Touching Hearts and Changing Culture

The transition to the new reality has not been smooth or easy. Last year, General Mills saw net sales fall by 6%, and only in recent quarters has growth begun to return. General Mills’ new competitive reality has significant implications for its 10,000-person manufacturing function. Once content to concentrate on efficiently pumping out massive runs of the I same tried-and-true products year after year, manufacturing at General Mills must now become nimble, and able to respond to changing consumer tastes, which means meeting the demand of rapid production change-overs and accommodating smaller-run products.

In our latest Dialogue with an industry thought leader, General Mills Vice President, Global Manufacturing Excellence, Donzel A. Leggett, spoke with Executive Editor Jeff Moad about the company’s manufacturing transformation which, Leggett says, starts with changing hearts, minds and culture.

Q: What’s exciting to you about your role today?
A: The opportunity to help transform General Mills. Our Global Manufacturing Excellence vision is to enable our return to growth by transforming our manufacturing organization through what we call Zero Loss Culture. Zero Loss Culture is our world-class manufacturing performance standard which will transform our organization from good to great.

Q: Slow growth has been pervasive across the food industry. What is causing that? And, what’s the company’s overall strategy for getting back to growth?
A: The world is changing. Consumers are changing. Preferences are changing. Consumers increasingly want to know where their food is coming from. They want to know if their food is produced in a sustainable way. They want products that are perceived as more natural with simple ingredients. But consumers are also focused on taste. More and more people are seeking different flavors, unique ingredients, more ethnic and international flair. All of this creates new challenges for big food manufactures. The manufacturing industry used to be geared to make high-volume products, in the most efficient and scalable way possible. Although innovation was important, new product introductions were fewer, slower, and less complex.

The industry landscape has changed. There are a lot of small players that are taking advantage of their smaller size and lack of infrastructure to be more agile, flexible, and innovative. Scale and efficiency are not as important is responsiveness and agility as they build their businesses.

Then you also have the Amazon effect. Amazon’s vision is to be able to provide consumers anything they want, anytime they want it. They envision a model where a person orders something and it is delivered to them within two hours. Their impact on food must be seriously considered. We must also consider the “Uberization” of food, where consumers can order food from any restaurant and have it delivered to them within 30 minutes.

In this type of truly disruptive environment, large food manufacturers must transform or face extinction. For General Mills to return to growth, we must transform the company. We will change the way we work to ensure every person is focused on the most important activity. We will be more innovative and lead with a consumer-first mindset on everything we do. And we will leverage our global talent and expertise behind a culture that plays to win.

Q: What do you have to do in the manufacturing function to support this growth strategy?
A: The company strategy requires our manufacturing network to be more agile and flexible but still as efficient as possible. The number of products we produce will need to increase, with more recipes and smaller volume. We must master the changeover, and significantly reduce cycle times. But we’ll also need to become more predictable, which means total system reliability must also increase significantly. We must be able to start up new products vertically and drastically reduce the overall lead time to market.

We believe Zero Loss Culture is the strategy to enable our manufacturing network to meet these challenges and support our business.

Q: How does your Zero Loss Culture initiative differ from prior approaches to changing the culture?
A: General Mills Manufacturing has experimented with continuous improvement and lean processes for more than 20 years. But, in the past, we didn’t have a globally-aligned approach, and we were focused on tools versus capability-building and culture. After benchmarking companies like P&G, we realized that we needed a more consistent program. We decided to purchase the Run-to-Target program from P&G in 2008, which provided an endless library of tools and processes.

What we missed – just like the American auto manufacturers missed 30 years ago when Toyota began to be recognized as the best auto manufacturer with the Toyota Production System–is that it’s not the tools. The key is changing the culture, investing in the capability of all the people, making your team members feel like business owners. That culture change, ignited by inspirational leadership, is the difference. If you simply focus on tools and processes alone, you’ll get some results, but they’ll never be sustainable, nor will they continue to get better exponentially year after year. And that’s the difference.

What’s different with Zero Loss Culture is that we start with the things that we know are most critical to our culture and our organization in terms of our business strategy. For us, our business strategy starts with our championship brands. Therefore Zero Loss Culture will start with brand and consumer protection. Behind anything that General Mills produces is a promise to consumers that when they buy it, the quality that they expect will always be delivered, and no product we produce will ever harm them.

