Yet the company’s corporate parent Diageo is maintaining an upbeat outlook about its third-largest market, according to Managing Director of Diageo Ireland, John Kennedy. He was speaking at last week’s Leadership Forum in the Dublin Institute of Technology (DIT) as part of a series of talks from senior managers whose companies won the 2010 Great Places to Work (GPTW) award. (The other speaker last week was Craig Skelton of Abbott. You can read about his talk here. Previous posts from the lecture series can be found here, here, and here.)
A native New Yorker, the son of Irish immigrants, and 15-year veteran of Diageo, Kennedy moved to Ireland when offered the position just before the 250th anniversary of Guinness Stout in 2009. Diageo, itself, had revenues of almost £13 billion (€15.2 / $20.8 billion) in 2010.
Although it has other business lines, the UK-based firm is best known for drinks. In addition to Guinness, it manufactures the world’s best-selling whisky, Johnnie Walker, the world’s best selling tequila, Jose Cuervo, and the world’s best-selling liquer, Baileys. Kennedy said they buy around 50 million gallons of cream a year to make the drink. “I can’t remember how many cows that is,” he said before guessing it was between 40,000 and 50,000.
When talking of the challenges and changes faced by the Irish subsidiary, Kennedy recalled lessons from a leadership program that drew on the experiences of Antarctic explorer Ernest Shakleton. Shakleton left on an expedition in 1914 and, despite losing his ship in ice, eventually got his men and provisions to an island while he set off to find help. He returned to rescue his crew and all returned home safely.
Kennedy said he took three leadership points from Shakleton to apply to his work.
- Destination ambition
- Unified leadership team
- Personal example
Destination: “When the recession hit, we lost track of where we were going,” Kennedy said. Layoffs were demoralizing for those that left and those that remained. GPTW and other staff surveys “nosedived,” he said. “It was a real wake-up call to us.”
A renewed effort was made to engage people with the organization, and despite current conditions, Kennedy said there is excitement about the expected return to profitability next year.
Diageo has also set a goal of beating the competition. Although it has a “great portfolio,” it is losing market share, Kennedy said. “Years ago, there was only Guinness, Smithwicks and Harp in the bar, and no one drank at home.” Trends have changed and buying alcohol from the store is a lot less expensive.
Kennedy also wanted Diageo to be Ireland’s most-admired company. With the amount of multi-nationals in the country using and pioneering HR best practices, he acknowledged that goal will be a challenge. But he asked, “Are we being dated? Are we being left behind?”
Unified Leadership: The recent layoffs also clobbered the leadership group when 40% of them were let go, Kennedy said. But a unified team is crucial. A company gets a “quantum leap on its ability to deliver” when people mesh as a team, he said. One way of doing this was to encourage senior management to see beyond sectional goals to prioritize organizational goals, Kennedy said.
He wants to get “that group absolutely joined at the hip” as leaders and not as functional experts. The leaders also need to show unity otherwise, “it gives people permission to opt out.” The results have paid off, and Diageo’s measurement of trust has gone up in percentage points from the mid-60s to the high 80s.
Kennedy and the 17-member team meet once a month and puts their chairs in a circle. There are no PowerPoint slides, “just a conversation about where we are going.”
Personal Example: Kennedy called this “putting yourself out there, heart and soul.” One of his prime goals now is to spark growth in others. He also said if work matches what you care about, you will be much more empathic.
Asked about the “nature vs nurture” debate on whether leaders are born or made, Kennedy said, “I hate the idea you can only be a born leader.” Most organizations have brilliant people and success as a leader is about “getting the genius out of them.”
Kennedy was also asked how the layoffs had impacted the management team. He acknowledged they had been hard on people, and his efforts to remould the executives had resulted in some tough conversations. A Briggs-Myers Type Indicator test of the team had shown there were 16 thinkers and just one feeler, he said. According to Wikipedia:
“Those who prefer thinking tend to decide things from a more detached standpoint, measuring the decision by what seems reasonable, logical, causal, consistent and matching a given set of rules. Those who prefer feeling tend to come to decisions by associating or empathizing with the situation, looking at it ‘from the inside’ and weighing the situation to achieve, on balance, the greatest harmony, consensus and fit, considering the needs of the people involved.”
Kennedy cited a saying that people often will not remember what you said, but they will easily remember how you made them feel. His executive team has now gone from “unconscious incompetence around connecting with people emotionally” to recognizing this is an area they need to concentrate on.