read original article

more Swiss stories?

The Swiss multinational is a quiet giant on the world stage, writes the business and general interest magazine, Facts. People tend to join.. and never leave, which makes for an unusual corporate culture.

For breakfast, a Nespresso and an LC1 yogurt, for lunch, a bowl of Maggi soup accompanied by a glass of Perrier and a Frisco ice cream. For a snack, a Powerbar and, in the evening, a plate of Buitoni and, for dessert, some Cailler chocolate. And, of course, Friskies for the dog. You can feed yourself throughout an entire day with just one company, says Facts.

Planet Nestlé - Sfr. 88bn turnover, 6.2bn net profit, 253,000 employees, 8,500 brands, including such trusted ones as Nescafé, San Pellegrino, Thomy and Smarties. The firm is run out of a super-cool glass palace in Vevey, by Lake Geneva. It's a global company, with over 500 factories in 86 countries.

A giant, but it's led like a family clan, with a subtle mixture of fatherly strength, care, and a mission. Above all, it is strictly hierarchical.

The management concept would appear to contradict everything one learns in modern management courses, which call for flat hierarchies, short decision routes, open communications and speed. Nestlé, however, insists on collective ways of doing things and refined restraint. During the firm's 138-year history, a code of behaviour has grown up that lays down unspoken rules to employees.

If you join Nestlé, it's not just a job.. you belong to a select group of people, whose elixir is success.

Commandment no. 1: be loyal to the company

There aren't many companies that can avoid being hit by scandals, lesser or greater, but Nestlé isn't the place to look for juicy stories. Power struggles and disagreements are dealt with en famille. Communications head Xavier Perroud, who has been on Planet Nestlé for over 25 years, keeps a close watch to ensure that nothing negative reaches the outside. And he generally succeeds.

Emails sent by journalists direct to employees are forwarded to the omnipresent Perroud's computer screen. He has the company under control, at least in publicity terms. "Respect of Nestlé principles is important to us. Loyalty is part of that", he says.

Changes at headquarters are rare, extremely rare - no more than 4% annually. When a Nestlé employee retires, he has an average length of service of 26 years behind him. At the top sit veteran "Nestléaners". Werner Bauer, a board member who has live on Planet Nestlé for 14 years, still feels "like a baby". Company head Peter Brabeck has been there 36 years. In total, the 12-man board has notched up 349 Nestlé years - an average of 29.1 per man. There are no women in the top level of management.

Loyalty applies at every level of hierarchy and lasts until the grave. Even managers who have left Nestlé's payroll say little or nothing about their previous employee, and certainly nothing critical. People with an unconventional approach have a hard time at Nestlé and are viewed critically. Too-enthusiastic newcomers are discretely shown the door, or slowed down. Nestlé once contacted a headhunter who had sent a manager to Vevey. The new man had a "very temperamental and brash" approach, they said, qualities which didn't really fit in to these discrete surroundings.

Second commandment: don't be arrogant

"Nestlé workers don't boast", it says in the management bible. The basic principles of Nestlé were laid down by previous company head Helmut Maucher. Even today, spokesman Xavier Perroud says: "We don't want stars, who just do things by/for themselves."

The spreading of glamour is confined to the products themselves. A new yogurt, Sveltesse, for example, appears in ads surrounded by liberally-dressed men and women. Nestlé's most important product, however, is Nescafé. According to a brand study conducted by Interbrand, the Nescafé name is worth Sfr 16bn and stands at no. 21 in the ranking of the world's most valuable brands - ahead of Rolex, Pepsi and Prada.

The foundations for this story of Swiss corporate success were laid by a German pharmacist, Heinrich Nestlé, who arrived in Vevey in 1830 to work on a substitute for mothers' milk. In 1866, he launched the product onto the market. Over a hundred years later, the apparently-favorable outlook was overshadowed by a PR debacle. Using the slogan "Nestlé kills babies", third world organisations launched an assault on the fast-growing multinational in the 1970s. High infant mortality in developing countries, they said, were down to Nestlé milk powder being mixed with impure water.

