by Peter Block
Have You Hugged Your Goalie
Business News Briefs
A Toast To The Future
Wine—Red, White, Chardonnay, Zinfandel or Merlot. Lucy and Ethel crushing grapes with their bare feet. The drink of the gods, Bacchanalian festivals and religious rituals. Wine has been around for centuries, and at the Robert Mondavi Winery they are preparing for the next millennium.
Since the winery's conception in 1966, Robert Mondavi and his family have held the desire of building a facility for the production of world-class wines. The family has remained committed to growing naturally balanced wines of great finesse and elegance to complement and enhance fine food.
Michael Mondavi, son of Robert, points out that “People in the valley thought we were crazy. Our winery was referred to as ‘Robert's Folly’ or the ‘test tube winery’. They said, ‘Look at the way he's spending money on French oak barrels.’ It simply wasn't done.”
As years passed, the family established itself as the industry's leading innovator. Whether it was the unique and extensive use of cold fermentation, introducing blind wine tastings in the Napa Valley or single-handedly popularizing new styles of wine, Mondavi has always looked toward the future. With the largest commitment to vineyard and winery research in the premium wine business, the winery continues to expand and upgrade its varietal grape supply and the wines it produces.
Four years ago, Robert Mondavi Winery recognized that the industry was changing and internal change was needed in order to maintain their leading role in the industry. The result: a change from a top-down hierarchical organization to one that gave power to each winery and department, reducing layers of management, empowering people and encouraging open, fluid communication.
Mondavi's need for change was driven by the demand to compete in an increasingly competitive industry. “The wine business had not been so competitive, but became really competitive in the past five-to-seven years,” recalls Alan Schnur, a senior vice president at Robert Mondavi Winery.
“Companies started to go public (like Mondavi) and shareholders demanded good returns. The patterns in the industry changed pretty dramatically, very quickly. Aggressive advertising, aggressive price promotion and a lot of changes at the retail and distributor levels were the instigators for change,” says Schnur. “Because of changes in the industry and increased competition, the management style we had previously to those changes simply would not have allowed us to be as successful. We had to change.” Schnur's 10 years of experience as a consultant gave him insight on what needed to take place at Mondavi. The first step of the change process was to conduct research which consisted of two parts.
“The first was a database that I had accumulated when I was consulting—Mondavi had been one of my clients,” said Schnur. “I had worked for 10 years with poor performing companies, so over that time I had developed a database comparing top-performing and poor-performing companies and what were the significant differences. That set of findings inspired the family to make changes and to look and behave much more like a top performing company.”
Says Schnur, “Another guide was some work I had done with outstanding sport coaches. We looked at what top-performing sport coaches do to maintain a tradition of excellence and winning.” The findings from the study led the Mondavi family and the management to believe that there was another way to conduct business, to structure the company and to motivate employees.
Applying Schnur's research findings that top-performing coaches communicate daily with their players, senior managers met with groups of employees to present the statement and discuss where the business and the industry was heading as a whole. “A short presentation was developed to explain the future of the industry and provided a great deal of insider information about changes in the industry: pricing, industry competition, advertising, public offerings and the growth of Mondavi,” Schnur explains.
“We shared information that management employees had never shared at Mondavi. Then, with the given scenario, we asked what should we be doing from our employees standpoint,” Schnur continues.
Leadership evaluated the employee comments and developed a second draft of the statement. They presented it to small groups of employees to gather their reactions. “We asked, we listened and we tried to implement as much as possible,” explains Schnur. “From all the input came a final version which we communicated to everyone in the company.”
According to Schnur, “Most vision statements don't stick in the mind, they don't resonate from an emotional standpoint.” Mondavi wanted their statement to be something their employees remembered and got excited about. If Mondavi employees participated in developing the statement, they would believe and support it.
The resulting vision statement is short, constantly used and remembered: "We will be the preeminent fine wine producer in the world.”
This statement encompasses every aspect of life at Mondavi; it is used in every voice mail message from the CEO, in all statements to analysts, in almost every communication from the CEO’s and Schnur's offices, it begins formal presentations to employees and is the basis of the strategic and annual planning process. “We base everything on it,” adds Schnur.
On Your Best
As a means of monitoring these behaviors, Mondavi has integrated a quarterly, quality survey to monitor behavior and improve quality. The surveys are made up of a few questions and are conducted for each team member within the department by their co-workers. The data is then tabulated and returned within two days to ensure timely feedback.
"The quarterly surveys of behavior are based on observation, not evaluation—an important distinction,” says Schnur. “We are trying to change behavior. We've outlined in our 13 core behaviors what will help us be better performers. We are simply looking for frequency. The rationale is if you can get people to do a behavior more often, it will eventually become a habit.”
The questionnaire focuses on five to seven behaviors and employees are rated on frequency (always, often, sometimes, rarely or never). Questions ask if a team member “asks for input on his/her performance,” “demonstrates respect for co-workers” and “provides timely information about the business.”
The success of the feedback has been positive. The underlying principle is that most people are intrinsically motivate—driven by their own sense of values to improve. The trappings of accountability around the survey are few and it is not part of any formal process(no tie between promotion/salary).
Throughout the changes, the Robert Mondavi family has remained true to its original philosophy and objective: to produce world-class wines, to educate the public about wine and its role as the mealtime beverage of moderation and to promote wine with the arts as an integral part of a balanced lifestyle.