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A new entry on my mental mentors list: Valerie Mars

I have a new business role model for my mental mentors list, and I’m guessing you’ve never heard of her.

There’s about half a dozen on my list. In times of doubt, or when I’m trying to think of an exciting plan, I’ll ask myself, what would David Droga, Zoë Foster-Blake or Rory Sutherland do?

This new entry is all the better because despite her billionaire status, I’d had no idea she even existed. Until this week when she pulled off a sneaky global-scale win. And that low profile was a deliberate choice on her part.

Meet Valerie Mars. Of that Mars family, who brought you the bars of the same name.

She’s the 65-year-old great-granddaughter of Franklin Clarence Mars, who started the company as a candy factory in 1911. The Mars company turns over US$50B (all numbers onward are USD) and remains privately-owned by various members of the family.

I never expected to see an ancestral wealth person on my inspo list. But you can’t change the family you were born into, and Valerie has taken an approach that’s both sensible and swashbuckling to build their business into a global monster.

Or rather, even more of a global monster.

The ultimate stealth predator

Valerie started her career as a banker in New York before joining the family biz in 1996. In the last three decades, Valerie has spearheaded the purchase of $81 billion worth of businesses.

Under a veil of stealth, while their competitors have to answer to their stock market masters, and that’s the bit I admire the most.

She is the polar opposite of Donald Trump’s boastful business shtick. She just gets things done without fanfare. Last week Trump held a press conference to talk of the rising cost of groceries. The campaign team put out a trestle-table of mixed groceries as talking point props. Trump stuck to the planned message briefly, but was distracted by the box of Cheerios.

“I haven’t seen Cheerios in a long time, I’m gonna take them back with me. I think I’m going to take some of them back to my cottage and have a lot of fun,” Trump said.

Valerie Mars doesn’t do press conferences, and she has more of an interest in Corn Flakes.

Last week she took home not just the box of Corn Flakes, but the entire company. Kellanova owns a stack of brands you know, like Kelloggs*, Pringles, Cheez-It, Pop Tarts, Carrs Crackers and more. It turns over $13B a year. Mars just bought it for $36 billion.

To go with their 2008 purchase of chewing gum brand Wrigley for $23B, a deal also spearheaded by Valerie, added to their massive portfolio of confectionery, food and petcare brands. They own almost every pet food brand you can think of.

Mars is the sort of company that has all the good case studies you do in marketing school, turning brands into profitable cash flows that run for decades, maybe centuries.

Not even a sign

Mars operates out of a stealth headquarters in Washington DC that doesn’t even have a sign. Neighbours joke that even the nearby CIA has one small sign. Mars is one of the most successful companies in the world, and they’re doing it entirely on their own terms.

Why haven’t they gone public? In the words of insiders interviewed for this story:

“The company says this allows it to make decisions for the long term without worrying about investors scrutinising its earnings every quarter.

“Being privately held also means that, should a major acquisition sour, Mars is not under sharemarket pressure to take a writedown, giving it more appetite for risk.”

I know most of us aren’t able to deploy private billions to buy household name companies, but there is much to learn here.

The intoxicating pleasure of reporting to nobody

What you and I are able to do is work toward complete autonomy, where you can do whatever you want without any outside interference. From personal experience on a relatively micro scale, the pleasure is intoxicating.

Nobody can tell you what to do. Nobody can ask you for a report. Nobody can make you guess what next year’s numbers will be when the reality is that all budgets are optimistic stabs in the dark. The idea of being “held to account” to this guesswork is nonsense and leads to bad short-term decisions.

The path to autonomy is making profits. If you have good profits, you can do whatever the hell you want. Without profit, to grow you need external investors and that is an absolute lucky dip in a bag of scorpions.

Some external investors are pleasant and constructive. We try to be that ourselves.

Lots more are super-creepy and do not have your interests at heart. Either way you have less and less control. You go through all the stress and responsibility of growing a business to make other people rich. You’ll likely look back and wish you’d just had a job.

IPOs are not as good as they tell you

IPOs have become the default entrepreneur goal. Because all the media coverage is of tech companies that don’t make a profit, so an IPO is the only way for founders to see any cash.

Non-tech businesses aren’t like that. Done right they generate ongoing dividends, which save you from the invasive horrors of public ownership.

You don’t have to spend your days second-guessing what will appease the analysts. You don’t have the ongoing burden of Big-4 audit, compliance and reporting costs.

You can plan for the long-term health of the business, rather than jacking it up for quarter-on-quarter growth. It’s the management version of steroid abuse, and it can only go on for so long before the unpleasant side-effects kick in.

Mars pays a much lower dividend as a percentage of cash flow than its competitors, allowing them to reinvest in the business. Mind you that lower percentage is still $600M, which is pretty adequate for a family business.

Keeping cash is really helpful

We’ve found the Mars approach valuable. Rather than pulling out as much cash as we could, we kept our lifestyles low-key and retained cash in the businesses. We knew there would be threats and opportunities to deal with.

Those threats and opportunities have both been bigger than we imagined.

That approach to keeping cash allowed us to keep almost all our staff through the COVID shutdown years. And it allowed us to buy a lot of expensive new revenue-producing assets when our industry returned to business.

Business in our sector is remarkably similar to the Monopoly board game. If you keep investing as you go round the board, you accumulate more assets that make more money and compounding does the rest.

It takes time, patience and consistency, things you have much less of if you’re dancing to the tune of market expectations.

A refreshing lack of nepo-antics

The Mars family clearly have some quality values embedded to stay this sensible and successful after more than a century. When most family empires dissolve into spoilt, warring nepo-tribes after three generations.

I love people with the work ethic to do lots when they clearly don’t need to. You’d imagine that these Mars deals would be a full-time handful for Valerie, but also:

“Since 2014 she has served as a board member of Fiat Chrysler Automobiles. She serves also as a board member of Ahlstrom-Munksjö, a Finnish-Swedish stock company (paper industry). She is member of the advisory board of Rabobank North America. Her participation in nonprofit organizations include board membership in Conservation International (nature protection) and the Open Space Institute (landscape protection, honorary trustee).”

Given a Mars a day helps you work, rest and play**, she must eat a ton of those things.

I also like that despite being married, she’s kept that surname. It must be so cool to go into a multi-billion dollar negotiation with a name that’s not only been on a century of chocolate bars around the world, but as a bonus is the Roman god of war and agriculture. You’d really think twice about displeasing them, this is a name not to be fucked with.

More Mars things to admire: they keep a lot of regional towns going. They just spent $112M to expand their Wodonga petcare manufacturing facility, and have been a massive contributor to that community for decades.

I’m not going as far as to take our sign off the building, but I’m definitely elevating this low-profile global badass to my pantheon of business imagined-friends.

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*In the US the Kelloggs brand remains with the original founders WK Kellogg, who spun off the rest of the global business as Kellanova.

** Trivia for any fellow Formula One fans out there, the man responsible for this legendary slogan was the all-time greatest F1 commentator Murray Walker, who also had a fine career in advertising. He denies he was the actual writer, but was part of the team and was probably being modest given he wrote a lot of other household-name stuff.

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