-By Meg Major

Thirty-three years after accepting a new position at a Minnesota-based wholesale grocery company that had at last persuaded him that he had found his niche, Jeff Noddle, executive chairman of Supervalu, Inc. and a stalwart of the U.S. food retailing scene, is approaching his planned retirement from the country's third-largest grocery chain and distributor in the same fashion he's done just about everything else up to now: incrementally.

"When talking with younger people coming up in their careers," says Noddle, "I'm frequently asked if I always wanted to be a CEO, how I got there and whether there's a special shortcut they can take to get there, too. But that was never my goal, and I never looked at my career the way other people do — I just took it incrementally."

 Through the years, though, the 63-year-old retail veteran says he found himself thinking that perhaps he should have been planning for what came next. "But I didn't do that, and it really wasn't until a few years before I became CEO that I finally said to myself, 'Maybe I have a shot to do a job like that as the next incremental thing to do.'"

So, while he's taken his career ascension as it's come, Noddle's decision to step down as Supervalu's chief executive and chairman was very much part of a long-range plan to turn the reins over to a new leader at the right time.

The youngest of three boys, Noddle was acutely aware of the high bar his parents had set for their sons, which included not only hard work, but also a commitment to service and personal integrity. Starting out sacking groceries as a teenager in the former Central Market at 16th and Harney streets in his hometown of Omaha, Neb., Noddle also worked in the stores and warehouses of the now-defunct Hinky Dinky Grocery Co. during summers while in college.

At the time, Noddle's two brothers — Harlan, who passed away three years ago from pancreatic cancer, and Allan — were already employed in the retail food business. "So, the reason I really started working in the grocery business, frankly, was because they could get me a job." Noddle vividly recalls an inner monologue he had at the time: "This is really hard work. Do I really want to do this for the rest of my life?"

Retailing Roots

When he graduated from college in 1969, it was the height of the Vietnam War, although his service in a reserve unit spared him from being sent into combat. During his early years in high school and college, Noddle quips that he "was determined to be the screw-up of the family. I got my degree, and I had a very good time getting it along the way," he deadpans, with only the slightest hint of sarcasm.

Yet, with both of his brothers well on their ways to the upper echelons of the grocery business, and despite how much he looked up to them, Noddle, whose retailing roots had already begun to run deep, remained steadfast against following in their footsteps, and was bent on pursuing "a different path. They went to the University of Nebraska — I did not. I went to the University of Iowa. I tried to do everything that they didn't do." But the looming challenge of his brothers' success, coupled with his parents' high bar and high standards, was nevertheless omnipresent in Noddle's psyche.

In his early quest to blaze his own trail and achieve success in a different field, Noddle got a fleeting taste of what it means to be careful what you wish for shortly after starting his first post-college job at his roommate's uncle's company in Chicago. "I was the cap and bottle buyer for a container distributor. It was the most boring thing that I ever did, but I didn't know when I was going to go on active duty."

Although he admits to being uncertain about what his next move would be, he determined in fairly short order what it wouldn't be — but not at the risk of breaking his word. "I made a commitment, and I intended to keep it; those types of things were always important to me. I stayed one year to the day and left."

As it happens, the short-lived — albeit eye-opening — experience ultimately proved to be a critical turning point that prompted Noddle to focus more closely on getting his professional show on the road in earnest. "At that point, I really wanted to get going on a career," reflects Noddle, and because he had experience in the grocery business, he began interviewing at companies in the field in which he was most familiar, circa 1969.

Among the most promising of his interview prospects, interestingly, was at Jewel Food Stores in Chicago, one of Supervalu's present-day flagship banner divisions, with Harry Beckner, a legendary figure in the industry and one of Jewel's chief merchants prior to becoming its president, and later, CEO of San Antonio-based HEB Grocery Co.

"I actually had an offer to go and work for Jewel, but I ended up going to work for Supermarkets Interstate, which was based back in my hometown of Omaha," and which then operated leased Treasury grocery departments in J.C. Penney stores, a major force in American retailing throughout the mid-1900s. Penney's acquisition of Treasury's parent, General Merchandise Co., put it into the discount merchandising game, and subsequently, the supermarket and drug store business, after its late 1960s acquisitions of Noddle's then-employer, Supermarkets Interstate, and Thrift Drug, a Pittsburgh-based chain of drug stores. Noddle recalls that Penney's food and drug stores were "distant forerunners of the supercenters of today."

