Ben Legg

1
Developing and retaining managers (cost
effectively)
Ben Legg Director of Training and Development

• Human Resources Network
• Warsaw, 30 April 2004

2
Coca-Cola HBC at a glance

• 3rd largest Coca-Cola Bottler in the World
• Headquarters Athens Vienna
• 26 countries
• 500 million consumers
• gt200,000 customers
• 37,000 employees
• 80 factories
• gt4,000m Sales
• EBITDA 665m
• Franchise company
• Ownership 40 family, 24 TCCC, 36 stock market

3
In 2002-03, CCHBC talent supply could not meet
demand
External vs. internal hiring (Grade 14) January
2002 June 2003

• External Hires (9)
• Corporate X 4
• Countries X 5

• CCHBC Hires (12)
• Corporate X 4
• Countries X 8

• TCCS Hires (5)
• Corporate X 3
• Countries X 2

4
We are creating a pipeline to balance demand and
supply of talent
Fully effective process across CCHBC
Non-existent
DEMAND
SUPPLY
1. Define the Requirement
2. Identify and Assess Current Supply

• Clear assessment of
• In-country talent
• Functional talent
• Potential General Managers

• Standard Competency Model (Core/Functional)
• Requirement forecasting by quantity and
  capability
• Definition and tracking of talent metrics

4. Control Retention and Sourcing
3. Manage People Development and Flow

• Graduate recruitment and development
• Effective recruitment and selection
• Actively manage retention of high potentials

• Individual appraisal, feedback development
• Career management processes
• Training curriculum for core/functional skills
• Key Players in Key Positions

5
A joined up Talent Management process may help
avoid the value destruction trench
Each standard deviation increase in the quality
of a firms work system is associated with a
20,000-40,0000 per employee increase in market
value
We intend to be here
We were here
We are trying to avoid this
Market Value per Employee,
Quintile Changes in Sophistication of HR
Architecture
Source Huselid (2001), University of Michigan
6
Our competencies differentiate between
hardwired and trainable
Attributes
Skills
Knowledge
7
We have 10 competencies, which we pick from
depending on the task
Hardwired
Leadership Competencies
Passion
Focus
Judgement
Leadership
Gets Results
Teamwork
Management Competencies
Communication
Creativity
Capability Development
Change Management
Trainable
8
Each competency is defined for different levels
Passion example
Passion Demonstrates personal determination to
accelerate the journey of CCHBC towards a World
Class Selling Organisation, and possesses the
energy, initiative, proactivity and drive to
continually challenge the status quo on that
journey

• Demonstrates enthusiasm for the job

• Encourages enthusiasm for the job among team
  members

• Contributes significantly to country-level
  initiatives/ projects challenging the status quo

• Develops and implements holistic plans to ensure
  a high level of passion throughout the function

• Is recognised in Countries as someone who cares
  passionately about success in all countries

• Sets an excellent personal example of passion for
  marketplace excellence

• Actively seeks input on how to improve personal
  performance

• Builds time for reflection, challenge and fun
  into team routines

• Creates an atmosphere in which all functions feel
  personal ownership for creating excellence

• Continually stimulates new thoughts and
  challenges for how to improve performance

• Does not let bureaucracy get in the way of
  important activities

• Removes unnecessary tasks and bureaucracy to
  allow focus on value creation

• Never gives up until a job is completed to a high
  standard

• Regularly notices opportunities for improvement,
  and ensures that something is done about it

• Actively enjoys change, and managing change

• Challenges all standards, processes and end
  products for further improvement

• Will always take time to get out into the
  countries, and the marketplace, to understand
  reality and try to help

• Regularly challenges the pace of change in own
  and others functions

• Ensures that personal outputs have a real impact
  on business results

• Has the courage to challenge senior managers on
  important issues

• Creates a rapid, sustainable pace of change in
  all functions, and leads from the front

• Sets unreasonably stretching objectives and
  regularly achieves them

• Shares passion for our brands with friends and
  family

9
Making appraisal a straightforward process
Competence demonstrated
Passion Demonstrates personal determination to
accelerate the journey of CCHBC towards a World
Class Selling Organisation, and possesses the
energy, initiative, proactivity and drive to
continually challenge the status quo on that
journey

• Encourages enthusiasm for the job among team
  members

• Contributes significantly to country-level
  initiatives/ projects challenging the status quo

• Develops and implements holistic plans to ensure
  a high level of passion throughout the function

• Is recognised in Countries as someone who cares
  passionately about success in all countries

• Sets an excellent personal example of passion for
  marketplace excellence

• Demonstrates enthusiasm for the job

• Actively seeks input on how to improve personal
  performance

• Builds time for reflection, challenge and fun
  into team routines

• Creates an atmosphere in which all functions feel
  personal ownership for creating excellence

• Continually stimulates new thoughts and
  challenges for how to improve performance

• Does not let bureaucracy get in the way of
  important activities

• Removes unnecessary tasks and bureaucracy to
  allow focus on value creation

• Never gives up until a job is completed to a high
  standard

• Regularly notices opportunities for improvement,
  and ensures that something is done about it

• Actively enjoys change, and managing change

• Challenges all standards, processes and end
  products for further improvement

• Will always take time to get out into the
  countries, and the marketplace, to understand
  reality and try to help

• Ensures that personal outputs have a real impact
  on business results

• Regularly challenges the pace of change in own
  and others functions

?

