Talent Management in the current climate Brewing up ... - Ashridge

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Brewing up strategy at Greencore Malt Imagine that you’re an MD who’s been asked by a new Group CEO to produce your strategy for the next four years – within about ten weeks and with reduced resources, following a major restructuring: quite a challenge! This was the situation that David Wilkes faced in January 2008. Elizabeth Braiden recounts how he rose to his challenge. David, Greencore Malt’s Managing Director, was very clear that external help was needed. In selecting a consulting partner, he was mindful that the resulting strategy should be wholly owned by the management team, so that they were in the best possible position to deliver it. In spite of his tight timescale David was determined that the consultant chosen would be a skilled catalyst, who could stretch the management team and get them to think broadly and differently. He also believed strongly that this would not be a case of “just looking at the numbers”. David decided that Ashridge Consulting offered the right blend of strategy and facilitation skills, while also sharing the values and beliefs so important to Greencore Malt, understanding their need to retain ownership, and improving their own strategic abilities as part of the process. Industry context Greencore Malt is part of the Greencore Group. It produces high quality barley malt for the brewing and distilling industries worldwide. Throughout the period 2004-2006, there had been overcapacity in the malting sector, allowing the brewers and distillers to become very powerful, and thus putting immense pressure on margins. Barley harvests were also very poor in 2006 and 2007, pushing up the price of malting barley, the business’ main raw material. 10 Greencore Malt had responded to these market conditions by concentrating on their core quality customers while closing three plants, restructuring to reduce head count, and cutting back on some export markets, particularly South America and Africa. Some of their competitors were unable to weather the difficult times and ceased trading, leading to a shortage of capacity in 2007. This, coupled with the poor harvest, enabled those that could deliver good quality malt to negotiate more favourable prices with their customers. Starting point Greencore Group has two significant divisions – convenience food and ingredients. The latter, reduced in size since Greencore’s withdrawal from the sugar business, includes malting. Greencore Malt was largely profitable, and provided a good cash flow. The appointment of a new group CEO, keen to drive the strategies of the different parts of the business, offered Greencore Malt the opportunity to demonstrate exactly what they were about, and bring forward options to further develop the business. Where is our energy? The closures and restructuring had left the organisation wary of dependence on an industry that appeared to have some degree of cyclicality, so energy was high amongst the executive team for looking beyond the malting business and exploring other possibilities. The Ashridge consultant, Dev Mookherjee, tapped into this source of energy for most of the first day, using models to explore the possibilities in both supply chain and other associated industries, while also keeping the malting business in focus. By the end of that first day they had confirmed that they knew a great deal about their own industry, and could see scope for further development in what they were already good at. David Wilkes commented that the day was “incredibly useful – we all had different views at the outset, but Dev brought us together to focus on the same thing – developing in our own industry.” The Commercial Director added: “We considered things we don’t normally think about – we are primarily focused on the day-to-day and not the big picture.” The Finance Director commented: “Dev managed to challenge us in our thinking without judging our ideas.”
