During the MBA, every so often, we get our shot at throwing questions directly to CEOs and CFOs. I took my chance yesterday during Mr Paul Bulcke’s (Nestlé CEO) visit to Vlerick. When asked about the biggest business challenges in today’s uncertain economy, his answer had nothing to do with reaching optimal product mix or acquiring new capital, increasing operation efficiency or simply low consumer confidence. Rather, the challenge was to inspire the PEOPLE within the organisation to remain confident but not arrogant and remain ambitious but not greedy.
People and Principles were the central message of his rehearsed presentation too before the Q&A. It was about uncompromising integrity, empowerment of employees, suppliers, societies, decentralised decision, diversity and corporate social responsibility (he preferred to call it “shared values”). It was not about innovation, not about competitive advantage, not about growth or operational efficiency, it was about CSR.
I doubt this presentation was tailored specifically for future employees and managers of Nestlé. I think this is the central message for all stake-holders of Nestlé. In an economy in which it is close to impossible to predict the risk premium, the approach relying solely on financial metrics to calculate probability of survival and growth has fallen off the cliff, the depth of which nobody knows :) Clearly the strategy is to emphasize and maintaine the strong culture based on principles of integrity. I don’t think companies today necessarily want the smartest people (like was the case in investment banking), they need people with uncompromising integrity first of all. This, the companies have realised is critical to survival. After all, like Warren Buffett said, if a guy cuts corners and is unreliable, you’d rather have him dumb and lazy, not smart and hard working :)