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Summary
Mattel’s employees are becoming increasingly disgruntled according to sites like TheLayoff.com and Glassdoor.com.
Bryan Stockton is back as a consultant, making more money than he was as CEO.
There appears to be no plan in place to turn the company around.
These points combined suggest that Mattel is committing to the path of inevitable failure.
Good news: Mattel (NASDAQ:MAT) finally has a strategic vision!
Bad news: The vision seems to be a mix of Chainsaw Al's plan for Scott Paper, Kodak's attitude towards digital, and BlackBerry's denial about Android and Apple.
I've been following the Mattel story in hopes of it making a turnaround, looking for indicators that might be making changes that will once again make it a successful company. In order to achieve a successful turnaround, I wrote in my last piece that Mattel needed solid, proven leadership and a solid strategic vision to get themselves back on the right track. This week, we were provided with some insight as to what that leadership and vision looks like:
Leadership: Bring back the recently resigned CEO as an overpaid consultant, retain VPs, lay everyone else off.
Vision: A toy company that does nothing truly innovative, but keeps selling their same tired, poor performing brands until no one buys them anymore because they've become outdated and a thing of the past.
I want Mattel to make a successful turnaround and become a strong company again. However, it's clear that Mattel's leadership doesn't necessarily want the same thing. That's why they awarded a consultancy contract to their ex-CEO, Bryan Stockton. You know, the same guy who wasn't able to help Mattel at all while he was CEO the last three years. What's insulting is that they are paying him $1.5M for a year, or $125,000 a month. It's more than he made while he was CEO, and I'm sure that's more money a month than the average employee's salary in a year. As if that's not insulting enough, it probably is coming from the salaries of either recently laid off or soon-to-be laid off employees. Even if money wasn't an issue, would you re-hire an employee who had poor performance numerous years in a row? As the board said,
"The board recognizes that the company is not meeting our own expectations and those of our shareholders, and we felt that now is the right time to make a leadership change,"
Clearly a change, indeed.
And what about the rest of their leadership? When you read through the posts at TheLayoff.com/Mattel or Glassdoor.com, the impression you get is that there are people all throughout the company that want to see the brands succeed, but upper management seems to have a different agenda. It reminds me of an open letter an employee wrote to the senior management of BlackBerry back when it was RIM and Lazaridis and Balsillie were in charge. Some of the quotes on the boards about Mattel's management:
Leadership struggling to get the company on track, processes seem broken, roles and responsibilities seem to overlap, tons of meetings, not very nimble and layoffs yearly and restructuring always a part of the job
My director approached me this morning asking if I was aware of this site and told me that he has been tasked with going around to each and every person in his charge and asking if they were aware of this site and to inform them that we are not to post anything company related as it is against policy.
Pulling into the HTC parking lot and seeing all the empty parking spots. Reserved parking is still full of course which is at the crux of why I feel the way that I do. This once proud and iconic toy company has been run into the ground by this class of senior mgmt. I enter and see the empty offices of those who delivered to get the job done. I catch a glance from one of these VP's and wonder if they enjoy that sense of control that they have over me and others.
Unfortunately this was very well said and so true. It has been embarrassing to pollute the world with the crappy toys that mattel puts out there. If we are going to introduce plastic into this world, let's make it something of value, something that will last, something our kids hang onto and not these cheap items that just get tossed. These toys don't say global responsibility to me.
You have to start to wonder: what is Mattel's turnaround plan? Does it even have one? This is a company that, like Kodak, let the digital age pass them by instead of trailblazing it. It counted on legacy brands to support them, rather than being cutting edge. Subsequently, the competition has profited and benefited massively because of their denial. Further, it appears that they aren't working on anything new or innovative. Hello Barbie and the new View-Master are just silver bullets - products which they're hoping will save the company.
What's worse than all of this, and perhaps the most telling indicator of Mattel's current health, is employee morale. Morale appears to be low and getting even lower. There is a growing disdain for management. Comments on the boards suggest people who put their life careers into the company have seen it squandered in the last few years. They don't seem to have pride in their company or product. People seem to not know when layoffs will occur or who is going to be let get. If employees are working under these conditions and have these opinions, do you really think that they are going to contribute in trying to turn the company around? Why would you support a company that even the employees seem to be losing support for?
Again, look at BlackBerry from 2007 onward as an example of the path I believe Mattel is headed down. In order to fix the issues outlined here, there needs to be massive corporate change from the top down (see Xerox for a great example). Problems like this will take years to fix assuming they can get the right leadership in place that wants to fix it and the brands aren't so damaged by that point that they're irreparable. Unless you see good, qualified leadership step in within the next few months, then everything done by Mattel should be considered a move to prolong what appears to be inevitable failure.
I'll conclude this with one parting thought: if you're upper management, wouldn't you have an interest in turning the company around so that you still have a job and a great claim on your resume? If you're not motivated in turning the company around, what is motivating you? A buyout offer? Or something else?
Best of luck to those at Mattel, especially those at Fisher-Price in East Aurora (I'm a Buffalo native). If you have any stories you'd like to share, please message me here.