Having completed just one day of work together, energy was now flowing to work on what they needed to do within their own business. Various tools were used to challenge Greencore Malt’s thinking about possibilities. Some were largely intuitive, others more analytic – scenarios and DPMs (Directional Policy Matrices) were particularly valued. The focus then moved to defining what work needed to be done before the team came together again. At this point, the directors admitted that they tend to be more internally focused than might be ideal, but were pleasantly surprised that they knew more about both their customers and their competitors than they realised. They already had knowledge they could build on. So short of time Having made a good and rapid start, the realisation of how much needed to be done in such a short time was even more apparent. At this point it was decided – reluctantly as far as David was concerned – that involving other senior managers in the strategy development process did not appear to be an option at this point. They needed to cover some of the tasks the directors would normally do, so that the directors would be freed up to complete the tasks laid out at the workshop. This was not an easy choice in an organisation employing just 200 people worldwide but was a price paid for keeping to the short time scales. In other ways, the tight deadline had some advantages. Delegating was easier because there just wasn’t a choice; urgency to complete tasks, even unexciting ones, led to work being completed for the next session with the consultant. It wasn’t all straightforward. One director expressed frustration because he never felt that he could quite do justice to the process, it was time-consuming, and there were day-today tasks he just couldn’t delegate. Pulling it all together The strategy team came together at Ashridge to pull it all together. The task seemed impossible at the outset of this session. The board had set aside just 1½ hours for the malt presentation, and that just didn’t seem enough for justice to be done to all the work accomplished. David Wilkes was clear: “We need to really engage the board, get them out of their chairs – do something different – get away from the seemingly inevitable PowerPoint.” In pursuit of this aim, it was decided to ‘tell the story’ of the work done, including what had been discounted and why, as well as what would be developed going forward. Dev proposed using posters, and while this seemed a real challenge in the time available, the idea was adopted. Eight posters were needed to cover all the areas needed in the presentation to the board, and every member of the strategy team was proud of what they had achieved. Involving Senior Managers A Greencore Malt Senior Managers’ meeting is held on a six-monthly basis. One was planned in a hotel in Cambridge directly before the board presentation was due to be held in Dublin. This meeting had the benefit of being a rehearsal, but the real downside was recognised – it would be hard for the senior managers to feel that they had had an opportunity to contribute. There was a sense at the outset of “You have done it all, do we need to see it?” After reassurance that their feedback was genuinely being sought, the use of the posters worked wonders in really engaging with the senior managers. David commented: “As a result of all the work we had done, we had gained confidence, and felt good about what we had achieved, and what was possible going forward. We managed to pass much of this on to the Senior Managers.” Winning the accolades The MD was absolutely delighted by the level of engagement that the posters and the ‘compelling story’ achieved with the board. One board member said that he had learnt more about the malting industry in the 1½ hour presentation than in anything else he had been involved in. The Group CEO described it as “an outstanding piece of work”. Without external help All members of the strategy group agreed that they could not have produced the strategy without external help. David said: “We could not have achieved what we did without Ashridge. Dev brought a process and a wide range of models and tools; he brought discipline and kept us to the process, he called a halt when necessary, kept our feet to the fire, insisted we finished tasks when we were inclined to skip bits – for example when we were ranking countries and products, we really did need a lot of detail to get the answers right. He kept our energy high, and ensured that everyone remained engaged. He brought a high level of objectivity. However, it really is our strategy – not Ashridge’s!” The Finance Director commented: “We’d have spent a long period of time evaluating each of our pet favourites if we hadn’t had an external facilitator to bring discipline. A consultant who simply facilitated wouldn’t have worked – we needed the models and the challenge. Dev kept our ambition there.” What next? The process generated not just a clear strategy, but also a high level of excitement about what was possible, and what could be achieved. This excitement is felt very strongly by the team, and to some extent by the senior managers. It was admitted that there was still some work to do in generating similar excitement throughout the company, but a spirit of optimism that this would be possible prevailed. The posters have taken on a life of their own. They have been modified in the light of senior manager input, and have been used in different combinations with suppliers, customers and staff, in meetings that are being used to get feedback and improve external knowledge. The importance of this is evident from the wider range of directors taking part. Working groups have been set up to progress the key themes of the new strategy – though scarcity of resource has led to external resources being employed to guide one project, and another has an Ashridge MBA student doing a significant piece of work for Greencore Malt. Finally, there is recognition that the Greencore Malt directors need to step back from day-to-day issues and focus on strategic ones on a regular basis. A new structure for separate business and strategic meetings has been set up. What of those tempting diversification options? Attractive though many of them first seemed, they were discarded in favour of ‘sticking to the knitting’: reinforcing Greencore Malt’s existing position and customer base – which is already firmly established as far away as, for example, Japan, where Greencore Malt is used in the popular ‘Kirin’ beer. In pursuit of further growth, the company will be giving attention to new geographic markets, particularly in the rapidly developing new economies where beer consumption, and hence demand for malt, is continually rising. 11
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