· 6 min read · Features

Heinz meanz business, says HRD Anne Sewell


Have you heard of LOL? I don’t mean today’s text talk for ‘laugh out loud’. Nor the ‘lots of love’ that ended every smitten Seventies girl’s letter to her sweetheart and recently made famous by ex-News International chief Rebekah Brooks and prime minister David Cameron in the Leveson inquiry.

No, I mean the soft drink LOL, available in apple and raspberry (Razz Bri), apple and orange (O Ranj) and apple and blackcurrant (B Current). No? Well, how about Chipotle & Garlic Hot Sauce? Or frozen Big Ready Meals?

Haven't heard of any of these? Well, you certainly will have heard of the company behind these brands, for it is one of the most trusted names in food: Heinz.

It's also one of the most recognised food brands in the world, a point not lost on America's top investor and 'Sage of Omaha' Warren Buffett, who last month tabled a $28 billion (£18 billion) bid with Brazilian billionaire Jorge Paulo Lemann to take the company private in what would be the fourth- largest food and beverage acquisition of all time.

Announcing the deal with Buffett's Berkshire Hathaway and Lemann's 3G Capital, Heinz chairman, president and CEO William R Johnson said: "As a private enterprise, Heinz will have an opportunity to drive further growth and advance our commitment to providing consumers across the globe with great tasting, nutritious and wholesome product."

Buffett, chairman and CEO of Berkshire Hathaway, noted Heinz's strong, sustainable growth potential, based on a combination of high quality standards, continuous innovation, excellent management and great tasting products. "Their global success is a testament to the power of investing behind strong brand equities and the strength of their management team and processes," he said.

Alex Behring, managing partner at 3G Capital, added: "We have great respect for the Heinz brands and the strong business that management and its employees operate around the world."

There's no doubt the iconic Heinz brand evokes nostalgia in every generation. Who can forget Beanz Meanz Heinz? The UK accounts for some 80% of Heinz baked bean sales globally. But relying on nostalgia and a strong image is not enough in today's tough retail market, as HMV for one can testify.

For this reason Heinz needs to stay innovative and agile, a point picked up by Buffett and explaining the past year's move into soft drinks, hot sauces and ready meals. The company has launched more than 200 products across its brands in the past 12 months. LOL soft drink is the first launch out of a dedicated hub that was established 18 months ago in the UK & Ireland business, focused on innovation in fast-growing categories - in this case, 'yoof' drinks. Called Explore, the hub looks further out than the other product development teams.

But it has not always been like this. Despite the continued delivery of profits, growth at Heinz UK & Ireland has been flat, prompting a plan concentrating on growth over the past six years. And while the UK business has caused concern, the company cannot afford to marginalise it. For the UK business is strategically important to the $10.7 billion US food giant; its performance helps fuel investment in those emerging markets. It's an investment that has contributed to those markets delivering 13.2% organic sales growth and representing 23% of total company sales in the group's second quarter results to 28 October 2012.

So achieving sustainable growth in the UK business is vital. And underpinning such plans at Heinz has been a cultural transformation based on high performance and game-changing leadership.

Enter UK & Ireland HR director Anne Sewell (pictured), who took up those reins last July from being head of HR Heinz UK & Ireland Commercial. "HR has been instrumental in getting the business back to growth," states Sewell, who sits on the UK & Ireland board and global HR board and who reports to Matt Hill, president of Heinz UK & Ireland, and Steve Clark, chief people officer of HJ Heinz Company.

"Previously this was a turnaround story," says Sewell. "Now we have year-on-year growth fuelled by core categories and innovation. It's now all about ensuring this is sustainable in the future."

The turnaround story began with a need to shift values and focus employees' understanding of what great performance looked like. Sewell explains: "Historically we had a strong culture based around a sense that we had best-in-industry people and passion for the brand. But we had an internally focused mindset and we rewarded for effort rather than results.

