A.B. Brewer Building

Transcription

[Music] Thank you everyone, thanks for being here, thanks for taking the time to listen to me. I will try to make it short and sweet, and sounds great to be back at the --. I am here today to talk about how to, in my experience with all learners, how to build a performance culture in a corporate environment, and it's very simple but it's at the same time very tough to do it on a day-to-day basis. And I will show you some examples. It relates a lot to sports, in life, in academia, here at business school for example. One of the first things I would like to throw at you is a provocation in that until the age 22-24 years old, all of us have been through school, high school, college, sports in some sort of form. And we all accept a lot of things as being natural. So the fact that there was a coach is sports, that the coach relates directly with the players, that there is locker room talk, lots of pressure being put on the players before the game, straight feedback, players that are playing well played, players that are not playing so well are sold or stay on the bench, where poor performance is dealt with, where amazing performance is recognized and awarded, where people are treated differently according to their talents and performance and track record, all this is natural. At school, the same thing, I mean the best students they are in the RJ's list and the 10% top they got scholarships, they got recognized, they got named. There is a ranking in sports and yes, there are people at the bottom and that's the idea that people at the bottom feel bad and they want to go to the top so yeah that's the idea to create that tension. So we live with that and we think that all makes sense. And then at the age of 22-24 we go out to the corporate world and all of a sudden lot of things that were so natural and made so much sense, in the corporate world because of many things peer pressure, politically correct way of doing things, whatever you want to label it, you start feeling that you cannot do what you used to do before. So a lot of people for example in big corporations say I don't have time to recruit people and I send somebody else, I am too high up in the organization and I think HR people would have to deal with that. I want them to bring me the best talent then they will work with me but I am not going to do it myself, I don' t have time, I have a busy agenda. Again, can you imagine the coach saying to somebody else hey I don't have time, go and talk to my players, go select players and go do the locker room talk for me before this very important game because I am doing something else, managing some paperwork? No. Can you imagine a teacher, a professor come into class and say well today I am going to send an assistant to teach because I don't have time for my students so I am going to do that. So no, of course you cannot imagine. But when you go to a company, you think it's natural to hire a headhunter to hire or just to ask somebody in the HR to do this for you. When you go to a big company, you see low performance and you want to act on it but somehow people pressure you, this guys has been here for 20 years, it's low performing for sure but I mean maybe next year, let's give it one more opportunity. Again it's different from the kind of lives you had before the corporate life. So that's the first provocation I want to throw out there. Why is that that when we enter the corporate world a lot of things that work so well in sports, at school and were so natural when it comes to corporate world so hard to implement? And that's one of the things in my vision, in my opinion, that gets lot of companies not to be a good or high performing company because they are full of these barriers okay to act naturally. Second thing I wanted to table here before we start is the whole idea that companies are formed by people, commonsense of course, of course but lot of again when you are in sports and you are in a tough game, and you are halftime, the players get together and they say we have to solve this, there is no like the team will take care of it, we have to solve it, we have to change strategy, we have to change players, we have to do something different because if we do the same, we will get the same results. If you are in school and you are performing badly in a subject and you have a final next week, you have to deal with it, you are not going to ask somebody. I mean you can ask for help but at the end of the day it's you who is going to go there and write the exam so it's you, you have to fix it, it's not the company. When you go to the corporate world, all of a sudden there is this image, this idea, perception that there is something of a higher hierarchy called the company and so you have a problem and you say yeah, I am sure the company will come up with something and they will tell us what to do and yeah let's wait and then maybe they will think of something. There is this thing like a company with some spirit in a black room that you slip messages in the door with a question and they will answer back to you, you never see them because you are in the company. No, I mean the company is us, I mean myself and 100,000 other colleagues of mine, they are the company. If we are excited knowing what we want to do, aligned, inspired, moving forward, learning, attracting better people than we are all the time, the company is moving in that direction, it's progressing, it's growing. If we are all going different directions waiting for somebody else to solve our problem not acting on things we should act like low performance or poor performance and feeling that we are big, everything is going to be fine, we will never fail, that's the first step into failing, and that's doesn't get you to be a great company. So these two ideas now let's go into what we learned, three things that create a top performing culture. We are not saying this is the only way to do it, I am saying we have done it for 21 years and has been worth. It's not perfect, we will never be but that has worth, okay. So the first three things are dream, people, culture. I will