How to Lead with Purpose | Full Speech

Conversation Introduction and Purpose

So here is how this is going to work. I think that Jen is going to give us some more perspectives on that, but we will start with a conversation here. Some questions, we will talk about the process overall, and then we will open for Q&A, okay? So get prepared, get your questions ready, and once you’re mapped here, everybody’s going to join the Q&A. Is that right? Yep, that’s right, Michelle. Well, thank you both for joining us for this conversation.

Simon’s Perspective on Purpose

Simon, I want to start with you. You’re a big believer in purpose. Why? What do you see the power of purpose for an organization like ours?

So, my love and my focus on purpose had nothing to do with business. It came from my own journey where I had lost my own passion for my own work and superficially my life looked fine and good. I owned my own business, we had good clients, we did good work, but I didn’t want to wake up and go to work anymore. And so that was embarrassing, quite frankly. I was embarrassed to admit that I was unhappy when superficially things looked well. And so most of my energy went into pretending that I was happier, more in control, and more successful than I felt, which is not a great place to be. And it wasn’t until a dear friend of mine came to me and said something’s wrong, was I able to take all of that energy that I was going into lying, hiding, and faking and to find a way to restore my passion. And what I discovered was based on the biology of human decision-making, this little model “why, how, and what.” And I realized I knew how I did things and I knew what I did, but I didn’t know why. And so the idea of purpose has nothing to do with business. It’s a deep-seated human need. Our need to belong is deeply ingrained in us. And if you consider the company as just the modern-day tribe, and the more we feel like we belong to our tribe, and the more that we feel that our company and our work has meaning beyond just the money we make and the product we sell, it actually is incredibly fulfilling and incredibly joyful. And it just so happens it’s exceptionally good for business. Organizations that have a clear sense of purpose, use that sense of purpose to make decisions, hire to that sense of purpose, build structure, incentives around that purpose tend to outperform, tend to out-innovate their competitors over the long term, almost always. Thank you.

Michelle’s Perspective on Timing and Transformation

And Michelle, looking a little bit about why now is the right time, you know, hearing Simon talk about the power of purpose for an organization and what it can bring to the table for our people and how we operate. We’ve had a couple conversations over the last few years about who we are as a company and where we’re going and how we want to be perceived, not just by our employees and our colleagues here, but more broadly by our competitive set and by people outside of the industry. Why was now the right time to tackle this?

So, I don’t think that there is like a right time, but we actually had a great opportunity. And I always had like this healthy dissatisfaction with the way that we were communicating our purpose in the way that we were talking to people. And there was this never-ending conflict of people like me that are for more than 20 years in the company and that we share this passion and immigration uh sense of Noble mission for doing what we do and get confronted all the time by people that are joining the company that were great people asking us questions of why do we exist, what would the company miss if the ABI would not be here? And I always thought that our answers were like sometimes either superficial or they were not really well thought to address the changes in society and the reason why people are asking this question. It was because they deeply care about this purpose, was not just a question in there, but we were trying to give answers that were very shallow and that thing was like was inside me growing for the years. And I had this conversation with Britt what I said it cannot keep trying to answer this if averages the average opinion of everybody. I want to give a try and bring the best people that we can and try to get to an answer to that that is massive transformational that mobilizes people that brings more is Miles than uncertainty and that people really engage with. And then a lot of people came together. It was super funny. It’s even a question that I have for you, by the way. I will link this on the question because one of these minutes of insanity when we were talking about that, I said I want everybody that knows how to build this that is really any specialist and is good at that, I want to bring Simon Sinek. And then there was this silence at the table and people said what are we talking about, how are you going to bring this guy here? And then I said yes, I want to bring him. And then I think that we set Marcel on a mission together, we fighting Kennedy, and we start talking to people here and there. And someone found a way that is always a way to talk to you. And it was super funny because at Prince at the beginning, people came and said oh, he’s going to join you for like a 30-minute session. But we have to let him know that one, he doesn’t do this job, two, he doesn’t engage on companies, whatever he talks about the topic. But he’s not going to do the work with you. And then I was incredibly frustrated and say why not if this guy is the good one, he’s going to come here to say okay, so give me one meeting with him, give me the 30 minutes and I’m sure that we can sell him the passion and bring him along and he’s going to engage and help us. If he does not, we go for the second choice, third choice, we find a way to do this ourselves. And then I was always curious to understand the perspective from your side because was this this group of crazy people talking all together trying to convince you to join. And I’m so happy and so glad that at the end you helped us and we continue to engage and talk after all these months. Sounds so like, like I’m hidden away that they don’t let me out of my box. The.

Simon’s Strategic Decision and Purposeful Mission

The reason is, um, a long time ago I made a strategic decision that when I realized the power of this little idea, I had some choices to make, right? Where I could build a business around it, become a consultant, you know, make good money, build a consultancy around this idea, that was option number one. And option number two was to become a preacher for a new way of thinking about business and to work and devote my life to undoing everything that Jack Welch did. Um, and I made a strategic choice that I would, that I would, that I would preach. And so, and my goal was to get to as many people in as many organizations as possible, um, to spread this message. Um, and so I would often get invitations to come and like become a consultant, but what I always viewed it, it would take me away from spreading the message, you know? Rolling up my sleeves for two years to work with one company is amazing, but I’m trying to change the way we think about business. The great news is the movement is growing, you know? When I first started talking about purpose a bunch of years ago, it was like hippie dippy stuff, you know? You didn’t talk about purpose at work, um, work was serious, um, and, uh, and now I love the fact that major corporations at the highest levels are talking about the power of purpose because you felt it. You felt like it was superficial. I love that it’s deeply human. You’re sort of reinforcing what we said a moment ago, um, and quite frankly a lot of companies pay purpose lip service because it’s fashionable, right? And so every company has a purpose statement on their website, but the question is, do they use that purpose statement to make decisions? Are they using it to build their strategies? And the answer is woefully small. Um, I’ll give you one silly example, you know? Uh, and I, I think it’s one of the ones I wrote about, um, which is a pharmacy, for example, you know? Uh, if you go to Walgreens, their purpose statement is to help our customers be healthy and what something like that, you know, whatever it is, and then you walk through their stores and they sell cigarettes and other really bad things. And if you ask them why do you do that, they’re like, well, I mean, the margins are great, you know? It’s like, but what about your purpose? In other words, they never meant it. It was never serious. And quite frankly, when we met, I was just blown away by your honesty and your passion and the fact that you do recognize that there’s new ways to run business, um, uh, yeah, I was just completely just drawn to the people and that you really, really do believe in this stuff. And I find that very attractive. And if you can change the way you do business, you can influence the way other people do business, um, at the risk of talking for too long, um, you know, GE back in the day was the leadership factory in the world. That if you had GE on your resume, that was enough to qualify you to go run any other company, you know? Um, well, that didn’t work, you know, the model many of those executives drilled those companies into the ground. GE is a shadow of its former self and it wasn’t built to last. Um, and no one has replaced GE as the leadership factory for the world because the old models, if you think about it, we all came up with the Jack Welch thinking, we all grew up and became executives in that world. And so the talent pool for a new way of thinking a business is zero foreign exciting is that it is a there’s an amazing opportunity for a large company to reinvent literally how business is done, just like GE reinvented it for those strange times. My question is why not ABI? Like why not ABI? The way that you will imagine purpose, the way that you’ll imagine leadership, the way that you will run your business will be not based on old thinking but based on new thinking and that simply having ABI on your resume qualifies you to be the CEO of absolutely any company in absolutely any industry. No one has replaced GE. My question is why not you?

