As a 34-year veteran of the fast moving consumer goods (FMCG) industry, Pradeep Pant, president and CEO of Kraft Foods Asia Pacific, can say quite convincingly that he knows the key to successful leadership.
The magic lies in a winning mindset: a trait that can make all the difference between the making a profits or suffering losses under trying business conditions. Pant, who spoke at a recent Wee Kim Wee Centre seminar at SMU, said that it was this winning mindset that helped turnaround Kraft's Asia Pacific business.
Kraft made the news recently when it launched a US$19.5 billion takeover of Cadbury PLC, the British candy maker famous for its iconic purple-wrapped chocolates. This was barely three years after the US$7 billion acquisition of Group Danone's global packaged baked-goods business. Clearly, Kraft is not a humble company merely selling cheese. Rather, it is one of the largest food manufacturers around.
On Feb 16th, the company reported that operating profit for the three months ended Dec 2009 nearly quadrupled to US$1.3 billion, on the back of a 3.2% increase in revenue to US$11 billion in the same period.
Today, Kraft's products can be found on the shelves of supermarkets and grocery shops in 160 countries. In its stable, a line up of 11 billion-dollar brands like Nabisco, Oreo, Jacobs, Maxwell House, and of course, Kraft and Cadbury, as well as dozens other in the hundred million brands category.
Naturally, within such a sprawling business organisation, it would be impossible for every cylinder to be firing at the same speed all the time. The Asia Pacific division, for one, saw operating losses between 2001 and 2007. Under Pant, however, operating profits have been growing at double digit rates since 2008 - despite the recent economic downturn.
From a regional business unit with relatively sluggish top line growth, Kraft Foods Asia Pacific has since taken the mantle of the company's growth engine. Today, Kraft Foods Asia Pacific boasts 6,450 employees across 15 markets, 21 manufacturing plants in eight countries around the region, and eight research and development centres.
Pant, who took on the job in January 2008, said what drove the turnaround were: a clear strategic focus where they can win, consumer insights-based innovation, powerful integrated marketing initiative, aggressive in-market execution, and heavy investment in people.
But all these would not have worked without the willingness to get into the mindsets, we will be leaders and we will win.
Eyes on the prize
To win, it is necessary to focus. In many organisations, the focus is on the core business. Focus means knowing what you want. But it is useless to know what you want if you cannot articulate it, for you will not be able to formulate a robust plan and steer your team or organisation towards your vision.
Focus also means concentrating on one task at a time. Gillette, where Pant worked his way up over 20 years to become President for Asia Pacific, is one good example. When the operations underperformed in 1999, the company came up with a recovery plan. While many other companies might have rushed to plug in the gaps and holes, Gillette stayed the course, tackling the issues one by one. This approach became the foundation of the organisation's successful turnaround.
In a highly competitive marketplace, companies may feel compelled to being 'everything to every customer', and 'doing everything everywhere', Pant said. But to do well, it is better to stick to a clear strategic focus. He suggests that organisations ask themselves two questions: What do I want? and What do I not want?
Mastery begins with self
In order to win, certain attitudes have to be adopted. For example, to master the business environment, one must first be the master of him, Pant said. Start by being self-aware. Ask yourself: Who am I? What are my values? What are my weaknesses and how do I fix them?
The art of self-control is important as well. If you can't control your weaknesses, you can't control other things, Pant noted. Old ingrained habits will require time to break, so try instilling discipline in small doses, he advised. For example, if you want to start a morning exercise regimen, start by waking up on time everyday for the first week, before easing into the exercise. The trick to lasting changes, he said, is to do it in small steps.
Mastery over oneself also means being genuine and real. Many people often put on a front to impress others. However, the real self will show gradually. So, be yourself and let people see you genuinely for who you are. Nobody, including me, can act well enough to fool people all the time, he added.
Pant, whose turf includes a diverse mix of markets with different characteristics and cultural nuances, encourages adaptability - so as to draw ideas and thoughts from different cultures. This, in turn, helps him to run the multinational corporation better.
Another route to winning, for Pant, is to think of opportunities in times of adversity. Citing the two Chinese characters that make up the word 'crisis', or wei ji (??), he noted that 'wei' (?) represents danger, whilst 'ji' (?) stands for opportunity. So these are two ways to look at a crisis.
During the global economic downturn last year, as most other companies cut back on spending and shelved expansion plans, Kraft Asia Pacific went the other way. It maintained its prices, its product quality and marketing spend. They saw results within a short three-month period.
Next, leaders need to realise that a winning mindset will do no good if there is no one to put the ideas into actual use. Unlike fixed assets, human assets need not be depreciated, he said. In fact, if there is an asset that appreciates all the time, it is people.
Pant's advice for any company is to help every staff maximise his or her potential, and make winners out of every one of them. At Kraft, it is the strong belief in people - the aggressive investment in people through development and training - that has played a key role in turning it around, he added.
Innovation and risk-taking
Winners never achieve success by staying put within their self-imposed boundaries. They need to be innovative; they need to take some risks.
Innovation and risk-taking starts with listening to the customers' needs, said Pant. An example is Tang, a cold drink, which is positioned and consumed as a hot drink in China. Oreo, one of the company's best-selling cookie brand, was not well received in China until the less-sweet version was launched. With this version, Oreo became the number one cookie in China. In contrast, Oreo sold in Indonesia, is sweeter. Ultimately, consumers are the bedrock of understanding the product, he said.
With insights from customers or targeted audiences, Pant suggests delivering solutions in ways that are unique and exciting. He gave an example of how Kraft Foods Asia Pacific encouraged its sales teams to meet their targets by offering a prize - a gold chain - not to them, but to their wives or mothers. At other times, the salesperson that achieves the target will receive a silver medal. The trick is to find out what makes people tick.
If you do well, celebrate. Reward yourself with a small celebration for small achievements, and a big celebration for big achievements, said Pant. But more importantly, strike a happy balance between contributing, learning and having fun at work. After all, we spend the longest part of our waking life at work.
So what is your idea of fun? an audience member asked.
Beating competition in the marketplace and seeing people grow, he replied.