Learning to Lead in Sabmiller

Learning to Lead in SABMiller

What we are learning about Relentless Leadership from our Relentless Leaders SABMiller – Business overview One of the world’s largest brewers, SABMiller has brewing interests and distribution agreements across six continents.

Our wide portfolio of brands includes premium international beers such as Pilsner Urquell, Peroni Nastro Azzurro, Miller Genuine Draft and Grolsch along with leading local brands such as Aguila, Castle, Miller Lite, Snow and Tyskie.

Six of our brands are among the top 50 in the world.

We are also one of the world’s largest bottlers of Coca- Cola products. Our Brands Brands Regional

SABMiller owns over 200 regional beer brands, including:

2M (Mozambique) Nile Special (Uganda) Atlas (Panama) Peroni (Italy) Aguila (Colombia) Pilsener (Ecuador) Carling Black Label (South Africa) Pilsener (El Salvador and Castle Lite (South Africa) Honduras) Club Colombia (Colombia) Šariš (Slovakia) Cristal (Peru) Snow (China) Dreher (Hungary) St Louis (Botswana) Gambrinus (Czech Republic) Timisoreana (Romania) Hansa Marzen Gold (South Africa) Tyskie (Poland) Haywards (India) Velkopopovický Kozel Kilimanjaro (Tanzania) (Czech Republic) Miller Lite (USA) Zolotaya Bochka (Russia) Brands International

 Grolsch Premium Lager - The Dutch premium quality lager  Miller Genuine Draft – The original cold-filtered draft beer  Peroni Nastro Azzurro – Italian style in a bottle  Pilsner Urquell – The Pilsner from the original source Becoming a global brewer

First acquisitions in Europe 1988 Compania Cervecera de Canarias in Canary Islands 1993 Dreher in Hungary 1895 Foundation of South African Breweries 2003 2008 2008 and launch of Castle Lager Regional and product expansion Acquisition of Acquisition of MillerCoors 1897 Listing on Johannesburg stock exchange 1978-82 Botswana, Lesotho Birra Peroni, Grolsch, The JV created, 1898 Listing on the London stock exchange and Swaziland Italy Netherlands USA 1895 2009

1910 Expansion into Zimbabwe 2002 Creation 2005 Transaction (formerly Rhodesia) of SABMiller with Grupo following purchase Empresarial Bavaria Global growth begins of Miller Brewing Latin America 1993 Uganda Company USA 1994 Angola, Mozambique, Acquisition in South Africa Tanzania, Zambia, 1956 Ohlsson’s, Chandlers Union Breweries China 1975-79 Old Dutch, Whitbreads, Swaziland 1995 Poland breweries, beer interests of the 1996 Romania Rembrandt Group – attaining 99% 1997 Ghana, Slovakia market share 1998 Russia 1999 Czech Republic 2000 India 2001 El Salvador, Honduras, 1999 Movement of primary strategic alliance with listing to London Castel Group in Africa Stock Exchange The SAB WCM Story Learning to Lead

CONFIDENTIAL AND PROPRIETARY Any use of this material without specific permission of The South African Breweries (Pty) Ltd is strictly prohibited This slide presentation is not complete without the relevant speaker notes The SAB WCM Story

(World Class) Efficiency Reliability SOP Cost Effectiveness Flexibility Featuring •Scientific management Performance SAB practices •Lean, TOC, DMAIC BOP II •Enabled by advances in SAB automated manufacturing 70% systems Featuring 1991 BOP I •Self sufficient work teams Featuring •Step change in •Work Instructions competence 50%QPUS •Process monitoring and •Team maturity control processes 1988 - 1992 •Team processes

1993 1997 1999 2005 Lesson 1: Make Reality your friend!!! Make reality your friend….

