Jonathan Thompson is the current CEO of Nielson-Massey Vanillas. Thompson is a veteran CPG executive with experience leading top-performing brands in high-growth categories. In today’s episode of the Be Epic podcast, Jonathan Thompson sits down with Matt Waller to discuss his experience as a young CEO and what led to his success in the industry.
0:00:08.5 Matt Waller: Hi, I'm Matt Waller, Dean of the Sam M. Walton College of Business. Welcome to Be Epic, the podcast where we explore excellence, professionalism, innovation and collegiality, and what those values mean in business education and your life today. I have with me today Jonathan Thompson, who is the chief executive officer at Nielsen-Massey Vanillas. Jonathan graduated from the Walton College in 2005. He has a tremendous amount of experience in consumer packaged goods. He's worked for Mars Petcare, Danone, Glanbia Performance Nutrition, Natures Best, and he has worked in sales, marketing, supply chain, sourcing, contract manufacturing, and he's been very entrepreneurial. And so it really is my pleasure to talk to you today, Jonathan.
0:01:08.0 Jonathan Thompson: Well, thanks for having me, Matt. It's a pleasure to be here.
0:01:12.1 Matt Waller: You really have had a wide variety of experiences, and I know right out of school, you went right into consumer packaged goods and you immediately got experience in finance and logistics and sourcing and sales, but when I look at your career, and it's one of the reasons I wanted to talk to you, you're very young to be a CEO, and I noticed also, when talking with you, just you're a very good listener, and I think that is a skill of good leaders, so...
0:01:47.4 Jonathan Thompson: Yes. Yeah, thank you, Matt. And just on the listing point, you're absolutely right. It's something that I think, especially today, with all of the distractions that we can find ourself in, you're looking at your phone, you're looking at all the different digital intrusions on our lives, that having that ability to listen is something that I've particularly tried to cultivate. I don't always get it right, in fact, sometimes you can't wait to speak to hear your own voice, but there is a piece of that, of just trying to really listen to understand.
0:02:19.0 Matt Waller: How did you learn to do that? What made you realize it was important, I should say?
0:02:25.4 Jonathan Thompson: Yeah. I think that part of it's the school of hard knocks, where if you just would've paid attention. And I'd say even from the personal side of life too, not just professional. There's been plenty of times where I said, "Man, I just would have listened to my brother," or, "If I just would have listened to what my friends were trying to tell me, maybe I could have made a different choice." And I've been fortunate to actually have a couple of really good mentors. In fact, there was one guy I worked for at Danone who was just the consummate listener, one of these guys that was kind of at the epicenter of our sales strategy department, lots coming at him all day long, but the minute you would ask him a question, he would turn to you and give you the full extent of his attention. And that always struck me, that how was he able to actually dedicate his full attention and be so patient? So I've tried to emulate, Matt was his name, I'm trying to emulate Matt's listening skills throughout the length of my career.
0:03:22.9 Matt Waller: It's so important. I think I learned it when I first started interviewing for jobs. The more questions I asked and the more listening I did, especially about the person that was interviewing me, the better things seemed to go. I wanna get back to something about your background that intrigued me. Graduating undergraduate. Undergraduate programs can help you a lot. They can help you learn important things, they can help you develop a network. But I know you went to a small private college for undergraduate here in Arkansas, called Lyon College, a really good college. But you graduated summa cum laude, which is something very few students do, that's hard to do. It's hard to maintain As for that length of time. [chuckle] And you majored in econ and business and Spanish, which is a broad variety of topics. Did you go into college wanting to get... Graduate summa cum laude?
0:04:28.8 Jonathan Thompson: Oh, no, Matt. No, I didn't, actually. I think it was a function of... I've always had a real interest in a lot of different things, and going into college, like many probably do, I didn't really know what I wanted to do with my life, but I knew that I had all these different interests. And the one thing that I did appreciate that I learned from Lyon was it taught me how to think across different broad categories of study. And part of the summa cum was just there was... I grew up in a... Just get into the family a little bit, I grew up with really two different awesome role models at the... From a grandparent standpoint. I had one grandfather who was the perfectionist and one of the smartest guys I've ever known, and another grandfather who was a bit more of the people person. Those two figures within our family played heavily into my development and upbringing. And so there was an aspect of the perfectionism, I think, that probably bit me as I got into college and said, "Hey, you gotta do your best." It was just focusing a process, not an outcome, really, if I had to sum it up for you, Matt.
