New Brew: Molson Coors CEO Peter Swinburn

Peter Swinburn had more than pint-sized challenges when he became CEO of the newly merged beer company. How did he help solve them? Pull up a stool.
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‘A Daunting Task’

When Peter Swinburn stepped in to lead a merger of two of beer’s most iconic names, he found himself the caretaker of a new entity with a mature pedigree. Both Canada’s Molson and the U.S.’s Coors Brewing Company had been family-owned for centuries—Coors since the 1870s, Molson since the 1780s—and a new CEO would have to play diplomat.

But when Swinburn, 59, started the job, he saw a gap between what the company wanted to be and what it was. Molson and Coors had merged in 2005, and though the new brewer aspired to be a leading global producer, it needed a unified culture across markets and a more international skillset to get it there. In 2008 another problem emerged: global recession. Beer, it turns out, is not recession proof. Men—the heart of the beer market—were facing more pink slips than women as fields like construction and manufacturing withered.

Swinburn was faced with the reality that centuries of success were no longer a guarantee of continued prosperity. “There are seventh generation Molson men sitting on the board and fifth generation Coors family members, and Swinburn had to walk in and say, ‘There are things about our culture that we have to change’,” says Molson Coors spokesman Dan Lewis. “It was a daunting task.”

It is a challenge that Swinburn has met. Through a series of management, process, and product innovations, he’s seen his staff of 15,000 transform the company into a growing, agile player that, despite a still-rocky economy, recently announced second quarter earnings with increased sales and after-tax income. In June the company made a substantial acquisition, enabling it to open the doors on its fifth business unit, Molson Coors Central Europe.

‘We Don’t Talk About Our “Mission” ’

Upon arriving Swinburn took stock of his company’s competitive frame. Molson Coors sat near the middle of the beer market, between the Anheuser-Busch empire on one end and a growing army of boutique brewers on the other. Since Swinburn couldn’t compete on scale, he decided to compete around innovation. That meant rebooting existing brands—to “maintain their relevance,” says Swinburn—and inventing new ones. It meant communicating with beer drinkers differently. “The traditional approach—have an idea, test market it, advertise—doesn’t work anymore. You must be more patient now. You seed an idea, and let people discover it themselves.”

This meant establishing a clear ambition for the company and then evangelizing it among Swinburn’s employees to build engagement and momentum. For this he enlisted the help of ?What If!.

Swinburn recognized the anxieties the merger produced. “When you bring two businesses together,” he says, “you really are crunching together different histories and culture, and people are uncertain.” In the first 18 months or so, says Swinburn, a merger consists of people wanting to make sure their jobs are safe. “Then they are emotionally ready. Like meerkats they get on their hind legs and are ready to look around and say, ‘OK, what’s going on here?’”

That, he says, is when “you want to be sure you have an effective infrastructure in place that supports innovation.” Swinburn had to instill a culture that stressed employee engagement and a shared vocabulary—he had to show that innovation was so core to the company’s ambition, it would be a part of everyday life at Molson Coors. “Culture is a big word,” says Swinburn. “To me it’s people. I don’t think it’s that complicated. No organization will be great unless it has great people.”

And you have to give those people clarity around the company’s ambition—which, in this case, is to be a leading global brewer (by profitability) and delight the world’s beer drinkers with its brands. To delight, however, requires a new mindset, a challenger mindset. Molson Coors employees needed a compass..

A key tool in the effort was the creation of a campaign called Our Brew, captured in a 38-page guide given to every employee. The Our Brew guide puts company strategies and goals into “pub talk,” with illustrations and clear language, instead of framing them in 500 pages of corporate jargon. Pub talk gets rid of legalese and cliché. “We don’t talk about our ‘mission’,” says Swinburn. “We talk about ‘what we will do’.” When there’s a problem, employees “Decide and Do”; they don’t “Analyze to Death.” Swinburn says he often sees people take piles of papers back to their desks to translate complicated decisions into a page or two of pub talk. “It was picked up so quickly by the organization, it blew me away.”

Our Brew did more than just engage employees. It established momentum by “giving people the permission” to challenge the expected, says Swinburn, which provided him with an early indicator of the organization’s capacity for doing so. In that way, Our Brew was an invaluable tool for validating the framework that best supported innovation and a culture of execution within Molson Coors. (Swinburn’s modest about his own role, though: “If I’m going to have an impact, it’s to inspire people, communicate with them, and believe in them. People arrive at the mission on their own.”)

