José Lopez: In his own words

José Lopez

Below is the text of a book I produced, with the help of a few colleagues, on the retirement of José Lopez from Nestlé in 2015. I had joined Nestlé in 2010 and found myself in meetings with José where I would be writing down some of his  ‘one liners’. After a while I discovered colleagues were doing the same; which led to this compilation.

His meetings were like a José Mourino press conference (in his pomp) – the unexpected memorable phrase that had many of us scribbling to reuse in different fora later. José had an ability to unpick conventional wisdom. His wisdom had an unexpected quality, like that chip by Raul (his favourite footballer) against Real Betis (his team).

Time has moved on, and a few of these may not make sense to non-Nestlé folk. But the majority provide food for thought today. Read, reflect and reuse.

“It’s One of Those…”

The Leadership, Philosophy, Wit and Wisdom of José Lopez

José Lopez
José Lopez

Introduction

Leadership. You know it when you see it: part vision, a focus on the right things; and with an ability to engage, motivate and empower. José Lopez worked at Nestlé for over 36 years, during which time he demonstrated all these characteristics.

The following compilation of direct quotes from his time as Executive Vice-President for Operations provides a flavour of José’s approach to leadership.

Compiled and produced by “My People”

July 2015

Setting a Vision

Communicate the logic, then communicate on activities

Once the logic is there, things fall into place.

Don’t build on promises

Don’t push, create pull

To do this, shape the context and change the circumstances. Don’t create antibodies

Under no circumstances will my successor launch a back to basics programme

The first one who is questioning me is myself

Clarity comes with simplicity

It’s more dangerous working at Nestlé than being a bullfighter.

Here José ended the mis-conception that Nestlé factories are safe places to work. The idea, that the food industry was less hazardous than the chemical or construction industries, delayed the need to improve safety in Nestlé for several years. Under his strong leadership Nestlé rose to the challenge and has now one of the best safety records in the industry.   

Actions not Words

I am not an Optimist, nor a Pessimist. I am an Activist

You are damned if you do and damned if you don’t, so just do!

Talk the Walk

Judge less and help more

There are good solutions, great solutions but we need simple solutions

There is no need to invent anything. We know what to do. We have the tools.

Aim high to establish a language. Don’t aim high if you want action

We measure the success of operations people by the resounding sound of silence

Stop investing in places where you have to spend time convincing the organization

We do by ourselves and inspire others to come along

Make choices. Do not assume that we have to do something anyway.

We can map out and see the first few milestones along the way. As we go down the road we will find more milestones. So its about the journey, milestones, constant evolution and innovation. It’s not about end points and targets.

Interview with CNN on Child Labour:

“There is no way, that long term, a company like ours can accept a situation like this. So it’s a matter of how fast, how well, and how many people have to participate in getting these sorts of problems behind us.

“We are determined to make real impact and hopefully also to be used as a lighthouse to show others that it’s just a matter of getting started.”

“My sense is that what we want to do here is to prove that it can happen…  what is new is purely an expression of the will to assemble everybody, to break down these silos and to get the action moving, instead of each one of us trying to give his own interpretation and his own answer.”

Lighthouses

José’s notion of a ‘pilot’ project was that the chosen factory/unit to implement a new concept was a victim, starting with the belief that things would go wrong as it was ‘just a pilot’. José wanted ‘vertical’ start-ups, in other words ‘first implementations’ – (later to be called ‘lighthouses’) of an already optimised process, first time right.

 At the end of the meeting where José launched the ‘first implementation’ concept, Tony Borg, then Head of Corporate Supply Chain, reassured everyone present that the next time they board a plane it would still be flown by a pilot rather than a first time implementer. 

Don’t throw back the stones that others are throwing at you. Ignore the stones and build something bigger than that. Take the debate to where the issue is

Lets do our jobs guys.

On Leadership

It’s my responsibility. The leader is not excusing himself!

We need principles not rules. Understand the context and then act

Compliance can’t be achieved by carrot and stick, you have to engage the hearts and minds

We are not going to spoon-feed people

While great leaders master systems, systems master weak leaders

We don’t want clones in this company, we want characters

Remove yourself from the equation

Do a good job, then you do not need to worry about your career

The enemy is outside. But we keep talking about ourselves.

The best way to deal with trade-offs is to put them on the table. There is a tradeoff between safety and productivity.

No management by anecdotes

Crises need intuitive actions. We just move on.

José never openly criticised a past decision, nor the person who took it. Instead, he referred to the fact that the context has changed and, consequently, decisions had to be adapted.

This motivational trait was also instrumental during Greenpeace’s palm oil campaign. José focused on the pride associated with re-defining the rules and practices of an entire supply chain, far beyond Nestlé’s own procurement volumes.

Stop the hyperventilation

For José there was frequently an over-reaction to events, involving (variously): panicked actions; a tendency to blow things out of proportion; people inventing activities;  or losing sight of what needs to be done. ie hyperventilation. He would have none of it

Too many of you are cheerleaders. There is too much cheerleading and not enough leading

Great leadership is not about vision, its about operationalising the vision

Customer Focus

Value what consumers value. When in doubt, ask the consumer!

Our customers will simply not pay for our waste

People won’t pay for sustainability, until one day they will stop buying the product

The energy [in our work] comes from doing the right thing for consumers and customers

Always ask why you do a particular job: don’t do it because you like it, but because it adds value to consumer: stop doing any activity that doesn’t add value

A brand is a product plus a story, not the opposite

We work on differentiation. Everything that removes differentiation helps private label

We produce products to delight consumers

Root Causes, Symptoms and Outcomes

We have to stop managing the symptom and start addressing the root cause

We need to focus on leading indicators not lagging ones

Drive behaviour not targets

Leaders need to understand the difference between outputs and outcomes. Keep your eyes on the outcomes you desire. What is the output that will get us there, and what is the input to get the output.