0:05:35.3 Matt Waller: What made you decide to get an MBA? I'm just curious.
0:05:38.3 Jonathan Thompson: Yeah, so after I graduated college, I still didn't know what I wanted to go do, but I ended up taking a Rotary International Scholarship, and I went abroad to Spain. And coming back, as I started to look around, "What did I wanna go do with my myself," I ended up falling back into the family business. And after working the family business for a while, I realized very quickly that it was not up to my level of aspiration of what I wanted to do with my life. And that's when I decided to go off and get the MBA, because I realized, as I was going to these interviews at places that I did wanna go to, that I just didn't quite have the level of background and formation. So I looked around and decided to stay close to home, the MBA at Walton, which I knew had a heavy CPG focus, seemed like a very interesting place, and so that's what led me to the program.
0:06:30.6 Matt Waller: So you're relatively young to be the CEO of such an established business. I suppose it's somewhat of a family business, is it not?
0:06:39.6 Jonathan Thompson: It is. So, Matt, it's actually a third generation, so it's been around for over 100 years. So very, very well established. It's got some tremendous brand equity. The business was actually built on the back of high-end culinary and pastry chefs, so professionals that really needed the utmost in vanilla. In fact, one of the things that attracted me was I had a chance to meet one of the shareholders, one of third generation, and she was telling me about the early days where they were hand-writing labels in the little red brick house in Chicago, because the founder of Williams-Sonoma had shown up and said he wanted 50,000 bottles by Friday, 'cause you get the order out. And that was their first big account. And to this day, Williams-Sonoma continues to be a huge partner for the business. So it's got this fantastic long-term pedigree, but I think where you're going with the question is the age and the youth, relative youth. And that is actually an interesting topic to delve into, Matt, 'cause it's been something that, as you see in my background, I've dealt with the age seniority question my entire career.
0:07:46.7 Matt Waller: Yeah, I could... I would imagine.
0:07:49.6 Jonathan Thompson: It's those kind of things where you walk into a role and you're managing people that maybe have 10, 15 years more experience than you. How do you deal with that? And so I've had to develop an enormous tool kit, partly of being humble, listening, seeking to understand, because those are the kinds of skill sets that allow you to be an effective leader when you don't have those age stripes, for lack of a better term.
0:08:18.1 Matt Waller: Well, you mentioned seeking to understand. Have you ever heard of the five whys?
0:08:27.2 Jonathan Thompson: Yes, I have. You keep asking why till you get to the bedrock why, right?
0:08:32.0 Matt Waller: Yeah. When I first started... I learned... It was really popular back in the '80s, during the quality movement. Back in the '80s, the Japanese auto manufacturers started gaining lots of market share, and one thing that was really clear is that the Japanese cars had better reliability. They didn't break down and they lasted a long time. And people like that. And so their demand started increasing, and US manufacturers really started trying to understand why. But one of the techniques that was really popular back then was the five whys. I think it comes from Toyota, but I'm not sure, but they practice that use of whys. As I've used it though, I've learned to be a little diplomatic about how I use it, because if you just keep saying why, people can feel like they're being interrogated. So you gotta use another word or you gotta do it in a way that seems more conversational. But nevertheless, the concept is really good.
0:09:38.3 Jonathan Thompson: It really is, 'cause it... I think a lot of times, we stop at the first or second order. We don't get really down to the bedrock of the situation. And you're right, there is a bit of not interrogating. But I find that the questions can be the huge unlock for not only driving the business forward, but actually culture. And creating a culture where no one feels that there's a taboo that you can't ask a question is immensely vital, particularly if you're an innovation business. So I happened into a turnaround role, one of my latest roles, not, obviously, my current situation with Nielsen-Massey, but prior to this, I was on the Isopure business, which was wholly-owned subsidiary of Glanbia, and that was a... It was a bit of a turnaround. So the business had been growing very, very strongly with the original founder ownership, then private equity, and then we bought the company, we integrated it probably a little too far, too deep, and it started to kinda take a nosedive.
0:10:38.4 Jonathan Thompson: But one of the things that was lost in that was the culture of innovation and collaboration. And I remember walking into a meeting and it was... There was no spirit in the air. People were working on things they didn't really know why. And it was just simply, as a leader, asking some basic questions and inviting people that normally didn't have a voice around the table to weigh in on it, even though it wasn't in their lane. And a couple of meetings of that, and we started to get this amazing collaboration going, and a culture of just what you're talking about, asking questions and asking why and trying to understand how do we drive the business forward. Huge unlock to culture, if you can get it.
