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Continued: Trudy Rautio: Suddenly, she's Carlson's CEO

  • Article by: DAVID PHELPS , Star Tribune
  • Last update: August 25, 2012 - 11:38 PM

Trudy Rautio was at her Moose Lake cabin a week ago Saturday when Marilyn Carlson Nelson called to tell Rautio that she had just become the chief executive officer of Nelson's namesake company, Carlson.

"Trudy, are you sitting?" said Nelson, the chairwoman of Carlson's board. "Hubert has resigned, and the board has elected you to replace him."

Hubert was Hubert Joly, the Carlson CEO who abruptly resigned that position to take over struggling Best Buy Co. Inc. as its new chief executive.

"I was totally stunned," Rautio recalled during an interview in her office last week. "I didn't even know Hubert was looking."

Over a weekend, Rautio, 59, went from Carlson's chief financial officer to chief executive of the international travel and hospitality company in charge of the likes of Radisson hotels, T.G.I. Friday's restaurants and Carlson Wagonlit Travel.

On Monday morning, when Rautio was introduced to hundreds of Carlson employees as their new boss, she received a loud and lengthy standing ovation in the atrium of the company's Minnetonka headquarters. She also joined an elite club of female CEOs of multibillion-dollar companies.

Rautio is now responsible for a privately held and family-owned hospitality giant that suffered through the Great Recession when many travelers stopped traveling and diners stopped dining.

But the workout plan authored by Joly, Carlson CEO since 2008, and executed with Rautio at his side, showed glimmers of a turnaround in 2011 with sales of $38 billion, up 13 percent from 2010. But sales still trail the $39.8 billion in 2007 before the economy tanked. Consolidated revenue, the amount actually returned to the company, rose to $4.5 billion in 2011, up from $4.2 billion in 2010.

Rautio comes to the job well-known within the halls of a company and is seemingly prepared to continue a growth plan that she and Joly engineered together and draft a new one for the outlying years.

"Now my job will be to set strategy, not implement it," Rautio said from her neatly organized 15th-floor office in the Carlson Towers.

Nick Shepherd, the chief executive of Carlson Restaurants, whose properties include T.G.I. Friday's, said Rautio "might have been overwhelmed when the unexpected happened. But I don't think she'll be overwhelmed by the challenge. We've got the strategy, and Trudy was crucial in building that strategy, and we've got a strong management team. This business isn't about just one person."

Rautio is described as a collaborative and patient leader who will listen to varying viewpoints on critical issues. But she is not one to dillydally over making a decision.

"She doesn't suffer from paralysis by analysis," said Sam Winterbottom, who was vice president of development for Carlson's hotel group from 2002 until 2007 and is now with the hotel brokerage firm Newmark Grubb Knight Frank. "I think the Carlson family has a great deal of confidence in her."

It's been quite a rise for an International Falls girl whose first job dealing with finances was as a cashier at the local Piggly Wiggly grocery store and whose early career aspirations were that of becoming a company comptroller.

Rautio's first finance job was with Boise Cascade as a cost accountant after graduating from Bemidji State University in 1975 with an accounting degree. From there she went to Pillsbury Co. as vice president of finance for nine years, during which she earned an MBA from the University of St. Thomas. Her first job with a public company was as chief financial officer with Minneapolis-based Jostens Inc., which she called a career milestone.

But in 1998, a recruiter called her about a finance job at privately held Carlson. Though reluctant to leave Jostens, Rautio eventually took a serious look at the Minnetonka conglomerate and signed on as chief financial officer for Carlson's hospitality division.

"I was captivated by the heart of the organization and its ambitious growth plans. I liked being in a service environment. I'd always been in a manufacturing environment, where you were always trying to cut people and reduce [assembly] lines," Rautio said. "I was now in a division with cruise ships, hotels and restaurants. I called myself the chief fun officer."

Rautio lives in Edina with her husband, Kevin, and two German wirehaired pointers (Bear and Lilly). She's an avid Jet Skier and a bit of a speed demon on Rainy Lake. She tends a garden at her Moose Lake cabin.

A former Girl Scout, Rautio was honored in 2009 as a "woman of distinction" by the Girl Scouts of Minnesota and Wisconsin River Valleys.

Former Pillsbury workmate Linda Keene, who heads the Minnesota and Wisconsin River Valleys chapter of the Girl Scouts, said Rautio's selection for the honor was easy.

"Trudy is a person who really wants to make a difference. She is so authentic," Keene said. "She's a straight shooter with high ethical standards."

As CEO of an international company, Rautio is the newest member of a small club of female CEOs at large companies. Among Fortune 500 companies this year, just 19 have female CEOs. Four of Minnesota's Star Tribune 100 companies are led by women.

"It's changing, but it's a slow rate of change," said Barbara Crosby, who studies women leadership issues and teaches at the Humphrey School of Public Affairs. "It's about perception. We have a male image for CEO and other leadership posts. People already in power can change that culture."

If there's a part of leadership that Rautio doesn't like, it's dealing with personnel issues, especially job actions that are based on economics and not performance.

"My toughest decisions are always around people," Rautio said. "It's extraordinarily difficult. You're dealing with people and their families and their careers."

Carlson hasn't been immune from layoffs. The company struggled through the recession like everyone else. While it now has 170,000 employees worldwide -- many employed by franchisees -- the headquarters reduced staff by at least 200 in the depths of the recession.

But the economic news is brighter these days, and Rautio sees growth opportunities on the horizon.

Naming Rautio as chief executive was particularly gratifying to Nelson, who spent 10 years in the top job at the company founded by her father, Curt Carlson.

"I'm totally thrilled about this," Nelson said. "She's a competitor whose work ethic is second to none."

Rautio had the last word on her ascension Monday when she told the assembled Carlson employees: "I wouldn't trade places with Hubert today."

David Phelps • 612-673-7269

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