Alignment and ability to make people work in one team are the strongest competences of Stefan De Loecker, CEO of Nestle in Russia and CIS.
1. What is your strongest leadership trait?
My strongest competence fits with this company, and it's the ability of making people work in a team. It's very important for our company because we're a company of consumer goods, we're close to people and we're obviously a mass company. I think the fact which had driven me to work for this company was is that Russia is a country where we're 12 thousand people in a company and to be successful in this country you need to bring everything together in the optimal circumstances at the optimal quality to the end consumer. And it requires the capability to have people working together, to align, to motivate, to inspire and to lead. Why I'm successful in this company is because I do not believe in a model where a leader knows everything and then it goes top-down and people just execute, because I don't believe it's the way we can work. To make people work, to align over the processes and to motivate within one common goal to serve the consumer in the country where we operate is the strongest leadership trait I have.
2. How do you find your way of management?
Nothing is black and white. If a person comes from a small country where everybody knows everybody and it's very easy to communicate with people compared with the country like Russia due to the dimensions, you have to adapt to the leadership style anyhow. It's clear that the clarity of communication and the clarity of where we want to go is much more important in a bigger country than in a smaller one. Also it has to do with the business model of the business you're in. If I take my personal situation I don't think I'm a specialist in anything. And I know that all these 12 thousand people in the company here much more competent than me, and it's very dangerous in this company to listen to only one person and to follow only one direction. I'm humble enough to recognize that there might be other businesses. I think in many situations considering that our world has become so complex and it need to maneuver and I would be very surprised if there was a person who knew everything. As a consequence, and I think it's the difference with the assessment center. Success in business is not success of tomorrow, and it's very clear that if you give me a task that I have to do by tomorrow, there's no time to start the process of finding, consulting, aligning. Then you really have to do it top-down.
3. How do you measure the success of the company?
Obviously, our kind of business is not only success tomorrow, the day after, next month, next year; it's the success for the next hundreds of years. This company is 140 years old, and we always think about how can we best perform and how do I get the best performance. And that means that you will have to pass on the competencies to other people because there will be other generations after me. So doing everything top-down cannot work in the multinational company like Nestle, because there will be a problem with delivery. Very often in many organizations you can see that if one person knows everything, very inspiring and has great vision, then the difficulties always come in a long run because sooner or later people will be replaced, and I think that we have a huge history of how to pass the competences. I think that the vision of Nestle is to be close to the local consumer. The fact the we need expatriates and we use expatriates we assume as a temporary issue, otherwise we will have the company which is by definition run by foreigners. The vision is that in the long run the company will be run by local people, and we have to pass on the competencies, processes, etc. In the assessment center you have to take into consideration the long-term prospective, the long-term performance and how you deliver it in the best way. And I do believe that the best way is to work in a team in order that you have the competencies within the company that can continue the success.
4. What is alignment for you?
Alignment is the fact that you're focused on your final result, and if you look at the final result of this company it's to delight consumers, so we're here to work with our customers, with our retailers to finally delight the Russian consumer. And that is the ultimate goal of everything that we do. And a point of alignment is how you do it, and usually it's not a sum of individuals who each individually reaches each individual target. One of the ways to delight the consumer is to bring the products at the lowest possible price, but if I look at all price components, my technical manager will come at a certain moment and say that he has the lowest production price for this product and for that I need to produce it in the East of Russia. Then my logistical director comes to me and says that it's a great idea but the lowest transport price is from Moscow because the most of the consumers are in Moscow. Both of them come with the solution that individually get the optimal, but everybody understands that production of something in the East and transporting it to Moscow doesn't work up, so at the end of the day you will have to make a solution that is optimal not only individually but as a solution that will ends up as a lowest delivered price for the consumer. And that is the need for the technical and logistical manager to sit together and work out the solution that will be the optimal for the production and transport cost. And that is just one example.
5. What is the second thing in being aligned?
We have come from the past where each individual wants to know if he has achieved a certain result. And we all know from the human being that you have to identify the result and you must give a precise target to the individual in order he delivers that. So you have to think about how will you give objectives to people so that they reach the optimal goal in their heads even if it means to be not optimal for them. It's not easy because every individual wants to achieve his targets and these targets might be very difficult. So you have to go into a process. This process is the easiest example because you can calculate, but it's much more difficult when you're talking about satisfying a consumer, how the sales is operated and how's the packaging looks like. The alignment is how do you get the best ultimate result breaking it down to the individual parts. It's a huge effort because it's the thinking - about how do I contribute as an individual to this ultimate goal, and I think all of the issues are very much at the beginning of that exercise anyhow.