explain because the company is us, people, dream the idea of the dream is something that comes naturally, we always have dream in our lives, we have always dreamt of something and that's what keeps us going. That Monday morning when you are tired, when it's snowy out there, when it's cold or too warm, you feel like oh man I have to bike to class but you have that dream, you have that dream of doing well at school, dating that person, being hired by that company, buying that car. So, dream is something that for human beings click I think much more than visions and missions. Missions are for military, visions are for, I don't know for whom but dream is something that we all understand because through all our life, dream is something that has always propped us up to next step. So in our company we don't have vision, we don't have a mission, we have dream, we want to be the best in what we do in a better world that's it, okay. And why is dream important? First because again it's about human beings, second because dream big or dream small takes the same amount of energy, think about that, one or the other takes the same amount of energy, so why not dream big. If you don't do it for yourself, nobody will knock at your door and say hey your dreams are too small, why don't you aim here? Nobody will do that. In our own experience we have always reached our dreams, never the way we planned, that's real life because you learn, because competition does something, the environment changes. But if you have a dream that's stretched enough that you know 80% how to get there and the other is 20, you learn along the way, you believe you can learn along the way, that's something that can inspire people, get the bar higher and getting the bar higher you tell the message, good is not good enough guys, if we want to be the best in what we do and go from here to here, that' s the gap, we need the very best to get us there. So the dream is only good if people buy into it, if they commit to it, if they bring their passion to it, that's why I don't like the word fun, I think fun is too weak. I don't like people in our company to have fun, I have fun at the beach with my kids, I like people in the company to have fun sure, plus passion, plus commitment, plus energy lots of other things. Fun is too weak, you just want to be the best in what we do. But there are differences, again the dream is to be something that inspires and credible enough so people buy into it because you have to work hard, it's not a target, it's a dream, and by definition it's a tough one, it's a stretched one. It's not an adventure. If you put out there an adventure and say guys, we are going to double the amount of the company next year, people say oh my god, okay you are going to commit to that, I am going to do something else. That's an adventure. An adventure is when you know 20% how to get there and you believe, in our experience, that 80% you can discover along the way. Dream is the opposite. You know 80% how to get there but at 20% stretch as per our experience is what you learn. And the learning curve, copying from others, tripping over things that you didn't know were there or just learning from the environment, that' s the dream. And your dream has to be powerful enough to commit people, and again dream big or small takes the same amount of energy. The other thing about the dream that's very important is that dream brings the best of people, think about this. Think about a high jump. I mean dream is about this. I mean you put the threshold here, you put the bar here; which human being having the bar here even if the guy could would jump here because we are rational, we optimize energy, we optimize time. So if the bar is here, we are going to jump enough to clear the hurdle even if you can jump here. So the dream is that is the high jump, is to keep putting the bar higher so you can see what you, the company, the team, the group can do, and as the leader, it's an art and science. You have to keep putting that bar higher and higher until you find that limit with what you have today and then you learn some more and then next year you can do a bit higher what's the maximum performance you can deliver. So that's the first thing and that's very important because if you don't buy into the dream, a lot of things I am going to say from now on don't make any sense. If you are just trying to survive as a company 9 to 6 you know just have a job because I have other interests and that's it, forget it, that's not the company for you that kind of company, okay. So that's why the dream is very important. Second thing, you can only have dream if you have people because people are the ones dreaming, okay. Couple of things, great companies are formed by great people, obvious but so many people forget about it, people think that great companies are formed by great products, great cash flow, great installations, assets, asset base, no. Even the consumer goods company what distinguishes you from an average company is the kind of people you can attract, retain, deploy, develop, train, promote within your company that's it because behind the brand that's doing well in the market, you have people that understood consumers, had the insights, execute according to the insights and translated all that behind a brand, that's why the brand is successful not because of the brand. The brand was there was the second step, first step was to have great people, okay. So again great companies can only be formed by great people. Second thing, great people attract more great people, that's important because the opposite is very sad, mediocre people attract more mediocre people, they like to work together you know. It's amazing, mediocre people love to work together because nobody challenges anybody, the targets that they give to each other are kind of easy, you know a 120% how to get there January 1st so it's piece of cake, everything is fine, the feedbacks and your unit performance evaluation is always like you are a great guy, no gaps, I mean you know you are terrific, you are going to be the next president of this company one day you