Santa Brought Back From Retirement To Run North Pole Industries!
The tweet to his millions of followers said it all: “SANTA’S BACK!!!!”
Like the situation at Disney, which recently brought back its former CEO Bob Iger to run the company because of the Disney board’s unhappiness with the performance of Iger’s successor, Santa Claus has emerged from his recent retirement to once again run North Pole Industries (NPI). It has been less than a year since Claus sold NPI to a private equity firm and being brought back as CEO represents an astonishing turn of events.
Readers who don’t recall the important details of the stunning sale last year and the factors which led to his decision can access this article from last December for relevant background: Pandemic, Other Woes Lead Santa Claus To Sell North Pole Industries To Private Equity
But now he’s back!!
The new management installed by the private equity owners after the NPI deal was finalized failed to execute numerous strategic initiatives and the new owners decided to make the change and bring Claus back to run the organization once again. He will have the title of CEO but like Iger, will have only a two-year contract to make the operation profitable once again and equally important, to identify and develop a CEO successor.
Terms of the agreement were not immediately available.
That short-term horizon also fits the needs of Claus, as he was beginning to enjoy his retirement away from the frigid North Pole weather and had previously expressed no interest in returning to the corner office at NPI or elsewhere. “The Mrs. and I have been so busy for many years doing the Christmas thing, and we just recently discovered the joy and wisdom of stopping to smell the mistletoe as a result of my retirement,” said Claus at the news conference that announced his return.
However, CEO Claus faces many of the same challenges that led to his selling of NPI last year and in fact, some new developments have created some headwinds for him and his turnaround plans. Those challenges include several labor force issues:
- In 2021 it was The Great Resignation that caused employee turnover problems. NPI was understaffed for many weeks before the company hired contract workers from outside the North Pole which created work visa backlogs. In 2022 the “Quiet Quit” movement has taken hold and Santa will have to deal with elves withholding their best efforts as a push back to the private equity management seen by the elves as insufficiently caring about their work-life balance.
- The managers brought in last year by the private equity firm after the sale closed alienated much of the workforce and there have been threats of a unionization effort by the Toymakers International union. The NPI employee opinion survey results from 2022 were abysmal and Claus will have to rebuild an enormous amount of trust lost among the elves to head off such an organizing drive. He and his advisors are closely following unionizing efforts at Starbucks and Amazon.
- At the news conference, Claus addressed having to provide more flexible and hybrid work schedules to appease the Work From Home (WFH) advocates among his elfin employees. “Supplying many of our employees with home-based toy-making equipment for days they don’t come into the NPI toy-making facilities adds cost burdens that we’ll have to overcome somehow,” he said.
There’s also a mixed picture on the toy and merchandising front.
While the supply chain constraints from the last two years have lessened, new threats have developed regarding Claus’ customer base because of increased competition from Roblox, especially with the all-important age demographic of the 8–12 year-olds.
Roblox, of course, is the online gaming platform that has captured the devotion of many young people. “For Christmas, too many kids these days want virtual accessories or special powers for their virtual avatars on Roblox. Holy Dancer and Prancer! Virtual things aren’t real! We at the North Pole make real things like games, bikes, dolls, real things that kids can find under the tree on Christmas morning. We don’t do virtual and never will!” declared the CEO as his face reddened two shades beyond his normal hue.
Claus also spoke of logistics and his delivery issues and indicated that he would be subcontracting with Amazon, UPS and FedEx to assist with his one-night worldwide delivery. Negative press from animal rights activists had forced him to reduce the number of sled-pulling hours his reindeer would work on the Christmas eve distribution so he has turned to companies that he once considered to be delivery competitors.
And asked about whether he has considered investing in a self-driving sled for the future, Claus dismissed the idea with a contemptuous “Ho-Ho-Ho. Next question?”
The record for CEOs coming back to run the companies where they had experienced earlier success is not particularly good, with Howard Schultz (Starbucks) being one of the exceptions. It will be interesting to see if Santa can return NPI to its former glory within a short two-year time horizon and still set up the organization for long-term success, including finding/developing his successor.
If he is successful with the turnaround, it will surely be considered for a future Harvard Business School case study. If he fails, though, Christmas and the Santa image itself will take a big hit from which it might not recover. All eyes are on Santa.
About the author: Mike Hoban is a business topics writer and leadership coach/ advisor. He is actively working at becoming a world-class grandpa to his five young granddaughters. In addition to his 35+ years experience as a leader, consultant, and business owner he has also published extensively in Fast Company and wrote many thought leadership pieces for DDI when he was there. He also wrote a business column for 12 years. His recent commentaries — including many about leading during the COVID pandemic — can be found on his LinkedIn page: https://www.linkedin.com/in/mike-hoban-b5756b6/ He can also be reached at mjhoban99@gmail.com.
