On Cue: How the Jones Soda CEO Navigated Her Own and the Company’s Comeback

Jennifer Cue left as CEO of Jones Soda Co. in 2006 believing that the company she had led to strong sales growth and a public stock offering was on the path to long-term prosperity.

But five years ago, after Jones lost a lot of fizz under her successors, Cue felt it necessary to return to the helm at the board’s invitation and sink $700,000 of her own money into a rescue effort. The biggest part of her strategy was to overhaul a corporate culture that had gone awry, bringing Jones to the brink of disaster.

“When I came back, there were declining revenues and losses of close to $10 million a year,” Cue told Chief Executive. Jones’ annual revenues were $39 million when Cue left, but only $16 million in 2016. But last year, even as the giants of the soda category kept experiencing volume declines, “we were back to double-digit revenue growth and positive EBITDA. So I feel positive about the stabilization, and now we have the knowledge and ability to bring out new products.”

The Seattle-based company was one of the original “craft-soda” brands that offered unusual flavors—and early social-media-era packaging that employed customers’ real photographs—to steal share from the big commodity soft-drink players. Jones was CFO, then COO before becoming the chief. But she left the job to focus on raising her daughter.

“I had to take those same principles as when we started and create that mindset again. Things had gotten too corporate.”

Quickly, the company spiraled downward under a string of four CEOs. Clearly they lost touch with what the brand was about; one introduced Jones in cans even though its glass-bottle packaging was an important aspect of its persona. Executive salaries ballooned even while performance waned.

Cue knew what she had to do. “We are a 21-year-old brand,” she said. “So I had to take those same principles as when we started and create that mindset again. Things had gotten too corporate.”

Here are 6 steps Cue took to transform Jones’ culture and put the company back in growth mode.

1. Slay the fat cats. Cue slashed overhead by replacing a cushy commission program for the salesforce with a more variable scheme and by becoming more generous with stock awards. “The previous group was spending $12 million to run the company with the same size of business that we’re now spending $4 million to run,” she said.

2. Become an example. Besides investing hugely in the turnaround from her own funds, Cue took a “low salary right from day one” of her return, about one-third the level of the previous CEO. And she asked board members to reduce their salaries too and take a chance on more stock compensation. “Our people could see that we weren’t asking them to change while, at the top, we were maintaining our same-old, same-old,” Cue explained. “Leading by example is hugely important.”

3. Hire young. Now, 70% of Jones’ employees are millennials. “They get a bad rap sometimes,” Cue said. “But I really do think that, whatever their age, most people just like to be able to make an impact.”

4. Provide more autonomy. “We began allowing people just to show up and do some great things,” including taking risks on new products that fit the Jones brand, such as Lemoncocco, a non-sparkling concoction that was inspired by a beverage popular in Italy. “We had to get the right type of people who could do that. And now it’s that type of person who’s really survived and flourished at this company, similar to how it was when we launched Jones many years ago.”

5. Create a family atmosphere. They’re “little things,” Cue said, but Jones now does stuff like “taking people out in our backyard and having a barbecue. People enjoy that kind of thing.”

6. Being there. The caring has to be real for employees, and also demonstrated. When the father of one highly respected employee died, Cue and other executives helped the employee to avail a cheap funeral plan and they also attended the funeral to pay their respects.  “It’s not about doing that to show something, but it’s really feeling it,” she said. “People are loyal to you when you do that.”