Lessons from Mars

A few years ago I interviewed John Bannister, who spent over 27 years with Mars confectionery. He was general manager of the Slough factory in the 1980s, responsible for over 3000 staff.   I had heard some interesting remarks about the company, which is one the largest privately owned companies in the world.   What lessons might there be for people these days trying to run healthy and sustainable businesses?

The starting point, he says is to recruit people with character, who can think for themselves!  Then, encourage them to think for themselves, following principles,  rather than to worry too much about what their manager might  want.

Educate them too. Mars would encourage staff to organise tours of other (non-competitive) factories (eg Lotus, NCR) so they were constantly learning. They offered these companies the chance to visit in return but only two (one was Honda) accepted.

They would allow every member of staff time out each month for “job information” – detailed info about profits, sales, strategy etc. (John reckoned the employees knew more than most directors in other companies). This was a bit of a pain to organise but well worth it.

They had no secretaries. So less paper! They also had a very flat hierarchy – just managers and shopfloor staff.

http://www.mars.com/uk/en/assets/images/center-content/the_five_principles_220x124.jpg John emphasised that Mars, at least in his time, was a principle-based business.  There are five guiding principles –  quality, mutuality, freedom, responsibility and efficiency –  that John said were “alive” in the business.

One result of all this, according to John, was that the staff were very creative. For example, most of their machines they used on the production line were designed by Mars staff and many were built in-house,  or made to order externally. They found they could not buy machines that were nearly as fast or easy to use and maintain as the ones they designed themselves.

They had no suggestion box – John’s view was that it was divisive (it is like a lottery, he said, and not really fair, since ideas tended to come from groups, not from individuals). If employees had new ideas he would say “Go away and find two other alternatives” and then send them away to discuss with their colleagues. When they came back they nearly always had a better view on it – a more subtle, thought-through solution.   So rather than rely on him, they learned to think for themselves.

If someone had an idea, they would be supported and encouraged to try it out, and be given the time and resources to do so. As a consequence Mars has moved into a number of new business areas (it is a major supplier of cat food, for example).

I liked the Easter egg story. Three members of the Mars family effectively led the company. They would fly round the world, keeping an eye on the numerous factories. They were Americans with a strong ethical code, and for some time refused to approve the sale of hollow Easter eggs for ethical reasons – they thought it was cheating the customers, to sell them air encased in chocolate. John felt they were wrong about this – the customer was under no illusion. Applying one of the five principles, freedom, John set up a small workshop where they started to make Easter eggs. Whenever the owners were in town, John and his team would rush to hide the workshop (they would move earth in front of it and mark it off with red tape saying ‘under construction’). Eventually, the owners were persuaded that it was ethical to sell the eggs (it helped  when John could show them the profits that the business has made already!).

John had to be quick-witted since the Mars family were smart. They would fly economy, hire a car and inspect a factory without warning before management arrived, talking to workers to get a sense of what was going on.

One result of their unusual approach, according to John, was that Mars were far more efficient than Cadburys or other confectionery manufacturers. He claimed that Cadburys had 15,000 people to do what Mars did with 3000.  John showed me some comparisons showing how superior Mars were to Nestle, Cadburys etc in terms of sales per employee.

I was struck by a couple of examples of how their adherence to the principles made them stand out from most companies in a positive way. For example, efficiency. To minimise travel, they installed videoconferencing in the 1980s  when it was still in its infancy. All the managers welcomed this. Because you had to book it, it gave you a limited time within which to hold your meeting so they would not drag on. You’d agree the minutes before the close of the meeting so everyone bought in. [By the way, agreeing the minutes of a meeting before it closes is a Quaker business practice – Mars, like most major chocolate companies, was founded by Quakers).

They had a rule that suppliers could not give any sort of gifts,  not even the cheapest, to a Mars employee,  to avoid any suggestion of impropriety.  John said that suppliers used to find this very hard to understand. I can see the value of this in indicating to suppliers that dealing with Mars was not business as usual.

The company was fiscally prudent – the family never borrowed money! If John wanted to invest in a new production line, he would have to persuade the family members to invest in his factory rather than in another factory. In that sense all the factories were in competition, at the same time there was lots of collaboration amongst the factories.

I was interested in the way they would go about their recruitment of unskilled staff – they would place an ad, reduce the thousands applicants to 8, then bring them into the factory for a weekend and get them to work as a team to, say, design a town (something anyone can do) and see how they would interact.  Potential employees were also allowed them to question anyone from the business, who wouldn’t have been primed.  This helped them to make their own minds up as to whether they might fit in the company.

Management didn’t negotiate salaries – they would be fixed at the beginning of the year. There would then be bonuses, linked into profitability and return on capital,  thus aligning incentives between the owners and the staff. This also encouraged staff to think creatively about how to make investment money go further(so if they invested more, they might get less bonus). Shop floor staff had a basic minimum but managers could have much more variation.

One notable alumnus of Mars is Allan Leighton, who left after 18 years there to join Asda, which he helped turn from near bankruptcy to one of the UK’s biggest retailers. One idea that Leighton took with him from Mars was the idea of calling staff “associates” rather than “employees”. He has been quoted as saying he owes a lot to the Mars brothers, who gave him the practical basis for much of what he did at Asda.

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