Jeff Harmening knows the pessimistic view of big food companies.
Consumers are shifting from heavily processed foods to fresh, natural choices. Large, old companies can’t innovate fast enough to keep up with new competitors. In short, Big Food is dying.
The new CEO of General Mills doesn’t buy it.
“We understand the narrative about food. But that doesn’t mean we are going to follow it, and we don’t believe it is all right,” he said in his first extended media interview since becoming CEO two months ago. “Certainly there are some kernels of truth. But a kernel of truth is different from the whole truth.”
Harmening, 50, steps into his new job at a time of immense challenge and change for a company whose roots go back to flour milling operations along the Mississippi River in the early days of Minneapolis. Sales have declined for eight straight quarters, and the company has shed thousands of employees.
But Harmening, a 23-year veteran of the Golden Valley company, says the changing consumer terrain is also an opportunity for a business with some of the world’s best-known brands, names like Cheerios, Betty Crocker and Gold Medal flour.
He sees potential to gain business overseas. He thinks General Mills can turn around embattled brands such as Yoplait yogurt while building on the strength of acquired lines like Annie’s, a maker of organic foods. And he wants to accelerate sales through online sites like Amazon.com or Walmart.com, a bright spot for the company’s sales.
To remain a global powerhouse based in Minnesota, his goal is simple: return the company to growth.
“We have the talent to be able to do it,” Harmening said. “The key is getting everyone pointed in the same direction.”
As he moves ahead, Harmening will need to navigate an industry that has changed significantly in recent years.
In the background of every strategic move the big players make is the Brazilian private equity group 3G Capital, which orchestrated the megamerger of Kraft Foods Group and H.J. Heinz Corp. The firm has been public about its intent to further consolidate the food and household-goods industries.
It is known for an intense focus on the bottom line, often starting with job cuts.
“They have a track record of getting high profits, but they have a reputation of being ruthless in how they get there,” said Brittany Weissman, food industry analyst for Edward Jones. “You are trying to avoid being that takeover target, and so you have to prove you can do it on your own.”
That is exactly what General Mills has been doing as it finishes up three years of deep cost-cutting efforts that resulted in the loss of more than 5,000 jobs, more than a 10th of its workers.
Harmening said he’s not interested in selling the company to 3G. While he said the Brazilian firm’s management approaches have had an influence, the firm is less impressive when it comes to creating sales growth. Harmening said a big part of General Mills’ identity will remain an emphasis on innovation and its commitments to consumers, community service and reducing its contributions to climate change.
“We’ve studied 3G quite a bit. There are some things that they do really well that we’ve applied,” Harmening said. “We are a lot better for it, for having done that. But we don’t aspire to be them.”
Harmening’s approach to business was shaped by many of his experiences growing up in Terre Haute, Ind.
His father taught literature and writing at Rose-Hulman Institute of Technology, but it was his mom who was the executive in the family. Jan Harmening was the dean of nursing at Indiana State University and a vice president at an area hospital, with a doctorate in business administration.
Her success made an impression on him, though Harmening remembers seeing her repeatedly hit the proverbial glass ceiling throughout the 1970s and 1980s.
“There was once where the senior team at my mom’s workplace was having a golf outing and they invited my dad,” Harmening said. “He wasn’t on the senior leadership team.”
These moments shaped his view on workplace dynamics. “I saw the value she brought to her business and I think she could’ve even brought more, if she’d have been allowed to,” Harmening said. “So, yeah, I believe in inclusiveness, whether it is gender or race or sexual orientation … because I saw what happens when you don’t do that.”
Harmening grew up a three-sport athlete who also excelled in chess, and one of the first words he still uses to describe himself is competitive.
He first visited Minneapolis when he was 13 for a national chess tournament. The strategic nature of the game appealed to him.
“The person who thinks farther ahead wins,” Harmening said. “If you can … anticipate not only what you’re going to do, but what they’re going to do, your chances of success go up.”
That competitive nature continues today whether he is on the golf course or making strategic business moves, said John Mendesh, a retired vice president of research and development at General Mills.
“I would describe Jeff as very strategic, very competitive — in a very positive sense,” said Mendesh, who reported to Harmening when he ran the Big G cereal division. “He likes to win.”
The new playbook
Harmening is known as a leader who sets clear goals — usually three at a time, not four, Mendesh said.
His first priority, set in motion while his predecessor Ken Powell still occupied the corner office, was to simplify the chain of command through a global restructuring. This removed a layer of management, which Harmening said wasn’t easy given the talents of many of the people involved.
The effort resulted in a new structure that Harmening said has streamlined the flow of information between global regions. If the Canada team figures out how to sell more Old El Paso products, for example, the U.S. team should talk to them and do the same thing here, Harmening said.
Now, Harmening’s direct reports are stationed on other continents rather than in Minneapolis, improving the flow of communication, he said.
Without a buffer between the global business unit leaders, “you are able to make trade-offs more easily,” Harmening said. And as a result, “The senior leaders here in Minneapolis are now closer to all of our businesses.”
Harmening is also restoring spending on marketing and increasing investment in new product innovation, which he says were cut too deeply last year. These dollars will be focused on core categories, like yogurt, where the company has lost its position as the No. 1 or No. 2 to newer companies like Chobani.
General Mills will also make a hard push in e-commerce, a relatively underdeveloped arena in the United States compared with Asia or Europe. Harmening hopes these strategies help General Mills regain sales growth over the next three years.
Lydia Midness, a recently retired vice president of research and development, said Harmening’s clear-eyed focus and ability to distill complex issues into action-oriented plans will be critical. She observed these traits when she reported to Harmening at Cereal Partners Worldwide, a 50-50 joint venture between General Mills and Nestlé.
“It’s not only his decisiveness, it’s his motivation skills,” Midness said. “In the food industry right now, there is a big tide change going on. And I think he has the skills to succeed in this type of environment because he is a clear thinker and people do rally around him. It’s a good time for him to be a leader. I won’t say it will be easy, but I definitely think he can do it.”