By Deborah Hill Cone
Friday 11th November 2005
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DB carried on making beer. It simply made 10% more profit while doing it. "You have to have a clear vision of what you are trying to do in business - and it doesn't have to be complicated," Blake says.
So, how did he do it?
Certainly not with the cult of personality. Don't get me wrong; perky, pixie-chinned Brian Blake is one of the most affable chaps you'll meet in business. "It doesn't matter where I go round the country I can't remember anyone calling me Mr Blake. I'd correct them.
People call me Brian." The former Wairarapa farm boy is so approachable for the past four years he has done a 22-stop nationwide 'coffee with the boss' tour where he sits down for two-hour sessions with his workers from throughout the organisation to listen to their concerns. "Having that access to the CEO is great," assistant brand manager Nigel Chenery says. Packaging operator Anil Kumar: "He's a really nice man and easy to talk to."
But I'd be surprised if the workers go back to their vats and desks after coffee with Blake vowing to give their all to the company because they have been bewitched by its voodoo CEO. Me: "Shouldn't it be beer with the boss, rather than coffee with the boss?" Him: "Er, not first thing in the morning it shouldn't be."
You're not likely to find Blake brandishing an Uzi onstage like former Lion Breweries boss Kevin Roberts or writing books about his views on branding. And although I didn't check, I doubt you would find him sketching chintzy frocks in his spare time like former Carlton United Breweries head Richard Holden. Or even going to the polo - but I'm willing to bet he likes a game of footy.
"I think those times, of the charismatic leader who has people very strongly attached to them, are over. Rather than leaders, some of those people are exceptional self-promoters," New Zealand Leadership Institute chief executive Lester Levy says. Dr Levy was so impressed by the DB profit story he wrote a case study on it in the University of Auckland Business Review and now describes Blake as a "post-heroic" leader - and intends that to be a compliment. "He isn't highly charismatic, but it shows true leadership comes in all types of personalities and I think in the past we have over-linked leadership to persona."
So if it wasn't personal magnetism, how did Blake get the former underdog brewery - now wholly owned by Heineken subsidiary, Asia-Pacific Breweries - to become so darn profitable? After all, you have to remember Blake had already been CEO of the company for five years when the board set him the new challenge of boosting earnings by 10%. It meant trying new things and taking some risks.
Blake started by giving seven DB managers the job of looking at the big picture; analysing the economy, the political situation, industry trends, breweries and, naturally, its main competitor, Lion. The group, after being "closed in a room for three months", presented 650 slides of findings. "They came back with some key strategies. But we were still not convinced we could grow by 10% so we did some modelling, which was not over-complicated."
Blake concluded that if three conditions were met - a certain amount of growth in the beer market as a whole, some growth in margins and an increase in market share - they could achieve their goal. The company will not release the figures; reticence perhaps to be expected in such a cut-throat market where a tiny change in price can turn sales graphs around.
What Blake will say: "None of those [changes] were significantly large, but if the model was correct, it would roughly deliver the right result. It wasn't complicated. It was quite simple."
Yeah right. Achieving those results involved a culture change in which DB's staff understood the direction the company was heading in and what they needed to do to help it get there. "You have to establish where you want to take the company - that's the first thing; you must ensure everyone in the company understands what you are trying to do. It's only then they can align their aspirations," Blake says.
He felt there had to be something in it for the staff, not just for the company's bottom line, and Team Align was created. I warned you there were some buzzwords, but this one seems to be tolerated by staff (couldn't their marketers come up with something snazzier?) since it involves a 10% bonus for delivering a 10% increase in before-tax earnings. "When you get alignment between the company's aspirations and people's personal aspirations that's when you start to get performance," Blake says.
But Dr Levy takes the view the financial incentive offered to DB workers is only a small part of what Blake has achieved. It was helpful because it provided clarity - everyone knew what the target was and monthly Team Align meetings let them know how close they were to meeting it - but developing integrity and trust was just as important. "Brian has done a lot more to gain people's voluntary commitment to give of themselves and he has shared the upside with people," Dr Levy says.
Of course, the workers aren't totally loved up; 170 walked off the job in protest in August over pay negotiations. "The company told the public that it had done so well over the past three years that it was celebrating by shouting every New Zealander a free beer, but it is refusing to share the good times with its own workers," Engineering, Printing and Manu-facturing Union national secretary Andrew Little said at the time.
Since then a settlement has been reached, but Little is not prepared to join in with DB's public relations spin. He describes the company's treatment of its workers is "overall not bad" but says the bonus conditions were not negotiated. "There is a deep-seated cynicism about it. I'd compare it to NZ Steel which has a performance-related bonus, which was fully negotiated and the performance measures relate to things our members ... have control over."
Workers are unwilling to look a gift horse in the mouth, publicly at least. Packaging operator Anil Kumar says, "We know everything that is going on. We know exactly where we are and what we need to do to achieve targets ... and the money comes to a good lump sum." So why has he gone on strike? "We never thought DB was a bad employer ... but, what can I say, I am part of a union and have to work with the union," he says. Nigel Chenery says in his previous job with Rio Beverages (now part of Coca-Cola Amatil) he was given only sales data - "people just went to sleep" - but he says at DB he appreciates knowing what is going on at all levels of the organisation. "It's nice to start eroding the competitor's lead - to see every month we are making progress. That's what motivates me."
Still, Blake would be the first to admit he doesn't get everything right and it is possibly the things he has got wrong that have helped most to build trust.
The way he reacted to the PR disaster when the unpopular decision was made to close the company's Monteith's West Coast brewery in 2001 may have worked in his favour in the long term. "Naturally everyone was ducking for cover because it was such a disaster for us. We had a meeting with 47 managers there. I said 'Guys, this is my problem, the buck stops with me. I made the decision and it was the wrong decision'." Blake says everyone in the meeting suddenly relaxed and was able to look constructively at the process and learn from what went wrong.
Blake says, like anyone, he reacts negatively to criticism but he has learnt to think about whether it is justified and, if so, to do something about it. When he gives criticism he likes to use the term 'positive dissatis-faction'. "As in 'Guys, the results are good, but we can do better; let's be, in a positive way, dissatisfied.' Otherwise people get defensive and think I'm criticising their area."
Blake emphasises peoples' individual goals are just as important as the company's. The CEO talks to new staff during their two-day induction in Auckland: "One of the things I say to them is you won't spend the rest of your life in this company. But when you leave if we can shake hands and you can say to me 'Gee, my career has been enhanced by the experience I have had at DB' and we can say thank you for the tremendous value you have added to the company, then we have obviously got that alignment right."
Former DB public relations manager Sharon Buckland, who left in 1998, is certainly positive about her experience with the company, describing Blake as having great integrity and being very supportive of his staff. "He said that people know when they have done something wrong, but it is important you tell them when they have done something right."
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