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Tuesday, July 27, 2010

Thinking of Leading? Think About Winning First!

As a 34-year veteran of the fast moving consumer goods (FMCG) industry, Pradeep Pant, President of Kraft Foods Asia Pacific, can say quite convincingly that he knows the key to successful leadership.

The magic lies in a “winning mindset”: a trait that can make all the difference between making profits or suffering losses under trying business conditions. Pant says that it was this “winning mindset” that helped turnaround Kraft Foods' Asia Pacific business.

Kraft Foods made the news recently when it launched a US$19.5 billion takeover of Cadbury PLC, the British sweet maker famous for its iconic purple-wrapped chocolates. This was barely three years after the US$7 billion acquisition of Group Danone’s global packaged baked-goods business. Clearly, Kraft Foods is not a humble company merely selling cheese. Rather, it is one of the largest food manufacturers around.

Today, Kraft Foods' products can be found on the shelves of supermarkets and grocery shops in 160 countries. In its stable, a line up of 11 “billion-dollar brands” like Nabisco, Oreo, Philadelphia Cream Cheese, Maxwell House, and of course, now Cadbury, as well as dozens other in the “hundred million brands” category.

Naturally, within such a sprawling business organisation, it would be impossible for every cylinder to be firing at the same speed all the time. While emerging markets are a critical engine of growth for Kraft Foods today, the Asia Pacific division was struggling with low to flat growth between 2001 and 2007. However, around 2007 onwards, three major "change" factors came together. First, there was a global reorganisation led by Kraft Foods' CEO, Irene Rosenfeld, to move decision-making closer to the local consumers and customers. Next, Kraft Foods acquired the Danone biscuit portfolio and finally, new leaders, like Pant, were brought in. Since 2008, operating profits have been growing at double digit rates – despite the recent economic downturn.

From a regional business unit with relatively sluggish top line growth, Kraft Foods Asia Pacific has since taken the mantle of the company's growth engine. The Asia Pacific business now boasts approximately 6,400 employees across 15 markets, 21 manufacturing plants in eight countries around the region, and eight research and development centres.

Pant, who took on the job in January 2008, said what drove the turnaround were: a clear strategic focus where they can win, consumer insights-based innovation, powerful integrated marketing initiative, aggressive in-market execution, and heavy investment in people.

But all these would not have worked without the willingness to get into the mindsets, “we will be leaders" and "we will win”.

To win, it is necessary to focus. In many organisations, the focus is on the core business. Focus means knowing what you want. But it is useless to know what you want if you cannot articulate it, for you will not be able to formulate a robust plan and steer your team or organisation towards your vision.

Focus also means concentrating on one task at a time. Gillette, where Pant worked his way up over 20 years to become President for Asia Pacific, is one good example. When the operations underperformed in 1999, the company came up with a recovery plan. While many other companies might have rushed to react to changes in the market, Gillette stayed the course, tackling the issues one by one. This approach became the foundation of the organisation’s successful turnaround.

In a highly competitive marketplace, companies may feel compelled to be ‘everything to every customer’, and ‘doing everything everywhere’, Pant said. But to do well, it is better to stick to a clear strategic focus. He suggests that organisations ask themselves two questions: "What do I want?" and "What do I not want?"

In order to win, certain attitudes have to be adopted. For example, to master the business environment, one must first be the master of oneself, Pant said. Start by being self-aware. Ask yourself: Who am I? What are my values? What are my weaknesses and how do I fix them? The art of self-control is important as well. “If you can’t control your weaknesses, you can’t control other things,” Pant noted. Old ingrained habits will require time to break, so try instilling discipline in small doses, he advised. For example, if you want to start a morning exercise regimen, start by waking up on time everyday for the first week, before easing into the exercise. The trick to lasting changes, he said, is to do it in small steps. 

Mastery over oneself also means being genuine and real. Many people often put on a front to impress others. However, the real self will show gradually. So, be yourself and let people see you genuinely for who you are. “Nobody, including me, can act well enough to fool people all the time,” he added.

