InBev (Interbrew, at the time) was the world’s third-largest brewing company with operations and brands across the globe when John Brock arrived as the company’s new chief executive officer in February 2003.
Brock had built an impressive 25-year track record in all aspects of the global
beverages industry, most recently as chief operating officer of Cadbury Schweppes. Charged by the InBev board with exploiting greater operational synergies and driving organic growth for the company, Brock had to define a new strategic direction and quickly learn the brewing business and the culture and skills of the organization. At the same time, Brock and the company’s new chief people officer, Peter Vrijsen, had to ensure that InBev’s structure and culture could support the new objectives and assess the management team’s ability to adapt to the new direction. This potentially required tough decisions about whether individuals were in the right positions.
How do newly arrived CEOs such as Brock make decisions about an inherited management team with confidence? In the best cases, when they inherit a highly skilled team in a stable organization that is well prepared for the challenges ahead, there are few tough decisions to make. Increasingly, however, as intense competition, heightened scrutiny by investors and regulators, and increased pressure to deliver have raised the stakes, a new CEO must quickly assess the organization in order to understand its readiness for change and identify the individuals who can help the company achieve its strategic and financial objectives. Among the most challenging aspects of this review is learning the capabilities, personalities, aspirations and leadership strengths and weaknesses of the legacy executive team.
To get at this information, Brock and Vrijsen brought in Spencer Stuart to conduct a management assessment of the Belgium-based company’s senior leadership team. Such third-party assessments can provide a new CEO with the detailed, objective information needed to make informed decisions about the management team, identify skill gaps, ensure individuals are in the appropriate roles and highlight potential retention issues.
When they arrived at InBev, Brock and Vrijsen focused on three priorities: the business strategy, the organizational structure and InBev’s culture. They quickly assembled the management team to review market opportunities and dynamics, key competitors and the drivers of success in the business. They also agreed upon a strategic direction and identified the key enablers of the strategy. One of the objectives was to create a more clearly defined and cohesive organizational structure and eliminate some of the silo thinking that had existed. This would require executives with strong leadership and teamwork skills who would be comfortable working in a more complex organization, Vrijsen said.
Brock and Vrijsen, familiar with executive assessments from previous roles, concluded that a third party could provide the information needed about individual executives as they were making decisions about the roles, responsibilities and reporting structure in the organization.
“If you are creating a new organizational blueprint and a new structure, you also have to be very selective about the individuals you want to put in these roles. The way we were moving the organization required different skills and a different mentality from the people fulfilling these roles. We received a lot of input from various parties about the strengths and weaknesses of individuals on the team, but, with both of us new to the company, we decided to initiate a process of assessment to get an objective view of the organization,” Vrijsen said.
Spencer Stuart consultants in North America and Europe conducted the excecutive assessments, focusing on each individual’s fit against the newly required skill-sets. The assessments included three parts: competency-based interviews conducted by senior consultants experienced in the industry; third-party referencing; and an Executive Intelligence Evaluation (ExI), a proprietary methodology that measures an individual’s “executive intelligence,” the specific cognitive skills and emotional intelligence that distinguishes successful leaders. A group of about 75 of the most senior executives and business unit leaders participated in the initial assessments.
Vrijsen conceded that the idea initially received a chilly reception. “In the beginning, some colleagues were very nervous about it, as you can imagine. They felt at risk about how the information would be used,” he said. “But it was interesting, once they were informed about the results and given their strengths and weaknesses analysis, they felt much more comfortable with it — even though there were some people who had some issues to address. They really recognized the objectivity of the whole process. Then we received much more support and even had people asking to expand the group to be assessed.”
As the assessments won broader support, InBev did expand the pool of participating executives. Ultimately, 200 executives were assessed.
The assessments led some individuals to be reassigned to different roles and created opportunities for others who previously had not been considered candidates for senior positions. “The data from the assessments gave us very good insight into what the talent base in the company at the senior level was. It really put us in a much better position to make some tough decisions because, based on the new structure and the new roles and the assessment data, the decisions we had to make were much more transparent,” Vrijsen said. Because participants were comfortable with the objectivity of the process, there was support even for the “tough decisions,” he said.
Early work on defining roles, refining the organizational structure and ensuring that individuals were in the appropriate roles helped prepare the organization for another
big change: a combination with Brazil’s Companhia de Bebidas das Américas (AmBev), the fifth-largest brewer at the time. “We had done all the work on the company’s organizational blueprint, so when we started to discuss what would be the ideal organizational blueprint for the combined company, we did not have to do a lot of new work on it. We just had to refine the model because of the new size and new complexity of the company. That was very helpful,” Vrijsen said. Today, InBev is the largest brewer in the world.
Several factors contributed to the success of InBev’s assessment process. The following are best practices drawn from its experience.
- Tie roles — and the corresponding skills and competencies required of executives — to strategic objectives. InBev conducted the review of the organizational structure in parallel with the assessment process. “It was important to the assessments to understand what were going to be the organizational requirements for the roles,” Vrijsen said.
- Choose an external partner whose assessment offering goes beyond competency-based evaluations that rely only on self-reporting of experience. Because the organization required cultural change, it was very important to understand the interpersonal skills of the individuals who would be in key roles. According to Vrijsen, InBev chose Spencer Stuart because, in addition to competency-based interviews and “360-degree” reviews, the firm’s assessment offering included an evaluation of individuals’ executive and emotional intelligence.
- Make no exceptions. The assessment process at InBev won credibility among executives in large part because there were no “sacred cows” who escaped the process. “That gave us much more credibility than if the assessments had been conducted on an isolated basis,” Vrijsen said.
- Communicate the process and the reasons for the assessment. Communication about the assessments came right from the top and explained why they were being done and how the information would be used. “We put a lot of emphasis on that type of communication and that also increased the support of the whole process. We did not make a secret about it; we were very open in our communication. If you do not have a good communication process going parallel with assessments, you will have a major issue,” Vrijsen said.
- Be aware of and sensitive to cultural differences that could skew the results of the assessment process. “If you ask the same question in Germany and in China, you cannot expect to get the same answer,” Vrijsen said. It also is important to allow participants to be assessed in their native language. All of the first interviews were conducted only in English. While InBev expects its executives to be able to speak English, Vrijsen said some non-native speakers focused too much on choosing the appropriate English words rather than on the task itself. To get more accurate results, later participants were given the opportunity to use their native language.
- Share feedback from the assessments quickly.
“It’s important for the acceptance of the program that people get feedback on time,” he said.
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