This was the only scandal to have affected Nestlé, but remains, to this day, deeply embedded in the collective minds of company managers and PR strategists. The current slogan, "Good food, good life", serves as an antithesis to the cries of the activists. Anti-baby food organisations still ritually appear at the Annual General Meeting to protest, but with modest success. Nestlé, today, stands for Swiss quality.

Third commandment: accept sacrifices with equanimity

The Vevey headquarters exudes power. Set in the idyllic surroundings of Lake Geneva and Waadtland Rebbergen, the six-storey glass building soars into the sky. Vevey brings together the threads of all the international activities and here, employees from 72 countries pore over market figures.

Real Nestlé life is not lived out in headquarters, however, but on the sales front in Manila, Mexico and Mombasa. "When Helmut Maucher brought me to head office", company head Peter Brabeck writes in his book, "Macht durch Nahrung" (Power through Nutrition), "I wasn't entirely motivated. But I am a good soldier and I know that some things, you just have to go through them." Capable workers have first to prove their worth abroad. Even those who belong to the chosen ones, who manage to scale the management mountain, are seldom to be found in headquarters. Board member Michael Garrett, a Nestlé employee for 43 years, spends 40% of his working life on the road. Only those who show their worth in the big, wide world make it to the top. The CV of Frits van Dijk, a Dutchman who heads up the mineral water business, reads like a world tour: England, India, Vevey, Sri Lanka, the Philippines, Malaysia, Japan.

This international nature makes Nestlé an attractive company. The company consistently ranks top on the wish lists of students. Take the most recent survey by the Swedish company Universum, for example, published in May 2004, which shows that Nestlé is the preferred Swiss destination for the country's business students - ahead of UBS, Credit Suisse and Novartis.

"I only ever wanted to join Nestlé", says one ex-director, whose first experience was, nevertheless, somewhat dull. As a young economist, he sent off his application to Vevey, then heard nothing for 5 months. That's normal - the company strives to maintain its elitist image and likes to leave people in suspense. Impatient hotheads are not welcome on Avenue Nestlé, the official company address. Maucher's favourite saying borrowed from John F. Kennedy: "Ask not, what Nestlé can do for you. Ask what you can do for Nestlé."

"Nestlé management and its principles" is an internal document in which Brabeck, on 15 glossy pages and in recognition of Maucher's vision, lists out the most important management tasks. It's not an American-derived management primer, but a work that is built around apparently antiquated words such as "pride", "identification" and "loyalty".

Helmut Maucher was a devotee of continuity who derided the push for short-term profits and Brabeck is very similar. Brabeck, who earns an estimated Sfr. 7 million annually, is constrained by the financial markets to act a little quicker and more flexibly, however. In the internal "bible of values", he lays down his marching orders to management: "Nestlé maintains a structure that puts the focus firmly on operational speed and results. We want, in as far as is possible, to dispense with bureaucracy - unusual words within a corporate culture characterised by contemplation.

To be taken into the Nestlé world, it's not just enough to have a good degree. Personal aspects are just as important. "We choose, as exactly as we can, which people suit us and those which can be happy at Nestlé. Then we don't have any nasty surprises later", says Paul Broeckx, who joined the company 16 years ago. New employees are only taken on after several rounds of tests.

Family relationships that are not in order? Not desirable. Politically left of centre? A problem. Over ambitious? You're in the wrong place. Nestlé looks for understatement and a high degree of commitment to the front line: "Good food, good life." You can only refuse a posting abroad once. People who are seen to be inflexible and insist on a local posting are out of the game.

"You have a one-way ticket" is what those singled out for an overseas posting are told on their briefing day. It's all about winning through, failure isn't an option. Sooner or later the realities of this are driven home. Candidates are told that 50% of the marriages of those sent abroad fail. And they're also told to expect a big-dipper effect in their emotions: most expatriates go into something like euphoria when they arrive in their new home and overcome the first hurdles with ease. After a few weeks, however, they hit a low point as everyday problems appear to wear them down.

