter, states that Avon “needed a person with charisma and Jung has that” (Chandra, 2004). Born into a highly educated Chinese immigrant family— her father is an architect and her mother was Canada’s first female chemical engineer—Jung always was expected to succeed. She received a Princeton education, graduating magna cum laude, and speaks fluent Mandarin and Cantonese as well as some French. When she joined Bloomingdale’s, her parents did not originally approve of their daughter lowering herself to become a retailer, although her current position is winning their applause (Executive Sweet, 2005: 1). After Bloomingdale’s, Jung followed her mentor Vass to I. Magnin and later to Neiman Marcus. Jung credits Vass with teaching her the art of tactful aggression, a style that matches her cultural roots (Executive Sweet, 2005: 2). Jung joined Avon partly because of the corporate culture and partly because women being a quarter of the company’s board of directors appealed to her. She left an immediate connection to Avon, its employees and customers (Executive Sweet, 2005: 3). Her constant smile and upbeat approach and attitude set the tone for her company and sent a message of confidence and success. She believes that leading from the heart and flexibility are key to success (Executive Sweet, 2005: 3). Facing new challenges, Jung recommended, “Reinvent yourself before you reinvent your company” (Jones, 2009a). Jung was able to achieve impressive results through dogged determination and unwav- ering confidence in her strategy, which involved the slow introduction of the Internet and other retail sales and a gradual blending of new retail methods with the traditional direct sales. However, in spite of all her efforts and persistence, an outdated supply system, increas- ing competition, poor marketing, and challenges in some of its global markets continued to challenge the company (Morrissey, 2013). Jung, who was named one of the most powerful women in business on several occasions and celebrated for her actions just a few years prior, was ranked third on Forbe’s 2012 list of CEO screw-ups for rejecting a potentially lucrative merger offer from Coty cosmetics, not grooming a successor, and being under investigation by the Securities and Exchange Commission for a possible bribery case in China (Nuyten, 2012). In spite of all her efforts, Jung was not able to reinvent herself. Avon continues to be in need of a massive makeover, a task that now falls to its new CEO, Sherilyn McCoy, who took over in April 2012.

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