Consumer Products CEO Spotlight

Interview: Jeff Harmening, General Mills CEO

“Challenging times don’t create character, but I do think they reveal it.”

Par Richard Webster

First published on octobre 25, 2024
min


A pivotal event in General Mills’ 158-year history occurred in 1878, when the young company’s flour mill on the banks of the Mississippi River blew up in an explosion that killed 18 employees and threatened to devastate the local Minneapolis community. Founder Cadwallader Washburn, a US Civil War veteran, had the choice to walk away from the business or rebuild. He chose the latter. In an interview with Richard Webster, leader of Bain’s Global Consumer Products practice, Jeff Harmening, chairman and CEO of General Mills, discussed how that decision more than a century ago—and the company rebirth that followed—put General Mills on a path to leadership set in purpose, which it retains today. Q: How has the legacy of your founder shaped today’s purpose? Harmening: General Mills was founded on this very idea of purpose. Cadwallader Washburn used the flour mill disaster as an opportunity to double down on his commitment to employees and the community. He opened an orphanage for victims’ children. He scoured the globe to bring back safety standards and technology that would vastly improve the safety of his new mill and to emulate the world’s most stringent food safety regulations. He shared both the technology and food safety measures with competitors. Through these actions, he established the culture we have today, in which our strongest value is to do the right thing always. Q: How do you balance meeting the needs of a broad set of stakeholders? Does this require hard trade-offs? Harmening: From my perspective, investing in the long-term, sustainable profitability of the business is not in opposition to investing in the brands, people, and planet. Our first allegiance is to our shareholders, but we view that as a long-term promise, not just maximizing profit in a single year. Our stance can be seen in the fact that we’ve paid a dividend for 126 straight years. We’ve never not paid a dividend through two pandemics and through two world wars, and our dividend has never decreased. To create long-term value in this way, we invest in our brands and innovate for our consumers. We invest in our employees through a culture of diversity, inclusion, and, most important, belonging, which has raised the engagement of our employees to an all-time high. And we invest in the planet and sustainability because both our consumers and our business depend on soil health and the climate. Q: How has General Mills been able to maintain its commitment to purpose over so many years? Harmening: You know, a lot of people think of food companies as being stodgy, but the opposite is true. Cadwallader Washburn was not afraid to change, and we’ve been around for nearly 160 years and have become a $20 billion company precisely because we have been willing to change. We’ve reshaped nearly 30% of our portfolio since 2018. We restructured the way the organization works. We’re a much more agile and resilient company. Challenging times don’t always create character, but I do think they reveal it. Q: You often talk about sustainability as being at the forefront of General Mills’ overall strategy. Can you talk about how sustainability gets put into action? Harmening: First off, the key for us on this journey has really been to commit to priorities that are most important for our business and ensure they are woven into our strategy. So “Standing for Good” is one of four pillars in our overall Accelerate strategy. Second, we focus on the areas where we can really have impact. When I became CEO, we had 70 impact commitments. We cut that down to 10, and with those, there are 3 that we really prioritize. While 3 is far fewer than 70, we’re actually doing more because the team is energized, empowered, and moving in the same direction. Regenerative agriculture is one area of focus. Soil health is critical because we are so dependent on soil as a factor for input, so the societal and business imperatives are aligned. As a result, regenerative agriculture now covers 25% of our land use, putting us more than halfway to our 2030 target. Greenhouse gas emissions is a second focus area. We were the first company to have a science-based target—a 30% reduction by 2030 and a full reduction to be net zero by 2050. Our third focus involves recyclability. Our goal is to get all products recyclable by 2030. We’re currently at 93%, and the last 7% is really hard because packaging is also about safety and shelf life. For all three areas, we have a governance council that I personally lead to ensure that our goals are met and that progress is tracked. Q: It’s impossible to predict what comes next, but what are some of the top priorities for you and the team as you look ahead? Harmening: One of the things that’s been so humbling about the last few years is that it’s become tough to look into the future and see what’s going to happen. So, we focus on making sure we react to what’s happening faster than everybody else. While some volatility is diminishing, other sources of instability aren’t going away. In that context, we are currently focused on three priorities. Our No. 1 priority is to accelerate our organic sales growth by delivering remarkable consumer experiences across our leading food brands. Second, we will create fuel for investment by generating strong levels of cost savings to offset inflation and reinvest back into our brands. And third, we will continue to drive strong cash generation while maintaining our disciplined approach to capital allocation.

