Constant change is the new business norm, says Paul Grimwood CBE

Nestlé USA’s outgoing chairman gave his inaugural lecture as Visiting Professor of Strategy at the University of Huddersfield.  Paul is a graduate of the University and is currently stepping down as head of Nestlé’s vast U.S. operation.

ONE of the world’s leading executives – newly appointed as a visiting professor at the University of Huddersfield, where he is a former student – has delivered a lecture in which he described the scale and the speed of the changes and the challenges that now face business.

Transformations that might once have taken place over the course of 40 years now happen every ten years, said Paul Grimwood, the Yorkshire-born businessman who became head of food and drink multinational Nestlé’s vast U.S. operation.

“Some of that change is driven by technology, some by consumer requirements and some by poor management,” said Mr Grimwood, who studied business at the University of Huddersfield, graduating in 1985, before embarking on a career in the food and drink industry that led to a succession of major executive posts and the award of a CBE in the latest New Year’s Honours List.

After standing down as Chairman and CEO of Nestlé USA – which has annual sales of $26 billion – Mr Grimwood became its non-executive chairman, and will retire from this post in May.  At the University of Huddersfield, he is Visiting Professor of Strategy.

Delivering his inaugural lecture at the University, he said: “I have had 36-year career in the food and beverage industry and I can tell you that the last six years have been the most incredible roller coaster ride of challenges that I have ever seen.”  He added that chief executives from other sectors – including automotive and retail – would tell the same story.

He described various macro-economic and technical factors that had led to rapid change.  For example, he said, “yesterday’s delight is today’s entry point” – meaning that consumers now expected features and service that would once have been regarded as a welcome bonus.

Customers also expected better service and rapid response from companies, plus immediate availability and delivery of products.

Mr Grimwood told how companies can respond to the dramatically changing market.  It was vital for CEOs to have a vision of the future, to ensure organisational flexibility and drive a culture of fearless change.

“Change is the new norm.  You have to show people that we are all going to succeed together,” he said, and was highly critical of companies that responded to difficult conditions by cutting back on their graduate intake and on training.

“How can you change your business model if you are not training people to take on the journey?  It is a frequent mistake, but I see it in every recession,” said Mr Grimwood.

Communication and compassionate capitalism

He also emphasised the importance of staff communication and described how he communicated strategy to the 51,000 employees of Nestlé USA.  Every quarter he would hold sessions at which he addressed an audience of hundreds at the Virginia headquarters, with cameras streaming the event live to other plants and recording them so that employees on later shifts or other time zones could watch and listen.

Mr Grimwood told how he made a point of answering every question posed by employees.

“I know I won’t achieve my objectives if I don’t have 100 per cent of the people on board,” he said.  “Communication is a critical management skill.  It is amazing how many managers think that power is keeping information to themselves.”

After his wide-ranging lecture, in which he provided details of business strategy, with examples from his career and an analysis of the vast U.S. food and drink sector, Mr Grimwood fielded a succession of questions from the audience, including his attitude to “compassionate capitalism”.

He said that it was now a pre-requisite for companies such as Nestlé to show their credentials and commitment on environmental and social issues, and was critical of “greenwashing”, when chief executives paid only lip service to concerns such as the use of palm oil or child labour.

“If you say this is what you are going to do but then don’t do it, you will be held to account,” said Mr Grimwood.

He was introduced by the Vice-Chancellor of the University, Professor Bob Cryan, who expressed his pride in the achievements of Mr Grimwood, who spent a year’s work placement with Mars UK as part of his Huddersfield business degree.

“Paul’s story is a wonderful testimony to the value that we have always placed on work placement and real-world experience alongside the valuable theoretical knowledge imparted by degree study,” said Professor Cryan.