With his "official" grocery management career underway at Supermarkets Interstate, Noddle spent the next six years working in Miami; running a store in Lake Charles, La.; and serving as a sales director in Los Angeles.

In 1976, Noddle accepted a position at the Minneapolis-based company at which he would spend the balance of his accomplished career, and which would finally solidify what he seemingly had attempted to avoid up to then. Having "made a job change and a company change," he recalls, "I knew at that point I was committed to the grocery business, which would be where I was going to pursue a career."

And what a long, stellar career it's been.

Ric Jurgens, CEO of West Des Moines, Iowa-based Hy-Vee, Inc., describes Noddle as being "one of the greatest food industry leaders that I've been associated with during my 40 years as a grocer. He led the industry, as I'm sure he led his company, with a calm confidence, and made everyone feel that their voice mattered. He's the kind of person who makes us all feel proud to be grocers," says Jurgens, praising PG's decision "to recognize Jeff’s career.

"Jeff and I have always been competitors," Jurgens continues, "but he is a wonderful friend who has been supportive of me personally, and kind to my family in ways that only a dear friend could be." Characterizing Jeff and his wife of 40 years, Linda, as "a great team," Jurgens says, "It’s hard to imagine that there are two more wonderful people to be around."

Holding a variety of positions of increasing authority in a series of different geographic markets, Noddle spent his first six years at Supervalu at its J.M. Jones division in Champaign, Ill., where his jobs included director of merchandising and VP of marketing. Between 1982 and 1985, he served as president of Supervalu's Fargo, N.D., division and its former Miami division. In 1985, he was named EVP of merchandising and hit his stride in 1995, when he was appointed president and CEO of Supervalu's wholesale food division, a job he held until 2000, when he was elevated to president, a role he performed until 2005, while simultaneously serving as COO from 2000 to 2001, and chairman from May 2002.

Noddle’s brother, Allan, a former executive with Amsterdam-based Royal Ahold and a longtime industry luminary in his own right, conveys deep admiration for his younger brother's illustrious career and impressive track record. "Jeff made his own way in this business — he started in the stores and quickly rose through the ranks because he's got a lot of common sense," says the elder Noddle, "and also because he's a great person to work with, and a fabulous person to work for."

Beyond brotherly love, Allan Noddle resoundingly applauds all that his younger sibling has done to "give back to community, his family and the industry throughout his life. That's what makes him the outstanding executive that he is, and why he's been recognized far and wide for his contributions — not just by his own company, but also by the industry as a whole."

Both ardent community and civic leaders, Allan and Jeff Noddle readily attribute their philanthropic allegiance to their late parents, Robert, who came to the United States in the early 1920s from Lithuania in his late teens, and Edith, whose family emigrated from Russia and who died in 2003 at age 91.

"Our parents came to this country with nothing, but learned through hard work and education that you can be a success in America," notes Allan, who returned to Omaha upon retiring from Ahold in 2002 and who remains closely connected to the industry as a board member and consultant for many esteemed companies. "We were expected to work hard, get an education and never forget where we came from, so charity was always a part of the way we were raised."

"Ultimate Game-Changer"

Tangible evidence of that creed was manifested in the Noddle family kitchen, via a metal box with a coin slot, into which the boys were expected to drop spare change until it was full. The money was taken to their synagogue, which in turn, distributed it to the needy. "We had a very sound family life and very happy upbringing," reflects Allan, and that goes a long way in explaining "why we turned out the way we did."

Indeed, that solid rearing likely played a large role in helping Jeff Noddle make "a fast name for himself at Supervalu," continues Allan, citing his younger brother's role in reshaping the company's supply chain structure, systems standardization and technology enhancements. Even better, he adds, "Jeff also proved to be the ultimate game-changer three-and-a-half years ago, with the stunning, creative purchase of Albertsons."

As the chief architect of the highly publicized $17.4 billion deal in 2006 that tripled the company's size and vaulted it to the position of the nation's third-largest grocer, Noddle oversaw Supervalu's virtual overnight transformation from a Fortune 100 company into a Fortune 50 firm, leapfrogging from a $19 billion entity with 50,000 associates to a $44 billion company with 200,000 associates, and flipping its former 50/50 balance of distribution and retail businesses to an 80/20 national retail powerhouse.