are so great, mediocre people, they love that. Great people is the opposite. They love to challenge each other, they don't take it personally because they know it's for the best of the business, they know it's not about themselves about the business. So they know there is no hidden agenda so it can challenge them because it's all about what's best for the business. And they like to work with each other because by challenging one another, they keep raising the bar and that brings the best in you that forces you to continue to be updated and learn because everybody else is pressuring you. That's why it's so good to hire people that are better than you because they force you to be better. If you had a whole bunch of mediocre people that think that you are the greatest guy on earth, you are going to start going like this because you have no incentive, no push to get better, okay. That's the other thing. What's great? You say I am saying great people attract more of great people, what's great? If there was a lack of definition anywhere, just take you and your colleagues as a benchmark, let's see if you were great. But if this is what we know, myself and my colleagues, I want to hire people that with the right training and right development can be better in some years than we are today, that's great. And smart people are not afraid of that, mediocre people are very afraid of that. They don't want very bright people in their teams because that's going to overshadow me, that's going to put me out of job. Smart people, even for the wrong reasons they arrive at the same place. It's much better to have a team of high achievers because that will help you as a leader to get targets in a more consistent way and will help you to get promoted faster because you have a pipeline of people. So even if you are selfish, so even if you are thinking about the wrong things, only think about you not about the business, you get to the same place. But it's better to have in your team great people, very talented people because that will be good for you and if you think in a more noble way, that's the best thing for the company, okay. So we look at leaders and one of the traits that we look is what's the capacity that they have to form, find, recruit, retain, develop people because leaders that can only use people that were developed by others, they are good leaders but they are not the ones that will get you 20 years from now, 30 years from now with the kind of pipeline that you need, okay. So we are talking about great people. In our experience, what kind of environment keeps great people on board because great people are very volatile, they could be, especially here in Silicon Valley. I mean if you have somebody who is very good, can be hired by somebody else two years here, one year here. Great people in our experience like three things; they like to work in a place where meritocracy is the name of the game, informality is the way things are done and where candor is the way to go. Okay meritocracy, easier said than done. Again in sports of course meritocracy, the good players play, the others don't; in school of course if you have an F you know exactly what it means, you fail, if you have an A you got the scholarship of course. But then you got to the company, performance evaluations, that's straightforward because you say well today is Friday poor guy, I mean poor me and poor him and poor her, I will wait for the Monday and then Monday you are traveling, goes by two years, 10 years and you never said to your co-worker what this person needs to listen, you play god, you play god. You say no, no I am going to manage it this way, I am not going to say today because I think by himself for some strange reasons he is going to click to it, get better and therefore I can avoid this moment that we are going to have now. Of course it never happens because this click it doesn't happen. Constructive feedback is what gets people to get better. In my life, I owe a lot to what I learned to constructive and respectful feedback. That's what gets you to progress, people that are interested in your success. But for that, you have to have tough conversations, it's not everything rosy, okay. So again they like meritocracy and think about this, it's so easy again peer pressure, you go to a company, you lead a business unit, you have a vacancy, somebody got promoted and you have to fill that vacancy. And then in sports you go for the best player but in the company people suppressing you and say well what about Mike, Mike has been here for 20 years, I mean he deserves it you know, okay he is not the sharpest tool in the den but I mean he's pretty good, people like him, I am sure it's going to be okay and then you have Jane who just joined two years ago and deserves that big time because built a track record, is a culture ambassador, has potential, will do it, is much better fit and sometimes if you promote Mike, nobody will ask you questions but Jane; if you promote Jane, Jane won't ask you a question but everybody else will. And guess what, if you promote Mike, Jane sees through that and she's leaving and she leaves and all of a sudden you are left with only the mediocre people who thinks that this thing of patronizing and promoting the senior guys is the best thing to do as opposed to meritocracy. The worst thing in the company since you cannot please everybody that's another lesson that I learned time and time again, if you cannot please everybody, please the most talented ones. I would rather have the most talented people say visit my company and people that are mediocre say oh man this is drag, I think I am going to leave this company, you know great, they are going to leave the company because sometime the way to solve a problem is to create a problem. That's why when you have a poor performing guy, you should give 2-3 feedbacks of course because people again they go with feedback constructive, positive feedback but after 3 feedbacks, a year went past, the guy's not performing, it's better for both of you to let that guy go first because you create a problem, that vacancy and in creating a