Norman demonstrated that it is imperative to:

 state your situation objectively

 acknowledge your new realities - because yesterday’s progress quickly becomes today’s status quo Norman Adami, Former Executive Chairman  have a high-touch, high engagement and MD of SAB (Pty) Ltd business - the more people who know exactly who we are (purpose) and exactly what we are doing, and exactly how we are doing the better off we will be…

There are 2 streams of visuals, both starting from the annual goals and targets: KPI’s consistently below target Loss analysis Focussed STU Improvement

DEF PQR 1 Plan ABC MNO (PIP /DMAIC)

GHI JKL approx 3 months Goals And Targets Daily SIC Daily ABC Graph Action 2 Plan (max 1 DEF Graph week horizon)

KPI’s that needs to be monitored daily Purposeful shiftly & daily engagements

Feedback No further action

Not required

Trigger

Level 1 Cause Yes Take preventative action Operation Known Activated

Feedback Determine root cause Relentless focus on Problem Solving

FFA Stage 1 System Analysis 5-Why Operator

Quick Fix Level ofLevel Complexity

Situational Systemic

Level of PS Activity Performance – Practice

Framework

Excellence in Results in Excellence

Relative Global Performance Performance Global Relative –

Excellence in Practices –global practice maturity

Aligned to our strategic priorities, the SABMiller Ways are a key part of SABMiller’s response to leverage our skills and global scale.

Vision Mission Goals Strategic Priorities

o To be the most admired o To own and nurture local o Investment of choice o Creating a balanced and company in the global and international brands attractive spread of beer industry that are the first choice of o Employer of Choice global businesses the consumer o Partner of choice o Developing strong, relevant brand portfolios that win in the local market

o Constantly raising the sustainable profitability of local businesses

o Leveraging our skills and global scale

The need to codify, share and build strategic capabilities across the Group has resulted in the SABMiller Ways...

The Purpose of the Ways

Codify knowledge that is core to our sustainable competitiveness, premised on core guiding principles, expressed as best practices

Build and develop capabilities in defined areas of strategic relevance

The SABMiller Ways are Codify Build & a global knowledge knowledge develop asset… capabilities

The Ways are…

o Clearly linked to our strategic priorities

o Single, credible points of reference on how to operate, manage and leverage a set of best practice, that will enable ownership of the profitable growth

o A vehicle for building group-wide capability in a defined area of strategic relevance through deliberate implementation and anchoring

o A set of best practices that represents real competitive advantage which are codified, implemented, anchored and refreshed continuously and over time

Graham demonstrated that:  the Transformation agenda is Leader Led  Capability building is Leader Led

The Five Roles Of Our Executives 1. Lead - Create a compelling view of what we can be at our future best. 2. Manage - Direct resources based on agreed-upon authority. 3. Learn - Access one’s resources. (Self-Discovery) 4. Teach - Impart to others that which you know.

5. Coach - Help others get to where they want to go. Graham Mackay, Former Chairman and Chief Executive, SABMiller plc

Champs Champs Prospecton WCM HRC HRS Ibhayi WCM MDS Steering Steering Committee MDC Committee MOC HRC MM GM HRC MDC WCM Strategy Development Newlands WCM Chamdor WCM & deployment; MDC Steering Steering GM & Alignment with Global Committee Committee GM Standards Eng OD M&T Champs Champs MDM CoE SME Director WCM Technical MDEV Org Development WCM Central Design & / & Change ODC Steering MDC: MCG Implementation MTEC Management Committee OE Work-Stream Work-Stream H Brew CM L&DC Pack CoE MDS Champs SME Pack CoE HRC WCM Learning, Polokwane WCM MM L&DC Development & GM Alrode WCM Steering Accreditation Eng Steering Committee L&DC Committee MDC MDC Brew Work-Stream L&DC HRS GM Champs HRC MCG GM Rosslyn WCM / MDC Steering MDE Maltings WCM Committee V Steering Champs Committee HRC Champs Overview of Implementation Map

SABMiller Manufacturing Way WCM Foundational Practices Implementation Map Pre Launch Preparation Development Implementation Entrench & Roll-out

LEVEL 2 SIC Roles and Resp / Daiily Meetings

PROCESS CONTROL Inputs and Outputs PROCESS CONTROL

WCM Infrastructure PERFORMANCE PERFORMANCE MEASUREMENT MEASUREMENT Regional WCM Plan Downtime / Yield

Identification of First Areas PERFORMANCE MEASUREMENT & CONTROL ASSET MANAGEMENT Project Team

