Change Is Sweet

At 10:45 on a recent Friday morning, Todd Manion was busted.

He and other members of the advertising-and-marketing team at Nestlé USA were meeting with people from the company's interactive-marketing agency. For 45 minutes, they had been hard at work in a Nestlé conference room. Suddenly, the 6-foot-5-inch frame of Joe Weller, CEO and chairman of Nestlé USA, filled the doorway.

"What's going on here?" the CEO boomed.

"What's going on," Manion replied, "is that we're having a meeting -- "

Weller cut him off. "I understand, but you know the rule: No meetings on Friday after 10 AM." Then he turned and walked away, assuming that he had broken up the gathering.

But he hadn't. "I hate to admit this, but I didn't think he'd come back," recalls Manion, 37, an e-commerce marketing manager. "We had a lot of work to do. We kept at it."

A short time later, Weller returned. Leaning through the doorway again, he delivered a succinct message: "I am sincere."

It appears that he is. Weller issued the rule a year and a half ago. His goal: to free people up to think about strategy and to set priorities for the following week. Now, for at least a few minutes on most Fridays, he prowls the corridors of Nestlé USA's 21-story, glass-and-steel headquarters, in Glendale, California, primed to bust in on any "after hours" gathering that he comes across.

"We have way too many meetings," says Weller, 56, who has been CEO since 1994. "Meetings waste time and sap people's energy. They slow us down. So far, I've been polite about breaking them up. But this year, I won't tolerate them."

Weller's edict is but one very visible tactic in an all-out campaign to remake Nestlé into a leaner, meaner, and ultimately faster operation. And at the epicenter of that effort lies the Internet. The "Internet changes everything" rhetoric of yesteryear may have lost some of its currency, but Nestlé leaders are relying on the Net to help them overhaul much of what the company does -- from buying raw materials to processing purchase orders to marketing the roughly 2,000 products that make up its nearly 200 brands.

The buzz phrase "Make e-business the way we do business" has permeated the vernacular at Nestlé. Weller even makes a point of dropping the slogan into a 45-minute conversation. "E-business has become a catalyst for driving change through the whole organization," he says. "It will make us a lot quicker. It will help us adapt faster. It's all about speed, speed, speed."

A year and a half ago, when small, tech-centered companies seemed to own the Internet, it would have been easy to snicker at Nestlé's lofty e-dreams. Nestlé USA is the largest subsidiary of the world's largest food company, Nestlé SA -- a 134-year-old global Goliath based in Vevey, Switzerland. It makes Nescafé and Nestea, Friskies and Alpo, Toll House cookie dough and Lean Cuisine dinners. The success of these established brands gave rise to a deeply entrenched in-house establishment. Some of the company's own managers admit that the food giant had become weighed down by an elephantine structure and a risk-averse culture that made it slow, slow, slow.

Indeed, unlike many of the companies that grabbed headlines during the first phase of the Internet economy, Nestlé doesn't aim to change the world. It just wants to sell more coffee creamer, more candy bars, more "wet" pet food. It aspires to 4% annual sales growth. (The food-industry average is only 2.5%.) But unlike those early-stage Internet companies, Nestlé has real size (17,300 employees), real assets (34 factories), and real revenues ($8 billion in sales for 2000). All of which puts Nestlé on the front lines of the real economy, where Godzilla-sized companies are rushing to blend the Internet into their traditional operations -- and finally, fully to leverage their breathtaking scale.

Size and success continue to pose a challenge for those who want to change Nestlé. After all, even for an Internet evangelist like Manion, old (meeting) habits die hard. But like Weller himself, with his dogged insistence on breaking up meetings, the company keeps plugging away. From the way it builds its Web sites to the way its managers relate to employees, Nestlé appears determined to try, try again until its Net strategy is truly the "very best."