The First Three Big Moves of Nestle's New CEO

A new CEO walks into a nightmare scenario: years of stock decline, growth that stalls, a major baby formula recall, and a shipment of Kit Kat bars that literally gets hijacked. That’s the leadership crucible we unpack as we go inside Nestlé and pull out the decisions that matter when performance slips and public trust is on the line.

Lone Rock Leadership co-founder Russ Hill talks through the first big lever: ruthless focus. Nestlé narrows the company’s attention to four core areas (coffee, pet care, nutrition, and food and snacks) and starts shedding complexity that slows execution. From there, we get practical about what “speed” really means inside large organizations: reducing internal congestion, simplifying priorities, and making structural changes that let teams move without endless meetings and approval loops.

Then Russ digs into accountability and performance management. We break down why “revenue growth” can be a mirage when it’s driven by price hikes and how a metric like Real Internal Growth (RIG) forces leaders to face the truth: are we actually selling more units? If you lead teams through change, this is a clear blueprint for turning strategy into measurable results with a few meaningful KPIs.

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Transcript

A CEO Walks Into Chaos

SPEAKER_01 0:00

He took over the company. The stock was down. Growth had stalled. There was a critical product recall, and someone had just stolen more than 400,000 units of another product. What this new CEO did next are some moves that we all can learn from. We're going inside Nestle for some leadership lessons in this episode of the podcast.

SPEAKER_00 0:28

This is the Lead in 30 podcast with Russell. You cannot be serious. Strengthen your ability to lead in less than 30 minutes.

Free Workshops On Leading Change

SPEAKER_02 0:43

Register for the industry-specific workshops on how to lead teams through change. We're digging in with pharma, manufacturing, healthcare, and three other industries. Register before all 300 seats per session are taken. Go to lone rock.io.

SPEAKER_01 1:00

Yeah, you can register for those sessions right now. There's a total of six sessions. We're limiting each session to 300 people, 300 seats, if you will. It's a virtual event. It's free. So 1,800 total seats. They're going quick. You need to go to lone rock.io. This is the whole premise of it is how do you lead through change? There's tons of change happening. And there's this whole piece of the change that's happening to us, the disruptions and the changes going on in our industry and the market overall and the way that we work and restructuring and efficiencies and all those things. Those are the changes or disruptions happening to us. And then there's the change that we need to be driving or leading as a leader whose value is going up inside our industry. We need to be driving change. So there's that whole aspect of it too. I am so stoked. You all, tons of value. They're only an hour long, and we really need to spend like half a day. But we're going to go into pharma. We're going to look at the changes that are affecting retail, restaurants, and hospitality. In another episode, we're going into healthcare. In another episode, it's finance and insurance. In another episode, you get the idea. Manufacturing, and then we're going into tech and all these different industries. So you're going to see from our research team some of the research, some of the data of the changes that are happening, and then specific changes you're having to navigate, and then we're going to give you some super tangible things that you can implement right away. So if you lead teams, this isn't for just for HR and L and D. Like we do a lot of those events. No, no, no. This is for business leaders. Like HR and L and D, you're welcome to come. We're inviting a ton, but this is business leaders, people who are leading the factory, people who are leading the sales team, people who are leading the hospital unit, people who are leading the risk management team, people who are leading IT teams, business unit leaders. So if you've got a team of like more than five or six people, you ought to be in this. So whether you're a VP, a director, those are really the levels that I would think would get the most value out of it. And then and then uh and then C-suite. Any any executives from the C-suite. We're not really talking of like frontline supervisors, that sort of stuff. Okay, so register, those are coming up. If you're listening to this at the time that I'm recording this, it's during the summer of 2026. We're doing those six sessions, I think two a week, and I think they um they're coming up, so you need to register. LoneRock.io.