problem you have to solve the problem. If the guy remains there for 10 years because you don't have the problem, you don't have to urge to solve the problem. So create the problem, let the guy go because that guy could be a huge success in another company but not here. So don't waste his time, life's too short, don't waste his or her time. Tell him or her what they need to know and move on, okay. So that sounds like harsh but it's not, think about sports, that's what happens and we accept it; I am not saying we like it but we accept it. Another thing that great people lack is informality. Informality is not the way you address but it's the environment you create in the company that people can speak up, speak their minds as long as they are constructive and respectful. That's why in our office for example nobody has an office space. I don't have an office space. I am the CEO of the company but I share a big table with all my direct reports and in all our offices across the world, everybody has the same kind of layout. Why? Because that gets information flowing, that gets people to connect in two-minute meetings, five-minute meetings as they interact across the table or they meet somebody across the corridor. Think of that. Not only outlook would allow you to schedule 5 minute meetings, right. I mean I haven't got that but you are sure to get with people and you interact with [inaudible] in two minutes, he is talking about Brazil and we interact two minutes here and then somebody asks about something and you are interacting here 5 minutes, bang you have got much stuff done and people are exposed both ways. So no place to hide, much better for you to get to know people who is doing what. So, open environment is something that great people like, mediocre people would love to be behind a closed door playing games and stuff. So candor, candor is the other thing. I mean talented people like to know where they stand because they know life's too short, they know they have other options even in tough economies people always have options and you have to tell them where they stand. This is going well, this is a gap, we do it twice a year and this is the plans, what's your future here, what do you think what are the next steps, talented people like that. Talented people are high maintenance people. It's much easier to work with mediocre good people in that respect, they never come to you, they try to hide from you, they loved the closed doors. Talented people ask whoever what about my future, am I doing okay, I have an idea, I don't think this is going well, I think the company is missing those opportunities, and it's high maintenance. But that's much better to have that than to have people that don't want to talk to you and when you talk to them they have no ideas, they think that status quo is the best thing that can happen, right, which is never the case especially in the moments and the kind of world we live today. So again just trying to summarize meritocracy, the thing about the people that you need to dedicate time with people just like a coach in a successful sports team would do it, think about that. For 20 years of my life that was the case, why should I forget all that and start behaving in a weird low performing type way to build a low performance culture. Is that what we are going to have after all these years of studying business, no of course not. Again I think it's very important for guys like you that are going to be leaders in the organization is to know what kind of pressure to put on the system. Look at the Olympics, World Cup, I mean the giants when they are playing their games, the World Series, I mean congratulations by the way and I think 50 years, but fine yeah. But you look at the professional athletes playing, they are not having fun when they are about to play. Think about the 100 meter dash, they film those guys, they are truly focused, they are not thinking about anything else other then to get from here to here in 9 seconds or whatever, okay. So there are truly focused and there is a lot of pressure built from the fact that you have 60000 people watching them, their contracts, their family, their wives, whoever. In a company, if you want the best of people, as a leader, you have to put pressure all the time. If you put too much pressure people panic that's bad, that's bad. You should put too little pressure, people have a great time. The targets are easy and they don't expect too much. I mean if we grow half of what we could, that's fine, I mean that's okay, we will pay bonus for that as well and shareholders didn't get their value, there was no value creation but we will pay bonus anyway and that kind of thing. No, you won't get the best of people and again the great people will leave, they don't like this kind of environment. So as a leader you need to know that people all of us, we are at our best when we are under pressure, healthy pressure. Think about school. When you really get your mind around things is when you have a deadline, right. I mean you have a deadline, you have that work that you need to deliver tomorrow. Man, you are as focused as a razorblade and you don't think about anything, you cancel everything, your social agenda goes to hell, your Facebook is off, everything is off, you just work on that thing, that's when you get the best of you. When you get transferred within the company to, we like to do that a lot what we call the crazy promotions, we got a guy from sale put the guy in supply chain for example because we believe that that's the way to build people. And again, the magic word, take people out of their comfort zone; whenever we are in a place that's too comfortable, it's bad, that's bad. You have to take from time to time people from their comfort zone because that's when this whole idea of the athlete 100 meter dash, that focus, that thing oh my God I have three months to learn this new job, that's when you really move to next level. If they stay 10 years in the same job, I am not saying the same company, lot of people stay 20 years 30 years in our company but 10 years doing the same thing, the same job in