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How Diageo’s Productivity Officer plans to save £500m by 2019

Chief Productivity Officer Chief Productivity Officer
Photo credit:

Nina Bobo

Brian Franz, Chief Productivity Officer (CPO) at Diageo, sits with Hot Topics to discuss the transition from CIO to CPO and how he is now driving progressive business change.

Brian Franz is far removed from your ordinary IT leader. He became Chief Productivity Officer (CPO) at Diageo in August 2015 and is using his many years of experience as a blue-chip CIO to drive true business change at the beverages company.

Franz joined Diageo in 2008 and spent his first three years as CIO. He assumed additional responsibility for shared services in 2011. Franz says his continued efforts to use technology to build operational platforms, and to create a process-oriented strategy in the organization, helped sponsor his move to the broader productivity role two years ago.

“The move to Chief Productivity Officer is best viewed as a progression,” he says. “I’m helping to lead a targeted drive in productivity against our entire cost base. My background in consumer products, and my vast experience in Six Sigma techniques, means it made sense to have technology, process and operational capability as a core driver of our productivity leadership.”

Franz previously held CIO roles at PepsiCo International and General Electric, where he developed his knowledge of Six Sigma, which is a management technique that aims to help improve business processes. Franz is leading Diageo’s attempts to meet a £500m, three-year productivity goal through to fiscal year-end 2019. Two-thirds of these savings will be reinvested in growth.

“Productivity savings are often wrongly associated to simply cutting costs,” he says. “We want to change the underlying way of working and put the consumer at the heart of what we’re doing as a business. We want to drive top-line growth in our business through these productivity-focused activities.”

The focus on organizational outcomes is nothing new to Franz, who was always interested in commercial activities as a CIO. He says it feels great when you hold a senior position that allows you to draw on all your experience as an executive. The Chief Productivity Officer role, says Franz, provides an opportunity to create the biggest possible impact across Diageo.

Driving productivity as CPO

His chief priority centers on driving efficiency and effectiveness in a sustainable manner. That work will make the most of advanced technology, yet Franz says his efforts could just as easily focus on changes in operational activities or the culture of how people work.

“Data is key for us – everything from how we see what’s happening in our own business to how we stay on top of emerging consumer trends,” he says. “We’re also focused on digital capability and how we use technology to support our major brands, to interact with our customers and to create a leadership role in digital commerce.”

Franz recognizes his role encompasses a broad remit. As Chief Productivity Officer, his business-focused activities differ greatly to an operationally-centred IT leader. “I don’t think there’s anything traditional in my role in terms of the position of a CIO,” he says, before suggesting the Chief Productivity Officer position highlights Diageo’s progressive approach to leadership.

“We think very carefully about how our executives can have the greatest impact in the business. It’s always been important for CIOs to use technology to enable business strategy but we want to think about how you drive that transformation across the wider organization,” says Franz.

“Being a change agent, with responsibility for many areas of the business, is not a traditional CIO focus, yet you can see how the move into productivity represents a natural progression. The CIO role in business is more important today than ever before, both in terms of protecting brand and reputation, ensuring the organization has the right data-driven strategies and helping the business to connect with its customers.”

C-level collaboration

Franz says his broad business experiences make it easier for him to contribute in the boardroom. Yet he also anticipates challenges. Franz recognizes the importance of key concepts, like agility and speed to market. He says it is crucial that he and his c-suite colleagues continue to develop internal capability.

“We must sure that changes in skills, people and culture takes place alongside the changes in process, data and systems,” says Franz. “We must balance that whole mix in a way that the result is a faster and more agile approach to the elements that we find are most effective in terms of advertising, brands and customer experiences.”

The good news is Franz believes the c-suite team has managed to deliver that effective balance. He is keen to take advantage of further innovation where appropriate. Franz refers to the use of advanced analytical tools to help understand both promotional data and supply chain information. Diageo also uses a range of collaborative tools, such as email, messaging and web conferencing, to keep people happy and connected.

Franz, then, keeps one eye on the future of technology as he leads the firm’s attempts to meet its £500m productivity savings goal through 2019. “My personal goal is to deliver to those productivity objectives and to hopefully exceed expectations,” he says.

Technology will play a key role, says Franz, as will cross-business partnerships. “To deliver to that target successfully means I’ll have used process, data and technology to enable improvements and I’ll have partnered successfully with my c-suite colleagues to work on those goals collaboratively,” he says.

“I want to see evidence of those productivity savings being re-invested during the next few years. I want to see evidence of how we’re using that money to grow our brands and our top line. The greatest measure of our effectiveness will be through our external results. That kind of success just provides extra motivation to achieve even more.”