NEXT AREA

ROLL OUT TO ROLL

LEVEL 2 SIC INTEGRATION

ASSET MANAGEMENT ProjectSign-off Goal Alignment AUDITS - TWP / GEMS Maintenance Program Design AUTONOMOUS

PREPARATION

WORK STATION DESIGN MAINTENANCE Project Team Training

MINIMUM ON-BOARDING STANDARDS

IMPLEMENTATION PLAN AND SIGN-OFF

CAP / CERTIFICATION / RE-CERTIFICATION Project Plan FLEXIBILITY Generic Training AUTONOMOUS MAINTENANCE Operator Based Maintenance

MAINTENANCE

FLEXIBILITY Quick Changeover Technology

ASSET MANAGEMENT AND AUTONOMOUS

Line/Area Project Management

Regional Project Plan Management / Area Progress Reviews / General Communication

Site Change plan Living WCM Excellence – THE HOW Entrenchment & Sustainment

Entrenching and sustaining change Engaging and enabling the whole organisation

Creating a Year 3+ (F11+): climate for change Kotter 1-8 applied to all FP projects

1 2 3 4 5 6 7 8

Increase Build Get Communicate Empower Create Don’t Let Make it Urgency the the For Buy-in Action Short-term Up Stick Guiding Right Wins Team Vision

Year 1 (F09): build capability in Kotter 1-6 Year 2 (F10): build capability in and apply to all FP projects Kotter 7&8 and apply to all signed off FP projects (F09) Culture Model (Edgar Schein)

• Language • Alignment and Integration • Iconography • Performance Management systems (IMP) • Top management cues • Social architecture Existing media eg, – Informal networks newsletters, websites, screensavers etc – How people work together • Decision Architecture - How information flows e.g. zero filter communication Symbols • Operating mechanisms F09 focus – Meetings and diaries, reward and recognition

Systems F10 – F11 focus & Processes • Leadership style and management practices • Team conversations on WCM issues. • Employee behaviour

Behaviours Decreasing level ofinfluence level Decreasing • Leader & Employee Beliefs • Leader & Employee Values F12 – F13 Beliefs focus Leader Standard Work – Gemba focus

• Visibility of Leaders at the frontline is demonstrated through coaching which takes place on the frontline and engagements are used as input into the 1-on-1’s. (eg. Coaching cards, Red tags, white tags) Leader Standard Work – Gemba focus

Where is your Gemba? (e.g. Sales Director and Strategy Director in a traders outlet – go see, ask why, show respect!) Lesson 3: True North remains True North…….. Relentless Strategic (Goal) Alignment

Because of the severity of our situation in 2008, we understood that incremental improvement across the board would be essential… but not sufficient.

We needed a break-out strategy…a strategy that was big enough and bold enough yet simple enough to break us out of decline… Norman Adami, Former Executive Chairman and MD of SAB (Pty) Ltd …restore our self-belief…

…get the blood pumping…

… because nothing energizes an organization like a big, bold strategy that is simultaneously genius in its simplicity Goals, KBIs, KPIs and PIs 3 Cascading Levels of Problem Solving

Goals Strategic Goals

KBIs Systemic

Goals KPIs Situational Goals PIs

Measures Relentless simplicity brings clarity and swift action Sue Clark,MD SABMiller Europe – recent blog

“…MBUK’s substantial growth. Thanks to Peroni’s continued rise, the first quarter of F15 saw NPR up 23% with volume growth of 18% – and there’s still room for expansion…

I came away impressed by the way that MBUK has stuck to its strategy of targeting its brands at selected outlets and has executed Sue Clark, MD of SABMiller Europe with such discipline over so many years. It may not be new news, but that’s the point. Consistency continues to bring results” Relentless simplicity brings clarity and swift action

Finally we are learning that as big organizations we underestimate the power of simple, consistent strategy. We learned over the past couple of years that the consistency does not bore people…

…the consistency actually accelerates the action…

Norman Adami, Former Executive Chairman …because the consistency makes it and MD of SAB (Pty) Ltd increasingly clear what the priorities are, and what they are not…

…and so our people can move much more quickly and much more confidently…

…because the priorities are clear and simple. Questions?