A conversation with Sarah Haywood, CIO at Carlsberg Group
In this episode of the HITEC Transform.ed Series, Marcelo De Santis, Chief Digital Officer at Thoughtworks North America, speaks with Sarah Haywood, CIO at Carlsberg Group, about Carlsberg's transformation journey, maximizing the information you have at your current disposal and more.
Marcelo De Santis: Hello everyone, and welcome to a new episode of The HITEC Transform.ed series, sponsored by Thoughtworks. My name is Marcelo De Santis, Chief Digital Officer at Thoughtworks North America, and I will be your moderator today. Both HITEC and Thoughtworks believe that knowledge should be shared openly, so we have designed this series to provide you with the opportunity to learn directly from C-level executives about their personal experiences in leading the transformation of their organizations.
For today's interview, it is my pleasure and privilege to introduce Sarah Haywood, CIO at Carlsberg Group, a Danish multinational brewer with amazing brands like Carlsberg, Tuborg, and Kronenbourg to name a few. Sarah is a business and technology leader with a demonstrated history of driving complex transformations across the enterprise in large CPG Fortune 500 global organizations like Cadbury, Mondelez, and now at Carlsberg. Sarah is well recognizing the technology industry for improving company performance through the implementation of emerging technologies. Without further ado, Sarah, welcome. Thanks for making the time to be with us.
Sarah Haywood: Thanks, Marcelo. It's a pleasure.
Marcelo: Sarah, let's dive in. Today's discussion is about transformation, and I know you have been driving a significant amount of transformation at Carlsberg. Tell us about that. Tell us about the business outcomes. How is it going?
Sarah: Well, I think the first place to start is we're a beer company, so beer is all about creating those moments where you can enjoy our products. Really, my role is around, how do I enable our company? How do I enable both the interaction with our consumers so that we are able to have the right products with the right connections, the right engagement with our consumers? That we are the best partner to our customers so that we are able to have products that appear in bars, in stores with the right quality, with the right pricing, with the right supply chain.
Then obviously, making sure that we are flawless in the way that we execute in the back office. Whether that's our demand, our order fulfillment, or even making sure we have a lean and efficient back office to be able to support the company.
Marcelo: Excellent. Thanks. You're basically working both in enabling revenue and also improving your margins, right?
Sarah: I think that's absolutely key because our journey as a company is to grow top line. It's to think about expanding the beer category and growing overall. What we would measure would be our profit per hectoliter. How do we improve the top line of the company? Also then, how do we manage the back office? How do we become more productive as a company, and therefore managing our SG&A costs? Making sure that as a company we can deliver our products in a more efficient and effective way.
Marcelo: Excellent. Let me ask you about your customers, right? Those that like me enjoy your beers every time I travel to Europe and here in the US. How a company like yours use technology to connect directly with your customers? Not with the retail partners, but with your customers.
Sarah: As an FMCG company, I think we've probably-- all companies have struggled with, what is that direct relationship? Because as you know, we are often interacting with our customers, which would be the retailers or the bars in this case. What we've been doing is trying to make sure that both our advertising, our digital marketing, our social media channels are building that engagement directly with our consumers, that we are using the insights that we gain from our consumers to make sure that our products are meeting their requirements, not just for the people who are current consumers, but actually for maybe other untapped consumers today of the beer category.
Then also thinking ahead to, what are the future innovations that we want to make in our category. How do we ensure that those are in line with consumer trends, the direction that we see in terms of people's preferences, people's behaviors in the future?
Marcelo: Great. This is a good segue to another question I had in my mind. You mentioned that you are aligning your technology investments towards where consumers want to go and also where your company needs to be more productive. Tell us about, how do you make those decisions about what things to do, what things to stock, what things to continue from the technology innovation perspective?
Sarah: We've tried, I think, as we think about our strategy, we tend to think about three buckets, I guess. There's the must-do, the kind of compliance or operational resilience investments that every CIO has to make to make sure the business can continue to operate. Then we have a bucket of investment which is really around, how do you generate productivity? How do we generate fuel for the company? That may be automation, it may be in simplifying processes. It may be in actually just giving better data so that we can make more effective, faster decisions in the company. Then the final bucket is really, how do we grow? That's all about, what is the data that we need?
How do we enable our sales force with better insights? How do we pass on that data to our customers to enable our customers to be more profitable so that we can in turn benefit from greater pull-through of our products? I think we tend to look in those three categories and making sure that we've got a strategy that actually fulfills all three. I think in the volatility that we've had in the last few years, it's been challenging to make sure that we're balancing that portfolio and making sure that we still keep a focus on growth of the company and the future investments, long-term investments, whilst dealing with the immediate challenges that are in front of us.
Marcelo: It's very, I would say, relevant what you just said about the volatility of the environment. What we see with our clients and with many members of our HITEC familia is that many people like you in the roles of executive technologists are dealing these days with, how do I prepare myself for next year, looking at the recession and things like that. Tell us a little bit about that. Also, I know, Sarah, you went through some challenging times with the war in Ukraine, and that has, so to speak, maybe had some impact in your team, and I know it's very close to your heart. If you can tell us about how you live through these uncertain times, basically.