0:11:18.5 Matt Waller: You talk about getting out of your lane and asking people questions that typically aren't asked these questions. One problem sometimes you get into when you get people out of their lanes, people can feel like it's maybe not following the line of command or authority. Some people feel it's out of line, I guess, is what I would say. Have you noticed that?
0:11:48.6 Jonathan Thompson: Oh, absolutely, particularly if there is a bit of a culture of hierarchy and expertise. In particular, I found that in some of the larger organizations where you have a certain degree of functional expertise that's been cultivated over the years, and there's a lot of value in that, but there's also a lot of entrenchment in that, where if we've always done it this way, and we continue to do it that way, we will never get the breakthroughs.
0:12:17.6 Matt Waller: There's a book called The E-Myth by Michael Gerber. It's for small businesses. And basically what it says is, if you have small business, you need to document things and streamline the processes and make it to where anyone could run the business. The point of it was, a lot of small businesses don't document things, they don't try to create processes that are replicable. No matter how small your business is, you need to get to the point where you optimize the processes, you idiot-proof them, so to speak, you can hand a guide to someone to run the business and they can come in and run it. But you may not perfectly get there, but that should be part of your goal.
0:13:10.8 Jonathan Thompson: I love where you're going with that, Matt. There's actually... There's another book... So I'll check that one out. There's another book called The Design of Business that I also found useful. But the build on what you're saying is that there has to be a... There's a healthy tension between having too much process or the right amount of process and having enough slack in the business so you can be creative and you can evolve. And what that book talks about, much like you're talking about, is you're creating an algorithm of how to run the business. But what happens when you create an algorithm is that you'll get very, very good at running that particular set of business practices. You'll get fantastic at your cost out put on your widgets. You'll get very fantastic at... Maybe your fact-based selling. Whatever it is. You're running that algorithm.
0:13:55.8 Jonathan Thompson: But what you won't necessarily get out of that is innovation. And the reason why is that you're continually looking at the past. You're continually looking at data and facts of how we've done things and that becomes a self-reinforcing loop. Which is great. And that's why you have very big businesses, blue chip businesses get very good at running the algorithm. But many times the critique will be that those same businesses will not be able to innovate. And it's the smaller upstarts that come along, the insurgent brands or whoever you wanna call them, that come along and create the innovation. Why? Because that they don't have that process holding them back. So they'll try a bunch of new things. And there's no right answer, but it's an interesting paradigm to consider as a leader.
0:14:36.1 Matt Waller: So true. It's interesting too, some companies are better at it than others. Some are very good process-oriented, and when the market changes they're in trouble. But you know, I've even been surprised... You look at WalMart, they've got lots of processes down pat. They have to because they've got so many stores and so many of the distribution centers, and so many trucks and so many employees... Yet they came out with Walmart, grocery pick-up, Walmart Plus Neighborhood Markets. And really even Supercenters. I know it's been a long time ago, but I remember when the first Supercenter... It used to be called a hyper market, came to Kansas City. I think the first one was in Denver, and the second one was in Kansas City. They were too big. The first one they put in Kansas City, I believe, was 300,000 square feet. Where Supercenters now are about 150 to 180,000 square feet. It was just gigantic. You couldn't get around it. It was so big. But they pivoted from that. Somehow they were able to allow for that kind of flexibility to let them pivot.
0:15:53.2 Jonathan Thompson: It's possible. I think another great example... Walmart's a fantastic example. I think another one is Amazon. It's an absolute behemoth. And there's different businesses within the different businesses. But I think a part of that is also culture.
0:16:05.8 Matt Waller: Yes.
0:16:05.9 Jonathan Thompson: And I think the... So there's having enough process, not overblown, but then also having a culture that rewards taking risk and innovation. And that's another thing I've experienced in my career, is the thing that can shut that down the quickest is fear or lack of clarity, or lack of collaboration. There's a lot of things that you have to root out of your business, but if you get those out of the way, then you can get into that space of, we're gonna have a culture that rewards risk-taking. Now, sensible risk taking. But if you reward risk-taking then you can actually have a healthy blend of people that are taking those risks and pushing the business forward. And then a whole other set of people that, quite frankly, whether it's personality, disposition or whatever it may be, are gonna be much better at running the algorithm, so to speak. And you need a blend of both in your business.
