RTM: So the whole process takes a lot of patience.

RF: Yes, and you have to manage expectations.  The new European ERP system, for example, is very good, but it doesn’t have all the features that had been developed in some of the customised national systems.  You have to warn people not to expect too much too fast.

RTM: I guess one of the problems is how you reward people. 

RF: Yes.  Our managers are now rewarded for hitting a triangle of goals.  One corner is their personal performance; another is based on national performance, and the third is for achieving European objectives.

You have to ensure that it is fair so that general managers who lose sales because a distributor has moved its warehouse to another country still get rewarded for the sales that the distributor is making from there.  It is a fine balance.  It is a thin line that you have to walk along.  The secret is to keep discussing it, to keep thinking about it.

“Retailers really haven’t put in place European operations of their own.”

RTM: And are you finding that large accounts are becoming more pan-European?

RF: Certainly the distributors are.

RTM: And the retailers?

RF: (Laughs) That is the paradox, really.  Now, when they come to us and say they want pan-European strategies, we can say: "OK, let’s look at how we can align our supply chains and Sales and Marketing approach".  Often their reply is: "No, we can’t actually do that!"  Sometimes what they are really after is just an extra margin for being a European customer.

In fact, we often find that the retailers really haven’t put in place European operations of their own – power is typically still devolved to a national level.  But at least now we can start talking about how we could work with them internationally.
   
RTM: So what are the lessons you have learned?

RF: For me there are three lessons.  The first is that change starts with people.  Change is a journey and the destination can change while you are on the way.  You have to prepare people’s mindsets so that they are ready to travel rather than seeing the journey as a threat.  The people aspect can never be overestimated; you can never put enough emphasis on it, and defining roles and responsibilities is vital.

Secondly, you can never communicate too much.  You may feel that you have done a good job but there will always be people who will feel they do not understand.

Finally, consistency.  Initially you have to establish a framework, a European mindset.  When you start with such a process you can never allow exceptions.  If you do, you will end up with a whole series of them.  You will be confronted every day with reasons why there should be an exception at a local level!  They will come up with thousands and thousands of reasons why!

But when you have defined the business processes and business policies, then you can be a little bit more flexible and give people more autonomy within the framework.  The European mindset has to be there first.  If this mindset doesn’t exist then there will be abuse.  If it does exist, then you can allow autonomy.