A Wall Street Journal article on March 30, 2026 in the paper’s “Heard on the Street” section was titled “McCormick’s Megamerger Has a Chance”. The article is about McCormick’s plans to acquire Unilever’s food business, which includes  Hellmann’s mayonnaise, French’s mustard and Knorr bullion.

Regarding McCormick’s plans, the article is saying “this is a huge bet.” Referring to McCormick, the article says that “the company that avoided its peers’ mistakes for years could make its biggest error yet.” But, the article, which points out that previous food industry megamergers have not always done very well, adds that “with disciplined execution, it” (the McCormick/Unilever deal) “could become a rare success story in the world of food mergers.”

Based upon my decades researching business success and failure patterns, big bets are far more likely to fail, while smaller bets tend to be more successful. Nonetheless, I’m not going to predict how this McCormick merger will do. But. I will say that there are definitely elements of strengths that could help propel McCormick’s success.

This planned McCormick acquisition is described as a food industry merger. But, McCormick whose product line includes not only spices, but also items like Cholula hot sauce, seems to have a specialty within the food industry. Essentially, McCormick offers food products that are generally used as add-ons to other foods. And, the planned acquisition would give McCormick additional add-on products with well-known brand names. This builds on McCormick’s prior strengths as a vendor of add-ons. And, it enables the company to build on whatever market research and other knowledge McCormick has about consumer needs and wants regarding food add-ons. Furthermore, McCormick does have past experience with acquisitions, though none of those acquisitions were as large as its planned Unilever deal.

So, what can we say about the success potential of this planned merger? It really depends on whether McCormick’s strong expertise with food add-ons, combined with its prior acquisitions experience, is enough to offset the fact that this merger is far more massive than McCormick’s previous deals.

According to the February 9, 2026 Wall Street Journal article, “Experienced Founders, Not Dropouts, Dominate the Billion Dollar Startups” by Yuliya Chernova, “new data show founders typically have about a dozen years of experience—or more.” The article says, “Founders had worked for 13.8 years, on average, before starting their companies in 2024.” The article goes on to say, “The data only included those startups that eventually reached the $1 billion unicorn realm.” The data came from “an analysis by venture firm SignalFire.” The article discusses examples of the advantages that experienced founders can have, such as knowledge and contacts, that younger inexperienced founders can lack.

The information in the article is consistent with the findings of my decades of researching business success and failure patterns. My research finds that companies succeed by building on their strengths and growing in a manner that is evolution, not revolution.  The experienced founders had strengths in what they brought to their startups, and thus, were in a better position to take the evolutionary steps needed for success.  On the other hand, younger, less experienced founders often still lack the necessary strengths, and are much less likely to be as successful.

This is important because so many new startups fail. And, it is even rarer for a startup to grow into a highly successful billion dollar company. Furthermore, as my previous blog post discusses, fouber led companies have tended to perform better than those run by CEOs hired from outside.

In summary, when a founder brings assets like expertise and contacts to a startup, there can be an increased likelihood of its success. So, there is value in having older founders who are able to do this.

But, what does this mean more generally in terms of successful business growth?

A recent Wall Street Journal article sheds some light on this topic.  The article, which is titled “These CEOs Might Boost Your Portfolio” appeared in the paper’s January 15, 2026 issue. Regarding investing, the article discusses what can make “your chances of owning a big winner rise.” The article says, “In the past five years, founder led companies in the S&P 500 beat that index by 167 percentage points. Companies helmed by outside ‘professional’ CEOs lagged behind the index by 11 percentage points.”

The article points out that, while CEOs are generally encouraged to act like owners, this hasn’t led hired professional CEOs to achieve the more successful performance attained by founder CEOs.  The article explains that “professional CEOs own less than a fifth the typical stake of founders.” The article cites John Ablin, chief investment strategist at money manager Cresset, who examined how well companies performed. According to the article, “he convincingly compares several during their founder and non-founder eras…the founders edge is stark.”

The article mentions that, unlike the hired professional CEOs, founder are not likely to leave to run another company. As I see it, this is essentially saying that the founder is far more strongly committed to the company’s success. I’ll add that a founder CEO is more likely to have a deeper understanding of the company’s strengths, while CEOs from outside might bring too much of what was ideal for their former employer, but may not be quite right for their new leadership role.

In my many years of studying business success and failure patterns, I find that doing what fits the company’s strengths is so important for achieving business success. And, a CEO hired from outside may not understand what fits the company as well as a founder CEO does. After all, what works well in one company does not necessarily work well in another.  A classic example of this that I wrote about some time ago is the Penney’s isn’t Apple situation, where a former Apple executive tried to bring what worked well at Apple to Penney’s. The approach failed miserably at Penney’s.