Why Nestlé Makes A Great Case

SPEAKER_01 3:38

Welcome in to the low the uh lead in 30 podcast. My name is Russ Hill. In less than 30 minutes, we give you a framework of best practices story. Today we're going inside Nestle. I'm so excited to uh to share with you what's happening there. Tons of activity. And the reason I want to share, well, I'll get into that in a moment. Anyway, so in each episode, we give you something in less than 30 minutes because you're busy, you're on the go, and so we want to give you something to think about, implementing, considering in the way that you lead others, because you've got to constantly be upgrading your ability to lead others because the market is changing. You've got to stay ahead of it, and this is one of the places where we help you do that in this podcast. Tons of resources on our website as well at LoneRock.io. I'm Russ Hill, one of the co-founders of Lone Rock Leadership. We're an executive consulting firm as well as a leadership training company. We work with business executives. Those are typically business unit leaders or members of the C-suite or the CEO, depending on the organization that we're uh that we're talking about. Most of them are Fortune 500 companies that we consult. Uh we sometimes go a little smaller than that, Fortune 1000, but we actually we work with some, like there's a I can think of several clients right now that are much, much smaller than that that that need some critical help and that we've signed agreements with recently, and uh and they're they're getting uh help from our our consulting team. And then we've got the leadership training side, which is for HR and L and D teams that are looking for um real tools on how to better train leaders of the organization to impact business outcomes. We don't do any nice to have training. Like we leave that for other firms that are selling you like 500 courses or 1,300, or or they've got 65 of them, whatever the number is. We're not into that. We're into no we only want to be in a meeting if it's actually gonna affect this quarter, if it's gonna affect our ability to drive performance, to drive the uh the results that matter most. So LoneRock.io is where you can find out more. Okay, let's talk about Nestle. And uh Nestle's an organization we've done some work with in the past. It's been a few years, and they've had tons of leadership changes. The current CEO, Philip Navratil, has been on the job for less than a year. He's been at Nestle for, gosh, I think it's like 20 some odd years. He's moved up through the ranks, came from the finance department, and then moved over into CEO after some controversy, some different things. What I want to talk about in this episode are some of the moves that he's making and why I think that it's worthy of discussion in a podcast episode, because that there are things that you might want to be considering, things that we would advocate that you at any level of the organization, this is not an episode for just for the C-suite. I know we've got lots of executives at the C-suite level who listen in all kinds of different industries, and then we've got a lot of you who report into your the next layer down, right? Your L2s inside an organization or an L1. And and some of you are lower levels, some of you work in smaller organizations. It doesn't matter where you are on the org chart, the size of your company, there are some principled moves that I want you to consider. So let me just give you the backstory and then we'll dig into more of that, okay?

Nestlé’s Scale And Immediate Problems

SPEAKER_01 6:59

So what you need to know is about Nestle. And and you think you know Nestle, you think chocolate or whatever else, it's actually the biggest food and beverage company in the world. Did you know that? Nestle's the biggest food and beverage company. So 150 years old, just over 250,000 employees, a quarter of a million employees, about about $108 billion in revenue. So over it's a $100 billion revenue company. You know all the coffee brands, Nes Cafe, Nespresso. Um, then they've got things like Kit Kat, Perina, Gerber, Perrier. I mean, you're talking about all kinds of different categories from frozen meals to vitamin supplements to um baby formula to dog food and cat food to coffee. I mean, they're the ones that make Nestle has the license to package and then sell Starbucks coffee in your grocery store, all of that. So they've got they're in tons of different businesses. So when Phillip takes over, stocks have been down 26% over the last five years. That's what he inherits. Okay, then there's a scandal involving the previous CEO. Analysts are saying that last year was literally their worst performance in 20 years. And at the time, one of the facts that I just I should laugh about it. But you all, life is so interesting, right? All the challenges that come our way. One of the first public appearances that Philip had to make, a video that he recorded that you can find on YouTube where he's talking to moms because they're recalling hundreds of thousands of units of baby formula. Like, that doesn't instill a lot of confidence in a mom or a dad that go into the store, Walmart or the grocery store or whatever to buy baby formula and here's this product being recalled. So that could have a major impact on financial performance. He's got to address the public. I love that he recorded that video, by the way. The buck stops at the top. Love it. And the video was a little too stiff and whatever else, but you know what? We we give somebody in finance a break that's uh that's in their first CEO role in a company of this size, very first CEO role, and you're leading a company this big. Okay, lots of pressure. So you have this recall, and then at the same time, right around the same time, they have this truck that's headed from from Italy to Poland, and it's it's it's del it's got um 12 tons. This is almost like a comedy skit. It's so bad. About 12 tons of Kit Kat bars, chocolate bars. Somebody hijacks the truck. They literally stole it. You can like search AI for this. You'd see that it's real, and like they have no idea to this day where it went. And you think about well, that's 400,000 chocolate bars. How much is that in value for Nestle? I mean, you're uh on the low end, you're talking like $200,000 worth of product, right? Maybe $400,000. Anyway, all of these things, there's just everything's going wrong. So into that mess walks walks Philip coming from the finance department. And he had a lot of different jobs over the years, which you know, we could do a whole episode on that. I think there's so much value in people working in different departments. And for those of you who are interested in scaling the org chart or in um whether it's at the organization you're at or whether it's just in your overall ability to lead others, there's a ton of value in being not only in different industries, although you can stay in the same one during your career, but certainly having different perspectives. And even if you stay in the same industry and the same company and the same department, like you're in sales, it's there's still so much value in you working in an area on the West Coast, and then we give you a region on the East Coast, and then you're over in this division, and then you're over in that part. Like you need that perspective. Some companies build that in. They build that in into how people um move up the org chart. Others don't. I just think they're missing out. Anyway, okay. So

