What the CEO of Kellogg’s Taught Me About Keeping It Real
How John Bryant prevents “navel-gazing” with everything from open office architecture to external innovation
A few weeks ago, I was on site at Kellogg global headquarters in Battle Creek, Michigan. We work with the food giant’s corporate venture capital firm, eighteen94 Capital, along with Simon Burton and Gary Pilnick. Simon and Gary, who manage the fund, are both full-time executives at Kellogg. We were visiting the HQ to meet with our investment committee and several business unit leaders.
Kellogg recently adopted an open floor plan for its executive offices, and plans to roll out this innovative architectural approach for all of its HQ employees, as well. As part of the remodel, everyone from the CEO down gave up their private offices in exchange for bullpen-style desks. The stated objective was to encourage more open communication and accessibility among the executive team.
As we walked through the new office space on the way to our first meeting, we stopped at one of the communal lunch tables in the (naturally) open concept kitchen. “You remember John,” Simon mentioned casually, as we stopped to say hello to an unassuming man quietly eating lunch and working on a laptop. After a polite minute of corporate innovation pleasantries and venture capital chit-chat, we proceeded to a nearby conference room. The conversation would have been unremarkable, except for the fact that John is the chairman and CEO of Kellogg, one of the largest food companies in the world.
The open floor plan and in-person accessibility are just some of the overt examples of John Bryant’s leadership style, and exemplify how he sets the tone at Kellogg. This tone also reverberates from our day-to-day partners in the fund, Simon, who is the managing director at eighteen94; and Gary, who is the vice chairman, runs corporate development and is the chief legal officer of Kellogg. All three of them convey a very midwestern set of values — humility, manners, transparency, among others — that befit the Michigan-based company. Perhaps surprisingly, none of them were raised in the midwest: John is from Australia, Simon is from England, and Gary is from New York.
Simon and Gary are very accomplished in their careers, but each constantly asks questions to learn more about the best practices of venture capital. There is never an assumption, for example, that the legal terms or valuation techniques used in a billion dollar acquisition would be the same as those for a $5 million investment in a startup. While that may sound obvious, this type of mistake is fairly commonplace among new corporate venture capitalists. The attitude from Simon and Gary is always ask, listen, and learn.
When we first launched the venture capital effort with Kellogg, my partner Rich Grant and I met with John to ensure we understood his priorities. One thing in particular struck me from that conversation: John’s orientation to making Kellogg a learning organization. He rattled off a list of business capabilities in which Kellogg is strong, and then also mentioned several areas he felt were weaknesses, or even unknowns. Then he said, “Go make some investments in startups that will help us develop these capabilities that we don’t have today. We need to learn.” It’s empowering to work with a leader who recognizes that the answers aren’t all inside the walls of the company.
Kellogg has long sponsored an internal innovation program called “Moonlighting.” Everyone in the company is encouraged to develop new product ideas and business opportunities, even if those ideas are outside the constraints of the individual employee’s day job. Again, the idea is to liberate the organization from restrictions, and discover business solutions by listening to new, sometimes unexpected ideas.
The willingness to admit what you don’t know, and the desire to learn, are the exact opposite of what typically drives CEOs who are labeled as “out of touch” with their teams, the market, and even reality. When a CEO thinks he has it all figured out, it’s easy for NIH (“Not Invented Here” syndrome) to set in across the organization. That’s how a company starts gazing at its own navel while the world moves on.
It’s easy sport to deride the shortsighted comments of out of touch CEOs who ignored the threat of disruption from startups. Some of the most egregious examples, compiled by CB Insights, include:
- “Neither RedBox nor Netflix are even on the radar screen in terms of competition,” said Blockbuster CEO Jim Keyes, speaking to the Motley Fool in 2008.
- Microsoft will roll [Salesforce] over,” Thomas Siebel of Siebel Systems flatly told Bloomberg in 2003. “They get Zambonied.”
- “There is no reason anyone would want a computer in their home,” said Ken Olsen, founder of Digital Equipment Corporation, 1977.
- “I think there is a world market for maybe five computers,” said Thomas Watson, president of IBM, in 1943.
I have a difficult time imagining these executives sitting at a desk in an open bullpen, or being randomly accessible during lunch hour on a given Tuesday.
This is why I believe one of the best ways John and Kellogg have decided to stay “in touch” is through their venture capital effort. Meeting and funding startup founders pulls a large corporation into the street-level reality of the trends that drive changing consumer preferences. This doesn’t happen just at the executive level; when we investigate a startup, we always work together with relevant business unit employees who help us diligence the opportunity and ensure the organization is constantly learning.
There may no better way to forecast the future of your own business than to meet and track hundreds of startups trying to become the next big thing. The process of running a venture capital program at that scale delivers insights and pattern recognition about the grass-roots market problems that — in the early days — only entrepreneurs will see. And at an established company, it’s a reliable way for a CEO to get out of his own head, and ensure he doesn’t become out of touch.
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(thanks to Janessa Lantz — a version of this story originally appeared in HubSpot’s ThinkGrowth.org publication on Medium here)
Scott Lenet is President of Touchdown Ventures, a Registered Investment Adviser that provides “Venture Capital as a Service” to help corporations launch and manage their investment programs.
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