It was just announced that Miguel Patricio will take the helm as CEO of Kraft Heinz. He is known as a brand builder with experience at Coca-Cola, Johnson & Johnson and, most recently, AB InBev. This is good news for the company as they appear to have taken their eye off of customers. Patricio’s predecessor, Bernardo Hees, known for cost-cutting and zero-based budgeting oversaw a 42% drop in share price in just the past year. No surprise that he was replaced.
When Kraft and Heinz merged, the promise was to produce value based on cost synergies, reduced cost of debt and increased shelf space, globally, for its 200 brands.
The hard work of merging takes focus and money.
Usually, the focus is on the internal processes and away from the customer. One wonders if merging in an environment of cost-cutting made the current results all but inevitable.
Regardless, a question for Patricio, or any new leader who is brought in to change the trajectory of results, is how have past practices shaped the current set of beliefs, assumptions and habits of the company? Creating a new strategy is many times easier than making it happen.
Here is what new leaders in high-stakes situations should do:
Create A Bold Strategic Direction Rather than a weighty strategic plan, businesses need a compelling strategic vision based on an understanding of what influences the decisions made by customers. In its simplest form the strategic direction must answer these questions:
- What value do we provide?
- Who can benefit from the value we provide?
- How do we convey the value we offer?
Fan The Flames Of Imagination
A leader who is new to the company has the distinct advantage of not being married to past decisions. However, the people who work at Kraft Heinz might be. Even smart, talented people can be surprisingly stubborn when what they have poured their hearts and souls into is criticized.
New leaders can help the organization by being upfront about the most important discomfort everyone will face – fear of making mistakes. Fear of making mistakes is especially lethal when a business needs people to be creative, to unleash their imagination. The fastest way to prove that creativity is valued is by highlighting and celebrating it. The fastest way to kill it is to marginalize or remove people who bring ideas forward.
Demonstrate Constructive Discontent
Patricio is quoted as saying that some Kraft Heinz brands are dusty. That is probably true for Kraft Heinz. The same can be said of many successful companies whose habits may be leading them in the wrong direction, even if they produced good results in the past. One common reason for this is strategic discussions often fail to include examination of underlying assumptions. What underlies a decision at one point in time will inevitably change. Leaders who show others that questioning is not only permissible but necessary will find it easier to expose bad organizational habits. This approach gives people the opportunity to see the flaws in a decision process for themselves.
Learn While Leading
When a leader is new to a company, they have an opportunity they will have but once; that is to learn in front of others. Every organization needs and wants people who are curious, innovative, constant learners or at least they say so. Most spout aphorisms about how desirable these qualities are and then proceed to train and manage the curiosity out of people while rewarding them for conformity.
If a new leader begins with a spirit of learning and genuine curiosity, word will get out, and fast. Nothing is as powerful as a leader showing people the behavior he or she wants to see in others. Indeed, no matter how flowery the company values may be, they are only as real as the behavior of the leaders.