The art of developing leaders at Kraft

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OF THE HANDFUL OF CEOS who were rumored last spring to be on the short list for the top job at Coca-Cola, three share strikingly similar backgrounds. Mattel’s Robert Eckert, Hershey’s Richard Lenny, and Gillette’s Jim Kilts all cut their managerial teeth at Kraft General Foods. That’s no coincidence. During the past two decades, Kraft (Northfield, Ill.) has been a prodigious producer of big cheeses. In addition to playing the leading role at Mattel, Hershey, and Gillette, Kraft alumni have held the top posts at Sears, Quaker Oats, Campbell Soup, Young & Rubicam, and Marks & Spencer. And while GE may get a lot of credit for graduating leaders to other organizations, Kraft has become a CEO machine.

The secret lies in Kraft’s management development process. In many firms, development programs are run in carefully controlled hothouses, apart from the daily work of the organization. Executives enroll in a series of topical courses or undertake an intensive study of case material. But when you grow leaders in a hothouse, you end up with hothouse flowers: they look perfectly good, but they wilt when exposed to the elements.

At Kraft, leadership development isn’t an isolated process. Though the company does have a formal program for training leaders, for the most part executive development takes place on the job and, more important, for the job. Throughout, it’s designed to reinforce Kraft’s business model. Building brands is critical to Kraft’s success. Other consumer-products companies separate brand building from cost reduction, but at Kraft the two are linked: reducing costs systematically lets the company invest in strengthening brands—and general managers are expected to be adept at both.

As promising managers advance, they face a series of challenges through which they learn to apply that model in varying circumstances. Beginning with their earliest assignments, they’re expected to demonstrate the kind of sophisticated thinking that’s usually found only within the top tiers of executives at most companies. As managers ascend the ranks, Kraft encourages them to develop a set of conceptual and interpersonal skills critical to corporate leaders—such as creativity, the power to persuade and influence, and the willingness to take risks. Perhaps most distinguishing of all, the Kraft process gives young executives extraordinarily broad authority that stretches their abilities and spurs their growth.

Behind the success of Kraft’s leadership development process you’ll find a set of principles that any company can learn from.

Focus on the big picture from the start

The dominant development principle in a Kraft manager’s early years is “bottom-line responsibility.” This ties in to the bedrock idea of the company’s business model: that cost reduction is not a one-time, reactive program but rather an ongoing strategic process for freeing up cash to invest in marketing. Cost cutting, in other words, provides the fuel for brand building.

Read the full article on Harvard Business Online.