Michelle and Simon Discuss ABI’s Purpose and Leadership

Simon, following on from that, um, I think we’ve all had the benefit of hearing Michelle talk about our purpose. We dream big to create a future with more cheers, um, and we’ve heard the passion in his voice and we’ve heard him refer to our purpose specifically as magical. Is that something that you feel is unique to ABI in terms of having a CEO as well as a company and employees that feel so passionately about our purpose?

The simple answer is yes, um, the simple answer is yes. I’m, um, and I’ll, you know, refer to the answer I gave a moment ago, which is a lot of the leaders of major public companies came up through the old system and so you know what got me here may not get me there but the fear of changing what I was raised to believe over a 20 or 30-year career, you know, it’s largely fear because this is what I know I’m really good at this, I perfected it, it got look where it got me why would I change, you know? And I think it takes tremendous courage to say yes that was great but that what got us here will not get us there and to challenge oneself and challenge one’s company is pretty rare in especially for large public companies. And so sort of following on to that I assume and you can both maybe speak to this that you both see purpose as a major driver or a catalyst for opportunity for a company.

I mean yes, I mean the simple answer is yes I think we all agree uh and you and I definitely agree um but I think it’s also um if you just look at if you look at this young generation who’s coming up you know remember that they grew up in the old in the old model more important their parents worked in the old model and so I hear so many people complain that this young generation shows no loyalty to the company they’re in and out well remember they watch their parents get laid off because the company missed its arbitrary projections the company was profitable just not as profitable as they promised and so their parents lost their jobs right so why should they be loyal to the company that’s what they saw no loyalty to their parents and it was not a meritocracy their parents had woodworking were working hard and so I don’t blame them and so they organically are challenging the old systems because it doesn’t feel right um and they’re looking for companies to respond to that and most companies either pay it lip service or or just don’t and so I think any company that ignores changing tides of the world will find themselves playing defense and playing catch-up in a few years as that generation gets older because they’re demanding it and they’re not wrong thinking through kind of the opportunity.

Importance of Purpose in ABI’s Vision

Here, um, one of the things that we had talked about when we were creating the purpose statement was that it would be something that was true today but also would live in through the future. Can you talk about why that’s so important for an organization like ours?

So I’m a devotee and complete fanatic for the infinite game and having an infinite mindset and very quickly, um, just a quick definition so you know what I’m talking about. Um, Dr. James Carson in the mid-1980s defined these two types of games, finite games, and infinite games. A finite game is known players, fixed rules, and agreed upon objective football, baseball, there’s always a beginning, middle, and an end, and if there is a winner, necessarily they have to be losers. Then you have infinite games. Infinite games are defined as known and unknown players, which means new players can join anytime and you don’t necessarily know who all the other players are. I mean, you definitely don’t know every brewery in the world. You know, the rules are changeable, which means every player can play however they want, and the objective is to perpetuate the game, to stay in the game as long as possible. Um, turns out business is an infinite game. You know, when Circuit City went bankrupt, Best Buy didn’t win anything. Um, uh, they had to keep playing, uh, companies come and go and yet the game continues with you or without you and there’s no such thing as winning nobody wins business, it doesn’t exist. Um, but if you listen to the language of too many leaders it becomes abundantly clear they don’t always know the game they’re playing in they talk about being number one or being the best or beating their competition based on what you know and I love it when Executives come to me and say you know we are number one and I always say for now you know. Um, and so and so um the idea of building a company that can survive every single employee in this room after you’ve long gone and that that company remains true to its purpose um is a very, very powerful thing a great example is right outside the front door you know the Walt Disney Company um you know the purpose that Disney founded and they’ve they’ve gone through you know trials and tribulations for sure um ins and outs but for the most part you know when they are at their natural best they are they hearken back to their founding purpose and I love that I love that uh you know you ask me is it essential I mean depends on what kind of company you want to run um if you want a company that that can continue to innovate and set set the course for what business should look like Define what Innovation looks like in your industry long before you’re all you know long after you’re all gone then build that company but if you want to build a company that just um sucks the life out of people who work there and does damage the you know to the industry all the name of it does damage to the the communities in which we work all in the name of short-term gains you can build that company too and it’ll come at a much steeper cost um in terms of Love loyalty you know Etc et cetera so yeah maybe I’m just a crazy idealist.

Balancing Finite Goals with Infinite Purpose

So I think Simon as far as the infinite game is concerned um and I think yeah I know we have one zone for example that has fully adopted the infinite game um and I imagine we as ABI knowing Michelle we want to be infinite players but we’ve heard from speakers yesterday and today that have talked about sort of the tension between you know needing to meet short-term metrics and having our eye on the long-term strategic objective and those metrics having everything to do with quarterly earnings as well as the annual targets that we set for ourselves and we live and die by so and this question is both for Michelle as well as for you Simon you know I guess from an ABI perspective how can we be an infinite player and align that tension yeah so we can still meet our metrics as well as have that sort of long-term growth strategy.

The infinite game is not the absence of finite games um you can absolutely have arbitrary goals and remember most of the financial goals we set a few people sat in and said what do we want our annual goal to be and somebody says let’s make it this number and somebody goes no let’s make it this number and that becomes the number right there’s nothing wrong with that absolutely nothing in fact it’s necessary human beings are very tangibly driven animals we like counting things it’s actually important can you imagine running a marathon without mile markers it would actually be unnerving so metrics help us measure speed and distance which is very very important but we have to remember that when we hit a metric or don’t hit a metric the game has not been won or lost they’re markers right and that’s the important part so stop thinking we have to stop thinking about business like a race or a game and start thinking of it like a lifestyle so for example I want to be healthy right so there are many things I have to do to be healthy I have to eat right I have to exercise I have to you know get enough sleep I have to nurse my personal relationships there’s probably 15 or 20 other things can’t do all of those things well all the time it’s a striving same in business we have you know we have product we have marketing we have sales we have leadership can’t do them all right all the time it’s a striving but we can set arbitrary goals like I want to lose x amount of weight by X date right and every day I’m going to stand on the scale some days I’ll feel good and some days I’ll feel bad and when I hit my goal I’m excited um but the problem is I have to keep exercising for the rest of my life like it hasn’t ended simply because I hit a goal and that’s important to recognize but what I find more interesting is what happens if you miss the goal and the answer is nothing nothing happens in fact very often we just miscalculated the the time it’ll take to achieve it so if you’re doing all the right things and you you see the trend data is is on path and you just lose that weight in a month later or two months later okay you’re healthier now even missing the goal than you were before the the bad news the where it gets dangerous is when we’re so obsessed with that goal that I’ll starve myself and stop drinking water to hit the goal and I’m actually unhealthy and companies do that so the goals are good and celebrating the wins are great and there are wins that’s fantastic but we have to remember that if we miss the goal the question is.

Trend Data and Company Health

“What’s the trend data like? Are we a healthy company? Are we taking care of each other? And I’ll just go back a few years ago, um, uh, uh, Ginny Rometty. IBM missed its numbers and Ginny Rometty made an internal video, which of course leaked. Made an internal video that was spread out, set up to the entire IBM, that basically, all over the sales team publicly. And I remember talking to somebody at IBM, and I’m like, ‘What’s with that video?’ And they’re like, ‘Oh, so glad I’m not in sales, right?’ And basically berated them for missing the numbers. This was the first time IBM had missed its numbers, the first quarter in 69 quarters. And the CEO’s response was to berate a team, to rate and hire division. Right after 69 quarters, they missed their first one. Guess what happened after that, berating the team? And what happened to the culture? And guess how many times they missed it after that? It continued. In other words, it’s fine. It’s fine to miss it. It’s a game. It’s a long game. So I think that’s where we get confused, which is we become obsessed with, we missed our numbers once, we’re doing fantastic, you know? So I think that’s where it’s just about keeping things in perspective. That’s why the infinite mindset helps. It’s just about perspective.”

