Leading the Charge to Disrupt Your Industry

by Michael Graber

Leading the Charge to Disrupt Your Industry

Richard Jupe, Vice President, Innovative Product Development, Altria:

Richard got to the point, fast: Altria’s strategy: reduce risk and expanding choice. “We have a Duel Engine. We are changing our culture with this model, he says.”

“Since 1955 our company has been on the Fortune 500. We were Philip Morris. Now we have owned and sold Kraft, Miller. We are now a holding company for various brands: Phillip Morris USA, NuMark, Nat Sherman, US Smokeless, and others.”

Given trends in health and wellness, the company hit a crossroads. As the leaders in its category, Altria sees that it also has a responsibility. “It’s no doubt that our products have health risk, so we want to be responsible,” Richard adds.

Altria started advocating that the FDA should oversee all parts of its industry and company. Highest standards were needed. Since 2009, Altria and others in the industry have been regulated by the FDA.

Given new forms (patches and gums) and new technology (e-cig popularity), the old product form is also under fire. “Since 2009 more than 100 entrepreneurial companies have entered our space.  We had to ask ourselves how do you take a products like cigarettes and innovate?”

More than 22 million smokers desire changes in the form nicotine consumption.

“We therefore look at Smokeless, E-vapor, and Heated Tobacco. These are the platforms. With each platform we keep in mind the Consumer, Commerce, and Competition,” he adds. “Retail environments are changing. New competitors, in large part, put us at this crossroads.”

“What we’ve done is taken a look at who we are, the Core—structure, metrics, processes, policies, business partners, and talent.”

“Then, we set up a Duel Engine model,” he adds. The second engine is innovation. “The second engine is structured to be growth orients, to create new business models, to be radical and disruptive, have a return on learning metric, managed by small, multi-disciplinary teams, rife with vision and empowerment, and are rapid experimentation.”

Here are some of the things Altria brought to life:

  • Core and innovation division
  • Aligned functions
  • Chief Growth Officer (and office with different metrics than a traditional CEO. “He’s on the hook for potential.”)
  • New approaches and methodologies
  • Talent acquisition changes
  • Open innovation with new partners
  • Chief Transformation Officer

Altria focuses on a Growth Mindset, rather than a Fixed Mindset. “How do you move an organization to an open mindset and believe anything is possible? That is the journey we are on,” he adds.

“We use the word ‘yet’ when doubters form a fixed mindset. For example, when someone says, ‘we’ve tried that before, it doesn’t work.’ We say ‘yet.’”

Altria’s new business model is broken into three categories: Shape the Future, Grow People & Teams, Deliver Winning Results.

This Duel Engine approach helps us to achieve these results.

“1,800 other companies have been on the Fortune 500 and are no longer around. By 2020 75% of the Fortune 500 will be companies you haven’t yet heard of. This point doesn’t scare us. It inspires us.”

 
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Michael GraberMichael Graber is the managing partner of the Southern Growth Studio, an innovation and strategic growth firm based in Memphis, TN and the author of Going Electric. Visit www.southerngrowthstudio.com to learn more.

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