‘A Culture Where People Challenge the Norm’

Swinburn has been in the beer business for nearly 40 years. He got his start in England, where he was born and raised in working-class housing outside Cardiff, Wales. His father was a World War II vet who survived three torpedo attacks on three different vessels (“He was not the most popular person on the boat,” jokes Swinburn), and his mother taught him self-sufficiency early on with skills like ironing and sewing.

Swinburn’s first job was selling Bass beer to pubs and union halls in Birmingham. He even delivered the beer when necessary, often finding himself loading it into the trunk of his car. John Clements, Molson Coors field sales director in the UK, says these experiences give Swinburn a unique eye as a boss. “When Peter is in town, nothing needs to change,” says Clements. “He doesn’t want to see things dressed up. Where I’ve worked before, everything gets a lick of paint and smells of air freshener. It’s not like that with Peter.”

As Bass’s sales director, Swinburn laid the groundwork for the kind of innovating he’s doing today. Dave McCarthy, Molson Coors’s chief commercial officer for Europe and the Middle East, who has worked with Swinburn for 15 years, says Swinburn oversaw a program to help pub owners write business plans and get loans. McCarthy helped one pub attract more families by lending it money for an outdoor beer garden. By supporting Our Brew, Swinburn has again sent “a clear signal that he is expecting fresh thinking,” says McCarthy.

He’s getting it. After rolling out Our Brew in February 2009, Molson Coors reached its three-year goal for employee engagement—improved morale, retention, and promotion rates—in just 12 months. Employees also report a rising comfort level with “challenging the expected.” “Innovation isn’t just around product,” says Swinburn. “The core theme of Our Brew is challenging the expected. We are trying to have a culture where people challenge the norm.”

But Swinburn admits he’s learned a few hard lessons in the transition. First, he says, “If your people aren’t going to fit, don’t pretend you’re an alchemist.” Second, “No matter how fast you’re going, you’re moving too slow.”

‘We Can Course Correct in Real Time’

Swinburn believes in beer as “a socially galvanizing product.” A few of the products putting the company on a path to its 2012 growth target include Molson M, which uses microcarbonation for a smoother taste, and Carling Zest, a light beer infused with a twist of lemon. Swinburn has supported new approaches to stalwarts like Coors Light; thermochromatic ink on the label turns blue when it reaches the right temperature, and the company has launched Coors Light Iced Tea in Canada. It also introduced an unbreakable, recyclable aluminum pint bottle for outdoor occasions—and a Home Draft system, which earned top billing in a 2009 Wall Street Journal article.

Additionally, Molson Coors isn’t yielding any ground to boutique brewers, who often have an edge over bigger players in the cider and craft beer market. Blue Moon—a brand Swinburn calls “a 14-year overnight success”—is now the biggest craft beer in America. The company’s also targeting more “white space” (consumer needs being met by other brands). “Take Jack Daniels,” says Swinburn. “It satisfies a rebellious individual in terms of white space.” When Molson Coors looked to tap that sense of rebellion in a beer, it found the answer in Batch 19, which uses a pre-Prohibition recipe discovered by a veteran brewmaster in the company’s Golden brewery. “It’s the beer that got beer banned,” jokes Swinburn.

Batch 19 has been on the market only two years, and its rollout has followed a delayed-gratification model to allow it to build buzz without an advertising blitz (similar to the approached used for Blue Moon). The original plan was to roll it out in 10 cities a year, 30 bars in each, but now Batch 19 is expected to be in 40 cities by fall. “It’s not the 100 percent approach,” says Swinburn. “We want to let people discover it themselves. It’s a slower burn, and we can course correct in real time.”

There are indications that the beer business as a whole might be course correcting. In the U.S., retail sales rose 2 percent and restaurant sales jumped 9 percent in 2011, according to the industry-funded Beer Institute. Swinburn’s sights are also set on international possibilities, aiming at high-growth, emerging markets like Ukraine, the second largest one for beer in Eastern Europe, and India, the world’s fastest growing beer market.

For Swinburn the most cherished part of Our Brew revolves around personal accountability. “It’s ‘I will,’ not ‘they should’,” he says. After the company had launched its aluminum pints, Swinburn was in Florida with his wife of 40 years, Janet, doing some late-evening grocery shopping. Swinburn headed to the beer aisle where, he says, Janet found him reshelving Molson Coors merchandise. Swinburn admits that it might not be the last time he’s found working in the aisles: “Yes, I still do it. It’s what I do.”

Swinburn knows that drawing on your principles, and infusing your work with them, is often the clearest way to message the path forward. And the path Molson Coors is on directly reflects the leadership style of its CEO: educating by example, encouraging employees to own innovation.

FROM the greenhouse