the same region, I mean at some point you get stale, I mean you get used to landscape, you don't see A from B, black from white because everything has been there such a long time. And you can only learn this much per day and if you don't learn because you are used to it, you are not going to recover that going forward so you waste your time. So that's very important too, the whole pressure, take people out of the comfort zone, that's the way to develop great people. The third leg of the stool is culture. So I spoke about dream, people, now culture. Culture in our company we call it's a culture of ownership. We don't like the word professionals, executives we like the words owners. Think about this. Owners are the guys that live and die by their business because that's all they have. If you have a bakery and that's the way you get your livelihood from, that bakery has to succeed, failure is not an option and you have to be competitive, you have to understand your customers, you cannot lose customers to Wal-Mart just because they opened across the street, you have to rethink your business but that's your business; you are not going to hop on to next job, that's your life. So owners, we like owners because of that because they are going to live with the consequences of their decision. I like to give an example that caused me already some trouble but I keep going back to the same example, of the rental car, okay. It doesn't happen to me but I have heard some people drive a rental car in a different way than they drive their own car but it doesn't happen to me. Some people like to try things, weird things in rental cars and experiments, experiments. Again, I have heard that. I have heard even people that say don't be gentle it's a rental. See how weird people can be? The world out there is weird place. But I mean rental car, why do these people behave like that with a rental car? I think it' s because they are not going to live with the consequences of their driving. So they are going to drive, experiment, there will be consequences to the car, they will give back the car to one of these companies and somebody else will live with the consequence next day. Your car, it's going to be your car today, tomorrow, next month, next year, next five years, you drive in the different way. We want your car to be your company not like a rental company. And you have lots of stuff that we do in the company from all the way to share ownership which is the classic way but more important than that is the mindset. We believe that people have shares, options, variable compensation which we [inaudible] of that, they first need to have the ownership mindset. And there are many things in the company that we do to foster that environment that this is my machine. If I work at a blue plan and I have a - line or a blue house, this is my part of the world. There are some rules, this is the sandbox but within the sandbox, I own it. We would fail if people would have to ask at some point, would have failed if at some points our key guys have to ask the questions what about if I had my own business. This is your business. That's the environmental we try to foster. It's a big startup, we always say that. We lack that flexibility of a startup where people are always trying to do new things within of course some very basic [inaudible] so we don't lose advantage of being a large company. So the rental car example is one that I like because I think it talks to the essence of ownership and we all understand that at least some people understand that. I think other things about our culture, a lot of people say they are very focused on the consumer, we say that too because the consumer is the boss, that's right. I mean think about this. People don't need to buy beverages. If tomorrow they decide just to drink water out of the tap, I would have no business and most of our competitors would have no business so it's that simple. But we try to take that to the next level. For example, we try to take that to the way we manage the company. I try to think if the guy guying my [inaudible] is paying a premium over my Budweiser, Bud Light other products, what do they expect me to do with that money as a consumer? If I have lavish offices and corporate jets and five course meals when I travel and Four Seasons and all that, we don't see the acid test. Would our consumers be proud if they knew we spent their money like that or would they feel better if we have a lean company where we have more money to spend on things that are important for them, an NFL sponsorship, a major league ball sponsorship, the Olympics, the World Cup so many things that they like that they see as a return for what they are paying for the product. So we try to be lean not only because it's the right thing to do but because our consumers would be proud of us knowing that we are managing their money in a way to have more to give back as opposed to spend in between friends in the company. So we are very lean because we believe so we call this the cross connect win. The more non- working dollars that are dollars that consumers are not willing to pay a premium for because they don't see it, they don't touch it, don't drink it, don't take home, don't pay for it, so non-working dollars; the more we get non-working dollars to become working dollars, things that consumers value, the more we connect with them because they see we are giving back to them, the more we win more business and more consumers, cross connection win. And that's why the way to grow companies is always and I am going to say here the finance 101, top line and cost efficiencies, do both. But if you only do cost, it's a short thing, can only do so much and the way to get people excited about cost because it's a tough thing to get people excited about is to connect that with the top line. So the more money we find here, the more we are going to revert back to the marketplace where it matters and the more consumers in business we will win, okay. Leadership, that's important thing in our culture. Our culture is only passed from person to person by means of leadership. Your actions