After Noddle closed the deal that secured the key properties of the former struggling Albertsons — Acme Markets, Bristol Farms, Jewel-Osco, Shaw's, Star Markets, many of Albertsons eponymous banner stores, and Osco and Sav-on pharmacies — Supervalu's top two supermarket rivals, Kroger and Safeway, furiously immersed themselves in their own repositioning initiatives, which have since yielded systemwide store-level improvements, vibrant private label programs and aggressive pricing strategies.

In the first two quarters post-acquisition, Supervalu's stock price rose significantly, surprising Wall Street by beating projections. But no sooner had it begun putting the pieces of its new, very large and highly complex puzzle together than an economic downturn kicked in that put a severe damper on its consolidation activities and related acquisition debt service. The lingering difficult economic environment that's given rise to more budget-minded consumers who have curtailed spending for the foreseeable future, coupled with investments in its pricing and promotional spending, has since taken a significant toll on Supervalu's financial performance and stock price.

But Allan Noddle firmly believes the Albertsons deal was far more significant than meets the casual observer's eye. "It forever changed" the company’s DNA, he says, "and is a move that most people probably [would] never even [have] thought about, let alone [tried], because they'd have been too scared to take the risk." In turning the former wholesale-driven company into a predominantly retail-driven one, "Jeff saw the possibilities that others couldn't even conceive of."

Supervalu board member Lawrence Del Santo, retired CEO of The Vons Cos., concurs. "Jeff came to the board with the proposition that we should consider the Albertsons acquisition. He evaluated the long-term viability of Supervalu as a free-standing company and, while acknowledging the complexities of the deal, sponsored the acquisition," recalls Del Santo. "He has been very methodical, straightforward and objective in his plan to put the two organizations together and worked tirelessly to mold the two cultures into one outstanding organization."

Aside from possessing an admirable work ethic, "Jeff is a very talented leader who has the ability to get people excited about the company, its objectives, and the importance of their participation and cooperation.” says Del Santo. "I attended several management meetings at our operating divisions with Jeff and witnessed his ability to develop enthusiasm for our company while acknowledging the difficult tasks ahead."

"The Clear Leader"

Fellow Supervalu board member Skip Gage, chairman and CEO of the Minneapolis-based integrated marketing services firm GAGE Marketing Group, also mentions the Albertsons acquisition when asked about a concrete example of Jeff's leadership abilities in action.

"Although he knew this was a game-changer for Supervalu, Jeff would not allow us to pay too much, and literally walked from the deal a couple of times. This acquisition will be reviewed many times by the industry in light of the current consumer recession and the liquidity crisis, but given Supervalu's long-term options, I believe it will prove the right thing for us to have done at the time, and Jeff was the clear leader."

In the board room, as in life, negotiating different points of view comes with the territory, but Noddle's management style, Gage continues, is never off-putting or overbearing. "A very important part of Jeff's management style is total transparency. He always presented all the facts on all sides of a debate, even if he had a specific opinion," notes Gage, adding, "He always made the board feel like we had all the information to make a decision."

Grace Under Fire

For his part, Noddle believes what was most important about the Albertsons transaction "is that it gave Supervalu more choices for the future, and really offers us strategic options that we would not have otherwise had. Right now, it's a difficult environment, no question, and I frankly don't like stepping down [amid] our current [financial] results. The whole industry is obviously under some stress and pressure, but this is a long-term proposition and, again, what I think is more important is that we have given Supervalu more choices for its future."

Prior to the acquisition, Noddle continues, "We were about the 10th- or 11th-largest food retailer in the United States, although we were one of the larger distributors. So, we either had to get big or get out, and I think it was still very important, even though it's a harder path today to accomplish in view of the dramatic changes in the consumer and their behavior."

When he looks back on the things he is most proud of, Noddle says it's a given "to think about the people that you were able to have some influence over, and that you were able to help with their career advancement. But one of the things I'm most proud of dates back to 1983, when I was sent to Miami after serving as a division president in Fargo, N.D. I'd only been there about eight or nine months when we bought Pantry Pride's warehouse, which was a pretty old, tired company. We were going to use their business as a basis to start a traditional wholesale business, and we worked on doing just that for about two years.