"We needed to be clear what great performance was and assess against it. We needed to ensure people understood the contribution they made personally to business strategy and to see the link between business growth and personal growth. And we needed to make results central to our values. If we were going to win against the competition we had to increase our agility and pace. The ability to look outside and adapt quickly was central to the turnaround."

The result was a strategy focused on a culture that rewarded for performance. "Reward for performance is based on both business performance and personal performance," explains Sewell. "So you can significantly impact the bonus and pay you have. The principle is that the financial pool is set, but the proportion someone gets is differentiated according to what is delivered."

It's also been important to create a 'winning' mindset, says Sewell, restoring a belief that Heinz can win and can be a high performing organisation."When we began, aspects of this were real for us but some elements were inspirational. Now I believe this winning mindset is authentic to where we are as a business," says Sewell.

It has taken four years to embed this cultural change but, once achieved, Sewell turned her attention to the second HR building block in the strategy: game-changing leadership. Only great leadership could ensure growth was sustainable, she believed, so, in what she calls the "biggest learning and development investment in recent years", the company put its 1,000 managers (out of 2,500 employees) through a leadership programme.

"Historically it was all about being a line manager. Now, if you are in a management position you are a leader in our eyes. Leaders lead; it's not just a focus on functional expertise.

"There is an emphasis on self-development and continuous improvement," she adds. "Leaders should constantly reassess where they spend their time and make choices as to what's important and what to say 'yes' to. If each leader were able to make one small behavioural change, the collective impact on the business would be significant."

The programme has been delivered on three levels - company, functional and personal - through a combination of big events, coaching, learning bites and e-learning. It centres on the four 'intelligences' of leadership: IQ, EQ (emotional intelligence), SQ (spiritual, ie purpose) and PQ (physical).

"We focus absolutely on success: having an end in mind and defining what success looks like, being clear on what the purpose is and why and how to go about it, as well as financial success," says Sewell.

Among the biggest wins has been the EQ area. "We want a one-team mindset. In the leadership space there is time to act, time to talk and time to think. While we did have good team building within functions, we are now building collaboration across functions.

"And one of our organisational strengths is we don't have a leadership type. We have a common language and are comfortable with people being authentic - it's about being yourself with skill. Diversity in leadership is important, it's part of our DNA."

The impact of the leadership programme is being felt throughout the business. Sewell tracked leadership capability between October 2010 and May 2012, across all five modules and all 1,000 leaders. For example, the score for the statement 'I am clear about the leadership example I want to set in the business' rose from 83% positive to 97% positive, while 'I feel energised about leadership in my life and work' jumped to 94% positive. More importantly, leaders said they feel actively supported by their line manager in their leadership journey, with this score leaping 35 percentage points to 96%.

The effectiveness of the programme has also been tracked through an employee survey, with positive increases in areas such as senior management interest in wellbeing, time to think and plan for both the short and long term, and opportunities to use coaching skills.

The emphasis has now turned to building specific capabilities that will enable the business strategy to be delivered over the next three years. This includes shifting performance up a gear in key teams (such as the board, category teams or supply chain teams) as well functional capability. There is also a plan to develop the performance management experience so that it feels culturally consistent and in tune with the employer brand.

As Heinz itself says, it is always cooking up something new - be it in product or packaging development, or people development. But while it has come a long way since Henry J Heinz founded it in 1869, his principles still underpin the business. One of his mottos guides its purchasing practices today: "Deal with the seller so justly that he will want to sell to you again". Heinz also hated waste of any kind. Leading by example, he inspired his employees to avoid the slightest waste of material, time or opportunity. And he always tried to practise his mother's rule: to place yourself in another person's shoes.

In fact, shoes have an important place in the Heinz history. While riding a train in New York City in 1896, Henry J Heinz saw a sign advertising 21 styles of shoes, which inspired him. His firm was manufacturing more than 60 products by then, but he hit on 57 as a lucky number and began using the slogan '57 Varieties' in all Heinz advertising. Today the company has multiplied to more than 5,700 products around the globe, but it still uses the magic number of '57' - something to smile about, if not quite LOL.