Pant, whose turf includes a diverse mix of markets with different characteristics and cultural nuances, encourages adaptability – so as to draw ideas and thoughts from different cultures. This, in turn, helps him to run the multinational corporation better.

Another route to winning, for Pant, is to think of opportunities in times of adversity. Citing the two Chinese characters that make up the word 'crisis', or "wei ji" he noted that 'wei' represents danger, whilst 'ji' stands for opportunity. So these are two ways to look at a crisis.

During the global economic downturn last year, as most other companies cut back on spending and shelved expansion plans, Kraft Asia Pacific went the other way. It maintained its prices, its product quality and marketing spend. They saw results very quickly, further confirming that the decision to stay the course was the right one.

Next, leaders need to realise that a winning mindset will do no good if there is no one to put the ideas into actual use. Unlike fixed assets, human assets need not be depreciated, he said. In fact, if there is an asset that appreciates all the time, it is people.

Pant's advice for any company is to help every staff maximise his or her potential, and make winners out of every one of them. At Kraft Foods', it is the strong belief in people – the aggressive investment in people through development and training – that has played a key role in turning it around, he added.

Winners never achieve success by staying put within their self-imposed boundaries. They need to be innovative; they need to take risks.

Innovation and risk-taking starts with listening to the customers’ needs, said Pant. One example is consumer research on Tang, a drink that is usually drunk cold in the US, is consumed as a hot drink in China. Oreo, one of the company’s best-selling cookies, was not well received in China until the less-sweet version was launched. With this version, Oreo became the number one cookie in China. In contrast, Oreo sold in Indonesia, is sweeter. “Ultimately, consumers are the bedrock of understanding the product,” he said.

With insights from customers or targeted audiences, Pant suggests delivering solutions in ways that are unique and exciting. One example he shared was from his Gillette days, when he gave salespersons silver recognition medals not after they achieved their targets, but before they set out to do so. He pointed out that the last thing someone wants to do is to return a silver medal because they didn’t deliver what was committed. The task is to find out what makes people tick. If you do well, celebrate. “Reward yourself with a small celebration for small achievements, and a big celebration for big achievements,” said Pant. But more importantly, strike a happy balance between contributing, learning and having fun at work. After all, we spend the longest part of our waking life at work.


How (Not) to Lead in a Crisis

Tony Hayward, ex ceo of BP, must have studied management in a parallel universe, where a set of anti-rules for bad leadership are taught. Here are some of these anti-rules:

Deny and minimise problems. Drop any mention of the high-minded principles you announced at the beginning of your term, such as safety and a culture that puts people first. Sweep them under the rug as you play down the significance of the crisis. Or better yet, find someone else to blame — a supplier, a business partner, a lowly employee or two.

Emphasise your own power and importance. Keep yourself front and centre all the time. Rarely bring forward the rest of the team, nor even indicate that it's a team effort.

Make the story all about you. Talk about your heavy burdens and the costs to your life. When forced to acknowledge the true victims, pay lip service.

Never apologise, and don't even pretend to learn from your mistakes. Brush off public disapproval, and persist in the same mindless behaviour that provoked criticism in the first place.

Hang onto your job even when it's clear you should go, in order to negotiate the highest severance package, whether you deserve it or not. Don't even consider a deferred resignation to allow for smooth transition. Cling to power, and keep everyone guessing to the very end.


The Importance of Ethics and Values in Business Leadership

Don Soderquist is the founding executive of The Soderquist Centre for Leadership and Ethics and former chief operating officer of Wal-Mart.

Here are some of his insights on the importance of ethics and values in business leadership:

• Values are really the filters through which we process the decisions that we make — and it’s extremely important that we have good filters. Problems arise when not everyone has the same filters.

• If values are touted at your company but not put into practice, it’s even worse than if you hadn’t mentioned them in the first place. It is in the acting out of our values on a day-to-day basis that they become alive.

• Among the key business values are: trust, integrity and a focus on customer satisfaction. Integrity is at the top of the list.