Sarah: The last few years has been super challenging. We had COVID. We went from COVID, as you described, to the war in Ukraine. Then now we face the commodity headwinds that I think many CPG companies are also facing, and the general volatility. As a company, looking at both volatile in terms of consumer reaction. Are we going to see consumers down-trading? Are we going to see consumers maybe making different choices around their spend, given inflation and the climate? Then are we also going to see the continued pressure on costs?
We see inflation across all of our raw materials, commodities. You take something like a glass bottle and a huge component of that, the cost of that bottle is around the price of gas, of fuel. We see that ripple effect through everything. I think the years of stability it feels a little bit like are over, and we're going to have to learn to be more agile and cope with what is a much more, as I say, volatile environment in the next few years. Specifically about Ukraine, I think has been tough.
I'm sure for everybody looking at this as a lens through the press, it's a very challenging situation, not just when we look at the horror of actually the war in Ukraine and the impact on people and their lives, but the far-reaching implications of companies like ours that are multinational. We have a large team in Ukraine. We have a large team in Russia. Obviously with the complex trading environment, with the political situation, and obviously with sanctions, we came to a tough decision to divest our Russian business. We are now in the process of actually separating that business out for sale and going through that process.
Aside from all of the conflict, there's the very practical parts of that. That's hugely complex in terms of carving out a business for sale at the same time as dealing with the emotional side of people, both the team in Ukraine who are-- many people have been displaced or are impacted day to day by the current hostilities, or by the team in Russia who are effectively going through what feels like a little bit of an ugly divorce as they separate from Carlsberg.
From a leadership standpoint, we've got these two now teams that are on either side of a war effectively still needing to work together in a practical way to understand how we carve out the business and how we separate our Ukraine business so that it can be standalone from Russia, how we carve out the Russia business for sale. As a leader, it's hard not to be touched by the human impact of the war.
I know, early on, I think it was one of the things that we really tried to do was create space away from maybe the practical things that we were having to focus on to allow people to really understand and explore their emotional response to this, because we had many colleagues in Poland who were hosting Ukrainian families, refugee families who had left the country, colleagues in the Ukraine who were having to make tough decisions around maybe leaving family members in Ukraine but sending their wives, children to safer places. It puts into perspective, let's say, some of the challenges that we face as a business leader when you understand that humanitarian sort of impact.
I think to then be able to continue to lead through that just requires an awful lot of humanity, a lot of empathy, and a lot of just honesty about the fact that we as a company are not trying to resolve and nor could we the political challenges. That's not our role here. Our role was to create a space where people felt safe as best we could, where people were able to contribute in the way that they felt able to, and continue to be purposeful.
What I've honestly seen with our team in the Ukraine has been not less than heroic. People's commitment to carrying on with work, continuing to contribute to the company, wanting as much as possible to be able to continue as normal. I think it's very inspiring having-- whilst challenging, but it's been incredibly inspiring to have the honor of leading a team that is impacted in that way.
Marcelo: Wow. What a story, Sarah. Having had the opportunity to experience your leadership myself, I'm sure your team and your organization are blessed of having you leading a change like this. Thanks for sharing that. I'm sure people listening to your story will be extremely inspired. Let me change gears back to technology. I have seen a couple of interviews you did with Microsoft, I think, about cloud. I was wondering how Sarah will sell to a beer company that you need to migrate to cloud. How does cloud Help Carlsberg to make better beers for their consumers?
Sarah: It's really interesting because I think Carlsberg is very much and has historically-- it's a very physical company. We brew amazing beers and have done for 175 years. There's a lot of history, a lot of heritage in the company. What I also find with Carlsberg is this heritage of innovation. If you hear the story of our founder, he was very much about really innovating in the process of beer making, all the way to we have a research laboratory where the pH scale was first developed.
To have that heritage of really innovating both for business results but also for the future actually gives quite a good space for us to be innovative beyond the beer and into how we could use technology as a company. Whilst it seems like a big reach, it's taking a leapfrog stab where we were still very, I suppose, dispersed in terms of our technology, lots of data centers not consolidated, lots of servers still sitting under desks, should we say, in markets and breweries.
Almost to say, well, rather than move to maybe consolidating into a data center and taking stepwise the journey, actually why don't we just take the leapfrog and go straight into the cloud, save ourselves maybe some of the pain on that journey? Then we start to enable the capabilities that you get with the cloud. I think for us, the first and very obvious example where we saw the payback was when COVID hit and when people were having to work remotely.
Very practically, the fact that our SAP platform was in the cloud, most of the tools that we use day to day were in the cloud, suddenly that concept of having people working from home, from different parts of the world, but still able to access the data and the tools that they needed, it was a lifesaver when we actually went through that sudden, overnight kind of locked down that COVID created.
