Kraft simplification strategy anything but

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True to type, Kraft has found a way to make speeding up and simplifying its business sound slow and complicated.

Acknowledging its unwieldy, bureaucratic ways, Kraft Foods' CEO Roger Deromedi last week promised analysts a faster, simpler corporate culture. The first step toward that nimble future? A new post: senior VP-business process simplification.

As part and parcel of its ongoing Sustainable Growth Plan, which has resulted in selling off businesses, ramping up ad spending and focusing on fewer and better new products, Mr. Deromedi earlier this month outlined to employees a series of guiding principles to create a "winning culture."

Among them is a mandate to "work simply, act quickly." In December, Mr. Deromedi named David Brearton, 43, also Kraft's corporate controller, to spearhead that simplification effort across all disciplines, including marketing, where Kraft has long been accused of shying away from risk-taking in favor of rigorous (and time-consuming) testing.

At first blush, Kraft insiders were surprised at the new position, which ironically seems only to add a layer to the already bureaucratic culture. But, said one executive close to Kraft, "by creating that position, it shows that management recognizes there is room for improvement."

Although Mr. Brearton's specific plans have yet to be determined, insiders suggest that the new "work simply, act quickly" push would ideally eliminate some corporate reporting and lessen the over-reliance on data.

Company spokeswoman Kris Charles said, "While certainly our discipline and our approach to using data to guide decisions isn't going to change, Mr. Deromedi has made clear to the organization that we not let overanalysis get in the way of being more decisive."

But pundits ponder whether Kraft can really walk the talk.

"If Kraft changes depends on how the managers of the business see their leadership act and whether in the end they will accept 70% analysis vs. 95% risk-free analytic rigor," said Gary Fraser, president of Norwalk, Conn.-based innovation-marketing consultant Growth Engine Co.

The announcement of the planned culture change at last week's Consumer Analyst Group of New York meeting in Phoenix was clearly intended to convince the investment community of Mr. Deromedi's seriousness about driving much-needed innovation, even before any changes have begun to be made inside the company.

Credit Suisse First Boston analyst Dave Nelson passed on the information to investors in a note following the presentation offering that "[Mr.] Deromedi has been pushing a `work simply, act quickly' attitude into what at times seems to have been a paralysis by analysis culture at Kraft."

He added that, according to Mr. Deromedi, "senior managers now take a more visible role in championing new initiatives and meet more often to make big decisions faster ... if they get this right, it will certainly be bigger than one new product."

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