Diageo Daze

Dear Diageo,

You produce great brands and are the sales and profit leader in the alcohol industry. According to press reports, you are about to acquire a large stake in Cuervo, which will be important to your future. Your global strategy of acquisition and growth in developing countries is second to none.

You are indeed the Emperor of the Booze World.

So, how come your senior management skills run from arrogant to stupid? Do you hire them that way or are they a product of a unique management development program?

Last week, at an industry event that you sponsored, the British Innkeepers Institute awards dinner, one of your executives created a hailstorm of criticism. It is hard to imagine a senior executive threatening to withdraw future sponsorship unless the award recipient (“feisty and independent brewer BrewDog”) was stripped of the title. As reported by Buffalo Trace Newsletter on May 9th:

Independent Scottish brewer BrewDog, claimed that the drinks giant Diageo had brought undue pressure to bear on the organizers of the event to override the decision of the judges to give them an award, allegedly stating that ‘under no circumstances could BrewDog be allowed to win’.

What was that executive thinking? Not only was the action inappropriate but also that genius managed to provide sufficient fodder for a social media barrage that will last for some time.

Is arrogance a major component of your corporate DNA?

It wouldn’t surprise me. As I recall from my limited exposure to the company, you have your own language that is accompanied by a cult-like obedience to it. Are you still using such expressions as DWBB, Diageo Way of Building Brands, pronounced “dweeb?” Or, TCUT (Target Consumer Understanding Tool)?

Oh, and whose idea was it to be a funder of the Heartland Institute, the folks whose main raison d’être is to deny global warming. Good for you, you pulled your support recently. But, only after learning that the group was engaged in an ad campaign comparing people concerned about climate change to mass murderers and terrorists.

I have met many extraordinary people at Diageo over the years but have observed that sooner or later their talent and creativity is forced to give way to groupthink and an unhealthy dose of self-importance. That’s probably why the gifted players have moved to other companies in the industry.

Listen Diageo; you’re a leader in the industry. You should consider acting that way by setting the pace and tone for the business, not by flexing your muscles and pushing fingers in people’s chests.

Despite my opinions, Imperial Diageo continues to grow – in the marketplace and in the stock market. So, what do I know?

But, each time I read about your missteps and foibles, I can’t help but be reminded of the story “The Emperor’s New Clothes.”

Next: A closer look at Diageo “new” products.

 

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2 comments

  1. They are also known for Seagull Management (at least to us in Asia). A flock of seagulls will fly into a market (probably from London). They eat all the best fish, make a lot of chatter, poo all over the place, and before you know it they’re gone. The poor local manager has to spend much time and effort cleaning up the crap, just in time for the flock to return out of nowhere.

    Take this story (reported from grapewine). A Diageo ad in the London subway featured a copy line that went something like “If it’s broken – send it back to Taiwan”. Very funny, if it hadn’t been for the visiting group of Taiwanese dignitaries who saw it, lost face, and after returning to Taipei, promptly banned the company from doing business there for one year.

  2. I can’t really argue with the bulk of this post – and would agree, what you describe sounds impossibly arrogant – but I am compelled to defend the silly sounding DWBB and TCUT. These tools, when used properly, work amazingly well for strategic planning. What I would give that other marketers used tools such as these. Yet, I think they are embraced & applied inconsistently and are no replacement for sound judgement and good sense. Sounds like the cultural dynamics you are describing are coming from another force further upstream.

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