Ruthless Focus On Four Businesses

SPEAKER_01 11:19

here's what Philip did. Immediately he starts restructuring the organization to narrow the focus on four areas. You all you've heard these stories from me in recent episodes. We we ever since we built lead in 30, you I have to step back and talk to you about leader OS. And I know some of you are gonna roll your eyes and like, Russ, I know you talk about this all the time. Yes, it's the same reason that Dave Ramsey talks about spend less, save more. Like how many times you have to say it over and over again. Why? Because it works, right? And so clarity is the value of clarity is just insane. And so he narrows the focus to coffee, pet care, nutrition, food and snacks. So that's one of the first moves that Philip makes taking over Nestle. He's like, we're we're really good at these four things. Everything else we're gonna sell, or we're gonna scale back, or we're gonna take a second look at. So coffee is the engine. That and and it's it's like over 20% of the revenue at Nestle. Did you know that? You probably didn't even know that. And so um he says, we're absolutely gonna lean into that. Then pet care is the next, like um, think of Purina, think about you know these different products that Nestle makes in the uh in the pet food aisle. Then it's uh then the next biggest one is nutrition. And under nutrition would be things like baby formula, baby food. That's where Gerber and these other brands that you would recognize are in. So that's a big one. Then the next category, food and snacks. I want you thinking about seasonings like stofers, um uh some of the frozen pizza brands, the the some of the chocolates like Kit Kat and these others. And then he decides, so those are the four bedrocks. So think of the power of that. We're we're gonna focus the organization on four things. It's just four things. By the way, how many do we always tell you over and over again? We wrote about it in the book Deliver. It's three things. It's three or four, it's never more, right? It's three key results, it's four areas of focus. I I I a couple episodes ago I talked to you about the five key results that um that Brian Nichol at Starbucks is leaning into right now. Five is kind of high. We wish that was three, but it at least it's not ten or in a lot of organizations, eighty. We've got a balanced scorecard. There are 80 things on it, we're tracking all these things. Don't worry, everybody's got the scorecard, Russ. And we all know what it is. Everybody knows what's on it. It's red, yellow, and green. We've got these pro nobody knows what's on it. It's so easy. You know how you do the test? You just don't let them pull out the email. Don't let them find the deck, don't let them look it up and ask them how many things are on the scorecard. They will not be able. I promise you, they will not be able to name three, maybe five. That's it. So you narrowed it down. So fill up four areas coffee, pet care, nutrition, food, and snacks. We're getting rid of ice cream. Less than a billion dollars. And um, gosh, what's the brand that they have? You all would know it. I'm not thinking of it right now. Um, super well-known. Uh, anyway, I'm not I'm that it's not booting up for me. Um, so we're getting rid of that. Then he takes a look at water like Perrier, San Pellegrino, and and that's under review. We're we think we're getting rid of that. Then vitamins and supplements that aren't part of the, you know, they they aren't really under the baby category, the baby food, whatever. We're gonna look at that. And so he literally moved them. He moved the number of products from 400 to 150. Okay, and we're gonna we're gonna lean into the winners. And as part of that, he restructured the organization.

