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Published: August 24, 2010
 / Autumn 2010 / Issue 60

 
 

Growth through Focus: A Blueprint for Driving Profitable Expansion

To make the vision compelling yet easy to understand, we recommend creating a “hook.” The hook should be kept consistent over time and across customer touch points. It can be a color, a number, an acronym, a phrase, or a symbol. At Fonterra, the rallying cries were “Winning through Brands” and “Dairy for Life.” The vision embodied two themes: farmers’ pride (Fonterra is a cooperative owned by farmers) and the company’s emphasis on natural products, captured through the blue and green color of the company’s logo and merchandising. At Kraft International, the vision was expressed in numbers — “the 5-10-10 strategy,” which meant winning by focusing on five categories, 10 brands, and 10 markets. At Lipton, the vision was “Paint the World Yellow with Lipton.” The brand’s characteristic color signified brightness and sunshine, and stood for a broader Lipton beverage experience than just a cup of tea.

Once a vision is chosen, it needs to be launched with a bang through a seminal event designed to inspire the team. For Kraft Foods’ international business, the top 100 leaders were brought together on the 99th floor of the Willis (formerly Sears) Tower in Chicago in May 2007. The event kicked off with awards for teams around the world that recognized great work in various categories. Awards can set a positive tone, instill a can-do attitude, and make people feel like winners. At Lipton, the kickoff event was held at Colworth House, the 18th-century mansion at Colworth Science Park, where everything was painted yellow — including the lawn in front of the building. The theme “Paint the World Yellow with Lipton” was brought to life through winning stories from successful markets.

In communicating the vision, pictures are often worth a thousand words or PowerPoint slides. Simple visuals that depict the “from–to” journey can serve as powerful communication tools. Lipton used two visuals to bring the transformation journey to life — a picture of Audrey Hepburn, representing the Lipton brand as it was (classic, aristocratic, reserved), and a picture of Cameron Diaz, representing the new Lipton (bright, sunny, vibrant).

4. People: Unleash the Potential

Once the vision and strategy have been defined and powerfully communicated, the next step is to find the right people and to place disproportionate resources in their hands. The right people need to be placed in all functions — supply chain, R&D, marketing and sales — to ensure that you have the skills to win. Selecting those people requires a rigorous process of matching skills with the needs of the business. For instance, if the strategy involves focusing on a specific channel or set of brands, you need to find people who have expertise in the relevant channels and brands and put them in charge.

In Kraft Foods’ international business, significant changes were made in the top leadership. Less than two years after launching the transformation initiative, two-thirds of the top 30 leaders were new to their roles. Many of the new leaders came from within Kraft Foods. Some were hired externally, and some came from the successful acquisition of Groupe Danone’s biscuit business in November 2007. Similarly, at Lipton, a number of managers were hired from leading companies in the beverage industry (Coke, Pepsi, Schweppes) to augment the traditional grocery skills within Unilever.

Once new leaders are appointed, they need to be given the freedom to operate within the strategic framework so that their potential can be truly unleashed. Leaders should be challenged to act as entrepreneurs within large companies that have traditionally been perceived as process-driven and bureaucratic. In our experience, the biggest enemy of creativity and imagination in large companies is the budget. Resource constraints, real or perceived, limit the imagination of business leaders and prevent them from thinking creatively. To liberate people from these constraints, we recommend a counterintuitive approach: Give people huge targets and empower them with virtually unlimited resources. The targets should represent a quantum leap from historical results. Although it may seem that unlimited resources would encourage profligate spending, business leaders have a strong incentive to spend wisely, because they do need to deliver profits and margins, not just revenue increases. When leaders are asked to act like owners, they behave with an amazing sense of responsibility and often arrive at sensible trade-offs among risks, rewards, and resources. It is important that leaders not be penalized for failure unless they consistently fail to learn from experience.

 
 
 
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Resources

  1. Irene Rosenfeld et al., “Inside the Kraft Foods Transformation,” s+b, Autumn 2009: A roundtable discussion of Kraft Foods’ overall corporate reorganization.

  2. Mohanbir Sawhney, Sridhar Balasubramanian, and Vish V. Krishnan, “Creating Growth with Services,” MIT Sloan Management Review, January 15, 2004: Perspectives on how companies can drive organic growth through services.

  3. For more thought leadership on this topic, see the s+b website at: www.strategy-business.com/strategy_and_leadership.

 
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