A pivotal event in General Mills’ 158-year history occurred in 1878, when the young company’s flour mill on the banks of the Mississippi River blew up in an explosion that killed 18 employees and threatened to devastate the local Minneapolis community. Founder Cadwallader Washburn, a US Civil War veteran, had the choice to walk away from the business or rebuild. He chose the latter.

In an interview with Richard Webster, leader of Bain’s Global Consumer Products practice, Jeff Harmening, chairman and CEO of General Mills, discussed how that decision more than a century ago—and the company rebirth that followed—put General Mills on a path to leadership set in purpose, which it retains today.

Q: How has the legacy of your founder shaped today’s purpose?

Harmening: General Mills was founded on this very idea of purpose. Cadwallader Washburn used the flour mill disaster as an opportunity to double down on his commitment to employees and the community. He opened an orphanage for victims’ children. He scoured the globe to bring back safety standards and technology that would vastly improve the safety of his new mill and to emulate the world’s most stringent food safety regulations. He shared both the technology and food safety measures with competitors. Through these actions, he established the culture we have today, in which our strongest value is to do the right thing always.

Q: How do you balance meeting the needs of a broad set of stakeholders? Does this require hard trade-offs?

Harmening: From my perspective, investing in the long-term, sustainable profitability of the business is not in opposition to investing in the brands, people, and planet.

Our first allegiance is to our shareholders, but we view that as a long-term promise, not just maximizing profit in a single year. Our stance can be seen in the fact that we’ve paid a dividend for 126 straight years. We’ve never not paid a dividend through two pandemics and through two world wars, and our dividend has never decreased.

To create long-term value in this way, we invest in our brands and innovate for our consumers. We invest in our employees through a culture of diversity, inclusion, and, most important, belonging, which has raised the engagement of our employees to an all-time high. And we invest in the planet and sustainability because both our consumers and our business depend on soil health and the climate.

Q: How has General Mills been able to maintain its commitment to purpose over so many years?

Harmening: You know, a lot of people think of food companies as being stodgy, but the opposite is true. Cadwallader Washburn was not afraid to change, and we’ve been around for nearly 160 years and have become a $20 billion company precisely because we have been willing to change. We’ve reshaped nearly 30% of our portfolio since 2018. We restructured the way the organization works. We’re a much more agile and resilient company. Challenging times don’t always create character, but I do think they reveal it.

Q: You often talk about sustainability as being at the forefront of General Mills’ overall strategy. Can you talk about how sustainability gets put into action?

Harmening: First off, the key for us on this journey has really been to commit to priorities that are most important for our business and ensure they are woven into our strategy. So “Standing for Good” is one of four pillars in our overall Accelerate strategy. Second, we focus on the areas where we can really have impact.

When I became CEO, we had 70 impact commitments. We cut that down to 10, and with those, there are 3 that we really prioritize. While 3 is far fewer than 70, we’re actually doing more because the team is energized, empowered, and moving in the same direction.

Regenerative agriculture is one area of focus. Soil health is critical because we are so dependent on soil as a factor for input, so the societal and business imperatives are aligned. As a result, regenerative agriculture now covers 25% of our land use, putting us more than halfway to our 2030 target.

Greenhouse gas emissions is a second focus area. We were the first company to have a science-based target—a 30% reduction by 2030 and a full reduction to be net zero by 2050.

Our third focus involves recyclability. Our goal is to get all products recyclable by 2030. We’re currently at 93%, and the last 7% is really hard because packaging is also about safety and shelf life.

For all three areas, we have a governance council that I personally lead to ensure that our goals are met and that progress is tracked.

Q: It’s impossible to predict what comes next, but what are some of the top priorities for you and the team as you look ahead?

Harmening: One of the things that’s been so humbling about the last few years is that it’s become tough to look into the future and see what’s going to happen. So, we focus on making sure we react to what’s happening faster than everybody else.

While some volatility is diminishing, other sources of instability aren’t going away. In that context, we are currently focused on three priorities.

Our No. 1 priority is to accelerate our organic sales growth by delivering remarkable consumer experiences across our leading food brands. Second, we will create fuel for investment by generating strong levels of cost savings to offset inflation and reinvest back into our brands. And third, we will continue to drive strong cash generation while maintaining our disciplined approach to capital allocation.