So, in conclusion, we must remember that there are advantages to having a founder CEO, rather than a CEO hired from outside.

It is often said that founders need to bring in professional managers to successfully grow their business.  For example, Alphabet, the highly successful parent company of Google, brought in a professional CEO to lead the company through tremendous growth.

But, what does this mean more generally in terms of successful business growth?

A recent Wall Street Journal article sheds some light on this topic.  The article, which is titled “These CEOs Might Boost Your Portfolio” appeared in the paper’s January 15, 2026 issue. Regarding investing, the article discusses what can make “your chances of owning a big winner rise.” The article says, “In the past five years, founder led companies in the S&P 500 beat that index by 167 percentage points. Companies helmed by outside ‘professional’ CEOs lagged behind the index by 11 percentage points.”

The article points out that, while CEOs are generally encouraged to act like owners, this hasn’t led hired professional CEOs to achieve the more successful performance attained by founder CEOs.  The article explains that “professional CEOs own less than a fifth the typical stake of founders.” The article cites John Ablin, chief investment strategist at money manager Cresset, who examined how well companies performed. According to the article, “he convincingly compares several during their founder and non-founder eras…the founders edge is stark.”

The article mentions that, unlike the hired professional CEOs, founder are not likely to leave to run another company. As I see it, this is essentially saying that the founder is far more strongly committed to the company’s success. I’ll add that a founder CEO is more likely to have a deeper understanding of the company’s strengths, while CEOs from outside might bring too much of what was ideal for their former employer, but may not be quite right for their new leadership role.

In my many years of studying business success and failure patterns, I find that doing what fits the company’s strengths is so important for achieving business success. And, a CEO hired from outside may not understand what fits the company as well as a founder CEO does. After all, what works well in one company does not necessarily work well in another.  A classic example of this that I wrote about some time ago is the Penney’s isn’t Apple situation, where a former Apple executive tried to bring what worked well at Apple to Penney’s. The approach failed miserably at Penney’s.

So, in conclusion, we must remember that there are advantages to having a founder CEO, rather than a CEO hired from outside.

However, not all first movers are able to hold on to a dominant market position in the longer term. Sometimes, stronger competitors enter the market a bit later, yet end up with a far more dominant position. These successful later entrants generally have greater resources or other market advantages that the first mover lacks.

We are reminded of these first mover issues when looking at today’s situation with the companies that offer AI. Open AI with its ChatCPT product was a first mover. Initially, it looked like other potential competitors, such as Google, for instance, might be left behind. But soon, Google products like Gemini were successfully competing in the AI market. There were other late entrants as well. And, soon, Open AI lost its former dominant first mover position. Ultimately, Open AI declared a code red in an effort to retain a strong position in the market.

The eventual outcome in the AI market remains to be seen.  However, the AI example clearly illustrates how being a first mover, like OpenAI was with ChatGPT, is no guarantee of being the most successful in the marketplace.

So, in conclusion, being a first mover can be a powerful advantage. But, as OpenAI’s situation illustrates, being a first mover is not necessarily a guarantee of ultimate success. Instead, becoming a succesful player in the market can depend more on a company’s strengths than it does on upon being a first mover.

Often, when an outsider is brought in as CEO, the company is looking for someone who can bring about change. On the other hand, an insider may be named the new CEO when a company is more or less on the right track and does not seem to need an outsider to bring about major shifts in direction.

This is illustrated by some recent examples, both in the retail sector. Not long ago, Wal-Mart announced that an insider would be taking over as the new CEO. Kohl’s, on the other hand, is bringing in an outsider to lead the company.

Both Wal-Mart and Kohl’s currently face the conditions brought about by today’s somewhat challenging economic situation. Neither of these two companies serve predominantly upscale markets. So, both are likely to face challenges as many consumers in their typical markets are straggling economically and, thus, may be unable to spend like they used to. Consequently, both companies need to adapt to the realities of current economic conditions.

Wal-Mart has taken steps to attract somewhat higher income customers. Thia shift at Wal-Mart seems to entail making more gradual evolutionary changes, so these changes have the potential to work well. Thus, since Wal-Mart may already be on the right track, naming an insider as the new CEO seems appropriate. In contrast, Kohl’s has been struggling with the aftermath of rather ill-suited changes made previously. So, Kohl’s may need more of a change in direction, which is when companies can be more likely to bring in an outsider as CEO.