Setting Right Goals and Targets

“Can I just compliment on that? Because they think that in our case, we’ve been discussing this in the last two days and it’s a very important topic for us, because sometimes we set ourselves the wrong goals, or even if we set the right goals, the right targets, to simplify the way that we measure, then we get too obsessed with that target. In the behavior that follows is the wrong behavior.”

Beyond Beer Space Opportunity

“So we’ve been talking here, for example, about the Beyond Beer space, which are these liquids that address needs that consumers have but that beer does not serve them because they like sweeter liquids or higher alcohol liquids or mixed liquids. And this is an incredible opportunity for us. One target can be a given number of net revenue. But this is not why we are going Beyond Beer. We are going Beyond Beer because we want this future with more cheers. We want to attract more consumers to our franchises. So we need to expand penetration, bring more consumers into the category. And the net revenue is just a consequence of that. It’s just a milestone, a mark. But if people start trying to achieve that target so hard and so obsessed, then they would do like unhealthy sales that will not turn in the point of sales that will leave retailers upset with our product, with the wrong impression that the capital is trapped there. And then we lose the long-term game, which is attracting more consumers to the category.”

Rebalancing Short and Long Term Goals

“And we have made like a huge change on our compensation and rewards model to rebalance short and long term in a way that people get free of this obsession of this 12 months targets.”

Focusing on Constant Improvement

“And the other thing that I agree 100% here, my example is a much uh, shallow one, but I love sports and I love all types of sports. And one of the sports that I follow is like martial arts. And that is this fighter, which I think that’s one of the best ever. His name is Khabib. And this guy came up with one idea that is like he always talks when he’s fighting the other guy’s trash talk. He talks like serious stuff. And he was saying in one of these world championship fights, like win or lose doesn’t matter. I know how much I put into it. I know that I’m giving it all here today. And if God helps, I will win. If not, I will lose and I’ll come back. Because this guy, he is focused on that fight, but he knows what he wants for the long term. Yeah. So win or lose it today, circumstance when in the long term, I know where I’m going to. And I think that this is a little bit of this idea of quarter by quarter, there will be win and lose and we need to get used to that because you learn a lot when you lose. But if you are training hard, if you are exercising every day, if you are attracting more consumers every day, if you are working together with your community retailers each and every day, then in the long term, I have little doubts that you can win, yeah, right? And this to me is this this beauty of the idea of the infinite game, which I think that fits super well for purpose because there is no final milestone for a future of Marches. Yeah. It really comes together very well on the idea and what you’re capturing beautifully with that story is the ultimate, the ultimate competitor in an infinite game is yourself. It’s fundamentally a game of constant improvement. That’s all it is because, you know, as we said before, if a company goes bankrupt, nobody else wins anything. It’s also a game where two organizations who sell similar products at similar price and similar quality can both be wildly successful at the same time, you know, even if the numbers are like this. Um, and so I think what you’re talking about is exactly right, which is the game is constant improvement, and the losses reveal to you opportunities to improve.”

Bringing Purpose to Life

“Well, I think constant improvement is something that we always strive for at ABI. You know, Michelle, it sounds like you’re really talking about the fact that if we all focus on bringing our purpose to life, you know, focused on dreaming big to create a future with more cheers, that we’ll all see the benefits from that. Can you talk a little bit about how you want everyone in this room to help bring that purpose to life?”

Fostering Company Culture

“Yeah. I think that the first point on that and I I like to repeat this over and over again. I think that we had like a couple of amazing moments when we were working on this purpose, and one came from one question that you asked, which was what is that very own thing that defines your culture and that is there since the foundation. As you do this soul search, you always remember that that was part of the company, and we came up with this monster.”

Driving Purpose and Impact

“This is dream big, and this was in our face all the time, right? And then there was the idea we dream big to something, and this is really how we create more opportunities for people, how we have a higher impact in the society, how we help the economies of this community where we operate our business, how our retailers grow their business so we can grow together with them. And this is a job that’s like it’s easy to define, come up with the purpose of the direction, but the execution is very granular, right? The execution depends on each and every country in each and every region and in the leaders that we have here at the room. That’s why every time that I go to visit a different country to talk to people, I want to know what they are doing that is related to our purpose so I can come back and tell these stories, right? So I think that what I expect is people really walk the talk and leave what we are discussing and trying to build together because there are plenty of opportunities out there and no one person can execute all of them. So we need everybody to work together. But maybe you can also compliment and tell me how do you see the role of these people here. We have them not the top one percent of the company, we have the top 0.1 percent of the company in the room, and they are the people that really drive and manage the company in the day-to-day because they are very close to the operations, to the communities, to the suppliers, to the customers that you have. So how do you see their role in making this purpose now come to life and really have the full impact that we expect to have?”

Leadership and Care

“They offer the most. They, first of all, they have the most, um, wonderful job in the world, which does to take care of people. I mean, you know, the responsibility of most senior leaders is that not to actually do the work of their departments but to take care of the people who are doing the work in their departments. And that new skill set that growth opportunity to become a great leader is magical. And when you see people do things, when you see people dream big to do something that creates a world with more cheers, like when you see them do that, it’s like a parent catching, you know, you’re catching your kids doing something wonderful or sharing or helping another child. It’s like you realize, oh my God, it’s all worth it, all the sacrifice, all that time, it’s all worth it. So leadership is a magical thing, and to be a student of leadership is wonderful. So that’s one. The other thing is there’s an opportunity for massive creativity. You know, the thing that I like about your purpose statement and I would, from, I would do one slight thing which is to drop the ‘we’. I mean, you can keep it up, obviously, I’m just saying practically, um, uh, when you say dream big and it becomes an instruction, right? Like you literally can go back to your people and say dream big. I mean, that that’s what I want you to do and understand what it means. So how I interpret the cheers is, I mean, there’s the obvious one, right, you know, the, the, there’s beer. But cheers is, is it’s more than celebration. It’s, it’s it requires at least two people. And what I love about it is it’s about, it’s about community. It’s about people coming together, whether it’s happy or sad. It’s about people taking care of each other. And I love how you’re pushing people to, to rethink how we do things so that people come together and produce something that’s worth celebrating at some point. Um, and it doesn’t have to do with product. I mean, as I said before, I’m realizing as I’m thinking this through, you know, that challenge of you know if if GE was the leadership Factory in the past, why not ABI for the future like We’re Dreaming big and coming up with a reason to say look what we’ve accomplished in the world we’ve changed the course of global business I mean that has nothing to do with beer but it has everything to do with your purpose and I think that’s the challenge and opportunity everybody here has which is some of what you are able to bring to life with your purpose is in product absolutely and in sales and marketing and all the things that you’d expect um but some of it is actually how you actually do business and your ability to interpret that cause that purpose through the actual business I think is is what makes your purpose actually have longevity which it’s it’s more than just a product statement or a statement of like what we want to achieve in the world you know based on numbers or metrics it’s actually a statement of how we think and how we approach problems and how we tackle problems and I think that’s the most important thing and the most important thing is you have to practice it meaning um you have to come together and work together and help each other because this is about Community it is about cheers.”