Asian head Michael Garrett maintains a true Nestlé relationship - with the company. He rarely sees his real-life wife, she lives in Australia. He is able to find barely two days a year to see her down under, so Mrs.Garrett travels to Switzerland to see her husband. Or they meet in a hotel lobby somewhere in Asia. The last time this polyglot manager saw his son was at Easter, in Singapore. "There's no easy solution for my family", says Garrett.

Fourth commandment: be patient

This doesn't make it any easier to attract successful professional - above all, when they're in professional overdrive. Headhunters know, things take a little longer at Nestlé. When they try to fix an appointment for a candidate, it can take up to six weeks. Many potential managers spring the nest early and head for competitors such as Kraft Foods or Unilever.

Nestlé prefers to bring up its management itself, something CEO Peter Brabeck himself quickly had to appreciate. In his early days in the post, he wanted to bring a breath of fresh air into the company and, in 1997, launched the "Young Entrepreneurs" project. Six young professionals with an entrepreneurial spirit, no older than 32 years old, were to be brought in from outside and, in an almost undercover way, be installed in key positions in order to break with engrained ways of thinking and decision processes. The plan quickly fell apart, in the face of passive resistance from some of the other leading managers, who insist on internal slog.

From the bottom to the top is the order of the day. Young "mercenaries" arriving in an overseas post first has to get their sleeves rolled up - filling shelves and loading trucks are among the preferred initiation rites. Company head Brabeck started out selling ice cream.

And it's effective. Aspiring career professionals learn quickly what it's all about - humility, engagement, team spirit. Those who later make it up the career ladder never forget how important that experience at the front was for them. It's the product, not their career, that takes prominence at point of sale. Peter Brabeck, it is said, still cannot resist making sure bottles of Maggi have their label pointing towards the front when he is out on store visits.

The sharpest minds make it into the exclusive circle of the "High Potentials", of which there are around 200. Their names are kept secret, in order not to stir up jealousy. Twice a year, top management discusses the 200 dossiers. "What's important, alongside personal qualities and results, is that they have respected Nestlé principles", says Xavier Perroud, keeper of the Holy Grail on Planet Nestlé.

While American-style companies like Unilever and Philip Morris record, in written form, the next career steps of their employees and then sits back and counts the dollars, everything at Nestlé takes place more slowly, cautiously. "You never really know when you're going to get the call", says one ex-worker. That can frustrate some people, especially when there are more generous employers ready to entice "high potentials" away. "Nestlé salaries are in the middle range", says Romeo Crameri, partner of the headhunters, Heidrick & Struggles. When one looks at the heavy workload, the salaries are certainly not outstanding. "Many people join Nestlé not because of the wages, but because they want to work for an industry leader", says recruitment consultant Birgitt Scharla, of Renz Consulting.

Nestlé's head of personnel, Paul Broeckx, left and joined SGS, also in Geneva. He came back in 1999, because Nestlé embarked on a more proactive personal development plan. "A new challenge for me", says Broeckx, who has developed new salary and career plans in order to keep the competition at bay. A new system for assessing employees is also being rolled out.

Fifth commandment: stand by your colleagues

There is still, however, no turbocharged route to the top. Coupled with this is the feeling of having been brought up within one big family, to which one belongs. Just as the company's logo - a nest containing a pair of cute young bird - promises. In this patriarchal model, self sacrifice ultimately gains reward.

Nestlé employees taking up posts abroad are not let down. The country head contacts them with an invitation to dinner, with his wife. Weekends are catered for within the closed world of the "Nestléaner" and include the golf and tennis club. The firm pays the rent, for the children to go to school, medical costs. Even ex-employees turn to the company in cases of need.

The firm is like a life partner. Even in Vevey, there is little incentive to move around outside this coffee-and-chocolate world. The Nestlé canteen is the town's biggest restaurant, offering spectacular views over Lake Geneva. The Nestlé shop, located just next to the main entrance, sells everything employees need to stock their fridge and at attractive prices. The leisure clubs, too, offer staff reasonably-priced free-time options.

Nestlé's 1,600 headquarter staff are reminded everyday about the importance of selling. On the building's sixth floor, a clock shows the number of cups of Nescafé which have been drunk, worldwide, since the beginning of the year. On May 11th, the figure stood at 45,415,190,900.

