By Karen Guzman
Three years ago, the Kraft Heinz Company, one of the largest food and beverage companies in the world, had a management problem, said Jorge Lemann. Lemann is a co-founder of the investment firm 3G Capital, which owns Kraft Heinz, and an architect of the global giants’ 2015 merger.
The company wasn’t performing as expected. Kraft Heinz brought in a new CEO, who concluded that the organization needed an infusion of new blood to keep pace with the technical innovations and changing social landscapes that were impacting global business in profound ways.
Relying heavily on its internal employee training program, the company’s approach had grown too insular, said Lemann. The new CEO replaced 25 of the firm’s top managers with new, outside hires.
Lemann, who recently retired from the Kraft Heinz board, now believes that 20% of any company’s workforce should come from outside the organizational pipeline.
“Kraft Heinz is a much better company with all these outsiders,” he told a student audience at the Yale School of Management on November 9. “You have to keep the culture you have but bringing in [new perspectives] is [important.]”
Lemann spoke at Yale SOM as part of the Leader’s Forum lecture series, which brings leaders from across sectors to campus to meet with students.
Jeffrey Sonnenfeld, senior associate dean for leadership studies and the Lester Crown Professor in the Practice of Management, moderated the discussion. The Yale Office of International Affairs, MacMillan Center Council on Latin American & Iberian Studies, and the Association of Hispanic and Latin American Students at Yale SOM co-sponsored the event.
Lemann’s varied career has included roles in finance, acquisitions of some of the world’s most familiar brands—including Anheuser-Busch and Burger King—and even a stint on the professional tennis circuit. But in his discussion with students, he focused not on the many successes in his storied career, but instead on what he learned from the mistakes he made along the way.
One bump occurred early on, after a finance company he’d joined in Brazil failed, and Lemann found himself adrift. “Here I was, 26 and broke and having to start again,” he said.
Rallying his competitive spirit, along with a good measure of grit and determination, helped him push through. “I’ve tried to do things better and learn,” he said. “That’s the most important characteristic” for success.
Many years later, Lemann said he was hoping that leverage from the Kraft-Heinz merger would improve performance of Kraft products. “It didn’t quite turn out as well as expected,” he said.
What he learned was that while Kraft was good at operations, it lagged in marketing and developing new products, and it needed a more consumer-centric approach. For Lemann, the takeaway was the growing need to innovate to stay abreast of today’s markets.
“You have to be able to adapt fast today,” he said.
Lemann is well known for his philanthropic ventures, especially in his native country, Brazil. He is founder and chairman of the board of the Lemann Foundation, which promotes access to high-quality public education for all Brazilians, as well as other social impact initiatives.
“Our biggest focus is really education in Brazil,” Lemann said, “and getting Brazilians involved with things that can change the country and make it better.