Building Trusting Teams

“Well, and I think to that point Simon one of the five pillars of your book is specifically trusting teams and when you talked about IBM for example missing their target um you know among other things it sounds like a culture issue and a communication breakdown so when you look at ABI I think everybody can agree we’re really far along on you know purpose otherwise known in your book as just cause trusting teams and culture is hugely important to ABI when you look at ABI or you look at other companies what are sort of the key elements to building those trusting teams and I would ask Michelle as well what does he want to see from us as far as you know the leaders of the company in terms of how we build those trusting teams?”

Defining Trust in Teams

“So number one trust is a feeling you can’t order people to trust you um and simply being smart or getting something right does not produce Trust let’s be Crystal Clear what a trusting team is we’ve all been on one in the past maybe and I hope you’re on one right now um we’ve all been on trusting teams where we have psychological safety to say out loud I made a mistake or I need help or I don’t know or I’ve got some stuff at home and I’m struggling and it’s affecting my work product and I need help without any fear of humiliation retribution and it’ll affect your promotability that’s what being an interesting team is and that’s what we have to build for the people who work for us not being on a trusting team we’ve also all been there unfortunately where we’re afraid to say I made a mistake we would never say I don’t know something or don’t understand something we would never ask for help because it’s we’re either going to get humiliated publicly or we’re going to affect our promotability um and the opportunity to build trusting teams is what leadership is all about um that’s that’s where the the strength of culture comes from so uh so yeah it’s it’s it’s it’s essential to building any kind of business short term or long term um but definitely definitely a long-term company for sure and all the stuff you talk about challenging and pushing boundaries means if you’re pushing.”

Embracing Failure and Learning

“…and you’re thinking big, you’re going to fall a lot, it happens. There’s no such thing as innovation without experimentation, and experimentation inherently requires failure. And I think a lot of companies that are too finite-minded, they fear failure. They fear, well, let me restate, I actually don’t like the word failure. You know, you hear it a lot, which is, you know, we have a fail-fast culture. I think the problem with the word failure is it’s like the word cancer, which is there’s a huge difference between stage four liver cancer and melanoma and a mild melanoma, but they’re both called cancer, that’s the problem. And there are failures which are minor and overcomeable, and there are failures that are catastrophic, but the problem is they’re both called failure. I like the word falling, failure we should work very hard to avoid but Falling we should encourage because you can get back up. I know of one large gaming company and I love this, um, that they don’t have parties when they hit their goals, they have parties when they fail, they have parties when a game completely is a complete blowout because they’re trying to acculturize being comfortable with missing a goal or complete abject failure. And they have a party and they have their own champagne which has a label on it, um, their own label I think it’s called they’re called lessons and on the back of those champagne bottle after the party they actually write the lessons they learn from the failure. And so it’s a comfortable, it’s very comfortable, it’s a company that’s very comfortable with failing which means they try again very easily and they’re super innovative. So creating a culture where falling is is part of the game right I think it’s wonderful it has to be celebrated I love it…”

Building Trust Through Vulnerability

“So if I go back to to the previous question before answering that I think that trust is that the the very center of building teams and having engaged teams and trust is earn it is not given it’s not because you are the direct or the vice president that people trust you and you need to earn every day because every day you have a different situation today I’m happy tomorrow I have a problem at home that day after tomorrow I made something right and the next day I did something wrong so people need to one earn the trust second I really think that this idea of exposing the vulnerabilities talking about things that do not work not having a theater of just greens and success in things that you achieve it is super super important in build interest. I love the conversations that I have with people when people come to talk to me and say let me share with you the things that are not working and here is what you are trying to learn and get organized so we can fix that so this is like the best way for it to start any conversation because then you can really focus on what matters in getting the business to be better…”

ABI Culture and Performance

“…in terms of culture I always like to to think that our culture is very simple travels everywhere I actually always spoke about that so I had the chance to manage our business in China and find the amazing people that understand our culture and live through the same principles and perform at very high level in China or in the United States or in Latin America simple is a high performance culture so people they like to think that they can run it well lose weight compete and party and do everything at the same time so people are very active and it’s a culture that when people like they really feel good about and they want to have a contribution when they don’t like it’s very hard for you to be in that place because if you’d agree too much if you don’t want Candor if you don’t want to talk about problems if you want to hide yourself is very difficult because you don’t have like closed offices because we have performance targets because we do perform as appraisal and my my recommendation for people from outside is what I told you is speak up look for people to help you every time that you have an idea bring this forward don’t let people just shut you down and at the end they always tell people if you have any issues that you cannot solve come to me or help you uh and it’s a simple culture that’s what I like it’s like I like to think that we are all like athletes we want to perform and improve our own marks and we can do this with people that are in the same team as us so that that’s what our culture is about great that’s nice…”

Importance of Storytelling and Reputation Building

“We are part of an incredible industry and an incredible category, so beer is a big category. I repeat this all the time: one out of a hundred jobs out there is related to our industry, from farming to the retailers and bars and restaurants. One out of a hundred. We have a huge impact in the communities where we operate; our category is very inclusive—men, women, young, old—it doesn’t matter where you come from, you can always sit, drink a beer, and talk, and that’s gonna serve you in many different purpose shapes and forms. It’s very natural for ingredients, right? So barley, yeast, water, hops, and you have these incredible beers, it’s very local, so different from other companies. We are not like designing in Palo Alto and produce it in Bangalore and in Bangladesh or somewhere in China. So we have businesses across 50 plus countries, several factories, and people and communities that rely on the work that we do. But we have not been telling our story out there all the time, and because of that, others start to tell our story and build the reputation that we need to live with because we don’t have the courage to go there and tell our story and say what we stand for and what we do. And the most incredible thing is that when people get to know us, the more they know, the more they like. So, wearing this event that they just was sharing here, the result of the work that you all do, and I start talking to people in Washington and you can imagine the conversations, the audience, and people and the conversation was two minutes, five minutes, fifteen minutes, and was unstoppable. At one point in time, we were talking for more than an hour, and people continue to ask questions about what we do in Africa, how do you support the retailers in Mexico, how is this thing of designing the seeds that we use for barley in Argentina, in Brazil, and people don’t really know the beauty that exists inside the bi and I think that as we work together collectively to tell our story to build a reputation then it’s always easier to open any door to do business to bring partnerships in to have more people sharing their dreams with us because we’ll never be able to realize all the dreams only by ourselves, we need partnerships, we need expansions of the company, we need to bring people to work with us and help us to achieve what we want to achieve and this is what reputation is it takes a life to build what you need to build and you need to take care because if you lose for one moment it’s gone forever, right then if not us to bring the reputation of the beer category if not us to build the reputation of ABI who then, right so we need to tell our story. I’m living proof of that by the way which is, you know of course I know Anheuser-Busch, you know I knew some of your Brands not all of them and like whatever beer you know and when I got to know you, you know I fell for something and saw something that I didn’t know and and understand that that there’s something really pretty magical going on here and narrative really matters um and your ability to tell your story that goes beyond product is is I think an amazing opportunity so that people shouldn’t have to get to have them they shouldn’t have to have a meeting with you to know how magical you are you know um uh it only reinforces it if I may um you know I talk about the concept of worthy rivalry which is the other companies out there who you know do things better than you so you can learn from them and the way that Phil Knight used to talk about Nike I don’t know if you’ve ever heard the story um he was speaking at a large conference a thousand someone people whatever it was and you know the most CEOs as you know and they show up to talk about their companies they talk about revenues and market share and you know and he stood up and he said to the audience if any of you have ever run for exercise can you please stand up most of the room stood up he said um if you run at least once a week please keep standing everybody else sit down most rooms sits down he says if you run on you know twice a week please keep standing he says we run three times a week rain or shine regardless of the weather or the temperature please keep saying there’s now a smattering of people in the room and he looks out at them and he says the next time you’re out there before the Sun is up it’s dark it’s cold and it’s wet and you’re running by yourself we’re the ones standing under the Lamppost cheering you on that’s how he described Nike in an instant you understand what just do it means just do it has nothing to do with winning it has to do with trying and if you look at the history of their advertising Bo knows this and all of those things it had nothing to do with it my favorite one was the kid who takes the steak did you ever I don’t know if you remember this whole TV commercial you know kid in somewhere in Latin South America it takes a takes a soccer ball puts it on the kitchen table takes a red raw steak out of the fridge and wipes the blood all over the soccer ball and then he goes outside and puts it on and all the dogs in the neighborhood sniff the blood and they start running and chasing him and he’s kicking the ball it has nothing to do with winning it has everything to do with trying it has everything with doing and his story his ability his narrative captured that so exquisitely and when Nike’s at their best they celebrate the ones who do not the ones who win and yet…”