Nonetheless, it is important to remember that success comes from making the right changes. Insider CEOs may be more likely to make changes that fit the company because they may have a better grasp of how the company works, what its strengths are, and what the company is actually capable of doing. Of course, they must be careful to avoid the trap of trying to change everything, believing that, after all, what is being done now is not working. Making too many changes, or changes that are too major, can ultimately become a disaster. An outsider brought in as a change agent CEO can easily end up making changes that do not fit the company. Yet, an outsider may be helpful if insiders are too resistant to change or are unable to see what changes may be beneficial.

So, in conclusion, whether the new CEO is from inside or outside, success comes from making changes that are right for the company. Ill-fitting changes can be a disaster.

My previous blog post discussed how important it is to get the changes right. I’m making that point again here by discussing the Levi’s example. The media recently reported that Levi’s is introducing a line of premium denim products at a much higher price point than the denim Levi’s has previously offered. This is discussed in the October 29, 2025 Wall Street Journal article “Levi’s Expands in Premium Denim” by Jennifer Williams.

The article reports that “Levi Strauss has its sights on both high-end and budget-conscious shoppers as it aims to sell more denim.”  The article says, “The company is rolling out…jeans, jackets and more that can retail for more than $350.”  The article also reports that “Levi’s aims to be more luxe while selling denim for as low as roughly $20 in mass-market stores.”

As I see it based upon my research into business success patterns, companies thrive when they build upon their strengths and they struggle when they move too far from those strengths. That’s why it is so important for companies to build upon those strengths when making changes in the kinds of products offered.

Levi’s needs to pay attention to its strengths as it strives to alter its product mix. In today’s economy, when so many low budget consumers have been hard hit by inflation, it is easy to see why moving upscale is seemingly attractive for Levi’s. But, the big question is: how well does going luxe fit with Levi’s strengths?

There are examples of other companies shifting more upscale after many years of focusing upon low budget markets. For instance, Wal-Mart appears to be doing this successfully. But, Wal-Mart moved only slightly upscale, in contrast to Levi’s, which seems to be making a much bigger upscale jump. And, according to my research, companies are more successful when they evolve gradually, rather than making a big revolutionary jump.

In Levi’s favor, however, is the fact that Levi’s has already been offering its upscale line in Japan. If its Japanese experience was adequate to develop strengths in serving luxury shoppers, and if there are enough similarities between Japanese and American luxury markets, then Levi’s may have what it takes to do well with its new luxury line in America. In other words, if these conditions occur, Levi’s Japan experience may make its new luxury line in the U.S. a less extreme jump.

It is beyond the scope of this blog post to predict how well Levi’s will do with its new luxury product line. The purpose here is point out factors that influence whether or not changes made by a business like Levi’s will succeed.  This is ever so important because making the right kind of changes is essential for business success.  And, the right kind of changes are generally those that build upon a company’s strengths.

In today’s times, there have been a number of examples of companies or industries that need revitalization.  The business press recently reported on several. For example, major challenges have been reported in the auto industry. Staff layoffs and store closures were reported at Starbucks.  And, an article about Six Flags, the amusement park operator, reported that activists were pressuring the company to improve its performance by selling the land that its theme parks occupied.

With many companies needing revitalization, change may be seen as the answer. Making changes is often thought to be what’s needed to fix the problem. However, this leaves companies with a major challenge. In order to turn the business around, it is important to focus upon making changes that are right for the company. When change is needed, it is so easy to think that doing things very differently is the solution to the company’s problems. But, companies must be careful with this. It is ever so easy to make the kinds of changes that are not a good fit for the business. And, making those ill-fitting changes, can actually make things so much worse at a time when the company urgently needs to make things better.

So, if your company is in need of a turnaround, be sure to carefully think through your revitalization plans. Don’t make the common mistake of thinking you need to refocus your efforts on entirely new areas that are a poor fit with the strengths of your business. Instead make changes that fit your business well and can actually help with the revitalization. Making the right kind of changes is crucial for success.

Handling these changes can be challenging for a company. Companies must be careful so changes intended to attract new customers, or to get existing customers to buy more, do not alienate too many existing customers that the company wants to keep.
This can be especially challenging when the changes involve taking away something that has been there for quite a while. What is intended to be an attractive update can easily end up alienating existing customers who expect what was already there and are very disappointed if it is taken away.