Cutting Congestion Without Breaking Trust

SPEAKER_01 15:15

16,000 positions being eliminated. He thinks that they're moving way too slow. And so 12,000 of those positions are white collar, they're management, management and office jobs. 4,000 of them are in supply chain and manufacturing. So the bulk of it is we're we're removing a ton of mid-level managers, hence a theme. I keep talking about it. It's just absolutely the trend in organizations. Some companies you'll see headlines, especially in the tech sector, where they eliminate um just like the whole middle. That's extreme. It's I actually think it's totally bogus. I think a lot of these CEOs that are making public statements in the tech sector saying AI is allowing us to eliminate all of our mid-level managers. Well, why are you doing that? I want you to look at their stock performance. The reason they're eliminating them isn't because they're incredibly innovative leaders and executives. It's because you need a good story to tell Wall Street on why you just cut 4,000, 10,000, 20,000 jobs. And so removing all mid-level managers is an absolute fool's errand. It does, it it you cannot argue the logic of that. Now, should we should we weed it out? Yeah, because so many organizations are bloated. It takes us so long to do something, so many meetings, so many discussions, trying to get consensus, which is a mirage. We talk and we talk and we talk and we talk, and our and our competitors are just like eating us for breakfast because they can move at such speed. And if the average organization three to five years from now is going to be much smaller, you guys know this, right? I talk about it a ton. The the the and I I I'm just very well researched on this, I'll tell you. I study this crap so you don't have to. And I spend gobs of time studying it and and and having these conversations with executives at the organizations we work with, and then paying very close attention to networking groups and and access that we have to data. That's what I'll I'll leave it at that. And what I can tell you is, uh I'm and I'm very I'm very um confident about this prediction, that the number of organizations, the number of companies over the next two to five years is gonna like quadruple. Pro probably more than that, 10x. Dramatically more companies, but the average company is gonna become much smaller because survival depends on our ability, your ability, a company's ability to move quickly. And the the market just demands that. Plus, innovation allows us to automate or turn over to agents, bots, computers, CPUs, or uh chips, uh, turn over a lot of automated um tasks, right? So anyway, so he cuts, um, Philip goes in, he trims 16,000 over two years, not all at once, and uh, and he's targeting, eliminating $3 billion in cost by next year, by 2027. And handling that uh, in my view, in a totally appropriate way. And and and the speed of that and where he's making the cuts and um and and the timing of that. Then so you've got you've got narrowing the focus, going and leaning into the products that that deliver the most, cutting off the ones, getting rid of the things that, yeah, okay, uh that generates a billion dollars, but it doesn't generate 25 billion. And we've got a division that does, and so let's lean into that. We only have so much bandwidth. An organization only has so much bandwidth.