Introduction

The video segment begins with a speaker addressing a major sports brand, suggesting that they have an opportunity for people to fall in love with the brand similar to how people fall in love with Nike.

Speaker: Ironically it’s one of these major sports brands, and I think you have an amazing opportunity for people to fall in love with you the same way we fall in love with Nike.

Audience Interaction

The speaker transitions to addressing the audience, indicating that there is time for audience questions.

Speaker: Let’s get to the audience. Well, we have some time for some audience questions, so if I believe we’ve got some mics around the room.

Question on Responsible Drinking

The first question from the audience revolves around responsible drinking and its alignment with the company’s purpose. The speaker addresses the importance of responsible drinking and its connection to community and taking care of each other.

Audience Member: Thank you, Simon. Thank you for sharing your personal story and why purpose is important for each of us, not only for companies. Really moved and touched with your comments. In this company, we call responsible drinking promoting responsible drinking. We call it smart drinking. How do you see the role of smart drinking into our purpose going forward?

Speaker: I don’t think so smart drinking is a practical necessity for the product that you have because it has alcohol in it right, like there is actually a healthy and there’s a safe and unsafe component to your product right like any product. Like you know if you make a car, we want you to drive not like a crazy person like you have to drive responsibly, you know, and so if your purpose is about community and taking care of each other if your purpose is about dreaming big and and creating a world where there’s more cheers I think one of the things that um instilling responsible drinking or smart drinking actually is a is actually less about the individual because if they got the point where they drank too much I don’t know you know they don’t usually stop uh it’s about our friends it’s usually our friends who say I’ll drive it’s our friends who say I think you’ve had enough it’s our friends who say just one more. I actually think smart smart drinking is it is very much built in your purpose when it’s done the best um and and I think to say that every individual person has responsibility for themselves at all misses the point of what it means to be a human being so I think if we can inspire people to take care of their friends who’ve reached the limit I think that that really captures your purpose.

Question on Vulnerability

The second question from the audience relates to vulnerability, particularly in leadership roles. The speaker emphasizes the importance of leaders being vulnerable and sharing their struggles to create an environment where others feel comfortable doing the same.

Audience Member: Hi, Simon. Thanks for sharing everything with us. I have a question on vulnerability. We have a massive Cultural Revolution going on, and we see like here High leadership uh really engage with that yeah there is a difficulty like we we say that we are not leaders anymore that know all the answers but we learn everything but it’s difficult in practice to be vulnerable and to accept and not being able to have all the answers so if you can share with us more on how to exercise vulnerability and how us as we as high leaderships can also influence middle management to to to exercise vulnerability.

Speaker: Thank you, um, it’s a great question, and that word scares a lot of people, you know when we’re told you have to be vulnerable right it’s it’s scary to a lot of people it doesn’t mean you have to walk through the Halls crying every day that’s not what it means and what vulnerability means simply is I’m willing to share um as I said before I made a mistake I don’t understand I don’t know I need help because that is a position of weakness right because as leaders we think we have to know all the answers we think we have to have we have to be right all the time and the problem is is when we when we project that it actually has a has a it actually has a negative impact which is we now put pressure on people that they always have to be right and they have to avoid the answers because I’m always right and I have all the answers in other words you’ll never get the truth out of anybody because that’s the example that you set being vulnerable when you say in a meeting I you know I don’t know or I don’t understand can somebody explain that to me again what you’re doing is you’re creating an environment where other people can say I don’t know can you explain it to me and you get more information that way but even I think even expressing how we feel right um I think people are afraid of that and I think covid covet was a little bit magical um because we saw people at home we saw people in sweatpants we saw people with their kids running through the screen and their cats jumping across and it was imperfect and things you know you lost the sound and we had bad connection and it was all fine everybody was patient and I really appreciated that we learned to be patient with people’s Humanity but how many leaders talked about when they were really struggling during covet um I went you know at the beginning of covid I called a friend of mine we had to Pivot our organization we had because what we made most of our money from in-person events and I called a friend of mine whose active duty military and I said how do you compartmentalize your emotions so you can stay Mission focused because I gotta stay Mission focused I don’t have time to worry about what’s going on and he gave me a very Stern warning he said you can’t he said no one can compartmentalize their emotions he says at best we can do it for a short period of time but every single one of us will suffer the trauma of combat he says the hard part is you may not suffer it in the moment you may suffer it four or five or six months later after you’ve been home already he says so the stern warning is you’re going to suffer the trauma of covet at some point and I called all my a-type personality friends and said we’re going to be hit there’s no avoiding it no matter how you know strong we think we are it’s going to hit us and we all made a deal to call each other if we started to struggle and sure enough one by one four five six months into covid the phone started to ring and people were really struggling and we all made a deal that there’s we never cry alone if you have to cry you call somebody that was the deal we made with each other and um sure enough almost on schedule about four or five months in I started to go through my depression didn’t was did struggle to recognize it right was afraid to call it depression because you know I’m a happy-go-lucky guy I don’t have depression I don’t want to be a diagnosed right but that’s what it was I was suffering Trauma from covet and um one of the first things I did was uh talk to my team uh well actually the first thing I did was I called active military friend and said what are your symptoms when you suffered the trauma of [Laughter] and he said he answered my question he said well um I my my sleep pattern gets really screwed up he said I go to bed really late for no reason and I don’t want to get out of bed in the morning and I was like yep and he’s like I I don’t

really want to talk to anybody I become really anti-social and I’m definitely not asking anybody for help and I was like yep and he’s like and um I’m unproductive he says I’ll have an unproductive day and he goes that’s okay I’ll I’ll rationalize it that’s okay you’re fine you’ve been busy it’s okay and they’ll have another and another in another and I’ll keep trying to hide it and I was like yep and that’s when I realized I was in it and so one of the first things I did was I when I had we had an all you know an all hands team as we always do we had one of our company uh All Hands meetings I said I’m I’m going through it guys I said I’m really struggling hard I said my sleep pattern’s off I’m not motivated I’m struggling to ask for help I’m going through this and I just need you to all be a little patient with me I’m figuring it out I’m sorting it out I’m asking for help but I’m I’m not going to be very good right now and I just need you as a team I need you to be patient with me that I did that to my team made it possible for them to do that to me if I had pretended that I was happy throughout all of it I would have put pressure on everybody who is struggling to pretend that they were being happy and the worst part about that as a leader is then how can I help if I don’t know and we make the mistake very often that when somebody’s High performing that they’re fine because some people the way.