• Has the courage to challenge senior managers on
  important issues

?

• Creates a rapid, sustainable pace of change in
  all functions, and leads from the front

• Shares passion for our brands with friends and
  family

• Sets unreasonably stretching objectives and
  regularly achieves them

10
Our network of People Development Forums (PDFs)
provide an organised way to assess talent
GM and Future Leaders PDF
Finance PDF
11
We conduct 3-4 Future Leader assessments p.a., to
identify potential Country Managers and Corporate
Function Heads
Objective of PDF Calendar Effective and
efficient flow of consistent information to
support the talent management process
November
January Yr.2
October
December
July
February
April
June
COUNTRY REGION
ABP Approval
Regional PDFs
Country PDF outputs communicated to Region and
Group
Function PDFs
GM PDF (Annual)
Country PDFs
GROUP

• Group function PDFs (with OpCo)
• Commercial
• Supply Chain
• Quality
• Engineering
• Procurement
• IS
• Finance
• HR

Info from centre on calendar and formats for next
year
Feedback
Future Leaders 1
Future Leaders 2
Future Leaders 3
Future Leaders 4

• Country PDFs make take place at any point in the
  year but up-to-date outputs must be ready in
  standard formats by mid June
• Dialogue and feedback between Country, Region
  and Function is critical to the talent management
  process

12
As managers progress, they need to develop their
Leadership and Strategic capabilities
Strategic capabilities
Leadership Interpersonal capabilities
Capabilities required
Technical (functional) capabilities
Career progression
13
The Core Curriculum of training develops
Leadership and Strategic capabilities at all
levels
Strategic Leadership Programme
Coaching for High Performance
Excel
Enabling Fast Change
Foundation in Marketplace Excellence
Foundation in Management 2
Situational Leadership
Foundation in Management 1
14
The Core Curriculum of Leadership Training is
primarily internally delivered
All training is based on Country Pull to ensure
value for money
15
Internal training such as Situational Leadership
helps CCHBC to underspend competitors on training
by 30

• Train the Trainer courses run by us in last 2
  years
• Trainers we have certified to teach the course
  in-country
• No. of courses run throughout CCHBC (last 2
  years)
• No. of managers trained (last 2 years)

4 50 157 2,206

• 5,000 consultant cost per course, plus cost of
  Train the Trainer and certification
• ASTD State of the Industry report 2002, with
  forecasts for 2003, surveying 50 European
  multinational organisations

16
Future Leaders (and a few others) attend the
Excel (mini-MBA) programme
Nov - Dec
Jan - Feb
Mar - Apr
May - Sep
Strategy Leadership (IMD)
Commercial
Finance Supply Chain
Strategic Projects (cross-functional
cross-border)
2 weeks
2 weeks
1 ½ weeks
2-4 weeks
Dedicated Programme Manager for13-14 weeks p.a.
17
We have achieved excellent results through
tackling 5 elements of integrated capability
building together
Set stretching targets, incentivise them and
follow-up rigorously
Design and burn-in processes to sustain
performance
Ensure innovation and best practice sharing
Hire/ train sufficient people with the right
skills
Get the right leaders, structure and culture
(from the top)
18
CCHBC Salesforce Development Evolution 2001-2004
Simple classroom training is no longer enough
19
Systematically developing leadership in CCHBC is
paying off

• Romania got talent development right from the
  start ? from 30 imported non-Romanian expats to
  40 Romanians exported to other countries, while
  producing excellent business results
• Future Leaders assessments have led to
  selection of 10 new Country Managers ? all have
  achieved great business results, compared to 50
  weak performance before
• Excel (mini-MBA) course payback
• Increased performance, motivation and networking
• Reduced turnover for participants from 10 to 2
  (pays for course)
• Preparation for more senior roles - 30 out of 89
  CCHBC participants promoted from the 3 courses
• Live project and case study business impact
• Retains high potentials who want to go to Excel
  in the future
• Improved selection of leaders for strategic
  initiatives ? increased success rate (e.g. SAP
  rollout)

20
The ultimate payoff is the overall business
results
EBITDA 15 CAGR
EBIT 37 CAGR
millions
millions
Net profit
ROIC
millions
Percent

Note IFRS on a reported basis 2004 based on
revised guidance 2003 Net Profit under US GAAP
as Euro 232 million
21
Lessons Learnt

• Senior management commitment (money AND time) is
  critical
• Start the process with top-down push
• Continuously look for and communicate - the
  payback
• Dont expect perfect processes be 8020 to
  ensure management commitment (be rigorous on what
  matters)
• If you get development right, retention becomes a
  much smaller problem

22
?
Any questions