Real Internal Growth And Accountability

SPEAKER_01 19:08

And so we're gonna narrow the focus, we're gonna restructure around that, and then the next step from Philip is I'm going to increase accountability. Interesting. Interesting topic. By the way, our next book, which is like 75% written, you guys, it's I'm so freaking jacked about it. Oh my gosh, am I excited about our book? It's on accountability. It's our accountability book, and it's about personal and professional accountability. And uh, and and those of you that have been listening for a while know that we don't like the word accountability because nobody wants to sign up for an accountability training session. And we spent lots of years, the founders of our firm, myself and them, we spent lots of years teaching the Oz principle, which is the ultimate model of accountability above the line, below the line. If you haven't read that book, I think it's pretty dry, but um not my favorite, but my but the authors of it are some of my favorite people in the whole world. They were my bosses, Roger Connors, Tom Smith. The principle of what's in that book is great. The book itself is is fairly dry. We tried to get them to rewrite it, but that's a whole nother topic. And and anyway, so we've got this expertise and a ton of experience around accountability, and and yet something was missing from the conversation. That's why we leaned and why we are leaning into the word power and powerful, because everyone knows what it feels like to be powerless in a relationship at this moment in their career, working towards a certain um result, and there's something or someone that's making them feel powerless. It's something that landed in their inbox, it's a text, it's a person, it's a condition in the market, it's a reality we're up against, and so we know what it feels like. It's a universal experience to feel powerless, and yet surrender, which is by the way, the behavior that um that all the psychologists and neuroscientists tell you is the general behavior from someone who feels powerless or frustrated or challenged or whatever it is off their game. They've hit a wall, they feel powerless, and so the behavior you see is surrender. But yet that we don't most of us don't like that. We don't like that feeling, we don't like we don't like to experience it for very long. We don't want a flat year, we don't want a down year, we don't want a flat quarter. Why? Because we were built for more than surrender or maintaining or getting by. If you've got any drive in you at all, any motivation, you know you were built to you you you were created to build, whether you believe in a higher power or not. I don't mean it by that. I mean it just like the human condition, the way we're wired, is we want to build, we want to create, we want, we that's what we want to do. We want to grow. And so that's why being powerful is so important. That's why I love it when I look at what Phillips' doing at Nestle, a company that we, again, like I said, we've got some experience with over the years, not recently, not in the last few years, as they've experienced all their the mess they've gone through. Um, but but previously, and so I've got some loyalty to the to the brand because of our personal experience. So Philip comes in, he makes those changes, focus to the organization, then he goes to the individual layer. And at that level, it's accountability. Once you create clarity, it's about accountability. So he rewrote the performance system. So everybody's goals, incentives, compensation is tied to what he calls real results. And they call it R IG, real internal growth. R-I-G, real internal growth. Well, what's real internal growth, Russ? It means that are we actually selling more of the products? Because here's what happens in a lot of these big companies. Maybe you work for one, maybe you lead one. And what happens is we can increase the price of something, and obviously there's been a ton of that going on in the last few years, and we can increase the price, and so it shows up as higher revenue to on our on all of our Excel spreadsheets. And in fact, we can go to the earnings call and say we're driving revenue. Well, the reality is when you crunch the numbers, we're not selling more units, we're not selling more baby formula, we're not selling more dog or cat food, we're not selling more frozen meals, we're not selling more coffee, we're actually just increased the price, and maybe we're actually selling less. And when you uncover that, then you got a concern. Like, well, we can't keep raising prices every quarter or every year. So we need the product to move. We've got to be growing. So the metric that Phillips's been focusing on is RIG, real internal growth, which strips out the price hikes, currency acquisitions. It only counts whether that business unit, that team is actually selling more of that product in those four business units or areas of focus that I just went to. And Phillips' belief, I think this is so interesting, is he believes that people um don't hate accountability, that they're actually hungry for it. I think that's totally true. Where is the quote? Gosh, I gotta find it in the show notes. Let me just type something over here and search for it. Um let me just type this and uh and have that pulled up because I've got to share this quote with you. I think it's so good. Um he said this is what he said. Employees appreciate clarity. Well, hello, mic drop. Like, what are we clarity alignment movement? Employee Phillip, CEO. He's six months, eight months, whatever it is, into the job at Nestle. What does he notice? What is his one of his big takeaways? Employees appreciate clarity. Then he says they know what's expected and they feel empowered to deliver. You know that last word that he said, that might make a good title for a book. Okay. My gosh. I'm telling you guys, we didn't write that book based on studying in some lab or some business school. We wrote it after being on the road a gazillion times. What's the job of a leader? Deliver. How do you get them to feel empowered to do it? You create clarity, you build alignment, you generate movement. Oh my gosh. Um, I love it. I love it. Okay, so what does accountability look like? Okay, Russ, it sounds great. Good. Um, thanks for thanks for listening to my soapbox. Here's what he did. So he tied performance or excuse me, compensation incentives to that business unit um KPIs. And the main KPI is RIG, real internal growth. And and so that if you're inside Nestle now, you're hearing a ton about that and building tons of accountability around it. No bonus if you don't hit the RIG goal, right? And so accountability, you all. So three things that I want you to think about.