Conclusion

The speaker concludes by emphasizing the importance of leaders acknowledging their struggles and being open about their vulnerabilities, creating an environment where team members feel comfortable expressing their own challenges.

Continuing the Discussion

The speaker continues to address the audience, encouraging them to reach out for support if they are struggling and emphasizes the importance of having at least one person who can provide courage and support during difficult times.

Speaker: They manage stress is to double down at work so their performance will actually be through the roof and they’re struggling really hard so performance is no indication of someone’s stress and so I think when the ability to be vulnerable is one of the greatest and most difficult Leadership Lessons any of us can learn but it is so important to building trust when people see us as human because it allows them to be human too. Do we have another I see in the middle of the room and if that whole story scared you if you feel like you’re going through something like that call one of each other I assume you have friends in the room and do it to one person you know I’m struggling what do I do and you’ll find that you can produce tremendous courage when you have at least one person who’s got your back I think I have Craig there right hello I’m here thank you Simon for the inspiration and and also thank you for the challenge you know about GE be in the leadership Factor the past and how can ABI become the new one right I wanted to ask you can you give us two or three examples of what GE and Jack Welch got wrong and how API should think about it differently overcome the new leadership factor of the future yeah absolutely um uh so in the in the without in the mid to late 1970s of an economist by the name of Milton Friedman offered an entirely new definition of the purpose of business he said the purpose of business is to maximize profit within the bounds of the law that’s a very low standard like what about ethics right but this new definition of business which was simply to maximize profit believe it or not that wasn’t the definition of the responsibility of the business prior right it was more uh Adam Smith which is to produce great product and great product is how we you know take care of the consumer and that’s what makes us Thrive and all of that stuff um and it shifted the the focus of business inwards and a lot of Executives embraced it and you started to see that miltonian embracement of uh really start to gain momentum in the 80s and was full-fledged in the 90s and 2000s so it has nothing to do with Republican or Democrat we saw it Fly and we saw policy change to embrace that definition so for example there was no such thing as using mass layoffs on a regular basis to manage the numbers there was no such thing as mass labs to balance the books prior to the early 1980s it did not exist it was used as a last resort when the company was really losing money right did not exist that’s number one number two the whole idea of rank and yank that Jack Welch popularized where you rank the entire company based solely on performance you promote the top 10 and fire the bottom 10 every single year with no assessment as to are they stabbing each other on the others High performers bad for the culture stabbing each other in the back for their individual performance and of the low performance struggling with other kinds of issues maybe they’re under stress maybe it’s market conditions who knows didn’t matter you get ranked you get fired you get promoted guess what that did to the culture everybody was stabbing each other right um the um the imbalance of shareholder Supremacy taking care of our shareholders was always a thing that’s not an issue but it wasn’t considered more important than the customer or the employee we now live in a world where the shareholder is now considered more important than the customer in the employee employee and you hear bankers and CEOs talk they’re talking nonsense when they talk about their fiduciary duty right it’s completely made up um and that all was popularized by Jack Welch he was the poster child for all of these new ways of running business that are now completely standardized one of my favorite stories is actually from Gary Ridge is the CEO he just retired CEO of WD-40 which is a public company and he was on his analyst call and his analyst said Gary you missed your numbers and Gary said um no I missed your numbers my numbers are just fine um uh but uh but that all of that you know the that that that that companies are making decisions based on the 27 year old analyst telling you that what you need to do so he can get his bonus like that thanks we can thank Jack Welch for all of that I think we have Greg Boss Of course I have strong opinions by the way I’m also the first to admit that the pressure is very very difficult and overwhelming from the public markets I don’t mean to minimize it that it is very difficult to find the courage to do the right thing that you know is right for your company despite all the pressures from the external markets from the external uh from the outside I don’t mean to diminish the pressures I know it’s huge but but uh there’s already a movement to start to push back and I really I love that so the same as a follow-up to that you’re talking about incentives in the short term mindset so what’s the right incentive structure when you think about the infinite game of business sure so it has to be balanced there’s no such thing as a perfect uh Professor there’s no such thing as a perfect company let’s start there just like there’s no such thing as a perfect person despite what we think about ourselves right that was a joke the um it’s always a striving and it’s always constant Improvement and going back to some of the stuff that Jack Welch did which is the incentive structures became too lopsided where the performance of the company actually was not how Executives were compensated it was only the the performance of the equity of the stock and we think about that for a second you know when a company announces Mass layoffs the stock price usually goes up and when they announce a huge investment in r d the stock price usually goes down right which if you think about business

Conclusion

The speaker concludes by highlighting the need for balanced incentive structures and constant improvement in business practices to move away from short-term thinking and towards a more sustainable and ethical approach.

Speaker: So what’s the right incentive structure when you think about the infinite game of business? Sure, so it has to be balanced. There’s no such thing as a perfect Professor, there’s no such thing as a perfect company, let’s start there just like there’s no such thing as a perfect person despite what we think about ourselves, right? That was a joke. It’s always striving and it’s always constant Improvement and going back to some of the stuff that Jack Welch did which is the incentive structures became too lopsided where the performance of the company actually was not how Executives were compensated it was only the performance of the equity of the stock and we think about that for a second you know when a company announces Mass layoffs the stock price usually goes up and when they announce a huge investment in r d the stock price usually goes down right which if you think about business.

Further Insights

In this segment, the speaker discusses the need for a balanced approach to evaluating performance in companies and suggests innovative metrics that consider both numerical achievements and contributions to culture.

