Talent Management as a Strategic Lever. Carlos Salazar CEO Coca-Cola FEMSA

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1 Talent Management as a Strategic Lever Carlos Salazar CEO Coca-Cola FEMSA

2 A history of more than 120 years 1890: Grupo Visa, now FEMSA, starts Cervecería Cuauhtémoc in Monterrey, the first brewery in México. 1943: Mr. Eugenio Garza Sada founds the Tecnológico de Monterrey, promoting and developing professional education in Mexico and Latin America. 1993: FEMSA and The Coca-Cola Company consolidate their business partnership, creating Coca-Cola FEMSA (KOF). 2003: Coca-Cola FEMSA integrates Panamco operations, creating the biggest Coca-Cola bottler in Latin America. 2007: Jugos del Valle operations are acquired and integrated, complementing our NCBs portfolio. We significantly grow our operations in Brazil by integrating REMIL. 2009: FEMSA exchanges its beer operations for a 20% stake in Heineken, the third largest brewer in the world. 2011: Coca-Cola FEMSA and The Coca-Cola company jointly acquire Estrella Azul in Panamá, the leader in dairy products in the market. 2011: Three Coca-Cola bottlers in Mexico (La Pureza, CIMSA and FOQUE) fusion their operation with Coca-Cola FEMSA, adding more than 425 million unit cases to our Mexico operations. 2012: Coca-Cola FEMSA through Jugos del Valle acquired the Mexican dairy business Santa Clara. Coca-Cola FEMSA signs a definitive agreement to acquire 51% of The Coca-Cola Company s Philippines bottling operation. 2013: Coca-Cola FEMSA and Grupo Yoli reached an agreement to merge their bottling operations. 2

3 Coca-Cola FEMSA is the largest franchise bottler in the world 10 Countries 3.9 Bn Cases US$ 13.8 Bn in Revenues MM consumers 109,264 employees Brazil Argentina 3

4 Bn Constant growth over the years Total Revenues (USD Millions) Filipinas FOQUE Santa Clara 2013 Yoli PANAMCO 2008 REMIL 2007 Jugos del Valle 2010 Matte Leao Estrella Azul 2011 G. Tampico CIMSA 1994 Argentina Consumers (MM) Employees Work Centers ,054 56,841 56,682 67, ,

5 Always driven by a clear strategic vision Our strategic framework allows us to continue building capabilities... Full Potential Maximize our operations potential Innovation Satisfy our consumers evolving needs KOF Mission and Vision Foster sustainability Sustainability Embrace our industry s growth opportunities Acquisitions 5

6 Challenges of the organization Globalization Greater competition Penetration of different and new brands to the market Channels diversification Generates complexity of operating in emerging channels Facilitates player consolidation across geographies and categories What brought us here, won t take us there.. Regulation Reduces freedom in the market to leverage our strengths Change of consumer habits We are facing consumers with new needs and aspirations Technology becomes a "commodity" Reduces entry barriers and ability to differentiate

7 People as the most important asset People are the most valuable resource to solve future challenges within the organization Talent management and development must be the priority of the CEO Human Resources must be a key player, supporting the vision and strategy of the organization Talent management must be a critical part of the strategy of any organization

8 8 Supporting growth through our people TALENT COMMITMENT Talented People Strong Skills Training Strategies Incentives Productivity Attitudes Habits Culture Leadership Productivity Talent without commitment is useless, and commitment without talent is just a good wish

9 Talent: Investment To acquire and develop talented people, organizations must commit resources Coca-Cola FEMSA invests in Strategic Talent Development more than US $15 million per year In 2012 we covered 83% of the vacancies with internal candidates, in order to promote the growth of our executives

10 Client Centred Skills Talent: Skills development In order for an organization to evolve, it must constantly develop capabilities Client Segmentation GVC (Value Based Client Segmentation) Modern Trade Gold Silver Bronze New Service Model Capabilities must be transformed into daily habits that are applied within the whole organization

11 Talent: Training The best way to train people is by doing on the job training not in a classroom Training Cells Model +20,000 people trained in Coca-Cola FEMSA s operative Model The best way to deploy best practices in the organization is by transferring people s knowledge, ensuring training and development of other collaborators

12 Talent: Right incentives Incentives must always be aligned and reflect the business strategy Based on Critical Success Factors, we share accountability of the Business challenges with all the associates Economic retribution Professional development Personal life balance Additional to economic incentives, organizations must recognize the merit of others and make it public (Don Eugenio Garza Sada)

13 Commitment: Attitude An optimistic and innovative attitude is required to transform a business Since 2002, Coca-Cola FEMSA recognizes innovation as an enabler to transform our Organization.. An innovating Leader: Challenges traditional duties Integrates high performance teams Motivates transformation Great ideas without people, are only ideas people are the ones that make them real.

14 Commitment: Leadership Real leaders empower the organization to make big transformations The empowerment of managers have guaranteed the success of our mergers and acquisitions Right Skills Accountability Culture and Values Empowerment without accountability is anarchy, organizations need people committed to their results

15 Commitment: Culture Culture and values must be daily lived They must become the core of the organization A culture based on strong values is universal. We have transmited Coca-Cola FEMSA s Culture in our 309 working centers, having a positive social impact People behaviors turn out into habits, and habits become culture

16 16 Some key learning's and watch-outs The future comes with changes and complexity and people is the answer to face new challenges Great ideas without people are only ideas Any entrepreneur process requires people the role of the leader is to inspire them It is the CEO s fundamental task to encourage and ensure the growth of its people Human Resources must actively support and be part of the business strategy