Krafting a New Company

Last Tuesday, the Wall Street Journal ran a piece on Irene Rosenfeld, CEO of Kraft Foods. The piece was called "Cooking Up Changes at Kraft Foods."  Here's the lead.

"After Irene B. Rosenfeld became chief executive officer of Kraft Foods Inc. in June, she spent months talking to employees and peeking inside consumers' kitchens -- from suburban Chicago to the capital of China."

Rosenfeld's history is interesting.  She was at Kraft for twenty years. Then she went off to PepsiCo as CEO of Frito-Lay in 2004. She returned to Kraft as its CEO in June of 2006.

Rosenfeld's challenge is interesting, too.  Kraft is a venerable old American brand. Though the Kraft name dates from only 1903, some of the brands under the Kraft umbrella were founded before the Revolutionary War. 

Back in 1985, Kraft was acquired by what was then the Phillip Morris Companies.  That company took the name Altria to seem less tobacco-like. Now Kraft is getting ready to spin off from Altria.

From my vantage point, she's doing a lot of things right and the Journal article outlines most of them. She started by asking questions.

Since Rosenfeld is a veteran of both Kraft and the food business, you might expect her to show up with an agenda for dramatic change to announce on her first day back.  No such thing happened.

Instead, she took the time to take it all in.  Like Ann Mulcahy at Xerox, another company lifer, she took time to find out what Kraft people and Kraft customers had to say and to show.

The bit about visiting customers' homes is especially impressive.  Ms Rosenfeld has a doctorate in Marketing and Statistics.  You'd expect her to base her decisions on the data in all those binders.  But here's what she says about that.

"We have all kinds of studies that we've done. But there is no substitute for seeing with your own eyes how people actually use the products."

She looks like she's going to base her strategy on the strengths of the company.  Here's how she put it.

"We have all kinds of capabilities in terms of manufacturing and selling and distribution. We've got complementary products that go together: cheese and crackers, ham and cheese, coffee and cookies. Our challenge is, how do we leverage those assets to accelerate our growth?"

She's also trying to keep the changes that need to be made within the tradition of things that have made the company great across a couple of centuries.  Again, in her own words.

"If you back up to what made Kraft such a strong company, it was about offering people's favorite foods in what was then a convenient form. That's exactly what we're talking about doing today."

Even though it looks like she's doing the right stuff, the job won't be easy.  Here's an example of why.

One of Kraft's new products is going to be macaroni and cheese for the baby boomer.  Sounds like a good idea, but there are two groups that need to be won over. 

First, there are all those people who grew up eating classic mac and cheese out of the blue box.  That's what they want, mac and cheese out of the blue box.  They don't want "sophisticated ingredients that appeal to the adult palate."  They want what they had as kids.  It's called comfort food.

At the other end of the scale are the folks who eat macaroni and cheese that they actually make.  I live in the South where many cooks use the classic "Macaroni Pie" recipe from the equally classic Charleston Receipts cookbook, modifying it slightly to add their own touch or the favorite ingredient of a mother or grandmother.  The people who eat this macaroni and cheese are likely to be highly skeptical of a product that comes out of a stand-up pouch.

It sure looks like Irene Rosenfeld is doing the right stuff.  And it sure looks like Kraft has a lot to offer, but that doesn't mean it's going to be an easy journey.

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Wally Bock has helped people learn to be great bosses for more than a quarter century. His latest book, Performance Talk: The One-on-One Part of Leadership, makes learning key leadership principles almost effortless by teaching through a story and providing lists of resources for further growth.

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