0:16:53.1 Matt Waller: Well... And this gets to a point I did wanna cover with you, and that is a little bit about your career path. And you clearly were willing to take opportunities when they came up, but I think that taking those opportunities makes for a richer life and a greater learning experience, and certainly more opportunity. But one of the biggest impediments to doing some of the things you've done for most people would be fear.
0:17:24.2 Jonathan Thompson: Absolutely... So... Well, at least in my career, I took at times, lateral moves where my peer sets were taking the promotion and they were on the fast track to... Whether it was director or VP or what have you. And I spent a lot of the time up front of my career of trying to get broad experience. And the reason for that was, I always knew that I wanted to run a business. And I wanted to have a broad experience. It was very intentional, actually. I've had a career map that I've had for... I don't know. Maybe over 20 years, where I had actually mapped it out. And I'd said I wanted to be a CEO or a general manager of a business in 15-20 years. And so I was very intentional about that.
0:18:05.5 Jonathan Thompson: But there's another fear that holds people back of, "Well, am I losing out on earning power?" Am I losing out on my ability to get promoted? And so taking those different experiences and raising your hand to take those assignments is at times very, very difficult. In fact, I remember jumping from the back end of the business at Danone to the front end. So making a change from sourcing and purchasing to sales. And that was one of the hardest transitions I've ever made because you're competing with really high-end talent at your same level. But I would say this, it's the old Darwinian principle of it's not the fastest or the strongest is the most adaptable organism. The more that you do it, the more comfortable you get with doing it.
0:18:48.6 Matt Waller: Jonathan, one thing this reminds me of is a book I read recently by a fellow by the name of Walt Rakowich. And Walt was the CEO of a company that really... He was with Prologis for almost 20 years, but he was CEO during the Great Recession. But he wrote a book recently called Transfluence. But one of the concepts... And I may not get it right, 'cause it's been a little bit since I read it. But it's like the two biggest hindrance to leadership, in some ways, is fear on the one hand, and hubris on the other. And you can have both, for sure, but people tend towards one or the other a little bit. And it's one of the reasons why having mentors is so important. You need mentors who are willing to speak into your life, but you need someone who could say, "Matt, the way you treated this person is inappropriate. You should have been more thoughtful, you should have listened more." You actually not only need good mentors, but you need people around you, who aren't afraid to speak in your life as well, including your direct reports.
0:20:18.7 Jonathan Thompson: Absolutely, absolutely. It's actually a practice to build on that, that I've tried to cultivate, is to take feedback from my directs as much as possible. I'm always asking, "How is this landing? How am I doing? Give it to me straight." And it takes a while for your direct reports to build that trust with you, but once they know that it's coming from a good place, I found that, I've had a number of direct reports that have actually become very, very insightful at picking up on areas that I needed to improve on as a leader. I think the hubris piece is also very important because the fear will hold you back from taking a risk, but the hubris will actually hold you back from learning. And I think that's also part of this growth, is being open and vulnerable to learning, learning from others. I think it's a fantastic model.
0:21:06.7 Jonathan Thompson: There's another one I'd like to share with you that if... That's been very helpful for me. It actually came out of a personal... Some very dark days in the personal side of my life, but it's really helped me in the professional side that's, I think, relevant to what we're talking about here. Probably get the credit wrong, but it was a book, Moore and Gillette, called King, Magician, Warrior, Lover. And it is basically kind of a synthesis of some Jungian archetypes that I found to be very helpful from a leadership perspective. The whole notion is the king is the archetype of the decision maker, the one who sets the vision. The magician is the planner, that's the consultant, so to speak, in business terms. The warrior, that's the one that executes what the king says and what the magician plans. And then the lover makes sure that everybody's taken care of and good along the way.
0:22:01.0 Jonathan Thompson: And I found that those four archetypes, whenever I'm dealing with a team or dealing with a business situation and think, "How am I showing up today? Am I showing up as the king, am I showing up as the warrior, am I showing up as the lover?" Ideally, you need to actually be showing up as all of them. And if you don't, you need to have somebody around you, a mentor or a teammate or somebody that's playing that role as well. Anyway, it's been a model that's been very, very helpful for me in my own personal leadership style, is to reflect on those four different archetypes. So credits to Carl Jung and the guys who synthesized that all, I think it was Moore and Gillette, in that book.
0:22:42.1 Matt Waller: That's great. Johnathan, I wanna ask a couple questions. One, I'd like you to tell me more about Nielsen-Massey. It's a intriguing company. But I'm also curious as to why you left what you were doing to take this job as CEO.