An example of this recently had considerable media attention. The example is Cracker Barrel, a restaurant chain that has been making changes in order to improve its business. The chain took away its existing logo, which included a picture of a man near a barrel and the words Cracker Barrel. The new logo only had the words Cracker Barrel, without the picture.

This change led to considerable reaction in the marketplace. There was widespread consumer disappointment with the new logo. In fact, there was so much backlash that Cracker Barrel soon brought back the old logo.

The lesson here is that businesses need to be especially careful when they take something away, especially if it’s something current customers really like. Granted, Cracker Barrel did receive considerable media attention from this, so there was some promotional/awareness benefit for the company. However, this example illustrates how important it can be to not take away something that existing customers really like.

When taking something away, companies must evaluate the risk of losing customers who really wanted what is being removed. If a desired product or service is taken away, customers might deflect to the completion to try to get what they want. And, since added new offerings often fail, the company may risk losing more customers due to what it discontinues than it gains by adding something new.

This doesn’t mean companies should never discontinue what they were previously doing. But, it does mean they should carefully think through their decisions before taking something away. Existing customers may really want what is slated for removal. If so, taking it away can really hurt the business instead of bringing on the intended revitalization. Companies should pay attention to this when attempting to revitalize their business.

A Wall Street Journal article on June 30, 2025 titled “AI Makes Learning Easy. Maybe Too Easy”.  reported that students using AI perform much better when writing papers. than those who did not use AI. However, the article also said that students using AI perform more poorly when taking tests.

As I see it, this is not surprising. Today’s AI is capable (though not perfect) at searching for relevant information, presenting it in written form, or producing videos. So, when students use AI, they are likely to prepare better written reports. AI can sift through extensive information much faster than human students can. So long as AI doesn’t hallucinate, AI can do better than humans at finding more of the relevant information that is out there. Furthermore, AI can do a pretty good job of packaging that information into a concise written report. So, AI does improve the reports that students produce.

But, when students use AI, they perform worse when taking tests on the material. Again, this is not surprising. After AI searches for relevant information, students get findings that AI summarizes. So, students are often merely reading summaries, not doing in-depth investigation into the topic. Someone reading a summary of the topic generally will not understand the material as well as someone who has studied the material more extensively.

Digging deeply into a topic, conducting numerus searches, and thinking about how all this material fits together provides the opportunity to develop a solid understanding of the subject matter. This depth of understanding is not likely to occur with quick readings of summaries. So, students end up with only summary knowledge and, thus do not get the in-depth expertise that might be required to answer some of the more sophisticated questions on tests.. Consequently, students who use AI are likely to do more poorly on tests

The Wall Street Journal article reported it like this: “Students who use AI tools to complete assignments tend to do better on homework–but worse on tests.”

So, in conclusion, it is not surprising that students who use AI produce better reports, but do more poorly on tests. That’s what happens when the deep investigation of the material is delegated and the student spends time merely reading brief summaries of the information.

This is not always easy and it can, in fact, be quite challenging. Companies succeed by building on their strengths. Yet, as external conditions change, and companies find they must do things differently, they might have to augment their previous strengths. But, often, this is not easy. That’s why we recommend taking an “Evolution, Not Revolution” approach when companies are pursuing new ways of doing business.

We are briefly reminded of this in the recent Wall Street Journal article “Shell in Early Talks to Buy Rival BP“ by Ben Dummett, Lauren Thomas, and Jenny Strasburg, published June 26, 2025. Although the article is primarily about possible merger talk between oil companies Shell and BP, it does offer a brief reminder of the difficulties companies can face when they choose to pursue new areas. The article says, “BP has been the laggard among major oil companies after an ill-fated push away from fossil fuels into renewable energy.”

It is beyond the scope of this blog post to analyze the oil industry and recommend what specifically BP should have done rather than put itself in an “ill-fated” situation. However, there are some general guidelines that might have helped BP avoid an “ill-fated push”.

To help avoid ill-fated endeavors, companies should not be too quick to respond to industry trends without evaluating what it takes to do so successfully. Yes, there were trends affecting the oil industry, such as climate change issues and the increasing role of alternative energy sources, like wind-generated power. But, even though oil and renewables are both energy sources, there are differences in what it takes to successfully do business in each of these sectors. Companies must recognize this if they are to avoid ill-fated losses when pursuing new areas. Just because a new line of business is in a related area, in this case energy, it doesn’t mean a company can easily pursue that new area without incurring ill-fated losses.

The lesson here is that when companies pursue new areas, they need to pay attention to how these new areas build on their prior strengths. The more different a seemingly related area is from the existing business, the more challenging its pursuit may be.