Although the economy was booming, the profits of Carnival Corporation remained stagnant and shareholders were getting agitated. The company was in the midst of two public relations nightmares. One of their ships had capsized off the coast of Italy, killing 32 people and another had suffered a power outage that left 4,200 passengers dealing with raw sewage and fecal matter. In 2013, Arnold Donald was called out of retirement to turnaround the struggling cruise line. Carnival’s market cap jumped from $25 billion to $48 billion and return on invested capital had doubled during his tenure.
Growing up in the Ninth Ward, one of New Orleans’ poorest and crime-ridden neighborhoods, did not stop Donald from forging his path to being a CEO. He was one of five birth children and another 27 children fostered by his parents. Despite the prevalence of violence in their communal setting, Donald and his siblings had a good childhood. He was recognized as an academically gifted student in junior high so his parents enrolled him at St. Augustine, an all-male, all-black Catholic high school in New Orleans. At age 16, he decided that he was going to be a general manager at a Fortune 50 science-based global company. No one in his family was in business, and he had never met a CEO but he still mapped out a career plan.
“There were lots of people saying, “You’ll be lucky to get a job. You’ll be lucky to finish high school, let alone go to college. Even those closest to you would only encourage you to aspire to so much. In their lifetime, they had never seen anybody have the opportunity to do much. I overcame that with tremendous support and guidance,” Donald said of how he achieved corporate success despite his poor background.
He wanted to gain acceptance and immediately set out to achieve the best credentials to stand out from the competition. Since he wanted to work at a science-based company, Donald chose to major in engineering at Washington University. He pursed an economics degree at Carleton College in Minnesota to differentiate himself from other people applying to business school. With two degrees, Donald received admission to the University Of Chicago Booth School of Business. He reached out to CEOs to find out how they got their positions to plot his career outline.
Donald received 20 job offers and accepted a position at the Missouri-based agricultural biotech company Monsanto. He quickly climbed the corporate ladder and was named general manager at the age of 32, achieving his teenage dream as head of the Monsanto Lawn and Garden business. Donald increased unit revenues fivefold from $40 million to $200 million in retail dollars. He went on to serve as group vice president for North America, head of the Crop Protection Unit, co-president of the agriculture sector, corporate senior vice president and ultimately president of Monsanto’s nutrition and consumer sector.
Related stories
In 2000, Donald joined a group of investors to buy the company’s sugar substitute division to form Merisant. He served as company CEO for three years and chairman of the board until his retirement in 2005. Donald then served as president and CEO of the Juvenile Diabetes Research Foundation International and later as president and CEO of The Executive Leadership Council. After his retirement, he followed his passions; buying a minor league basketball team, indulging his love for dancing and joining boards. One of those boards was Carnival Corporation, the world’s largest cruise company.
When Carnival Corporation’s founders and board called Donald out of retirement, he was on the verge of rejecting the offer. He had been on the company’s board for 13 years, knew its state of business, and foundation. He was the perfect person to lead a turnaround of the struggling brand and ultimately accepted the position. A seasoned business leader, Donald brought a fresh perspective and decades of global operations, financial and regulatory experience to the company.
Although Donald had never run a cruise line, he knew the Carnival’s fundamentals and felt he could get the business on track. He approached the job by listening to employees, guests, the travel agency community and other stakeholders. By marshaling people around communication, collaboration and cooperation, he managed to leverage scale and cut costs. His cooperative purchasing strategy saved the company a total of $480 million over a six-year period. In his first two years, Donald streamlined operations and grew the company’s market cap from roughly $25 billion to about $37 billion.
In addition, Donald accelerated and increased Carnival’s focus on environmental compliance, ethics, governance and inspection. He enhanced internal investigations group to get at the root cause of incidents, and implemented tracking mechanisms to prompt continuous improvement for deck and technical crew. As Carnival’s first Black CEO, Donald promoted diversity and inclusion at all levels and ranks to increase diversity of thinking for innovation. He also established the cruise’s Innovation Center which improved guest expectations.
“Businesses thrive over time through innovation. Innovation by definition is diversity of thinking. It’s thinking outside the box. You have to put the right processes in place. I engineered a diverse team, brought in some folks who were ethnically diverse and who were gender and background diverse. I wanted one person on the leadership team who didn’t have a college degree,” Donald explained how he leveraged diversity and inclusion for business innovation and growth.
Carnival made history in 2016 as the first cruise company in 50 years to sail from the US to Cuba under Donald’s leadership. He also led the effort to form a cruise joint venture in China, CSSC Carnival Cruise Shipping Ltd., and finalized a deal to build two ships for the Chinese market. During the pandemic, Carnival got 260,000 passengers home from ships all over the world and repatriated 90,000 crew at a time when planes couldn’t fly and borders were closed. Donald managed to keep the company afloat when business closed, raised more than $29 billion in new capital and refinanced more than $9 billion in debt.
After nine years of leading Carnival, Donald, at 68, felt it was time for a generational change and retired from the company in 2022. Referred to as “the best turnaround artist of our time,” he turned what looked like an irredeemable situation into a steady profitable enterprise.