"About six months after the acquisition, Supervalu decided to vacate the food retailing side of the business and put all the stores up for sale, which was 80 percent of our volume. The decision was made, and I supported it, to sell the division to our competitor, Fleming. But for the 16 people that came down to Miami with me, and a warehouse workforce that was largely comprised of people nearing retirement," Noddle says he worried incessantly about their prospects for future employment.

"I didn't know what my next career step was going to be, but I went to our HR guy and let him know that I, and a few others, planned to stay until everybody that wanted a job, got a job. We set up interviewing techniques out in the warehouse and had [employment] hotlines in touch with all the companies in Miami. I knew the folks I brought down from Supervalu would be able to transfer because the company was growing and we could find them other positions. But I knew that a lot of the people nearing retirement were going to have trouble getting jobs, and we stayed until every person's situation was resolved. So, when people ask me about what it is I'm most proud of, I immediately think of that."

From a strictly business standpoint, Noddle's prescient, albeit controversial, decision to terminate Supervalu's $2.5 billion-a-year distribution contract with Kmart Corp. in 2001 provides a case study in grace-under-fire decision-making that underscores his steely character and astute instinct.

"When I first took over as CEO in 2001, we had a major contract with Kmart, which was going through a significant transformation, with plans to expand dramatically in the food business. We supplied about two-thirds of the products sold in traditional Kmart stores," which at the time represented about 12 percent of Supervalu's total volume. The now-defunct Fleming Cos. serviced the areas that Supervalu didn't, mostly in the southwest and western United States, but Kmart decided it wanted just one supplier, a development that found both Fleming and Supervalu pitted against each other in a bidding war for a $4 billion annual contract, which, "if you listened to Kmart, was a $10 billion dollar deal," Noddle recalls.

"We were trying to develop strategies of our own, and had been contemplating this for a long time. But one day, I woke up and said, 'That’s it. We are withdrawing from negotiations,' knowing full well that we were going to give up 12 percent of our volume. But if we continued down the path we were heading, it would have wiped out any other strategies that we could pursue because [it would have limited] our resources."

After calling an emergency board meeting to announce a decision that was ultimately supported by the directors, Noddle immediately called Chuck Conaway, Kmart's then-CEO, to communicate the unexpected news. As it happened, Fleming was awarded the entire contract, and Noddle and Co. walked away and never looked back — at least not right away.

With six months remaining on the Kmart contract, Noddle says he gave Conaway his word that Supervalu "would live up to the last delivery on the last day, which we did." And though it took some 60 days to collect on the outstanding balance, Kmart filed for bankruptcy 90 days later. One year later, Fleming did the same.

In the aftermath of the gut-wrenching decision, Supervalu took a hard hit on Wall Street, "and we went through some pretty miserable times," says Noddle. "But, as I explained to our people, sometimes you've got to have the guts to make decisions, as tough as they are, and take the heat, if you know it's the right thing for the future. And those are always the toughest to do."

Changing of the Guard

As he readies for retirement, Noddle is circumspect but simultaneously excited for what the future holds. “I don’t know if anyone is ever fully prepared for retirement, but we worked on this [leadership transition] for the last year-and-a-half." When he became CEO in 2001, he told the board he'd like to serve for five to seven years. He was 55 and intended to retire before he was 63 for personal reasons. And though his contract was extended for a bit longer to see the critical Albertsons integration period through, Noddle says it was long part of the plan to retire at this stage of the game, "because the longer it goes, the deeper your roots get and the less objective you become."

He also believes it's healthy for large, publicly traded companies to get new vision and new leadership periodically. (His predecessor, Mike Wright, served as CEO for 20 years.) Having worked on the succession plan for the last year-and-a-half, the board discussed a changing of the guard "frequently over the past 15 months or so," said Noddle, noting that a number of internal candidates were considered, alongside exploring external candidates. "We had some great internal candidates, but we chose to go outside and get someone with a fresh perspective, deep retail experience and a unique perspective, all of which Craig [Herkert] brings."

