Tetra Pak's Dennis Jonsson and Coke's Venkatesh Kini talk about collaboration and innovation

On the road to Nuh, a village in the Mewat region of Haryana, Dennis Jonsson, President & CEO, Tetra Pak and Venkatesh Kini, President, Coca-Cola, India & South West Asia, get chatty on leadership, innovation and working together for out-of-the box solutions. Coke is today among the top five customers for the 11.2 billion euro Tetra Pak and the two collaborate in every sphere — including corporate social responsibility (CSR). Jonsson and Kini are traveling to Nuh as part of a joint CSR initiative called 'Support My School'. Edited excerpts from a conversation with Corporate Dossier during the long drive:
Developing leaders

Dennis Jonsson: We recruit internally in a large measure and when you do that, you try to develop their leadership qualities. We expose them to international environments so that they get a global perspective, understand the value of diversity, learn to look beyond the short term. That helps enormously to grow leaders. Venkatesh Kini: We prefer to grow internal talent, though we recruit laterally too. While we have a structured orientation program, the process of culturisation takes months, if not years. Culture is adopted by understanding the unstated behaviors that represent values. That can only be imbibed through observation and experience.

On managing change

DJ: Managing change is about communicating. One has to understand the reasons for change, and reasons for the accompanying pain. We must ensure people understand that there is light at the end of the tunnel and then incentivise them to cross over to the other side. Last year, we had to close a few units in Europe because we hadn't seen enough growth there. It was painful but we had to ensure every worker was aligned to the reasoning for the closure.

VK: Unless people buy in to the why of change, the 'what' of the change will never be accepted. In any change process, there will be people who will benefit and others who will not. Making sure that the sum total of the change creates a more positive future is the most important thing in change management. People have to understand that doing nothing is worse than doing something. At Coca-Cola, we're going through a redesign to focus more on our core business and drive it faster. As a result, there have to be some changes on how we operate globally. One is that many of the business unit functions now work directly with the corporate office. We are de-layering in some ways at a global level, and that's creating some job impacts. So it is a given to have top management conversations, townhalls, one-on-one communication with people.



The innovation quotient

DJ: We have a system to collect ideas, funnel them, select the ones with the most potential, farm the right projects for them. Following up on innovation is critical too because it is very difficult for product development otherwise. What matters in innovation is if you have to fail, you must fail quickly because it is less costly. Otherwise, you spend a lot of time and resources. But once you actually make it through the funneling process, you actually have a high success rate. So after the funneling process, our success rate is about 70%.

VK: We have launched a lot of new products in partnership with Tetra Pak, and innovation is key there. We launched the Tetra Fino pack riding on the affordability promise. It is the first time in the world, Tetra Fino has been used in a non-dairy product. We have done innovations in league with our partners. Innovation also necessarily has to have a team accountability. When you have a project lead and a cross-functional team supports the project lead, the team wins and loses together. It is important for the team to be accountable. One person alone cannot drive innovation. Out of 100 ideas that we evaluate, if one meets marketplace success, you're doing well. But out of those 100 ideas, you take 50 through a development process. Of those 50, you might put 20 into a pilot. Of the 20, you might put 5-6 in scaling up. And of the 5-6 ideas, if 2-3 succeed, you're doing well.

Learnings from India

DJ: You need to have the right partnerships in India and whatever you sell needs to have an affordable promise. The Tetra Fino pack we developed for Coke in India comes as a chain solution and we have used it in Indonesia to sell chocolate milk. Indonesia too has a kirana culture. Africa is another market where these kinds of solutions would work. Looking at India's size, we have our second biggest plant after Lund in Sweden, in Chakan.

Managing in a multi-speed world

DJ: Europe has been pretty flat for years. But we've seen 20% growth in India and we've had amazing growth in China, particularly from 2000-2010. In Europe, the population is declining and some of the categories are declining, such as dairy products since people are consuming less of them. While you have to be realistic, you should never give up. It is very important for us to seek opportunities in new areas, like prepared foods in Europe, a growing category. Overall, we have a 5% growth target for the company so it is important to look at opportunities in growth markets because they will compensate for decline in other markets.

VK: It's about how you define growth. In some places, growth is about getting more consumers to try the product. Growth in other places is to get more people to consume more often, or offering them more choices. We customise strategy depending on the market characteristics.

Future scope of collaboration

VK: There'll be an acceleration of Indian innovations jointly. But we can do cooperation on three counts—economic, through products and portfolio; social, through jointly supporting causes, like setting up toilets in schools for the girl child; and, environmental, like 'Do Bin', a citizens' initiative by both Coke and Tetra Pak for waste segregation.

DJ: We continuously bring in our knowledge in working with various governments, and have a very clear idea of packs and costs, which we share with our partners. It helps our customers in launching new products. VK: We work together in product development because you can't develop a product without keeping the package in mind. Only then do we develop a total beverage solution.