Paul Walsh defends Diageo’s social responsibility

Paul Walsh, chief executive of the world’s biggest drinks company defends Diageo’s social responsibility policies

In a wide-ranging video interview with BBC’s Robert Peston, [July 28th 2008] Paul Walsh examines the social responsibility policies of Diageo, and provides a glimpse of his leadership style.

The 23 minute video is worth watching, and (for business educators) a nice focus for discussion on leadership or retailing courses on a global brand.

The loyalty of a lifer

Walsh is one of a disappearing breed, a corporate lifer in the fashion of Henry (Hank) McKinnell of Pfizer. His tenure as CEO is also substantially beyond that of current norms.

In this interview, he did not appear to be under pressure to justify his belief in the social responsibility of his company. [Why should he? The question was framed around public debate in Great Britain on the vexed issues of underage drinking and its social consequences.]

Not in the witness box but bearing witness

On this matter, as elsewhere during the interview, Mr Walsh was not so much in the witness box, as someone bearing witness, given an opportunity to share his personal faith in the company and its values.

This is a claim that comes more easily to the corporate lifer, whose commitment has been demonstrated by decades of loyalty. [Corporate shareholders: take note].

Diageo? Most of us (including many financial commentators) still refer to Diageo by its centuries-old earlier name Guinness.

You can see the attraction of moving to a name that avoids preserving an image of a single-product company, a sort of one-trick pony. The brand shift occurred at a time when creativity in branding seemed to have been at a low ebb, and when rebranding decisions tended to favour the Rorsachean over the impactful and memorable. But that’s another story.

Walsh reveals himself an admirer of the success of globals such as Coca Cola and BP. (Does he have some envy at the retention of legacy in such brand names?).

Admitting a mistake

Watch out for how Walsh deals with a recent commercial decision. ‘We got it wrong .. we listened .. we put it right’.

End of story. You don’t have to project yourself as perfect to run a great company.

Invulnerability

Walsh seems quite relaxed and invulnerable to the risks of revealing something about himself or his company. Peston flashed the old school tie, one successful comprehensive boy interviewing another. Walsh avoided the invitation to provide the tempting narrative of the poor boy who made it to the top.

Politicians in the public eye are more likely to judge it advantageous to sketch out such personal details. But theirs is often more an exercise of personal branding.

The boys with the black stuff

Some years ago, before the company was known as Diageo, I spent some time working with its marketing and corporate managers in several different countries. In those days, the culture was a remarkably coherent one. Arguably, the dominant image of Guinness was beginning to restrict strategic transformation. In Ireland, the job as ‘Guinness rep’ brought high social status. The parish priest was not unknown to use his pulpit to mention job vacancies in the company.

Success was recognized through hard-won achievements as the ‘boys with the blackstuff’ spread the word and the product as successfully as their Christian brothers around the world.

But transformation to a global force has not been accompanied with the replacement of leaders who put financial ratios above the products which have been the lifeblood of the organization.

Facing the media

Robert Peston has argued that business leaders are too reluctant to put themselves forwards for public scrutiny.

In this interview he demonstrates again his claims that such exposure is desirable and valuable for the corporation.

On my wish-list Peston to get a crack at Tony Hayward the BP leader, or Muhtar Kent, recently appointed CEO of Coca Cola, the ultimate family firm.