How Standards help Nestle to be a global player interview with Paul Bulcke CEO

Issue 42 – September 2012

This article first appeared in ISO Focus+, July – August 2012. It is summarised here with permission from ISO.

Paul Bulcke has been Chief Executive Officer of Nestlé S.A., since April 2008.

ISO Focus+: Nestlé produces a wide range of products from ready meals to chocolate, and from mineral water to coffee. How does Nestlé manage to maintain a worldwide consumer base when traditions and tastes vary from one country to the next? How have International Standards contributed?

Paul Bulcke: A global company like ours has a common strategic objective. Just as we have to have common values and a common culture, we need common Standards as well.

International Standards provide a framework for the world. Tastes may differ, but health requirements and minimum standards are the same the world over. International Standards, therefore, help to shape our company so that we can be a global player with globally recognised terms of reference. But, they serve only to frame our work, the 'paintings' inside those frames are locally made.

The International Organization for Standardization (ISO) has a specific role to play as a truly global, multi-stakeholder, expert-driven, consensus-based standardisation organisation: it enables us to work efficiently. If that were not the case, if the interpretation of certain dimensions were really local and not relevant and not the same, we would be totally inefficient as a society and as a company in that society.

ISO Focus+: What is the strategic value of international Standards to a company like Nestlé, with an international workforce of 330 000 people? ISO has developed 1000 food-related Standards. How many does Nestlé implement and what are the benefits?

Paul Bulcke: One of our basic strengths is that we have deep-rooted principles, which put value on compliance. I could hardly steer a company like ours if I could not trust our people to comply with our own values, culture, and strategic direction. Beyond our internal functioning, they also need to meet the demands coming from the outside world.

International Standards help me to apply, throughout the company, the same dimension of judgement and the same terms of reference. In turn, this helps me scale up efforts to comply with these Standards. If I have a Standard that is the same the world over, I can muster the resources to achieve or, whenever relevant, surpass the requirements of those Standards.

As for ISO's 1000 food-related Standards, we are a food and beverage company, so those are the minimum Standards with which we comply. But, we comply as an operation, as a part of society, with many other Standards, too. We also provide services and operate factories where we apply Standards on health and safety. We are committed to environmentally sustainable business practices, so we also comply with environmental standards. And these are just some examples.

There are many Standards beyond those concerned with food that are important for us. Because ISO's impact goes beyond product criteria to best practices in factories, and even to our environmental performance, these Standards are part of an overarching reference framework.

ISO Focus+: Can you describe the use made by Nestlé of ISO's management systems Standards ISO9001:2008 Quality management systems – Requirements and ISO14001:2004 Environmental management systems – Requirements with guidance for use and how this has evolved over the years?

Paul Bulcke: We pride ourselves on being part of an industry that works with ISO to shape Standards, putting at your disposal our knowledge, our expertise. ISO has supported our industry through the publication of internationally consistent measurement and management tools, processes, and practices. The extent of your involvement has led to the achievement of improved environmental performance. In other words, ISO helps us work towards our goal, and we encourage the development and use of relevant international Standards.

ISO's global authority is useful for us. For example, building on the Nestlé Environmental Management System, we have 413 out of our 461 factories that are already certified to ISO 14001. We have distribution centres, R&D centres, all undergoing certification. That is the value ISO gives us: by being a global Standard, globally accepted, when we comply with ISO International Standards, people know straight away what they are getting and the level at which we are working.

ISO Focus+: What concrete benefits has ISO 22000:2005 Food safety management systems − Requirements for any organization in the food chain brought Nestlé?

Paul Bulcke: Food safety is essential. Since the adoption of ISO 22000, we were able to measure our own very stringent standards against those stipulated by ISO.

We are again using as our terms of reference a globally accepted Standard. This is the best way to get recognition for our own systems for assessing the safety of food. Issues of food safety are not purely intramural. They lead us upstream to our suppliers and downstream to retailers. Having a common Standard that is globally accepted like ISO's helps us to neutralise situations where companies all have their own proprietary standards.

ISO Focus+: What is the business case for investing in socially responsible actions that may not be immediately beneficial to the bottom line in a competitive market? How could ISO 26000:2012 Guidance on social responsibility contribute to the company's already well-established CSR programme?

Paul Bulcke: Like I said, Nestlé's orientation is long term. We would not do anything for a short-term advantage that might jeopardise our long-term interests. This reflects how we see our role: evolving with society, safeguarding our relationship with the communities in which we work, because we intend to continue to be a part of those communities. This is why we have linked the concept of corporate social responsibility with our basic activities. Our success must be linked not only to the creation of value for our shareholder, but also to the creation of value for society.

Using internationally recognised Standards such as ISO 26000 gives us the added authority of a globally recognised body, provided it can be certified. We have been in contact with ISO on this topic and will be happy to make further contributions.

ISO Focus+: What would you like to see coming out of ISO?

Paul Bulcke: As an international company, we are facing many different evaluation practices, be it of company or of product performance. To eliminate the different yardsticks and the resulting unnecessary administrative burden, a worldwide authority facilitating alignment among rating agencies and evaluation methodologies would reduce the time lost and volatility involved in juggling different standards. Standardisation of Standards is not a bad thing! Alignment between ISO Standards, for instance between ISO 9001 and ISO 14001, possibly merging them into an integrated management system – along with occupational health and safety – would be a step forward.

Like Pascal Lamy, Director-General of the World Trade Organization (WTO), Nestlé actively defends the free movement of goods and the suppression of trade barriers, particularly when Standards and regulations are politically motivated and counterproductive for delivering the best value at the lowest cost to consumers.

The technical authority of ISO is important because it is neutral and objective in a society that is subject to so many influences. ISO helps us build bridges. Pascal Lamy is very vocal in his support for ISO and for opening up the world to increased acceptance of global Standards.

ISO Focus+: May I ask an additional question? What's your favourite Nestlé product?

Paul Bulcke: That is like asking a parent which child is their favourite! I normally do not answer, but sitting in front of me, on my desk, is my Nescafé so that is definitely one of them. But there are so many other Nestlé products that I love.

Published in international.

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