as we all know are important than words. What's important about leadership, I will tell you in 5 minutes what we discovered. First, who is the leader in the company? We say anybody who needs a team to get to a target. If you can get to a target by yourself in that role, you are not being a leader, you don't need to be a leader you are not in leadership position because by yourself you can get your target. If you need a team to get together to the target, you are in the leadership position. What's the definition of leadership? I mean people write books about it, we have three, three dimensions. Leadership is all about delivering results on a consistent basis with your team because by their definition, you cannot do it alone, do it the right way. So you can be on top and you can replicate the way you did it to other parts of the business. That's leadership. Leadership's a very important trait in guys like you that are going to join companies. Very hard to define but you know when you see a good one. These three things are just basic definitions but I like to say other things about leadership. Leadership is a guy that can see the world out there which is a very complex world and translate that by analysis into simple things. Think about this. I have a 100000 plus people in our company, we have 70,000 that are sales reps. They are very smart, they are street smart but I don't have time to explain them everything that happens in the marketplace in terms of deep [inaudible] analysis that we do unless this is everything we do in the marketplace. Not because they can get it because they don't have time, they are busy, they are the ones bringing the money in facing the customers. They need to have customer facing time. So, as a leader, we need to understand the world out there which is very complex but translate that into two, three, five action things that can be done by 80,000 people. Think about the automobile, think about the automobile. How many of us drive here? Everybody. Think about if we had to understand about thermodynamics, mechanical engineer, I mean everything that goes into a car under the hood. Somebody was smart enough to put two pedals and a steering wheel and a shift that everybody drives even without knowing what's under the hood. That's genius. I mean it took a very complex type machine and you made it so simple to operate that billions of people around the world can operate. That's the thing about leadership in a company. 90% of the people in the company if you were to compare with a ship need to be running the engine room. Well you need some people in the bridge looking at the bridge looking at where the ship's going but the 90% doesn't need to know that, they need to because they have a busy life, very busy life. So leadership's about that. Leadership's about not being selfish. If you have questions about your company, try to get them clear because you reference to your team, okay. So those are some things about leadership. The other thing, last one in culture, there is no shortcuts. We work a lot with Jim Collins that used to be a professor here at business school. I met him in '88-'87 when he was here and he works a lot with us. Once I taped an interview with him for a global conference of ours and I asked Jim, I read your book Good to Great. For me, it's so commonsense and it's even better because it's based on research so it's not your opinion, it's based on research; why would companies choose not to do what's in your book if that's a recipe book to go from good to great. And he says do you know what the problem is in my research in context with the companies? All companies start with the same good ideas and a good intent but at some point they start looking for shortcuts. So instead of forming their own people, building their own strength, they go to market and hire. Somebody else did their job for them, right. Instead of hiring somebody out of school, 22 years old and form this guy to be a great marketer, why not go to a great marketing company out there, at P&G or Coke or Pepsi and hire somebody from this company. But then you hire people from other companies and you don't have the culture, the fabric that holds everybody together and that takes 20 years to build, in one month, it's gone. So that's why in his view, and I agree, a lot of good companies never get to be great because they are looking for shortcuts. They don't understand that to build a great company, it takes time it's brick by brick, person by person. Yes, it takes a long time but once you build it and you keep the gap to your competitors, it's hard for them to catch up because lot of the things I am talking about here, Dream-People-Culture is very invisible, [inaudible] this will come as well but it's about what's behind that's invisible, that's hard to touch, it takes 10 years to build. To finish up, let me tell you this. For me, that's the best kept secret in our company. I am not saying it's the only way to do it, I am just saying it's the best kept secret. You know what because every time I talk about this not to you but people from other companies, other CEOs and stuff, the reaction I get is of course but this is so commonsense. I mean having a dream, big idea, hiring the very best people and then having this culture of ownership to your company, no shortcuts and stuff. And for me, it's great that they think about that especially my competitors because they take it for granted and they don't do what we try to do which is not to take it for granted, talk about it every single time we have an opportunity to do a town hall, to do a Q&A with our employees. I always do a 10 minute Dream-People-Culture introduction and then to give time to warm up and then it is because this is what we are all about, this is what brought us here from a very small company to the top five consumer goods company. We are very humbled to say that because we have to earn it everyday, there is no such a thing as oh and we got there, no, no, no, the more you go the more you have to fall. We know that in a very humble way but at least I can show you this is not a concept with no proof. The