Albert Camus, the French existentialist, looked to Sisyphus, condemned by the
gods to roll a boulder to the top of a hill for eternity, and saw in his
toil the absurdity of the human condition.
It seems that Nestlé looked to Sisyphus and saw a business model.
“Every step we take, we're directed towards the top of the mountain,” Paul
Bulcke, its chief executive, says. “We have to maintain the pace and that's
the Nestlé way. It continues every year. We have to do 200 metres to get to
the mountain top. We're going to have to adapt flexibly.” This begs the
question of what the top of the mountain is. Mr Bulcke looks puzzled, as if
the thought had never occurred to him. “The top of the hill is an end and a
company doesn't have an end.”
So what is next for Nestlé? “Year-end results.” And after that? “Next year's.”
Boring? Hardly. Mr Bulcke's office may overlook the scenic splendour of Lake
Geneva, but the view from the chief executive's chair at the world's largest
food group is anything but calm and peaceful. This spring he took charge of
a company with sales of about SwFr110billion (£60billion) at a time of
rampant food inflation, a crisis eclipsed only by the financial carnage that
followed the collapse of Lehman Brothers. His surprise appointment is
thought to have triggered the defections of two key executives - Paul
Polman, who left for Unilever, and Lars Olofsson, who went to Carrefour. It
has been a controversial few months.
So how was it for Mr Bulcke?
“Motivating,” he says in fluent, accented English, his fourth language of six.
“An ideal year to take over a company like Nestlé. It's a privilege to have
the experience of leading a company like Nestlé - a strong company with a
good vision and strong strategies behind that vision, a strong human
structure behind that vision.”
Mr Bulcke is good at talking Nestlé. The company appears recession-proof: in
October it reported an 8.9 per cent organic increase in sales for the first
nine months of the year. He says that the robust performance is vindication
of the company's strategy of pushing its four competitive advantages -
research and development (R&D), its product range, global reach and
280,000-strong workforce - in four growth platforms - nutrition, emerging
consumers, premium goods and “out-of-home” goods.
When he became chief executive in April, Mr Bulcke was bequeathed $39billion
by Peter Brabeck, his predecessor, money raised from the sale of a 25 per
cent stake in Alcon, a maker of eyecare products, to Novartis. Nestlé looked
certain to spend it. Analysts excitedly suggested that Nestlé would buy out
the majority stake in L'Oréal held by Liliane Bettencourt, the 86-year-old
daughter of the cosmetics company's founder. Others suggested Hershey, the
underperforming American confectioner.
Mr Bulcke pooped the party by ruling out making any significant acquisitions
in the near future. It was as if Nestlé had celebrated winning the lottery
by having double-glazing put in. On mention of this, the 54-year-old Belgian
returns to his mantra. “One vision, four competitive advantages, four growth
platforms,” he says, raising four fingers for emphasis.
But the image this paints of Nestlé - that of a relentlessly, ruthlessly,
unapologetically boring company - is wide of the mark, according to Mr
Bulcke. “We're not a supertanker. That monolith you perceive isn't what we
perceive,” he says, reeling off a list of innovations that have gone from
the drawing board to the shelves in less than a year. One coffee product
went from “bean to box” in less than a year; a water brand was signed off
only a year ago and “Bang, we have it,” he says. “Yes, we're a huge company,
but we're going faster than yesterday. The world is changing.”
Nestlé has also proved to be nimble at adapting to local markets: in Africa,
it sells individual cubes of Maggi, its stock product, so that it is
affordable, adding iron to combat anaemia. It redesigned its Top Cup - a
coffee filter that sits on top of a mug - to make it work better in humid
countries.
Nestlé's work in developing countries is a prickly subject. For 20 years, it
has been dogged by accusations that it aggressively markets baby milk in the
Third World. The long-running campaigns to boycott Nestlé products, from
KitKat to Nescafé, still clearly rankles. “I would like to have Nestlé's
image more in line with what we think we stand for in Britain than what it
is today,” Mr Bulcke says.
“I just wish that organisations and people who hang on the past gave us an
honest chance to be who we are in Britain, rather than being dragged down
any factors that aren't relevant today or never were.”
Nestlé's battle to rid itself of that image explains why it is unusually
sensitive to regulatory problems or ethical criticisms. In October, it was
slapped on the wrist by the Advertising Standards Authority for a claim that
Maggi noodles “help to build strong muscles and bones”. It was aired on
Nepali TV, where regulations are less stringent, but was also shown
accidentally in Britain by satellite. “Somebody pushed on the wrong button.
Then the ad was aired in the UK,” he says. Throwing up his hands, he adds:
“Well, okay, you got me. You can sacrifice me. We didn't have a clinical
test for something that we knew was true.” For the first and only time, the
attendant press officer interjects, beginning to say that the error was not
Nestlé's ... but Mr Bulcke cuts him off, telling him: “No.
“We're going to change that because I don't like it. I don't need terrible
incidents where I don't need to have them.”
Mr Bulcke says that Nestlé not only always plays by the legal rules in every
market but also “everything we do is totally in line with our own company's
values”. Despite hailing from Flemish Belgium, Mr Bulcke appears to be proud
of Nestlé's position in Swiss society as a bastion of stability, a role that
has become ever more important after the sub-prime-fuelled excesses of UBS
and Credit Suisse.
He allows himself a brief look out of the elegant, modernist headquarters at
Vevey, near Montreux. His office shows no trace of a hinterland beyond
Nestlé. An alpine scene by the Swiss artist Ferdinand Hodler hangs opposite
his desk. On his bookshelf, the occasional environmental tome rests between
titles such as The CEO Within and Why Should Anyone Be Led By You.
He says that Nestle's value resonate with him. “We're proud of our values, as
a Swiss company. Long-term thinking. That passion for quality. A certain
pragmatism. A direct way of treating people. That's why you see at the top
of this building that Swiss flag waving in the wind. And then he returns to
his theme - “Four competitive advantages, four growth platforms” - before
concluding with a satisfied flourish: “You know them.”
Paul Bulcke: CV
Born: 1954 in Roeselare (Belgium)
Education: 1972-76 Studied commercial engineering at University of
Louvain; 1976-1977 postgraduate studies in management, University of Ghent
1995 Program for Executive Development, IMD Switzerland
Career: 1977-79 Scott Graphics International, Bornem (Belgium),
financial analyst; 1979-80 Nestlé SA, marketing trainee (Switzerland, Spain,
Belgium); 1980-96 Nestlé Peru, Nestlé Ecuador and Nestlé Chile marketing,
sales and division functions; 1996-98 Nestlé Portugal, market head;
1998-2000 Nestlé Czech Republic and Slovakia, market head; 2000-04 Nestlé
Germany, market head; 2004-08 executive vice-president Nestlé S.A. Zone
Director for Zone Americas: United States of America, Canada, Latin America,
Caribbean; April 2008 to present chief executive officer, Nestlé SA
Family: Married, three children
Q&A
If you could change one thing in the financial and commercial environment,
what would it be?
Bring back common sense and basic good practice
Who, or what, is your mentor?
Many of the great Nestlé people I met over the past 30 years, not least
(honorary chairman) Helmut Maucher and (chairman) Peter Brabeck
Does money motivate you?
It certainly can be a demotivating factor if you don't have enough. But real
satisfaction comes from a job well done
What gadget must you have?
I'm not really a gadget man, things have to be useful. But I do have a soft
spot for nice watches
What does leadership mean to you?
Firing up 280,000 people's enthusiasm behind a shared vision
How do you relax ?
Time with the family. And thinking about sailing. I too rarely get a chance to
actually do it
