Inside the chocolate factory at Mondelez
From the hostile takeover of Cadbury to a global rebrand, the past year has been a challenging time for to Mondelez International, the snack food company. But Diane Tomlinson says the difficult period has only reinforced the need to focus on people, with impressive results
Cadbury House in Uxbridge, UK & Ireland HQ of snack foods firm Mondelez International, may not feature molten rivers of chocolate or orange Oompa Loompas, but it is as magical as Willy Wonka’s factory in its own way.
This is the place that Mondelez chairman and CEO Irene Rosenfeld calls a “$36 billion start-up”. It’s where investment in R&D has grown by a dramatic £17 million in the ?past couple of years, and an office where, ?according to UK & Ireland president Mauri?zio Brusadelli, the only two things that matter are brands and people.
At Cadbury House, the HR function sits firmly front and centre of the business, says ?Mondelez HR director for the UK & Ireland Diane Tomlinson. “I don’t feel there’s much I don’t know about,” she adds.
Tomlinson has been part of the business since 1990, working her way up from graduate recruitment manager at the now-defunct subsidiary Cadbury Schweppes to leading talent and organisational effectiveness for the EMEA region by 2007.
Then, in 2010, American food giant Kraft launched a hostile $19 billion takeover bid for Cadbury. As Cadbury is such a revered brand in the UK, the transaction was front-page news for months, and not all of it positive. Tomlinson was given the unenviable task of leading the people integration process of an unpopular takeover.
“It was challenging,” she recalls. “It’s not an experience you have every day. But the thing that gets you through any acquisition and integration is the same thing you should be doing every day to keep the business and the people happy – look after your people. You continue to invest in and take care of them. It just had a slightly different spin on it.”
Despite the initial negative reaction to the takeover, three years on the acquisition has left a sweeter taste in the mouth than many anticipated. Jobs were inevitably lost, but Kraft also invested millions in manufacturing and R&D in the UK, bringing innovation to the fore. The company’s centre of excellence for chocolate in Bournville, West Midlands, began producing iconic American products such as Oreo cookies for the first time.
“We’ve decided they taste better being made in Sheffield,” Tomlinson jokes. “It’s nice when you eat something and think ‘we ?did that.’”
During the acquisition, Tomlinson says the company hired about 900 people and lost 800. Offices were also closed.
“We are now in fewer locations, so there is more of a community feel and it’s more efficient and effective,” she explains. “With the [£17 million] R&D investment we hired 100 new people for our centre in Bournville, and we invested in our sales force. By bringing two businesses together, there are inevitably some synergies you need to realise, but we also had a growth story sitting right alongside.”
HR in M&A
HR directors are often not involved in M&A deals until it is too late, but Tomlinson insists HR involvement is “absolutely critical”.
“They couldn’t have delivered the acquisition without us,” she says. “We were involved from the start. In meetings with the leadership team, people took up much more time than systems. HR is the thing that got us through. With all the press coverage, it was a difficult acquisition. And all the effort we put in on people paid off.”
Tomlinson adds that the investment and time spent on people have left the company ?in prime position.
“Everything we did in acquisition created a great foundation from which to accelerate into our new business,” she says.
People development initiatives that began during acquisition have kept growing since, such as a campus programme where 400 staff from all over Europe are brought together for a week of training and to be “spoiled”.
“Whatever situation you’re in, you’ve got ?to take care of your people, and you’ve got to keep growing them,” Tomlinson says. “That’s what keeps your business moving forward and makes it sustainable.”
The leadership team also takes part in four ‘people days’ a year, where “we talk about people for a whole day; we’d never talk about finance for a whole day.”
Internal communication is also critical to the success of the business. “(It’s important to) be open and clear about what’s going to happen and when,” Tomlinson says. ?“We always had strong foundations of internal communications, but you ramp them up during integration. You don’t want the rumour mill to start, so you get more regular and focused about what you are saying.” Today, that includes quarterly business briefings for everyone and regular ‘town halls’ with the CEO.
From Kraft to Mondelez
Mondelez International was established last year, when Kraft decided to split its business into two. Kraft Foods remains a North American grocery manufacturer, while Mondelez covers global snacking brands. The name is the result of an employee competition, a hybrid of ‘monde’, which is French for ‘world’, and ‘delez’, an alternative form of delicious.
According to Tomlinson, the changes couldn’t have come at a better time. “It means we can leave both Kraft and Cadbury behind,” she says. “And we’re excited by the name, once we got over how to pronounce it (Mon-del-eez is the correct answer). It’s being framed as the world’s biggest start-up. You don’t get the opportunity to redefine yourself very often as a business.”
And with that, Tomlinson produces a bag of goodies (although, of course, HR magazine was in no way swayed ?by their influence).
“Our business is about creating great brands, exciting the market in a new way and in as many places as possible,” she says. “It’s about the creative opportunity, for us to create a product in the UK but for it to go out into the world of Mondelez. The challenge is then fulfilling that promise. People get really excited but you have to help them release their energy in the right way.”
Seeking the right skills
With the company’s strong focus on R&D, one challenge is finding staff with the necessary skills to create impressive new products. “Research, development and quality (RDQ) has grown from acquisition, but it’s where we find it a real challenge to get talent because we are exhausting the supply,” Tomlinson says.
To overcome this, Mondelez runs industrial placement and apprentice programmes, and through the Food and Drink Federation is developing a food engineering degree, partnering with competitors such as Nestlé. “It’s all about trying to get people at the grassroots, attracting them from the very beginning, and not just those into engineering but into engineering for food,” Tomlinson says. “We are competing with the oil and space industries, any innovative industry where engineers might like to go.”
One thing that is sure to help attract more ambitious talent is the increasingly international nature of the business, something Tomlinson is harnessing through a ‘Globe Trotters’ programme, which helps young talent move abroad. “One of the nice things about the acquisition is that the business has become much more European,” she says. “For anyone who wants to be the next Irene Rosenfeld, being international is a prerequisite. But as we have a lot of cross-functional opportunities, you can also grow here. You don’t have to pack your bags.”
As the business develops further, it’s only fitting the HR department does too. Tomlinson’s current goal is to turn her function into one that is “insight-led”.
“It’s about HR being able to spot the growth opportunity coming down the track, or the thing you’re doing today that might negatively disrupt the future,” she explains.
Tomlinson gives the example of one team member recognising that although salary is the biggest spend for the company, it is not talked about very often, leading to the launch of communications initiative ‘Simply Reward’. “As a branded goods company, the standard of what we do and our communications has to go up.” she says. “It should be fun, as that’s what our products are about, and based on an insight – in that case, not getting enough ROI on pay.”
Tomlinson has asked everyone in HR, from administrators upwards, to be involved in her quest for insight. “We are looking for that ‘a-ha’ moment,” she says. “My HR co-ordinators look after about 200 people. The things they spot are quite interesting; they have wider conversations with a wider variety of people than I do. The insights you get build and connect across levels.
“We are the ones making sure people in the organisation are at their best, that they can come to work and do a great job and contribute to the organisation in a step-change way. The best HR people are connected to people with their fingers on the pulse. They know what’s going on.”
That’s certainly true of Tomlinson.