other thing I can tell you is that we grew our company organically and also through M&A, Anheuser-Busch being the last one we did. But in the last 12 years we did five cross country's big combinations we call it. And every time we combine with a company in all sector, we ask the questions because we could see the guts of our competitors in different countries and say okay why are we performing as a company on average, we are not perfect, far from it but on average performing better than this other company. And the only answer I could always get to was Dream-People-Culture in the sense that we had a group of people that aimed higher, had a sense of purpose, better higher motivated than this other company. I had people that were better, more talented and had a culture of ownership. This is my company not my job and that made a huge difference. So, with that, I would like to open for questions. Thank you very much. [Audience] Very good point, very good point. We do that for example, the best example would be for example the merger we did with Anheuser-Busch, the Budweiser company just two years ago in the midst of this whole financial crisis and stuff. What we do, and this was the first one we did, we learned that when you do such a thing you have to start talking. When I went there to St. Louis the day after we signed the merger agreement, I went there, I gathered the top leadership of the company. All I spoke about was Dream-People-Culture because once you set that framework, every question you go back to that framework. So when they said oh what's your opinion about this, I said well as I said and we have a thing called 10 Principles so Dream-People-Culture for us if you go to our website you see it's a 10 principle thing one for dream, two for people, seven for culture and it's great, it's a great frame for you to anchor things. And what you have to do in our experience to change, when you talk about culture it's important to say that we believe a lot in national cultures, we don't want to change those, that's why we travel, that's why life is so interesting when you travel because people dress differently, spend their free time in a different way, have different family ties, eat differently, that's why we travel, different architecture. But the company, no, we say it's one company one culture. We have zero complacency for differences in basic stuff like a constitution of a country. So this company that's going to join us this is how we operate. And I never met anybody who said I don't agree with this. If you want to be high performing just like an athlete that's what you have to do, have a dream, surround yourself with great people, work hard, that's what you have to do. But I am not up for it; I have met some people that said that. I am in a stage of my life and this and that, I am not up for it but I think if you want to do, I agree with this. So what we do is we try to get the leadership of the company because the company is all about this; you have 20% who are the leaders, 70% who will follow mostly with the leaders because they use the leaders as their place for Q&A and inspiration and all that if the leaders are good leaders and you have at the bottom 10% or 15% whatever the balance that are always against anything. So those guys you have to identify and bang out. I think what was good in this last transaction that we did is that the first layer of management left day one for different reasons. Some because they were retiring, some because they were too rich to care because of the price we paid and some because we felt wouldn't have a good fit. It was great because then we promoted a lot of new people that had been waiting for that opportunity and these new people said this is my company now and I like this stuff because it's all about high performance, meritocracy, openness, candor, that's my company, I have been waiting for it so now let's do this according to this. So it's all about making sure you have the right leaders because the right leaders will get that other 60% or 70% of the people along with them and they will also identify the bad apples and take them out and there is bottom 10%-15% that for sure will have to go out, yeah. But it's about the leadership. [Audience] You are right. When we started expanding as a company, we had that thing in mind. And the one I was talking to you about national cultures, we said okay are we going to be able to find people in all those other different cultures that we are going to go, the four national cultures that we brought up in a different way that will get excited about the way we are trying to build our company or not. And the fact of the matter yes, you can find. You find a lot of people in those places that had been looking for this kind of thing because they came from sports, they came from a competitive school and they know that that's what build a great performance and they are just waiting for an opportunity to go a corporation where those things are accepted allowed. But you are right, you have to look harder in places like some of the ones with nation but over there you find great people that are looking for that kind of place where they can be themselves so it is possible. Audience: So my question is on delegation and you may be using your sports analogy, great coaches know when to direct their team and when to just trust that their team will figure it out. And how do you kind of translate that into the business as being a leader when to delegate and when to make the decision yourself? I think that's a very good question. I think the people that we value in our business, it's a very different mix. As you go up your organization, you have to keep apparently that false dilemma that you have to think more where the company is going strategically but you cannot lose touch with the business. That's why we try to have fewer layers in the company, open office space. We value leaders that can ask questions that are very detailed but not losing sight of the big picture. That's what we value. Because people when they are having meetings with me they know, I am not saying I am the best but I