Speaker: It’s the opposite and so it’s about a rebalancing you know which is I think a performance of company needs to be included I think that long term needs to be included um I think that adherence to values needs to be included so that’s all fine and good you’re you’re a high performer and your numbers are great but nobody trusts you you stabbed a thousand people in the back to get to the numbers you’re doing and you are actually damaging our culture no you don’t get a promotion you know um there’s one company I know out there who does what they call 50 50 bonuses 50 of your bonuses based on your numbers and 50 of your bonuses based on contribution to culture so if you hit your numbers and you ignore culture 50 if all you do is walk around and check on everybody but you don’t actually do any work 50 you know the point is and it goes back to what I was saying before unfortunately there’s not a lot that exists out there about companies that have profoundly changed these things especially in the public markets you know um it’s very much the old ways and there’s companies that are experimenting here and there with bits and pieces but like really robust trust measurements that can be included into somebody’s compensation package kind of doesn’t exist and so this is where I challenge ABI to think big which is the metrics need to be invented and just like Jack Welch either invented new or created such an imbalance for the metrics that have become standardized today we need to invent new and recalibrate but I wish I could tell you which company has done it but it hasn’t been done not on mass anyway right over here thank you um hello so Simon thank you very much for for the thoughts and the comments and Michelle and Kate and Jen thank you for this session I I will say I find it very valuable and took a lot of notes and words already but I’d like to pull out one word Simon that you said which was preacher at the very beginning and ask a little bit about that word and to dig into it because when I hear the word preacher you know there has been a lot of lack of trust in the world within religion between countries media government neighbors between you know almost every every indication yep so we’re almost in a low trust world that’s here and yet we’re trying to create a high Trust Company and culture that’s centered around the purpose itself yeah so my question is is when you think about how you be an effective preacher particularly for kind of this leadership group where we are all tasked with that very much and the purpose and living that purpose and talking about that purpose how do you be an effective preacher not a false prophet and really make it live and breathe in the organization right what have you found that works well so you you so the word authenticity is bandied around a little too much you know so it’s kind of lost its meaning a little bit but the true definition of authenticity is that you say and do the things you actually believe um and I believe these ideas the core of my being and the reason you can tell is because I talk about them with great Passion that’s not you can’t manufacture passion like I can’t give you a passionate you know presentation about the migration patterns of European swallows because I don’t care right and so um to be passionate is is finding connection passion is an output not an input I always love that we only hire passionate people well how do you know that the passion of interviewing but not for working you know passion is an output like when I’m a part of something bigger than myself when I love my team when I feel supported what you get is passion you know working hard for something we don’t believe in is called stress working hard for something we love is called passion and so number one you have to you yourself have to connect with the purpose of the organization if you find it corny or cheesy then this may not be the place for you like you you actually have to find personal connection in it and and as Michelle said before like in the past it felt superficial and I’ve seen that a lot in companies where it com where executives are expected to go you know preach but they don’t even believe in it I ask them in private like do you believe in like no no really you know they can’t even like they have to read it they don’t even know what it is you know they kind of remember it um so you have to find connection at it and more important you have to look for examples that bring it to life both in culture um but even outside you know it’s not always product related as I talked about before you know you know uh dreaming big to to produce more cheers could be it’s an opera it’s a mindset it’s an operating principle um and so I think people are smart you know you can you can fool them for a little bit but eventually they catch on and people ask me all kinds of questions and what they find is consistency in my answers and sometimes I’ll say things that are unpopular or sometimes that I’ll say things that you know maybe I shouldn’t say in public I am polite but I still say the truth like I remember I spoke at a large company we’ll leave their name out to protect the innocent or the guilty and uh the one of the c-level executives came up to me before and he says listen I know you talk a lot about layoffs and don’t talk about them in your session because we have an unannounced uh round of layoffs that’s coming because we missed our numbers right so don’t don’t talk about it he instructed me and I said to him very polite like listen I’m not gonna Target you I’m not going to humiliate you and I’m not going to bring it up but if somebody asks me a question about it I’m going to talk about it and he says I don’t want you to I said then you shouldn’t have hired me like like you know who I am and this is what you get like I I’m not your monkey you know um I didn’t say that

um he asked me to think about it and somebody asked the question and I answered it you know and I told them my opinion about about what they do to a culture and I understand that sometimes they happen but they have to happen for the right reasons and they can’t happen on a regular basis because the cost is dramatic the damage we do to the culture is dramatic so it’s really really really has to be worth it to do that much damage and that much cost you get the point and so um I think to be effective preachers which um some of you will be naturally better at than others it’s not a problem this is why we have each other we’re Partners but part of your job in senior leadership is to is to is to embody love of the brand which doesn’t necessarily mean you know being a preacher it doesn’t you don’t have to necessarily stand on stages but you do get to find fun ways to bring it to life like starting a meeting like you can start every meeting talking about it like dick Robinson who used to run Scholastic they had an amazing cause which is to inspire children to love reading and he would bring it up in every meeting remember what our cause is it’s to inspire kids to deliver and he was constantly reminding people and people loved it and believed in it it’s why they worked there I bring up our cause we imagine a world in which the vast majority of people wake up every single morning inspired feel safe wherever they are and end the day fulfilled by the work that they do I talk about it constantly I bring it up in our own meetings with our own team I make no assumptions that everybody knows it no matter how many times they’ve heard me say it and I think I think that’s what it means to be a preacher which is look at real preachers you know people who talk about their um their faith it it people people who talk about their children right it’s like Ugh more about your kids right it’s like people when they have love for something all they want to do is tell you about it and that’s what it means to have that’s what I think it means to be a preacher it means to have love can you wait for the mic one second question here in the back in your books and conferences you talk about the generational Gap especially for newcomers into the workforce as senior leaders here what advice can you give us in practice to become more self-aware foreign and this younger generation seems to be getting harder because they’re way more activists millennials were difficult but this younger generation they’re more activist which when it’s you know when it’s like climate change we love it but like when you’re like the intern and you’re sending an email to the CEO going I don’t think that you like it’s like you know there’s other ways to do that um uh it starts with empathy it starts with empathy and we have to understand it doesn’t it’s For Better or For Worse the changing nature of what work has become in our lives if you go back a bunch of decades it used to be that you got your sense of purpose from church you got your sense of community from bowling league you got you had you you knew your neighbors you barbecued with them on the weekends and work we were I was loyal to work and work was loyal to me at some point I’d get a gold watch aside there’s an entire generation that when I talk about the gold watch they have no idea what I’m talking about right that’s how much the world has changed um and and work was simply a place that I made a living to pay my bills but there was I still enjoyed my you know I I it was still loyalty over the course of time attendance church attendance is down bowling clubs

Key Takeaways:

1. Balanced Incentive Structures: The speaker advocates for a balanced approach to incentive structures in companies, emphasizing the importance of including both numerical achievements and contributions to culture in performance evaluations.
2. Authenticity and Passion: To be an effective preacher of the company’s purpose, leaders must authentically believe in it and passionately communicate it to others. Authenticity is essential, and passion cannot be manufactured.
3. Embodying Love for the Brand: Senior leaders should embody love for the brand and find creative ways to bring the company’s purpose to life in everyday interactions and meetings.
4. Empathy for Generational Differences: Leaders need to empathize with the changing nature of work and understand the perspectives of younger generations, who may approach activism and communication differently. Empathy is key to bridging the generational gap in the workforce.

Wall Street and American Airlines Contract

In a contract where Wall Street demanded that they asked for something in return or not do it, American Airlines said no. They’re the lowest-paid employees in the industry; we have to do right by them and ask for nothing in return. American Airlines actually does something that’s very sophisticated that I really appreciated. They have bifurcated their shareholder community, so when they say that they’re shareholder-driven, they’ve actually bifurcated the group into long-term holders and short-term holders, and they actually focus exclusively on the long-term holders because the short-term ones are fair-weathered fans. They don’t actually care what kind of business you’re running, and if you’re doing well, they invest in you anyway. So what American Airlines did is they literally ignored this group of investors and they pay attention to these. So when they called those investors and said, “We’re about to give this big pay rise,” those investors went, “It’s the right thing to do, go ahead and do it. We believe in you. We know the stock’s going to get hammered for a short period, but that’s okay, do it.” That’s being shareholder-driven in a healthy way. I thought that was very clever. But again, they’re pushing up against the limits, they’re not coming in with a sledgehammer.

Trends in Advertising and Business

One thing that to me is interesting, I’m just wondering if you can give us some ideas on that. I was in Cannes, and we saw that for the first time, the majority of the Lions and awards they were given to brands that presented work related to purpose, sustainability, causes. So it’s almost like if this dominated the creative environment and there was a lot of creativity but linked to a purposeful execution. And this morning here we were talking to an analyst that was saying that for the first time in many, many months and quarters, the majority of the conversations that he has been having with investors is not moving around ESG, sustainability, and things like that. So what do you think that the current situation of recession, war, economic crisis, and this new generation coming, we will provoke as a change? So one thing that are emerging trends and disruptions that will come. So what are we going to see five years down the road in Cannes? What’s the new big thing coming?

