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Where is Value Added:
I think it would be better if the assignment were to add value to the original
memo that we did in January. I think it forces us to make a better
original, as opposed to pretty much doing the same thing that we did in
the first one. I know I would have benefited from perfecting the
first one. But then again, I guess I should have done that the first
time.
Cuban Carlos Gutierrez living the American dream: Carlos Gutierrez is a Cuban born American who has spent the last 25 years of his life working his way up into the corporate world at Kellogg Company. He was born and raised in Havana, Cuba until the age of seven when his father moved to the family to Miami, Florida to avoid the Communistic Fidel Castro. After spending years with his family moving from city to city Carlos found his first job in Mexico City in 1975 as a sales and marketing trainee. It was there where he met his wife and started taking business administration at a local university. Even though he never had time to finish his degree, he was eventually promoted to corporate headquarters in Battle Creek, Michigan, often called Cereal City.
CEO Carlos Gutierrez is taking Kellogg in new directions: Gutierrez has now been the CEO of Kellogg Co. for two years. When he took over the struggling company in 1998 he faced the problem that Kellogg sells something that doesn’t easily fit into America’s eat-on-the-run lifestyle. After taking over he did something none of the previous CEO’s had the courage to do: he closed down the original 93-year-old Corn Flakes plant, putting more than 500 people out of work. He then did something even more radical: he purchased Keebler Foods Co. for 4.4 billion dollars. After that acquisition took place, Kellogg’s now derive just 40% of its sales from breakfast cereals, down from 75% before the acquisition. It used to take Kellogg’s six to eight weeks to roll out new products from warehouses to retailers. Now it can use Keebler’s in house distribution system to get new items on store shelves much faster.
Gutierrez doesn't make promises he can’t keep. For this, investors on Wall Street like his candor. In a meeting with investors in November, Carlos Gutierrez vowed that Kellogg would not make promises they couldn’t keep. Instead of high projections that he knew he couldn’t hit, Kellogg Co. would now aim lower—about 6% at the most. Kellogg stock fell 5% that day but Gutierrez believed it needed to be done. It will be interesting to see how if Kellogg now hit all of their targets that they aim for.
Applying the Technical Core Model: Gutierrez has a very different method for running a company. Instead of the usual buffers that most companies have intact, Mr. Gutierrez tries to eliminate those so that technicians, scientists, and regular office employees can go directly to him whenever they have an idea they think is worthy. Before he took over, new ideas were only presented at monthly meetings and only by the heads of research and development. He has strongly encouraged communication and with this system intact, Mr. Gutierrez has emphasized employee individuality. He has made the employees feel like they actually can make a difference and that they are all working together to achieve company goals, not just for a weekly paycheck. I believe this incentive will keep many employers at The Kellogg Company and employee retention will be much higher than in the past. |
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