Sixth commandment: Read the signs

Here at Vevey you can see the entire brand world of this FMCG giant laid out before you: cornflake boxes, yogurt pots, soap tubes, baby food jars, tins of packs of dog food. In the offices of the president of the advisory board, Rainer E. Gut, laid upon the coffee table is a glass bowl full of Nestlé chocolate brands: Galak, Frigor, After Eight.

Even the women serving coffee during the morning and afternoon breaks could have come straight out of a TV ad: the Nescafé logo shines out from their trolley as it rolls through the long corridors.

Non-conformists and daredevils have a hard time at Nestlé. "Some employees wanted to hang posters in the corridors. That was going too far", says spokesman Perroud. If it turns out that somebody has been appointed who later does not fit in, Nestlé deals with the problem discretely. "In American companies they stick a knife through your heart. In Nestlé, non-verbal communication rules", says one employee. It is simply made clear to that person that he is not wanted any more. When Hans Güldenberg, ex-head of Nestlé Germany, achieved profits that fell below expectations, he was transferred to the division responsible for operation in Russia, Belarus and Kazakhstan.

Controversial figures or fallen angels have no chance of re-entering the family. Mario Corti, once a respected diplomat and finance chief at the firm, left to try to save ailing Swissair. Insiders are convinced that there is no possibility that Corti will be accepted back in Vevey. The now ex-Swissair boss is a typical example of how difficult it is for "Nestléaner" when they move to another corporate culture. The rather elitist manager appeared helpless in the face of the intrigue and manoeuvring occurring at Swissair headquarters in Balsberg.

Seventh commandment: Be grateful to the company

Even those who leave the family castle of their own free will, for no evident career reason, earn themselves few friends. "What, you want to leave your wife?", one staffer was told when he announced his resignation. You see, working for Nestlé is like a marriage.. until death do you part. During his long Nestlé career, Michael Garrett did, indeed, once file for divorce, but later withdrew it. He was too tied to his "wife".

Every family has its informal hierarchy. In the case of Nestlé, you can understand it by observing the seating plan. When leading management meets, representatives from the most important markets - USA, Europe and Asia - and the finance chief are placed close to company head Brabeck.

Those marked out for better things sit closer to the boss, although a certain distance always remains. Brabeck himself even flies first class, while his management colleagues are consigned to business class.

An Austrian, Brabeck, who spends his free time in the mountains or flying small planes, places great value on the fact that his name is, in fact, double barreled (his full name is Brabeck-Letmathe, Letmathe being his mother's maiden name). He is even believed to have given instructions for this name to appear on all external correspondence. Ones place in things is also evident in the parking lot: the closer your space is to the lift, the higher up you are.

Brabeck's ascent to the top was - typically for Nestlé - planned far ahead. The hardworking economist was first appointed by Helmut Maucher as country head for Venezuela. Then, in 1987, the boss called him to head office and asked him: "What are your aims?". Brabeck's answer? "I'd like your job one day." That, at least, is what Maucher told the writer of his book. Maucher was thus able to present his successor two years before the event before, on the day of handing over, telling him: "Your first duty is to start training people tomorrow who will be able to take over from you."

Many have ambitions of reaching the top. To achieve them, they will have to prove themselves across the world and in the company's training centre in Rive Reine. 2,000 Nestlé professionals from all over the world are trained there each year in groups that often work late into the night. They are allowed to sleep for short periods in the Villa Augusta, which was originally built by Friedrich Wilhelm III, King of Prussia, for his wife but has been used by Nestlé as a private hotel since 1946. The high-point of any seminar is a personal appearance by Peter Brabeck himself.

Nestlé earns just one per cent of its worldwide turnover in Switzerland, yet Peter Brabeck continues to stress the company's Swiss roots. "Nestlé has many Swiss characteristics", says headhunter Romeo Crameri, "constancy, reliability, tradition, pride and long-term thinking." Even Michael Garrett, an Australian, stresses these national values: "Nestlé is rather Calvinistic, respectful and fair", he says. And, as the final command requires, grateful.