0:23:00.9 Jonathan Thompson: Sure. Yeah, so Nielsen-Massey, it's a very cool company. It's third generation-owned and operated. So it's been around for over 100 years. We have family members embedded in the business, we have an independent fiduciary board, but there are... There's family shareholders own 100% of the business. It's based up in Waukegan, Illinois. We've got a manufacturing plant there that does vanilla extracts and powders and vanilla paste, so it's really the high-end kinda culinary products that the business was built on and has since started to branch out. It has its own brand that you can buy from the consumer standpoint. We have a big B2B side of the business where we would supply large CPG and other manufacturers with their own products with the high-end vanilla products. And we also have a plant over in Europe. We have plant in the Netherlands that services the Eurozone.
0:23:56.4 Jonathan Thompson: But what really attracted me, Matt, to the role, was I had just come out of doing a turnaround, and I'd worked in growth businesses, and I'd worked in maintenance businesses, and I'd worked in a lot of different types of scenarios, of course, in my career, and the one that really attracted me most was growth, that kinda steady, sensible, how do you take a business and transform it inside out and grow it organically, also inorganically, but with a lot of focus on innovation. And when I looked at Nielsen-Massey, they have a product that is just second to none, a fantastic brand reputation and a lot of capability. What was in my mind, the opportunity, was to take that and leverage it with some of the experience that I had of how do you take it to new markets, how do you get it into the hands of consumers, how do you get the positioning and the storytelling right. So for me, it was all about the growth and the chance to actually take a CEO role and place a bet on myself.
0:24:54.8 Jonathan Thompson: And since I've been on board, Matt, I've learned so much more about vanilla that I didn't even know is fascinating, because this plant is actually an orchid, and it's hand-pollinated. It only blooms for a few hours on one day a year. And that's just the start of it. Takes months for the actual vanilla bean to grow. It takes about 6-8 months to cure it, and then we process it. So you're looking at about a year, from the time that you hand-pollinate this thing, to actually getting the product that you would see showing up in your cookies or your brownies or whatnot. So it's actually a... It's an amazingly complicated supply chain with, I think we counted, there are somewhere upwards of 700 touch points, without machinery, by hand, that have to happen for this product to come to market.
0:25:39.5 Matt Waller: That is remarkable. So for growth, obviously, you can grow in channels of distribution, you can grow in existing channels, you can add channels. What are some of your ideas there that you can share?
0:25:57.1 Jonathan Thompson: Yeah, absolutely. So the closing growth is building a CV from the branded perspective. We have all commodity volume distribution. We have very, very low distribution that is just waiting there to be ceased upon. And what it made is we're in the midst of a pandemic, people are cooking more at home, vanilla usage is up anywhere for one and a half to two times what the overall baking category is up. So we have a tremendous opportunity in front of us just to build distribution in existing channels. But to your point, there is new channels of business that we're gonna start to look at, and there's also a huge focus that we're gonna place on our e-com business. It's a channel of growth that has many, many tentacles and facets to it, but that's gonna be an area for growth as well for us. International, that's another growth vector for us. And that's all with... Just within vanilla.
0:26:48.7 Jonathan Thompson: We have a couple of, I would call them innovation ideas in the hopper, that are tremendously exciting, will serve as a whole new consumer need, but also will have to do with vanilla. So that's another area for growth. And that's all just on the organic side. And before we can start talking about how we can leverage some of our cold extraction process for other types of what I call tangential products to vanilla that will be a pretty quick build for us, as we get outside of vanilla into some of these other flavors and other natural food extracts that we can bring to market. That's one of the other great things about Nielsen-Massey is, if you go back into history, one of the first Fair Trade vanillas founding member of sustainability organization, the SVI. So we are on trend from a lot of what the consumers are looking for from a better for you, whole foods, naturally, transparency of supply chain perspective. And so there's a lot of room for us to grow the brand.
0:27:45.1 Matt Waller: Well, Jonathan, thank you so much for taking time to share with us today. You have such an interesting career path, and we wish you the very best as CEO.
0:27:58.5 Jonathan Thompson: Thank you very much, Matt. It was a pleasure being with you today. Take care.
0:28:04.4 Matt Waller: Thanks for listening to today's episode of the Be Epic podcast from the Walton College. You can find us on Google, SoundCloud, iTunes, or look for us wherever you find your podcasts. Be sure to subscribe and rate us. You can find current and past episodes by searching BeEpic podcast, one word, that's B-E-E-P-I-C podcast. And now, be epic.