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- The right fit. The path to the CEO job can take many forms—an uninterrupted climb straight up the ladder, lateral moves to build skill sets, and leaps of faith to lead new businesses. A rarer way to make it to the top? A demotion.
But that's just what Michelle Gass, the former CEO of Kohl's, did on her way to becoming the new chief executive at Levi Strauss. At Kohl's, Gass was a Fortune 500 CEO atop a struggling $18 billion-in-revenue retailer. Besieged by activist investors and up against giants like Amazon, she announced at the end of 2022 that she would join Levi's, the legacy denim brand.
The one catch: Levi's already had a CEO—a well-known one at that. Chip Bergh took over the brand 12 years ago and led it back to the center of the cultural zeitgeist. In sketching out a succession plan, he announced Gass would join Levi's as president, with the expectation that she would replace him within the next 18 months—but it was no guarantee.
Levi's announced that Gass officially had the CEO job at the beginning of December; the Starbucks alum is set to take over on Jan. 29. Bergh and Gass joined Fortune CEO Alan Murray for a conversation late last month about their unusual succession plan.
"It took a level of humility," Gass said. "We had to check our egos at the door."
Bergh said that Levi's board of directors wanted an insider to take over as CEO, but he believed that the company needed a retail background only an outsider would have with direct-to-consumer now up to 40% of Levi's business. He said that he was the "right guy" for the job 12 years ago "when the brand was broken." "But now, more and more of our business is retail," he said. "I felt we needed somebody with a different skill set."
Gass, he realized, was that person. The pair knew each other from their overlapping time at P&G. He persuaded her to accept a demotion—from CEO of a Fortune 500 company to president at a largely family-controlled business—on her way to the job.
The pair hope that their succession plan will be replicated. "I think we may be creating a new model for succession. At least we'd like to believe it will be a model," Bergh said.
And for those who questioned her career move, Gass urges them to take the long view. “People have to see the big picture. This was just one year across many years," she said. "It’s been a privilege to have a year to go deep into the business, in the brand, traveling around, deeply understanding the opportunities to accelerate the business and the values of the company…Who wouldn’t want that?”
Emma Hinchliffe
emma.hinchliffe@fortune.com
@_emmahinchliffe
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