17 Oct 2011

Frucor's Managing Director, Carl Bergstrom, recently featured in two well circulated New Zealand business magazines, NZ Management Magazine and the FMCG mag.

Below is the article that featured in both publications.

Boosting corporate energy

The man who heads energy drinks company Frucor has his own recipe for boosting corporate vitality. Fun plays a part - so do words like "trailblazing" and "straight up". Why? Carl Bergstrom shares his ingredients for leadership success with Vicki Jayne.

It could be something of a cliché - but talking recipes with Frucor managing director Carl Bergstrom is a fitting analogy. One of his other potential career paths might have seen him on the celebrity chef circuit, rather than heading a beverage company.

"I did think about becoming a chef when I was young - and it's still a hobby..."

He also contemplated law for a bit because the idea of being paid to argue seemed rather appealing. That was before he had daughters and got the whole arguing thing out of his system.

But then, he probably would have been wasted tucked away in a kitchen because Bergstrom is very evidently a people person.

Personable and easy going, he shuns the notion of hierarchy in favour of a corporate climate that is both informal and professional. Fun is good - but it's underpinned by solid commitment to business
goals.

To illustrate how that works he tells a story. It revolves around a corporate fundraiser that prompted Frucor staff to give up something they loved for a day. Bergstrom sacrificed his coffee, someone else gave up walking - instead spending his day whizzing around the office on a kid's scooter - and one of the company's sales managers quit talking.

"Unfortunately it was the same day that he had to come and discuss a major business proposal with me. It was a multimillion deal, quite complex and he couldn't speak. So instead, with the help of a whiteboard, he sang me through the whole thing.

"It was a bit hard to keep a straight face but it really showed commitment - if we say we're gonna do something then we do it. You support a good cause but you don't put work on hold. It's about innovation, commitment, fun - I left for home that day knowing that's why I want to come here every day. That is the sort of environment I want to create."

Seems he has succeeded. This year Frucor Beverages was one of only two New Zealand organisations awarded Best Employer status by Aon Hewitt - an honour it shared with Frucor Australia. The company had set that as a goal for 2012 two years ago, making it a year ahead of time. Last year, it similarly achieved its goal to be market leader in the Petrol and Convenience Channel.

"Our sales force is recognised as best in the convenience trade - as assessed through independent surveys," says Bergstrom proudly. "It's really about blending those aspects - of being a great place to work and a competitive goal-focused successful business."

The ingredients for that are not so secret - or difficult. If there's one thing that 50-year-old Bergstrom has discovered during his years in business, it's that people are prone to over-complicating the process.

"One of the businesses I was responsible for when I worked for Carter Holt Harvey was Raleigh Paper - a great little private company they'd bought whose owner stayed on to run it. I remember he had a sign over his desk that said ‘nothing happens until you sell something'.

"It's a fundamental statement, but one that is often lost sight of by people in a corporate environment. I think people who run private companies have a knack of simplifying business and they know with
crystal clarity what creates value. They may be less able to articulate that eloquently in a power presentation like their corporate counterparts but they know it, everyone in the business knows it. I think that helped shape me."

Bergstrom's career started at Caxton when it was still owned and run by the Spencer family. He was fresh from university with a degree in applied mathematics.

The maths was put to very good use in areas like production optimisation, supply chain management and logistics.

"At the end of the day, it's a way of thinking about how to solve practical problems with empirical techniques," notes Bergstrom. It also led on to his being given some fantastic opportunities.

"At different times, I ran the manufacturing and technical side, sales and marketing, stand-alone commercial products business - I even ran IS [information systems] at one stage. I just got a fantastic practical grooming in business management."

When Caxton was bought by Carter Holt Harvey, he shifted into a more business-to-business role. Just prior to joining Frucor as CEO, Bergstom was general manager for CHH Distribution Group and Carters Building Supplies.

"I saw the Frucor role as an opportunity to get back into the consumer goods business which is what I enjoy the most. I prefer to be as close to the consumer end of the value chain as possible because there is a greater degree of freedom to control your own destiny and create value."

That said, he believes business is becoming increasingly homogenous and business processes more generic.

"You can move from one company in one industry to another and find so much is the same. Increasingly I have come to believe that the quality of people and culture is the major thing - possibly the only thing that differentiates you, that can be your point of competitive advantage. During my career that has just become more and more apparent."

As to his own leadership style, he believes versatility is the name of the game as different situations call for different styles - sometimes consultative, sometimes directive, the ability to be both visionary and pragmatist.

"But underpinning that is one key word and that is authenticity. People aren't silly, they see through someone who is not authentic, who doesn't walk the talk."

Overall, a simple strategy that has worked for him in all his roles is to "hire the very best people you can and then create an environment they can really enjoy and can flourish in". Hence the informal and professional approach. When he talks to another employee, says Bergstrom, rank is not in the room. It's just people having a discussion about business.

With an organisation the size of Frucor - 800 people (600 on this side of the Tasman and 200 in Australia) engaged in a range of areas from manufacturing to R&D, it's important to find common themes that resonate for all.

"Everyone wants to treated with respect, feel they can be listened to, have a contribution, enjoy the team and environment they work in - I think all employees would tick those.

"One of the programmes we've been running over the past couple of years in all parts and at every level of the business is called Quest. It's based on the notion of improving your every day, giving people some skills and toolsets they can use, challenging them to look for ways to do things better, to achieve goals they want but in a different way... and we're getting a lot of value from that."

It's very much part of a "can-do" culture that has its own buzzwords adorning the building on posters or informing staff-designed artworks.

"We articulated our values about 10 years ago now - the substance came from all our staff and these values hold a very special place here. If you wanted to buy an argument with anyone at Frucor, you might suggest those be changed... it's what they felt was inherent in the business and those things they aspire to do better.

"I think they're a pretty good reflection of what we've been talking about. ‘Go for it', ‘trailblazing' - that's all about goal-focused innovation. ‘Straight up', ‘one team', ‘value you' are more about the community of Frucor."

Perhaps not so coincidentally, Frucor values turned out to be pretty similar to that of parent company Suntory. One of Japan's oldest distributors of alcoholic beverages, Suntory bought Frucor from French company Groupe Danone in 2009 - and its motto "Yatte Minahare" can be translated as "go for it", says Bergstrom.

While still New Zealand based, Frucor now generates at least half its business offshore and that is where its best opportunities are for growth - particularly in markets where the energy drink category it pioneered is still in development phase.

"We're totally committed to having a strong footprint and autonomous business here while we focus on expansion offshore as well," says Bergstrom.

"After that, really my goal for the business is simply to be the very best at what we do: being the innovators in our industry, building aspirational brands like V, having the most highly regarded sales organisation by its customers, and being the best company to work for in FMCG in Australasia."

Looking back on his own career, he is grateful to have held a range of challenging roles as well as playing a role in the wider industry as president of the NZ Juice and Beverage Association - without compromising the other things he enjoys doing.

"I unashamedly live in New Zealand for the lifestyle and while work is a very important part of my life, it is by no means the only thing. I think I've managed to keep a good balance."