September 12, 2019

DatePublished: 09-12-2019 02:49:14

DateModified: 05-03-2023 05:05:01

Consumer Goods Company

OVERALL BUSINESS CHALLENGES

The $3 billion International region of Diageo, a multinational beverage company, employed 7,000 people throughout Africa, the Middle East, Latin America, the Caribbean, and Asia Pacific. Facing economic, political, and social barriers, the region was experiencing modest top and bottom-line growth.

The Regional President was frustrated because he had high expectations to increase volume in 15 key markets, but they weren’t achieving the double-digit growth he knew was possible. He believed the key to a sustainable future was to create a breakthrough performance culture. Achieving extraordinary growth, independent of overall market growth and geopolitical challenges, required innovation across the business—willingness to rethink anything that would stand in the way of breakthrough performance.

Innovating the Organizational Mindset

CHALLENGE

To unlock the organization’s potential, the Regional President knew he needed to create an organizational capacity to think and work differently. He wanted everyone—from the bottlers to the executive team—to be in a “breakthrough thinking” mode about all aspects of the business. They had to shift how they viewed everything— their industry, their supply chain, their customers, their people, and themselves.

Additionally, in the absence of an inspiring, overarching purpose, the leaders were not operating as a unified team.

The predominant organizational mindset caused leaders to focus on increasing volume in their own markets as independent business units. With no collaboration or synergy across markets, the Regional President needed a way to bring them together.

MINDSET SHIFT AND SOLUTIONS

Diageo’s traditional innovation approach focused exclusively on products, leading them to create revolutionary drinks. But, rather than viewing “innovation” as limited to products, the Regional President believed it needed to be an organizational capability. This expanded context forced them to challenge long-standing beliefs and assumptions across the business. To start, it caused them to reexamine things as fundamental as their reasons for being in business and for achieving extraordinary performance.

The executive team rolled out a purpose statement: “Celebrating Life, Every Day, Everywhere.”

But it couldn’t be just a slogan. Discussing the potential meaning and breathing life into every word brought them together as a team. Getting “under the hood” this way created an emotional connection to their purpose and to themselves as a leadership team.

Once they brought it to life, the purpose became a catalyst for the executive team to realize the power of 15 different parts of the company playing a bigger game together. It became a new, larger context for the business and its people, oriented around contributing to every aspect of life around the world.

Until this point, the business model called for each business unit to operate independently. It had not made sense for them to share valuable resources and information with each other. In the new paradigm, continuing to play with individual country shirts, which slowed things down, was no longer an option. They recognized they needed to play as a unified team, innovating and optimizing performance across all markets.

As the organization committed to realizing their purpose, it created excitement, pride, and energy to build a new future. Across the business, people felt free to take risks and invent new possibilities to realize this inspirational vision. This new thinking became the driver for exceptional results throughout the organization.

RESULTS

Fueled by their purpose and breakthrough performance mindset, Diageo launched a multinational initiative to enrich the communities they served. By unleashing a dormant desire to make a bigger difference across the globe, the company provided clean water for thousands of Africans, jobs and vocational training in Latin America and the Caribbean, and contributed to a greener environment in the Middle East.

Diageo’s business and cultural transformation fueled people’s innate desire to make a difference in the world. Galvanizing around purpose and working as a unified executive team spurred widespread innovation and breakthrough performance. In addition to shattering their flat growth trajectory, they outperformed every business unit and achieved the first of many record-breaking growth rates.

The combination of these and other breakthroughs enabled the International region to achieve record growth in all major metrics, outperforming every business in the company. Specific results included:

• Double-digit growth in top and bottom lines, marking the first in a series of record-breaking growth rates for the region and the overall business
• For five consecutive years, the region achieved double-digit growth in operating profit with an overall CAGR of nearly 20%
• The region became known as “the growth engine for the future,” both internally and by external analysts