The Leadership Framework And Key Takeaways

SPEAKER_01 26:41

And that Nestle, and why I wanted to record an episode talking about Philip and Nestle and what's going on there. Um number one, I think it's really good for me to bring to you different examples that we're seeing in organizations that we've worked with over the years and uh what's going on in the marketplace. So I shared with Brian Nickel and and Starbucks um in a couple of episodes ago. Philip here with Nestle that we we've got a long track record with. We still keep in contact with some of the executives over there. Um and and um and and so I wanted I wanted you to share, I wanted to share with you some of what's happening there. Everything I share in these episodes obviously has to be publicly available because of the agreements we've got. So so uh so that's what we do. Um so what Brian did, the first thing was to narrow the focus. Narrow the focus. It can't be a gazillion things, it's gotta be just four or five, three to five. That's it. So he did that. Then it was efficiency. Where are we, why are we moving too slow? Well, if we're moving too slow for two different reasons at Nestle. Number one is we've got what 400 products in in all these different divisions. We're gonna narrow that to 150, which is a massive um reduction, and just in four different business categories. Here's what they are. So we're moving slow because of that, so I'm gonna solve that. Done. Next thing I'm gonna do, why else are we moving slow? Because we have we're bloated and we've got congestion inside the organization. We all absolutely despise congestion on the freeway. We hate crowded subway cars, we hate we hate freeways that aren't moving, we hate lines that don't move at the airport. Congestion is something we all despise, and yet we have it in almost all of our organizations. If you're above like five people, 10 people in your organization, you have congestion. It happens immediately when you add multiple people with different perspectives, different priorities, different whatever. You immediately get it. Then you go to scale an organization that now has 5,000 people. Oh my gosh, you got tons of congestion. Now we got 25,000 people, tons of congestion. We got 50,000, 100. They've got, you know, over a quarter million. You can imagine the congestion. So how do I solve that? I narrow the focus and I have to remove part of the organization. And so I'm gonna do that in a humane, appropriate way. And most of that's gonna be managers, people sitting in meetings. I'm not gonna touch too much of the people doing the front line that are selling to the customer. I'm not gonna hit too much on the senior executive level. We'll just make sure we got the right people there, and then I'm gonna remove that. Then what's the next thing I need to do? Now I got to go to the individual employee. How do I get them to move faster? How do I get them to focus and prioritize? I create certain KPIs. We call them team key results, TKRs because it's stickier. He called the one that Brian or excuse me, that Philip picked was our RIG, real internal growth, and then I'm gonna build accountability around that. How do I create accountability? It's gonna be in our performance management system. We're gonna focus on it in meetings, we're gonna talk about it relentlessly, and we're gonna build resort uh uh expectations, metrics, targets inside all the business units around that are driving RIG. That you all is a case study, one of our most recent case studies in effective leadership. Focus and prioritize, reduce noise, eliminate congestion, create greater accountability, systems and performance that are driving movement.

Upcoming Accountability Book And Closing

SPEAKER_01 30:30

We talk about movement as high-leverage activities, HLAs, and then obviously our network. So, so in in the last book we wrote, Deliver, it was about how do I create that as a as a as a as a leader inside of an organization. How do I build that? And and then in the next book that comes out in the next few months at the time I'm recording this, which you're gonna absolutely love, um, is all about okay, now how do I build accountability around that? Both personal and how do I affect that in my personal life as well. Oh, I'm so excited for you today. I think I think in one of the upcoming episodes, I'm actually gonna let you listen. Because you listen to the podcast, I gotta give you some rewards for doing that. And so one of them is maybe I'll give you an advanced copy of uh like I'll play the audio because we've already got it. The audio, probably chapter one. Oh, it's amazing. It's amazing. I love it. And uh, we're fine tuning it, and it's got to go through lots of different rounds of editing and fine-tuning and and then uh um and then we get it out to the advanced team and all that. So um maybe maybe I'll put one of those, maybe I'll put chapter one or chapter two or something, the audio um in one of the upcoming episodes. So accountability is that next bucket you've got to take care of. All right, Nestle getting back on track. I've got total confidence that what Phillip is doing at Nestle is going to impact performance. Watch it. It's gonna happen. And I love an executive that goes in, makes moves, creates focus, builds accountability, driving performance, doing it in a humane way. Get out of their way. They're gonna deliver results. That's what I wanted to chat about in the latest, the newest episode of the Lead in 30 podcast.

SPEAKER_00 32:18

Share this episode with a colleague, your team, or a friend. Tap on the share button and text the link. Thanks for listening to the Lead in 30 podcast with Russ Bell.