6. How do you measure the target that any person can carry?
I usually ask my people to come up with their own targets and I make them think what force them to play the ultimate goal in this company, that forces them to speak to their colleagues because you cannot come up with your targets if someone else's target is in the conflict with it, and I force them to quantify it because the quantification is the best one. That is an exercise that takes some time but people will come up with the target that is aligned. The other part is that in the company to have flexibility as well, because it's also human when you say now that you want a person to reach this target and you see by April that under some circumstances that the person cannot fulfill it. The year 2009 was a difficult year in that case, it was quite a gap between the targets of September 2008 and 2009. And at a certain moment it was a human effects that you see by April that you will never reach your regional target. And as a manager you can do two things: to say that the target is neither negotiable and the people must reach it. But the human behavior is such a thing that the person thinks that is he's not able to reach it anyhow, why should he try to do it.
7. What do you do if the person cannot fulfill it?
On the other side you can review and adapt to where we want to go, and we have an institutionalized system of adaptation where we adapt to the reality without losing the ambition, and obviously there are a number of KPI to measure that. Adaptation can mean the reverse as well because the reality shows that we can do it a lot better. What can you do now when you see when a target that should be reached in September is reached in April. People thought it was an easy life when before people reached their targets in time. The comepetition of today means taking an advantage of the four months that are left to do more than the normal performance. So we try to adapt that so that people keep motivated and ambitious while respecting the reality and the circumstances. Bit it remains one of the most difficult issues by defining targets you give the messages to the company that is a more human reaction that just setting targets.
8. Could you give any concrete example?
For example one of the companies which I took over within the Nestle Group which was an acquisition, used to be organized by the department as a profit center, so basically within the whole organization there were different companies - but everybody was very individualized and they did that for the last 70 years. It was very hard to come to someone and say that he was a service provider, we're not in the business of transportation, and we're not in the business of warehouses - we were in the business of bringing products to customers. It was a major overhall not only in the way people work but also in the mindset because people were educated for many years of working in the way they were doing it and people were good at their individual part but they had no idea of what did the other people. Even the people at the highest top level had never contacted with each other, people in logistics didn't know who the sales people were, they didn't know who HR were. So we had to redefine the values of people working together. I believe in a team and I think the team in our case performs best, for me the point of building a team is not because it's nice to work together, it's because it's the best performance.
9. What was the most difficult thing?
One of the things to do this is to put the responsibilities within the people, I don't think it works when you do it top-down when you put all these seventy people in the room and tell them that from the next day they will be different. The key issue here is to make it work in such a way and provoke the reaction of thinking of the people themselves, putting them in front of what we want to achieve if the way we work is the best way. The best way to change is when people convince in that themselves. That's why I didn't want to change everything overnight because the system didn't exist at that time and if people are not convinced they wouldn't work. They had to see themselves that the old style would not work - and then change goes very quickly because the best way of convincing the person is making him talk to the one that was convinced before. We basically changed the company in a six months' time to the team approach with the fantastic results. It's easier if people immediately see the effect of that but as well it means that people are joining the new success, because the optimization man can have worse results than before if they feel part of the ultimate success.
10. It's very difficult to make people change if thing are going well anyway.
If things go wrong people are tempted to change anyhow, but if you are successful and you motivate to change, so it's a very hard thing to do. And usually it has to do with looking into the future because if we have our opinion and vision for the future other people may have another opinion to that and you'll have more discussion. Also as a leader of team you should convince in some cases or you'll see the team where some people will be convinced and agree with the change. And you'll see two types of people: some of them will say that they would do but they wouldn't do because they're not convinced and the other would say that they wouldn't do it because it's wrong. And here it comes a point when you ought to be clear: you're either with us or not with us. Even in the difficult situations I had an experience when you will say even to top people within the company that now the time of discussion is over. And if they don't join, you will do it without them. It's an important issue to put a team at No 1 and not compromise based on what one individual might look into.
