By Brenda Barnes

(FORTUNE Magazine) – With a portfolio that includes such strange bedfellows as Kiwi shoe polish, Bimbo baked goods, and the Wonderbra (not to mention stagnating income and profits, and a languishing stock price), Sara Lee has long looked like a B-school case study of a company in search of direction. Now it just may be getting it. On Feb. 10, Brenda Barnes was promoted from president to CEO; the same day, she announced an ambitious strategy to wake the slumbering giant. Her first order of business: Jettison products that accounted for almost 40% of the company's $18.3 billion revenues in 2004. On a personal level, Barnes herself is an interesting case study. She created a stir in 1997 when she ditched a highflying career as head of PepsiCo's North American beverage business. For the next six years, she focused on her family--one husband, three teenaged children--while also serving on the boards of a range of companies, including Avon, Sears, the New York Times, and Staples. After a whirlwind first week on the job, Barnes talked to FORTUNE's Cait Murphy about female CEOs, town hall meetings, and thinly sliced lunchmeat.

You left the executive suite for six years and still made CEO. How did you manage that?

My primary motive was to spend more time with my family. I would do it a million times over. At the same time, I served on several corporate boards in different industries with different strategic and competitive issues. That experience was extremely helpful to me. I believe that it prepared me to do this job better than I would have, had I stayed on at Pepsi.

You were named CEO the same week that Carly Fiorina was forced out at Hewlett-Packard. Do you see any significance in one woman rising as another was falling?

The way I look at it, CEOs are supposed to drive performance. That comes with the territory, male or female. The fact that we are both female is interesting, but the job is what it is. You have to do the job.

Sara Lee has historically been very decentralized, with operating units accustomed to standing alone. This plan goes 180 degrees the other way. What has been the response inside the company?

A lot of these ideas came from our people. My first weeks and months [after joining the company in May 2004] I went around the world, talked to people, and asked, "What would you do with Sara Lee?" These ideas came from every business unit and every part of the globe. Since this plan was announced, I've been meeting with our employees in big town hall meetings. The reaction is overwhelmingly positive, even when people's lives are being affected.

How will you know if the strategy is working?

This is a three-year plan; there are interim benchmarks to make sure we are on track. They include things like cost level, volume growth, market share, whether we are on track for centralized procurement, and the implementation of one IT platform.

Given the intense price pressures from retailers, how can you increase profit margins?

The combination of an attractive cost structure and innovation is the only answer. Take something like Hillshire Farm Deli Select lunchmeat. Lunchmeat has been around forever. Then we started slicing good-quality meat in a very thin fashion and put it in a Gladware container. We could barely keep it on the shelf.

Now that Hanes is being spun off, Sara Lee has no billion-dollar brands. Is this a problem?

I think there are a few that will be billion-dollar brands. Sara Lee is pushing close; Jimmy Dean and Hillshire Farm are others.

Finally, cherry cheesecake or plain?

Plain. ■