As you enter the Kellogg's head office in Manchester you half expect the life-size Tony the Tiger model that hangs out in a large tree in the atrium with Snap Crackle & Pop and Coco the monkey to greet you with a "They're Gr-r-reat". For the plethora of best-workplace-type awards that blanket the reception area serve as proof that working at the cereal giant does indeed give you that 'special feeling', to paraphrase the company's employee brand.
But just in case you fail to notice these, the walls around the entrance to the four-storey glass building are covered with words that sum up the Kellogg's culture; words like committed flexible people, developing talent, wellness and trust. In fact, Kellogg's values are everywhere and it is clear that the 600 people working at the Talbot Road head office have great pride in the company's heritage.
Trying to get a deeper understanding of this culture is UK commercial business HR director Jacqueline (or Jacq, as she likes to be called) Lunardi. A relative newcomer to the business, with a mere three years under her belt, Lunardi heads up HR for the largest part of Kellogg's UK, sales and marketing, as well as finance and distribution, and sits on the UK board.
With Kellogg's one of the most influential brands in the world (Tony the Tiger is one of the top 10 brand icons of all time, according to Advertising Age) with a strong identity based on a single product category - cereals - it is surprising that there is the need to do any work on culture. After all, the Kellogg's story is famous, starting in the 1870s when brothers Will Keith (WK) and Dr John Harvey Kellogg founded Battle Creek Sanatorium in Michigan, USA, with the belief that you are what you eat. Seeking a wholesome and tasty breakfast, Dr John developed the first corn flakes, and in 1902 his brother went into full-time cereal production. By 1909 the company was selling one million cases a year.
WK Kellogg set the culture from the beginning, realising the importance of advertising, campaigning for continual improvement and innovation and creating the idea of consistency and quality control. He printed healthy-eating advice on packs and spread the word about good diet to consumers and schools. He also talked about investing his money in people.
Kellogg's now has sales of nearly $13 billion, produces more than 40 cereals with plants in 19 countries, sells in more than 180 countries and employs 32,000 people globally. In the UK, the Manchester factory where Corn Flakes are made was built in 1938, employs 1,000 people and is one of the world's largest cereal manufacturing plants, with 67 million packs of Corn Flakes coming off its conveyor belts each year.
But despite the size and global nature of the business, Kellogg's has kept to its founding principles and retains a family feel. So why do more work on culture? "It depends on the importance you place on defining and understanding your culture," Lunardi says. "Sometimes businesses don't spend enough time on it and take it for granted."
It would be easy for Kellogg's to take its culture for granted. Many employees stick with the company for years. A global survey every two years shows staff believe in the brands and company values. They also appreciate a benefits package that ranges from a share incentive plan and pension to CornFlex - the company's flexible benefits scheme - and the much-loved summer hours initiative, whereby staff can leave at 12pm on a Friday between May to September provided they have worked 36.66 hours that week and dependent on business needs.
But Lunardi believes the cereal giant needs to put more emphasis on culture when recruiting. She is talking with external suppliers to try to quantify the cultural aspect in order to develop an online tool to assess it in the recruitment process. "Yes, the knowledge skills and behaviour required for a role is vital," she says, "but we have realised that how people feel about Kellogg's is really important to our success. It is difficult to explain this and measure it in the recruitment process."
Alignment with the culture is all the more important given the highly competitive market in which Kellogg's operates. With the UK multiple supermarkets accounting for nearly 75% of all food spend, balancing the needs of the business with the relationship with these all-powerful retail distributors is tricky. "If people like the culture they stay and we can develop talent from within. This is important to our major customers," explains Lunardi. "You may be the best negotiator in the world, but if you don't live our values it won't work. When we talk to multiples we need a negotiator who can go in, hold their own and stand by and work with them. But our people have got to have integrity and honesty."
The cereal category is a hard-fought one. During the past year supermarkets have invested heavily in their own-label cereal and in a recession consumers are more likely to be price-sensitive, turning to the cheaper variants. Kellogg's has sought to combat this with major investment in advertising and a focus on the Kellogg's heritage with a PR campaign around plans to laser the WK Kellogg signature directly on to the cornflakes themselves, mirroring his earlier signature on the cereal packs. All this has paid off, with Kellogg's outperforming the branded cereals market in 2008 with a 7% value rise and 2% volume rise, according to IRI (week ending 29 December 2008). The company accounted for 10 of the 15 best-selling cereal products (IRI, w/e 9 August 2009).
Lunardi says a culture of innovation has helped the company achieve consistent growth over the past three years. "We generally always have some innovation and do a lot of work on sustainability from a packaging perspective," she says. Indeed, as we talk, Kellogg's marketers are in Chicago looking at the next couple of years and Lunardi is excited about developments, though will only say "watch this space over the next 12-18 months".
However, constant growth puts one in danger of complacency and Lunardi has the unenviable task of driving leadership development through a top team that believes it is doing things right. Starting with the top 120 across Europe and developing specific skills both from a functional and country perspective, the programme has been live within the UK business in the past 14 months; it involves one-to-one sessions with coaches from the England cricket and Olympic swimming teams.
"At the beginning people weren't sure. We had to use sporting analogies, saying when sportspeople win one gold medal they don't say they have done it once so can do it again - they have to work at it," says Lunardi.
"We have had three years of growth so there was no burning platform. But it is about where we are taking the business and what we want to leave behind. We want to be active and stay ahead of the game."
Being ahead of the game means a year of major change ahead for the business, which is leveraging its global scale. A European VP for marketing has just been recruited and the company is hiring a European VP of sales.
Lunardi will be helping to drive a new HR model as well as leading work on structural flexibility.
"There is no longer one structure that works for the next few years, it is now redefined every year or even six months. HR needs to be leading in this but we also have our own change project," Lunardi says.
Phase one of this is about to start in Europe following the launch of Programme Go in the US in October last year. This includes the implementation of SAP to help deliver manager and employee self-service, more efficient centres of expertise, shared service centres and what Lunardi calls a "true" business partner model.
The UK HR team already has business partners who look after sales, finance and marketing. But it is now examining what business partnering really means for its business and how to upskill the HR team in advance of the change. "With the fast nature of change in the business we need HR to support these changes, whereas at the moment we still seem to be dragged in a lot to the day-to-day reactive stuff," she explains.
"It is more complex for Europe than in the US because of the different languages, legislation etc. We are looking at the global processes, what they mean for us and how we can make it work. For example, where could we have a shared service centre? It is a huge project and it is a big piece of work just to plan it."
Lunardi says the strategy is about making HR the most efficient it can be, although she stresses there are no planned HR redundancies as a result. If all goes to plan the new model will be in place towards the end of the year.
Change is not something she is scared of, however, having worked for some of the biggest, fastest-moving businesses in the country. From drinks firm Bass to Philip Green's fashion empire, Arcadia, and then Coca-Cola, her roles have been varied. "I spent my last days in Arcadia at the London summer catwalk shows. The following Monday I was with an all-male team at Coca-Cola looking in a double-door drinks cooler. I have to confess I did think, um, I have gone from nice dresses to staring inside a double-door cooler - have I done the right thing?"
At least this time Lunardi is in the right place to deal with the stress of change: after all, we all function better at work after a nutritious breakfast.
1995: Personnel and training officer, Bass
1999: Regional personnel manager, Arcadia Group
2000: Joined Coca-Cola Enterprises as regional HR manager, North East and Yorkshire; moved in 2003 to become HR business process manager, (Atlanta, US); took up role as controller resourcing and planning in 2004
2007: Joined Kellogg's as HR manager; promoted to HR director in July
