A NEW FLAVOR AT BEN & JERRY'S

By Daniel Kadlec

With their stock melting, ice cream icons Ben Cohen and Jerry Greenfield have created a new flavor for their management repertoire: the Holland Heave-Ho.

Cohen and Greenfield, of course, are the hippie founders of Ben & Jerry's Homemade, the Waterbury, Vermont-based superpremium ice-cream maker that vaulted to prominence with its quirky management style and equally quirky flavors, including Chubby Hubby and Chunky Monkey. Ben and Jerry have made a very public effort to put the environment, politics and people before profits--an unpardonable sin in the canon of Wall Street and a style that worked so long as Baby Boomers were ignoring their fat intake and scarfing Cherry Garcia by the pint.

But this is the lean, fat-free 1990s, and superpremium ice-cream sales have been flatter than Nebraska, which makes Ben & Jerry's just another company with a management problem. So forget all the sugary explanations heard since CEO Robert Holland said on Sept. 27 that he would resign. The party line: Holland accomplished his mission, solving production problems and launching critical expansions into new products and countries; now the company needs a CEO with greater marketing skills.

In reality, those skills have been needed from the start--and the big scoop is that Holland's days have been numbered for months, maybe even a year. He came to Ben & Jerry's in February 1995 and soon after began to clash with the forceful Cohen, who remains chairman and, along with Greenfield, still controls 42% of the company. Cohen denies any serious clashes. "That's not the way it felt to me," he says. He acknowledges that Holland's stint was short but says "changes in the marketplace" dictated his departure. Other insiders, though, say Cohen wasn't happy with some of the folks Holland hired and vetoed Holland's initial choice to fill at least one key slot.

Holland won some battles. He persuaded the board to expand into France despite Cohen's resistance, but that victory probably widened the divide between the two. Cohen opposes France's controversial nuclear-testing policies. Holland is something of a social activist in his own right. In Detroit in the 1980s, he created programs to help disadvantaged students graduate high school. Still, clear and early enough were Holland's and Cohen's differences that Holland never moved to Vermont from his home in New York City. Why get comfortable? Holland didn't return calls seeking comment.

By many accounts, Holland did a fair job of running the company, considering the conflicting demands. "His tenure was one of their better periods in a while," says Kim Galle, an analyst at the brokerage Adams, Harkness & Hill. Boosted by a new sorbet line, revenues in the second quarter rose 12% from the same quarter last year. That's on top of an 11% gain in the first quarter. Galle estimates that the company will bring in $171 million this year, vs. revenues of $155 million last year--a respectable 10% increase.

Holland was one of the few African Americans to head a publicly traded company. That brought both him and Ben & Jerry's a lot of useful visibility. Ben & Jerry's has long favored publicity stunts over traditional advertising. Not that choosing Holland was a publicity stunt--but the manner in which he was hired clearly was. The company staged an essay contest called "Yo! I want to be CEO." It attracted 22,000 applicants and was widely covered in the media. Holland did not enter. He was found through a blue-chip search firm.

Holland's successes have subsequently been overshadowed. For one thing, the popular new sorbets are pinching sales from ice cream, which is now losing ground in supermarkets to archrival Haagen-Dazs. Holland also imposed a pair of price increases, the most recent taking hold this month and pushing the retail price of a pint of Ben & Jerry's to more than $3 in some markets. That's a hefty charge that could deter even some loyalists. In an ominous sign, Ben & Jerry's last month said earnings in the just-ended third quarter would be below the 35[cents]-a-share of a year ago.

By the end of last week the stock had drifted to $12.13--down from a 52-week high of $19.50 and at roughly the same level as when Holland first walked through the door. While Ben & Jerry's has stalled, the Standard & Poor's 500 index has roared nearly 50% higher.

Holland's departure won't fix the company or the stock right away. Analysts still regard both as troubled. But given Holland's and Cohen's differences, it's a pity things weren't resolved sooner. Shareholders might have been spared at least a spoonful of pain.

Daniel Kadlec is TIME's new Wall Street and investing columnist, joining us from USA Today. His columns will also be available on TIME's Website at time.com and readers can reach Dan online at kadlec@time.com