Posted April 2010
The Mission
AB-InBev’s culture war | “This
is the end, beautiful friend, … the end of everything that
stands”, sang Jim Morrison. Perhaps this is not quite the end of
everything that stands in the brewing industry, but the final
act of the industry’s Great Game has begun. With AB-InBev
controlling about a quarter of the world’s beer production,
bookies will soon be taking bets on how many deals the Brazilian
management will have to clinch before they can close the door
behind themselves: Will it be one? Two? And what will the
“bankers who sell beer” chiefly be remembered for? Their
merciless cost-cutting drive? Or their counter-colonialist
strive which has shown little regard for the complexities of
mature markets and for brewers’ corporate cultures in Europe and
North America?
Brewers, let us be frank about
it, you’ve never had it so good. Ever since the Fall of the Iron
Curtain and the end of the Cold War twenty years ago, you have
had a ball. Money was sloshing around and the living was easy.
You wanted to enter a new market? Done. Build a brewery with
bells and whistles? Done. Roll out new brands? Done. So much,
costing so little. “Wonderful”, you said. “This is the free
market economy. Globalisation is a great game.”
The scramble to bring beer to
the farthest corners of this earth developed into an Olympic
conquest: Citius, Altius, Fortius (or
“faster, higher, stronger” for those who do not speak Latin)
became your motto – and may the best one win.
Sometime over the past two
decades, something has shifted in your thinking. The brewing
industry took a “numeric turn”. Quantitative principles began to
dominate your life. The concern for cultural values turned into
a love of size and speed. Concern for customers converted to an
obsession with market share. Brewers became so attracted to
competition that they decided to buy it. Acquire, merge and
reduce headcount to pay for it was your modus operandi.
Wealth and shareholder value
has become the primary measure of your success. You don’t
complain too much because so many of you are silent
beneficiaries. Once the stock market became the only measure of
value, you became the victims of its whims. When it rises you
are happy, when it falls you gnash your teeth and resort to
cost-cutting.
The “numeric turn” has
affected all aspects of corporate organisations. What began as a
weekly conversation among members of corporations now resembles
a statistical journey. Dialogue became tools, charts, fishbone
diagrams and eventually a competition for bonus payments.
At a personal level, the
consequences have been even more dire. If we only value what we
can measure, we have in effect quantified and objectified our
own selves. Hence employees are routinely referred to as “human
assets,” human “resources” and no one gives it another thought
that this is a euphemism and means that people have been
decapitated so that only their “heads count.”
In effect, the “numeric turn”
has led us to believe that if we cannot measure something, it is
not real and perhaps does not exist. Cultural values, for one.
Of course, they are almost routinely paid lip-service to. I
heard of a company’s vision statement that said its core values
were: trust, respect and accurate gauging. I love the
term—accurate gauging. Does it evoke the image of humans whose
loyalty, involvement and knowledge of the industry is cherished?
No, it reminds me of automatons in a machine shop: minute
measurements, hard edges, vices and low tolerances.
Who is in your face here?
Perhaps the “numeric turn” in
the brewing industry was inevitable. Perhaps it was the
unavoidable corollary of rapid growth: of having to knock into
one all the various companies which brewers have gobbled up over
the years while staking out their claims on foreign territories.
Perhaps that’s what brewers thought they had to do as they were
playing to the gallery: the financial analysts, the marketing
hypists, and their allied fiction mongers, who had convinced
themselves and the industry’s swashbuckling executives that the
rush for profits, for higher margins and short-term shareholder
value creation was really the only reason why companies existed
in the first place.
Those of you brewers who were
brought up in the free-wheeling Nineties, may think: “No sweat.
That’s how it is”. However, industry old-hands – and that’s
basically everybody who was born in the Sixties because anyone
older with some sense will have moved on – will remember the
days when quantitative principles did not rule ok. Talk to them
and their verdict on the current state of affairs in the brewing
industry is: “an all-out culture war”.
Come 2010 and the global
recession, this industry is witnessing an unprecedented and
particularly vicious culture war which is pitting beer against
bonuses, values against profits, life style against leverage.
Although incidents of this conflict have flared up all over the
industry, the culture war is raging most fiercely, it seems, at
AB-InBev, where the Brazilian management has shown little
willingness to end it. What is tearing AB-InBev’s corporate
culture apart at the seams is trench warfare over values. On one
side you will find AB-InBev’s management, driven by a New World
counter-colonialist fervour and carrying the flag of neoliberal
free-market credence, while on the other side you have their
European employees, fired by Old World nostalgia and defending
the achievements of Europe’s social market economy. The
demarcation line is easily drawn: between the Brazilians here
and the Europeans there.
Read on
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