In May 2020, Frank van den Driest talks with Jodi Harris, global vice president for marketing culture and capabilities at AB InBev, and Miguel Patricio, chief executive of Kraft Heinz. The conversation moves from what the crisis taught them to creativity, digital transformation and the route from marketing to the top job.
Patricio recognizes the shift away from the Milton Friedman position that a business has one social responsibility, to increase profits for shareholders. His own first concern during the crisis was the safety of the teams across 80 factories, and he says morale has never been higher because people feel a sense of purpose and because safety was put ahead of everything.
Key findings
- Patricio declined to talk to the media about quarterly results, on the view that the financial results were less important at that moment than the company’s people and consumers.
- He argues zero-based budgeting is widely misunderstood: it is about efficiency, not cost-cutting, and companies that treated it as a cost-cutting opportunity ran into trouble, his own included.
- Cutting too far is self-defeating. His formulation is that if you cut too much, costs actually start increasing.
- Harris describes the obsession with being number one in share and preference as a driver of marginal growth in stagnant categories, and of risk-averse, short-term, safe and bureaucratic behavior.
- Patricio’s view is that in a consumer goods company marketing is the natural path to the chief executive role, because marketing is the part of the company that thinks about and understands the future.
What the crisis taught them
Harris’s answer is about resilience. It is easy to feel helpless inside, and at times they did, but what she found exciting was taking the opportunity to do things they had never done before and to help people in need.
Patricio’s is about employees rather than customers, and specifically about mental health for people working from home as well as those on the front line. The company began producing content for its own people, and he describes cooking with three thousand colleagues the previous day.
Building a culture that grows
Harris frames her role by saying that as head of culture and capabilities her customers are her colleagues. The first element is operating with a growth mindset and building the infrastructure to support it, asking what the team needs and how to remove its barriers the same way one would address consumer truths when building a brand program.
The second is attracting strong talent and partners who are focused on growing together, in an environment where people feel empowered and heard and creativity can thrive. The third is obsession with the consumer, including internal systems that build a deeper understanding of people faster than anyone else. Her summary line is that if you do not open your mind to different perspectives you never learn, and learning equals growth.
She describes the marketing role as super-connector: the gateway to the consumer, connecting multiple disciplines inside the organization so they can see the future and understand who the products are for. Her team partners with sales, supply, logistics, legal and corporate affairs.
The program was piloted for two years in the US business before going global, and she reports significantly increased employee engagement and collaboration across disciplines that had not happened before.
How a company became creative
Patricio’s account of leadership and failure is direct. He says he has failed many times, that the most important role of a leader is to inspire, and that part of that inspiration has to be about reducing shame and fear.
The worked example is a country team pursuing a path he thought was wrong. He did not tell them to stop. He told them to go for it and to keep talking, expecting either that they would come round or that they would change his mind. His conclusion is that you kill creativity by saying no, and that his standing line is go ahead, change my mind.
The systemic version came out of a week-long meeting with marketing leaders and agencies, held to work out why the company had famous brands and poor creative work. Four causes were identified: leaders who did not like creativity, safe agencies, processes that were killing creativity, and no reward for being creative.
The remedies followed each cause: promote or hire different leaders, change agencies, change processes, and build a reward program for creative work. He notes that five years before the company was not in the Cannes rankings at all, and by the time of the conversation it was the third most creative company in the world.
His wider argument is that efficiency and creativity are not alternatives. He wants creativity brought to every area of the company except accounting, safety and quality, and rejects the idea that companies must be either efficient or creative. What he wants to build is a company strong on both sides of the brain.
Behavior, data and the growth role
Harris notes that much of the consumer behavior change being observed had already been building for years. People were socializing in smaller, more intimate gatherings, with deeper conversation, and were hesitant to return to large parties and clubs. In China a phenomenon called e-clubbing emerged, and the live-streaming idea was scaled across markets after a Brazilian brand’s streamed event drew enormous attention.
On digital transformation, Harris argues digital moved the company closer to consumers and speeds up learning, citing a US consumer panel of around 6,000 people tapped daily. Her formulation of what makes it work is marrying the data-driven approach with empathy.
Patricio also explains why innovation launches were paused: stores were dealing with huge complexity, with fewer people working and volumes up sharply, so they wanted fewer stock keeping units rather than new launches. He is careful that this is not a judgment about innovation, and says his real concern is that research teams were developing products from their kitchens rather than labs.
On the chief growth officer question, his position is that the role is the evolutionary result of the CMO. Growth has to be led by the chief executive, but with a right-hand person who has a marketing background, and separating marketing from strategy weakens marketing inside the company.
Scope and limitations
This is a conversation recorded in May 2020, in the early months of the pandemic. The claims about consumer behavior and about company performance are the speakers’ own accounts rather than measured findings.
Source
This page summarises Frank van den Driest in Conversation with Miguel Patricio and Jodi Harris, by Frank van den Driest, Miguel Patricio, Jodi Harris, May 8, 2020.