When pressed for future details of what might come next, Noddle says he'll heed the advice of retired friends and colleagues, one of whom is a personal and professional friend, Steve Sanger, former CEO and chairman of General Mills. "Steve and I have known each other for years, and the advice that he gave me, having just recently stepped down, was to refrain from making any big decisions for six months."

After years of leading the company in a high-pressure, results-oriented atmosphere, Noddle acknowledges that he won't miss the day-to-day stress and pressure that accompanies constant deadlines and the scrutiny of shareholders. "But I will miss the strategizing, and I still want to stay active in business and on the boards that I serve."

Getting it Right

An unabashed admirer of "simple common sense and doing the right thing," Noddle says he's hard-wired to be as transparent and straightforward as possible, and has thus sought to instill a "solid foundation of principles and values" that have long defined Supervalu's corporate culture. Those who worked closely with him through the years say his leadership style aptly mirrors the high standards he espouses, perhaps to a fault, as others have harshly suggested.
Cognizant that managing the people side of the Albertsons transaction was bound to be a tall order, Noddle describes his commitment to getting it right. "I know everybody does it in their own way, but I think that too often with integrations and acquisitions, people get hung up on the technical side, and don't spend enough time on the culture side."

During the Albertsons integration, “We spent a lot of time on the cultural side and are perhaps now paying a little bit of a price because of where the consumer is going and not having all the more technical things complete, but nonetheless, unless you get a common culture in place, you haven't integrated anything  — [not] emotionally, certainly."

Having been through a difficult integration with American Stores in 2000, Albertsons' associates had already endured a protracted stretch of uncertainty and confusion by the time Supervalu came along in 2006.

"They never fully integrated culturally [then], and we said we were going to tackle that differently by spending a lot of time talking and reaching out to people to bring the foundation of our values" to the forefront. A year or so into it, he notes, "nobody gave much thought about who came from what company. It's something that’s hard to pinpoint, but I feel good about how well the companies came together culturally."

Having had a chance to rub elbows with some of the best and brightest minds in the business world, Noddle has little time for "ego-driven executives that let their ego become the company, and vice versa. The folks that most impress me are the more low-key types that don't need to be in the limelight," but instead focus on building "integrity and trust." Some of these include many of Supervalu's various independent retail customers.

"I've learned so much from them, and many of them are really thriving even in these very difficult times, because they are committed and devoted to their communities, and they also know their customers innately," he says.

Dramatic Changes Ahead

In the realm of present-day supermarket economics, Noddle says it's abundantly clear "that the consumer is in a far different place today than when we laid out our Albertsons plan three years ago. But that's what change is all about. But you need to be able to move and adjust, because the world will never turn out as you expect it to."

And so it goes at Supervalu, where a leadership transition that's now unfolding is certain to bring forth dramatic changes in the coming weeks and months ahead. Noddle doesn't disagree. "If anybody thinks we’re going back to the way we were a year or two ago, I think that's not true. The consumer is more conservative, the savings rate has gone up dramatically in this country, and that's a significant change that I think is going to be long-lasting. So, we're going to have to learn to market differently and create value differently, and everyone's going to have to apply their own flair and innovation" to the process.

That's good advice for the next generation of aspiring grocery executives — a subject that happens to be near and dear to Noddle's heart. In recent guest speaker roles at industry events, he's been aiming to work as a catalyst to reinforce "the fact that we need to do more as an industry to build careers and attract high-potential people," many of whom, he says, often "shy away from [it] because it's retail-oriented, which means it's nights and weekends, and damn hard work. But my argument is while that may be true, the related advancement and management opPortunities are probably greater in this industry than any other because of those factors."

When speaking to college students and business groups, Noddle is frequently asked about what he feels can't be acquired in a classroom setting. His perennial response is "Communicating and motivating people," which he says can only be learned from solid observational leadership. "If you run a department, your own store or your own company, people are watching everything you do and they take their lead from you" without your ever having to say a word. "If you walk past a piece of cardboard lying on the floor when walking through a store, it sends a very powerful message when the CEO stops and pick it up, or straightens a shelf" in disarray.

However, he concludes, no discussion of leadership can be had without emphasizing the importance of integrity, which Noddle insists "is essential for any successful organization of any type, and we should always pick the kind of leaders who have that as an essential value" of their characters.