Leadership in a bottle
When a staff survey revealed some unpleasant truths about its corporate culture, Coca-Cola Enterprises took radical action. Stefan Stern reports
When Mark Schortman, CEO of Coca-Cola Enterprises in the UK (CCE), looked at the results of a company-wide staff opinion survey nearly two years ago, he did not like what he saw. Bluntly, his people were telling him that they did not understand what direction the company was going in. It wasnt that business was bad. Far from it. CCE bottles and distributes the familiar fizzy brown liquid produced by its major shareholder, the Coca-Cola Company. Since CCE acquired the business from the original UK bottler, Cadbury-Schweppes, four years ago, results had been good. And if the business wasnt broken, why try to fix it?
Schortman did not give in to this tempting but dangerous thought. He understood that you cannot stand still in business.
He was not alone in seeing the need for action. He was aided by his new vice-president for HR, Simon Brocket. Brocket joined CCE in September 2001 from Procter & Gamble (P&G), where he had spent 17 years in a variety of roles, including a senior post in charge of organisational excellence. Right from the outset he had to get to grips with the data emerging from the staff survey. And Schortmans view was simple: We have to respond to this.
CCE was ready to grasp the nettles contained in the staff survey. Our people told us that there was not a lot of clarity about the leadership of the company, Brocket says. What was the added value of the executive team and directors? Who was accountable for what jobs? What do you bring to the party? In other words, staff were asking that dangerous question: Mummy, what are those men for?
It was not surprising that there was confusion in the ranks. It had been four years since CCE had acquired the Coca-Cola bottling business and, although results were good, there were still a lot of scars, according to Brocket. Teams and structures had been rearranged, managers had new roles, no job was left untouched. People looked back on simpler times and wondered what was going on.
So it was that in the summer of 2001 Schortman came to be sitting down at a CEO lunch event run by the Lane4 consultancy in the luxurious surroundings of Cliveden, the Berkshire estate once owned by the Astor family.
Austin Swain, director of Lane4, says he was struck by Schortmans openness and appetite for a radical intervention. This is a guy from the US who has done extremely well, has an apparently high-performing team around him, but who was ready to do the difficult work on change and leadership that he felt was necessary.
Work began with Lane4 in autumn 2001 after the consultancy had beaten three other tendering consultancies. Schortman knew there was a lot to do. With 5,000 staff in 23 different sites around the UK and Europe, CCE was facing a big challenge.
The first task was to speak to the eight top executives and win their support for change. Swain was impressed at how ready the senior executives were to discuss how they were going about their business. The leadership team is a very talented group of people, he says. They wouldnt have got where they are now without ability. They are very good at driving through their own agenda.
However, strong though they were as individual players, there was a certain lack of team spirit at the top. The challenge was to get them as a team to work for collective as well as individual goals, says Swain.
This leads to the first interesting point about leadership: the behaviour that may get you to the top as an individual may no longer be what is required from you as a leader on the board. And getting grown-up, senior people to accept the need for change is rarely easy.
But leadership behaviour is absolutely crucial to the health and success of an organisation. We get watched a lot more than we realise, Swain says. Are you really leading by example? And do you recognise the impact you are having? Or as Dick Brown, the former CEO of Cable & Wireless, has put it, Leaders get the behaviour they exhibit and tolerate. You change the culture of a company by changing the behaviours of its leaders.
The CCE leadership team started their development work with a standard Myers Briggs personality test to identify the varying characteristics and abilities of the team under examination. The premise is that individuals must be recognised and respected for who and what they are before a genuine team ethos can emerge. One-to-one and group discussions supported the exploratory work.
At the same time, Lane4 was keen to introduce its coaching philosophy to the company. People do have the answers you just have to ask them the right questions, notes Swain.
Given that one of the goals of the leadership development work was to empower staff and trust them to do more, coming to terms with coaching was essential. Letting go and trusting colleagues becomes possible where coaching is effective.
The senior management team had to look hard at themselves, and wrestled with the three basic elements or key words that make up leadership: vision, support and challenge.
Support is crucial because if individuals feel they are alone they will not be motivated and will be unable to achieve what you and they want. Challenge is equally important, because the workplace needs to be a stimulating environment where high performance standards are expected.
Vision is clearly also vital, because without a compelling, well-articulated narrative of where a company is heading, leaders cannot expect to win many followers. Support and challenge have to be balanced carefully by leaders as well. A high support, low challenge business will fail through underperformance, whereas a low support, high challenge business will be an awful place to work.
So what was CCEs culture like, and where will the new leadership style and culture take it? Brocket was thrown into the deep end when he joined the company in September 2001, inheriting the plans for leadership development while being very much the new boy himself.
The first thing I did was to get out to as many of the sites as I could, talk to people and get a feel for their issues, he says. But people are not always comfortable telling you what they think. What I saw was a really exciting company, with people who were very passionate about their jobs: action-focused, real street-fighters if you like, a bit of a contrast to the more intellectual approach of P&G where Id come from.
Some of the dynamics were difficult, however. People were not really set up to collaborate, they were set up to compete, so, surprise surprise, thats what they did, Brocket says. But this lack of collaboration was merely a reflection of the behaviour that staff saw in their leaders at board and senior management level. The crucial thing was to change peoples perception of what leadership does, Brocket adds. Hence the extended work, initially with the top eight, but subsequently with the next tier of leadership (22 directors), and ultimately with all 150 senior managers.
As Lane4s work with CCE continued, more managers became involved through a series of workshops. Sustainability is crucial for us, says Brocket. It is a long-term piece of work. It includes coaching, off-the-job training, measurement and validation thats really vital. Perhaps because of my P&G background I find the data immensely important.
Brocket has also been surprised by the very positive attitude of senior management to the leadership development work. They could have just said, We dont care about this, were making a lot of money and meeting our targets, but they have shown real commitment. We asked them at the outset, how committed they were to making a difference, as we had a very long way to go, and they have responded well.
So what has changed so far at CCE? The firm has had two data points measurement of employee attitudes and commitment using Hewitt Associates methodology and found a sharp increase in team attitudes, engagement and purpose. Brocket, however, is cautious.
This is a long-term piece of work that will perhaps take six more years. But in two years well know if we are really heading for world-class levels of commitment, he says. Leadership development goes to the heart of everything the company does how people behave, what their attitudes to work are. Leadership in this sense is what everyone does, not just the top executive team.
For now it is a question of getting hold of the agenda and providing a sense of the future, Brocket says. We need to take the lead on things that matter, and ask what it is we really need to lead on. We use a leadership alignment model to measure this. CCEs work on vision and values, led by the top executives, underpins this.
In the final analysis Brocket reveals the personal commitment that lies behind this major piece of work on leadership. I really think we should be aiming high. I want us to provide the best possible future for our people. Its an unfashionable word, but I really think this is all about creating a sense of fulfilment. I want people to want to come to work every day.
Brocket believes that the fact that people are changing jobs so often these days is a sign of companies failure to offer them real careers. We are definitely going to stick with our defined benefits pension plans, for example that sends a clear signal to everyone. The business case for this is clear: if you shift peoples engagement you shift the business performance. We have very challenging goals to meet, and we are going to have to do things differently to meet them.
Thats the true meaning of leadership for CCE it is at heart a moral task, providing meaning, drawing out talent. Dick Brown got it right: leaders get the behaviour they exhibit and tolerate.