Complexity is asphyxiating us. We are too internally focused.

The objective is not to reduce complexity. Managing complexity does not sell one more case

We have decided to fight complexity with complexity…..but this must be focused complexity, not hyperventilation.  When you fight complexity with simplicity, you lose!

In complicated situations     If there is no solution, choose a future

On Value Creation

There is a difference between wealth creation and value creation.  The world was confused [before the financial crisis]. Wealth and value were seen as identical, because they are measured in same currency. Wealth with work equals value, wealth without work is a social sin. This is one of the Seven Social Sins attributed to Gandhi. José frequently referred to these.

Wealth creators don’t care about tomorrow. We don’t accept the people who make the money in that way

Analysts spend all year looking at our numbers, unlike us. Thank God.

There is no need to get buy in – the only question is ‘does it add value or not?’

People will get it or will get it – those who don’t get it may be better off elsewhere, and replaced by those who get it

Waste, Gaps & Competitive Advantage

I am not here close gaps. I want to create gaps

José frequently exhorted everyone to create competitive gaps. Closing gaps was a given

Take waste out – use it for creativity and entrepreneurship

The world is not going to become simpler and therefore there is even a stronger need to remove what does not work

Strive for excellence – improve everyday

Operations cannot win if the business does not win

Silos and Flow

Waste happens at the interface. 60% of waste in an organization is at the interfaces

Perforate the silos and create flow. The way to do this is to:

– create a logic and a narrative

– get alignment

– and deliver reliability

To get flow, don’t dig deeper. Create a picture.

Scale is out, flow is in. Why? Because of information – everyone has iPhones

Engagement

On adopting a defensive and legalistic response to issues:

– If public says it’s wrong, well, then it’s wrong.

– It’s like a red rag to a bull. It’s not the way to deal with the issue. We have to show the bull the prairie and get out of the way.

On participation in platforms and associations:

  • We can’t employ the strategy of the empty chair
  • If you are not on the bus, how can you be in the driving seat?
  • We can’t use industry platforms to bring forward Nestlé’s agenda. Industry platforms are for when we need to engage with authorities 

On Sustainability

Planet Earth can’t be managed through a P&L account. We need a balance sheet approach. Planet Earth will not go bankrupt when we run out of oil, but when the liabilities exceed the assets. Take the case of the conversion of forests – there is no value until they are cut down at which point the activity shows up as GDP growth.

Industry is being demonized – there is an environment of lack of trust. Nestlé is part of the problem and part of the solution.

‘Admit, Improve, Engage’, later adjusted to ‘Transparency, Improvement, Engagement’

Governments have to talk and worry about the ‘half empty’. Companies have to talk about the ‘half full’. If we talk about the half empty we will never get there. By concentrating on the half full it shows its possible.

I am thankful to Greenpeace – they helped us to see things we knew were there, but we didn’t really want to acknowledge.

There is a new reality out there.

On not engaging early enough with campaigning NGOs:

This a typical case of agreeing with NGOs on something. Then looking to the outside world as we shoot each other.

We have to be present. We can’t just hide and hope things get better. They won’t – they will only get worse.

Lets not become a symbol

We have to put ourselves into the equation, not blame others

To fight the bull you have to be in the arena, not on the spectators seats

We are not a political party, and not an NGO. We are business. The only response we have is through the value chain, not through communications.

We can’t save the planet, and shouldn’t give the impression that we can. We can demonstrate what can be done: make great products, and give consumers trust in the company. The consequence will be that we sell more.

No empty promises, don’t feed the cynics. Operationalizing the challenges

Not being seen as a greenwashing is a competitive advantage!

On climate change at a time when the focus was on nutrition, water & rural development

The focus on nutrition, water and rural development is not an excuse not to worry about other issues. Our people are our most important element. They need an answer – they are not comfortable with us not saying anything. What could be the consequences of the forces of climate change on our company? Saying ‘I don’t care’ is not an option. We have to find our way.

Consequences

Intend the unintended consequences

To do this José advocated

– change the circumstances

– create a different environment. Otherwise nothing will change

– change hearts and minds

– don’t throw in more tools and roadmaps

We don’t always need business cases, analyses etc.

We are happy with the price increases [for commodities] – this is counterintuitive for many, but it improves the situation of farmers: the young generation doesn’t want to farm any more

Peter Brabeck-Letmathe: I don’t want the savings, but a compliant, safe high performance company

José Lopez: you get both, because one is the consequence of the other

The factory of the future is the factory that has a future

Philosophical Bits

On socio-dynamics and careers in Nestlé: You are rotating around a planet until another planet (bigger than the current one) passes close to you and attracts you into its gravitational orbit.

Hercules meets Buddha

This was used to describe Nestlé – a company with both hard and soft characteristics – a Cartesian and Confusian company. IMD described the concept as follows: When the business environment is complex… this requires a new way of thinking about leading and organizing people, one that combines simplifying and controlling on one hand, with amplifying and empowering on the other.

Its OK to have dilemmas. We have to live with them and little by little we resolve them.

Nothing kills an opinion more than a number

The sum of the optimums is better than the optimum of the sums

Accept it for what it is

The F word is one of my favorite words, it just puts the right emphasis on a point

Friends come and go, enemies pile up

Your virtuous circle is a virtual croissant. A lot of people decide to invest savings in a brand in order to make the brand grow and create a virtuous circle. But a virtual circle does not always start with savings. You have to start with an idea, a strategy (such as innovation and investment) with which to provide the vision for savings. The virtual croissant stops at the other side of the croissant.

Its one of those

Finally

Do you understand what I’m saying?

That’s All.