Additionally, at General Mills, our greatest asset is our championship people. Therefore Zero Loss Culture also starts with protecting our people and ensuring that no one ever gets hurt in our facilities. Our goal is to capture hearts and minds by ensuring Zero Loss Culture starts with protecting our people, our consumers, and our brands. Starting with a focus on capturing hearts and minds, instead of just putting new tools and processes in people’s hands without context, is key in creating a sustainable culture of zero loss.

Leaders also have a critical role in creating a Zero Loss Culture. The power of culture is enabled through our Zero Loss Leadership module, ILEAD, which is a descriptive acronym representing the words: Inspire, Light (the way), Engage, Activate, and Develop. ILEAD is one of the three principles of Zero Loss Culture, along with total employee engagement and process rigor.

“This is a rigorous process, but we believe that this cascading training and coaching approach will build the competence, credibility, and confidence required.”

When we launched Zero Loss Culture in our international organization three years ago, I personally visited each facility to train and engage all the employees. We wanted everyone to feel like they were part of Zero Loss Culture, no matter what country they were in, and that they mattered and were critical to our success. Zero Loss Culture actually became an employment advantage. Team members started feeling like “this is where I want to be; this is not where I have to be.”

We saw the difference in inspiration, motivation, and commitment immediately. Our climate scores increased an average of 15 points across all of our plants outside of North America. We also saw our productivity increase by a factor of 50 percent in the international facilities, while injuries were reduced by 80 percent.

“The biggest challenge that we have is convincing everyone that zero is possible, and that we can transform a 151-year-old company. It’s getting everyone to believe that we can win.”

Q: Are you finding that people are excited and ready to come along, for the most part?
A: We have tremendously talented people at General Mills, and I think most of our folks are very excited about this transformation. But it is also natural for some of our people to feel some apprehension. It is our accountability to continue to explain to all team members what’s in it for them. There is a lot of positive energy and excitement to be a part of a transformation. But clearly, there are some folks that are still not quite sure. It is on me and all of our leaders to ensure that everyone is brought along on the journey. We have more than 10,000 people in our manufacturing organization globally. Everyone has to feel like they have a part in this transformation.

Q: How important a role does digitization and M4.0 play in the transformation that you’re driving now?
A: The branded food manufacturing industry has really been a laggard when it comes to digitization. I think this was influenced by the fact that the industry had a very predictable and positive business model for many years. For a long time in big food, there was consistent growth, very healthy profit margins, and strong cash flow leading to complacency. But of course, now, the landscape has changed.

Zero Loss Culture will enable business growth by transforming our manufacturing sites to world-class performance. But we know that’s not going to be enough to ensure our future competitiveness. We will need to leverage digitization and embrace the IoT, virtual reality, and artificial intelligence self-learning technologies. Marrying Zero Loss Culture with our digital evolution strategy will create a differentiated competitive advantage for factories of the future.

Q: Considering the cultural transformation you’re involved in, what keeps you awake at night? What do you see as major challenges?
A: The key to culture transformation is inspiring everyone to believe. The biggest challenge that we have is convincing everyone that zero is possible, and that we can transform a 151-year old company. It’s getting everyone to believe that we can win. It can be difficult to convince folks to change when they have been successful doing something the same way for many years. And there are those who feel like they’ve been changing and doing things different. They believe that taking last year’s plan and tweaking it is doing things differently. They see that as change. By definition, I guess it is, but it’s not transformation.

Q: Going forward at General Mills, what do you feel will be the most important leadership skills to have?
A: If you’re going to be in manufacturing, you’ve got to be able to inspire people. I truly believe that. I played football in college. From my experience, the closest thing to football in business is manufacturing. You have a large team, there are clear measures of performance, sometimes it feels like everyone is against you, and it is very hard work. But what brings you through is being inspired to give more of yourself to achieve a larger team objective. Most football teams that are consistently successful don’t always have the best players, but they have a winning culture that is inspired to play and win as a team. Knowing that each person is working together, helping one another, and sacrificing themselves to create a strong and cohesive winning team is truly inspirational. Great leaders should always be focused on inspiring their teams.

Strategic thinking is also extremely underestimated and not as well represented across manufacturing as it should be. For manufacturers to be successful going forward, being able to think strategically will be critical. Manufacturing leaders need to be thinking about the future, and considering potential consumer, industry, and customer changes and the impact they could have on your network. Manufacturers should also be developing their digitization strategy to create future competitive advantage.