I think we forget that companies are living, breathing animals, and the ones that thrive over the long term are able to adapt with changing politics, changing tastes, changing culture, changing technologies. And we’ve seen entire industries disappear because they were incapable of adapting to new technology; the internet’s the best example. Like literally didn’t know what to do, they just went out of business. Or like if you look at television or movies or music or publishing, they’re all still playing defense, still trying to catch up and figure out this internet thing because they have these old business models. And I think it’s a powerful thing when the Business Roundtable makes a public statement about the importance of purpose, weirdly signed by Jamie Dimon, the CEO of Johnson & Johnson. Johnson & Johnson had to pay a 550 million dollar fine for its role in the opioid crisis. You know, Jamie Dimon thinks purpose is how much you give back to your community. Like they’re not really good representatives what purpose is, but the point is the pressure from the market, the pressure from young people and employees that this really matters to us, is actually forcing these CEOs who they may have had to come to Jesus moment that year, all three of them simultaneously may have happened. But I just love that it means that the thing that we stand for, the things that we’re talking about here, are actually shaping business and where for too many years it was those folks who are forcing us to do it their way, now we’re actually applying the pressure and they’re starting to talk like us even if they don’t believe it. And so, I’m less concerned about what the advertising looks like in five years because I think the advertising is a reflection. I think the advertising simply reflects what people want to hear, so the fact that they want to hear that, I think is fantastic. My aspiration is that companies actually start doing it and not talking about it. That it’s one thing to make a piece of marketing about it, a piece of advertising about it, it’s quite another thing to make a strategic decision back at your company about it. So I’m hoping that the actions follow the words more. But yeah, no, it seems to be going in the right direction.

Narrative and Purpose

A moment ago, Judy’s cost about the relevance of the narrative. My question is if you have any advice or a benchmark on how to do this in a very bold manner outside how to position a good narrative of our purpose that you’ve helped us to create outside.

So there’s many ways to do narrative, there’s no right way. I mean, one of the ways it shows up obviously isn’t going to be in some of your marketing, especially your brand work. Of course, I think there are some very clever things you can do at a product level, and this is what I love about purpose. When you have clear and compelling purpose, it starts to make you creative right at every level. So for example, and again, learn from your worthy rivals, do you remember a bunch of years ago, one of the soda companies, I think was Coca-Cola, they put people’s names on cans, and you just remember, just for a while, it was just a marketing thing. I mean, you could write things on cans that capture the spirit of what cheers means. I mean, you could write cheers, but you can actually write statements like, “This is for this. This is because I love you. Cheers because congratulations.” Like you can write those things on the cans, and you can start to do it in product, that’s narrative, you’re starting to tell your story through your product. Also, the way you talk about your jobs, quite frankly, you know, if I ask the average employee at ABI, if I were to sit next to them on a plane and say, “What do you do?” the dreaded question, right? “What do you do?” “Oh, I’m a marketing manager at Anheuser-Busch.” “Okay, right.” What would it mean if they were to actually say something at a higher level than that? “Oh, um, I get to help find new ways to bring people together to celebrate each other and take care of each other. That’s amazing. How do you do that?” “I’m actually a marketing manager at Anheuser-Busch.” Right? When narrative starts to seep into the culture, people start talking about the cause before they start talking about their jobs. You know, Marines, if you ask somebody in the Army, “What do you do?” they say, “Oh, I work in the infantry, blah, blah, blah.” If you ask a Marine, “What do you do?” they say, “I’m a Marine.” That’s what comes first, it’s the global right, it’s the membership. I think every time you go give a… every time you show up on television and every time you give a public speech goes back to that story of Phil Knight, and I’m not proposing you tell Phil Knight-type story,

but the point is, you’re going to go on Squawk Box, and they’re going to ask you a question, and your ability to talk about your cause, not sometimes the literal words but sometimes in interpretive words, and how you imagine the company coming to… and what bold means, you know, what dreaming big means and sharing some of those dreams and like, “We’re a company that says we dream big. Let me tell you what we mean by… let me tell you some of the dreams we have,” and you can talk about how you’re changing your incentive structures, you can talk about how you’re challenging old notions of business, you can talk about how the world is changing and you’re not going to follow the change, you’re going to lead the change. This is all narrative, and it all is based on the same core. So to answer your question, there’s no right answer, but if you listen to all of the different narratives, they all have a flavor, you know, it’s like somebody asked before, like what is how am I an effective preacher? If you go watch any video I’ve made and if you go read any book that I’ve written, you can feel that there’s a theme, that theme is always there, and people are smart, people can discern themes, and so the more consistent you are in all the different ways you bring it to life, people start to understand what that theme is like Disney, it’s always there. I think we have time for one more, right? That’s right. I see Philippe there. Nope.

Measuring Success towards Purpose

Simon, how do you see companies measuring success towards the purpose? Like usually, how are companies measuring or like if they are far enough or close to achieving an up your.

Purpose and Metrics

Purpose or your dream, you know. So, purpose is always idealized, right? Like as I said before, I imagine a world in which, right? I know I’m not going to get there. Like when Martin Luther King said, “I have a dream, like one day little black children will hold hands on the playground with little white children,” right? Like all of these things, they’re all striving and the milestones that we pass make us feel like we’re making progress. And that’s why metrics are really important and milestones are really important. And the most important thing is context. There’s nothing wrong with quarterly numbers, annual numbers, the only question I would ask is to what end? To what end? You know, I was talking to a young entrepreneur last night and she’s looking for investment, and one of her potential investors said, “Um, how long is it going to take you to hit a hundred million dollar revenues?” And I said, “Don’t take that person’s investment. Show me one article, one, I just need one, show me one article in HBR, one study, I don’t care, that demonstrates that hypergrowth or high-speed growth is good for the company on any level.” The answer is there are none. The pressure comes from that person trying to achieve their financial goals, so they put pressure on you to make your short-term goals, right? And so, there’s nothing wrong with goals as long as we understand the context and the purpose of that goal, right? I like to think of money like fuel, right? And a car is the company and the purpose is the destination, right? And if money is fuel, it makes the car go. You absolutely have to have money to make the company go, you have to have… There is no dreaming big if you have no fuel. You can have the most beautiful car in the world and yet if you’ve got no fuel, it’s pointless. But we don’t own a car to buy fuel, right? We don’t own… We don’t have companies simply for the money, right? It’s the destination, you want to be able to go somewhere and the passengers are the employees and they’re excited not about the fuel in the car, “How much fuel do we have?” No one gets excited by that. We get excited where we’re going. “We’re going to Alaska. Are we near?” And that’s the analogy. And when there’s a roadblock, if you’re only driven by the metrics, then the way we think about money, the way we think about corporate goals, the same way we think about our goal is to drive 200 miles a day, our goal is to make X amount of money, right? That’s how we think about it. Well, what happens if you drive 150 miles, is that a problem? What happens if there’s a roadblock, do you know what to do, you start freaking out and panicking because you’re going to miss your numbers. We’re purpose-driven companies that know their destinations in the idealized state. They take detours, and to the outside world that looks like you’re going sideways or slowly, but you know you’re just going around. And that’s how companies actually look, you know? It’s circuitous and messy and purpose helps us keep focused on the very far distant future so we know we’re going in the right vector, even if somebody can’t tell we’re going the right direction. And so people have to understand the purpose of the goals you’re setting and how they’re contributing to something and start talking like we and our P&L. I don’t have the word profit on my P&L, it doesn’t exist on my P&L. It says freedom. I damn well want more freedom this month than I had last month, right? Freedom to say no to things that I want to do, freedom to give it away, freedom to take care of my people. I want freedom because profit means nothing. So I’m trying to contextualize all of these words that have no inherent magic to them. So yeah, think of money like fuel and fuel drives your purpose, be purpose-driven and talk about the place you’re trying to get to and talk about the world that you imagine, and you damn well better make a lot of fuel to get there because it’s going to be expensive and it’s going to take a long time. Thank you both, thanks so much. Okay.