mean they know because I have been in the company for a long time that I can ask questions specially sales because that's my background detailed questions. I always say that when I go to a meeting, a board meeting, 80% of the board meeting is my preparation. The benefit that I have to go to a board meeting, 80% is myself getting prepared for that conversation, I have a tough board, 20% I learn with the board. I think the meetings I have with my people is the same thing, 80% is them preparing with their people to try to understand the drivers, the root causes of the issues and come prepared, 20% will come in our discussion but 80% is the preparation. But this capacity to not lose sight of the big picture but too comfortable in selecting one or two areas and there you go deep that's appreciated by your organization because they say I can count on him to help us here and that also gets your meetings to be much more productive because people prepare because they know at some point you can ask here or there, they never know, okay. You cannot micromanage the company, that's bad. If you micromanage the company, you create a whole bunch of people like sometimes, sometimes in the army that I used to follow orders. We want people to think but they should know that despite your thinking more strategically most of the times that you can go deep, that's why we go a lot to the market, we visit the market, we hear from customers, we like to be with our frontline people because that's where you learn what's going on. [Audience] Two questions real quick. How do you continue to push yourself out of your comfort zone, and two, what's your favorite beer? My favorite beer is Budweiser, the king of beers. For 20 years we had this dream of doing something with them with Anheuser-Busch, never worked, and it finally worked after 20 years so that's something that we always had in our minds as the beer that can be a global beer, an iconic brand, American iconic brand so much so as Starbucks, Coca Cola, Pepsi so many other iconic brands that sell so well around the world. America continues to be an inspirational place; I am not American I am Brazilian but I recognize that through research, America continues to be a magnet for young people around the world, talented people, young people, people that want to make things happen and have an opportunity, they all want to come here. America is taken for granted but people from outside value and know that the opportunities are here. To your first question, what was it again? [Audience] How do you continue to push yourself out of your comfort zone? Two things from underneath and from above. First, I am very critical of myself, have always been so people say when I am critical to other people and tough on other people they say Brito we accept that because we know you do even worse with yourself. So I am the kind of guy that for me to celebrate anything is very hard, that's the criticism I often get because I am always looking for next step and always it was good but this, and everybody says that what's important in a sentence is what comes after the but. You should never listen before the but. When somebody says oh yeah it was all great and stuff but, then you listen because that's what matters. So I push myself out of my comfort zone because of the board I have, as I said in the other question, a very tough board that forces me to up my game all the time, because I hire people that are better than I am and because I don't want them to get my job anytime soon, I have to keep running and revamping myself in some respects and am very critical of myself as well. So I think that's the beauty of having great people surrounding you, they give you the energy and the motivation to continue to revamp, learn, push yourself to next level. Again, if you have a whole bunch of mediocre people they are going to feel about yourself when you shouldn't and then you are going to have the world will continue to do this and you are going to be here. [Audience] You sound very ambitious and I like that. I have two questions, the first question is what's your next merger target? The second question is do you have any ambitious plans to upgrade the taste of Budweiser? Thanks for the question. You know what Frank we can show because it's third party research, Budweiser in blind tests, blind tests and that makes a huge difference I reckon, in blind tests is the best liquid in the domestic market, said by consumers. So our challenge is why is that that when we label the product people have different perceptions about the liquid. We know that we have a challenge there as with most iconic brands sometimes you fall in that trap that the brand is so iconic that you cannot change it, consumers move, the brands stay and now consumers are here, the brand' s here. And because of that we defined it as a problem two years ago when we merged because before it was not seen as a problem because Bud Light was skyrocketing and compensating for the Budweiser slippage but we said no, no, these two brands are now two huge brands number 1 and 2 in the US and in the world so we need to give Budweiser what it deserves. We did lot of research, there are a lot of positives, some negatives and some other things that we need to bring to the brand because of its iconic status. So I am very excited. And if you look at Budweiser outside of the US it's growing like crazy especially China. Your other question is about ambition, I think whenever people ask me in the company what's our next step I always say de-leveraging because I mean we took a lot of money to be able to do this transaction with AB so we are ahead of our de-leverage plan and we are very happy with it, our cash flow generation, you are right, it's huge, it's north of free cash of 7-8 billion a year and that's a real problem, I mean what to do with it. But it's a good problem to have and I will think about it when we have to cross the bridge. But for now we are using that cash flow to pay down debt and pay interest to regain our freedom. So again, guys thank you very much for being here and thanks for your time. Thank you. [Applause]