Marcelo: In terms of cloud, let me double-click on that, Sarah, in regards to cloud and data. You mentioned before specifically CPG companies have always this challenge of trying to really understand what consumers think and do with their products, how cloud and data intersects in actually enabling that kind of outcome.
Sarah: We're still fairly early in our journey, but absolutely, that ability to bring together those different data sources into the cloud. Being able to pull data, whether it's data from our internal transaction systems, whether it's data from our different channels, sales channels, and all the way through to actually capturing data from in the bar. Using tools that enable us to capture data from the pumps, from our draft master system where we're able to see what is actually being sold?
What is being pulled in a bar? Bringing those data sources together actually is then key to being able to understand not just what we're actually maybe selling, but what is being consumed when it's being consumed, and understanding more than about the habits, behaviors, and the profile of our consumers.
Marcelo: That's very interesting because I have at one point the opportunity to meet some people in your organization and I remember they took me to some of the bars you own in Copenhagen. To me, the model of CPG companies owning or being closer to the point of sale was really-- I found that extremely smart. How much of that proximity to consumers is helping you?
Sarah: Getting to know our consumers better is absolutely key then to everything that we do, because ultimately it is about building those products that people want to consume and creating new brews that make social occasions better, that people enjoy, that contribute in that way. I think for us, it is about, how do we use the data that is available? There's so much data out there now. How do you take that data and ingest it in a way that actually allows you to create insight? I think that's the big challenge for many is it's not the availability of data. It's more about how you can take that data and turn it into insight and action.
I think that's where we have a number of areas where we look at whether it's around everything from our promotions and how our promotions are supported through to managing things like our customers and our customer churn. How often we see customers repeat ordering from us. How many customers swap between different brews or maybe stop ordering from us? I think there's a whole range of different initiatives that we have that are focused on, how do we take information we've already got and make that more powerful, more useful in terms of decision-making for our sales force and ultimately also for our teams in terms of the different products that we're both innovating and developing going forward?
Marcelo: Thank you for that. I can see the quote. Sarah Haywood said, use information you have. I think it's very practical, pragmatic, and useful advice because we also see many organizations that are trying to do many things with information, but you are 100% correct. Many of us, we're not using the information we already have properly. There's a lot of untapped value in what we already have. Now, what we already have may be very fragmented across an organization. That's the challenge for CIOs and CTOs these days.
You mentioned agility. You mentioned the ability to lead in uncertain times. In your experience, Sarah, at Carlsberg and in the previous companies you've been having executive leadership roles, which are those leadership behaviors that you must nurture in order to go through a transformation in a successful way?
Sarah: There's lots, isn't there? I think one is very much about not getting too embedded into the past. Think about how much technology evolves year by year. Almost getting familiar with the idea that whatever choice we make today in five years' time is probably not the choice you would make in five years' time. Getting comfortable with the pace of change, getting comfortable with having to revisit and pivot the direction that you're taking I think is one very important skill as a leader in tech. I think also being curious, being interested and wanting to understand how things evolve, the pace that we are all experiencing.
Particularly when we look into technology, I think requires a very curious mind, somebody who loves learning, continues to grow in a variety of different ways, but particularly when you think about how technology can come to impact a company like Carlsberg. Then I think there's also something around the-- back to pace if we're thinking about agility, it's no longer good enough to sit back and build a roadmap and then revisit it in five years' time. If we look at the last three years, we couldn't have predicted or expected the world economic, political situation that we're in.
Getting comfortable with shorter horizons and being able to make decisions perhaps in shorter timescales with shorter windows of investment, but also with long-term vision in mind I think is-- these are not typically now programs where you're going to plan 5, 10 years out. These are activities that you need to be planning by quarter, and being prepared to adjust and move as you see either competition moving or technology changing or the macro environment changing.
Marcelo: I totally agree with you. I also do believe that those five-year strategic plans specifically related to technology might not work anymore. More than one year, one year and a half might be an exercise of maybe some esoteric exercise into the future. Thanks for that. Very practical advice. Let's move into the future of Carlsberg. Sarah, in your role, how do you see your company two, three years from now?
Sarah: We're in a great place I think as a company with a great performance track record over the last three years. I think where for us now it's about focus on, how do we grow? How do we grow the category overall? How do we grow within the category? To do that, I think where I see the key enablers in technology is around-- it is about cementing that relationship with our customers so that we are the partner of choice for them, and that we're providing them both with the data and the capabilities to be able to compete successfully in the marketplace.
It is about that deeper connection with consumers. How do we build that deeper, direct connection with our consumers? Looking at the demands of a consumer. Whether it's well-being, whether it's sustainability, whether it's equity, you look-- our consumers are becoming much more sophisticated. They want more than just a wonderful pint of beer. They want to know that it's ethically sourced. They want to know that it's sustainably brewed. They want to understand that we uphold certain ways of operating behaviors as a company. I think there's a lot more depth in our engagement with our consumers now.
Back to the data point, I think the world is becoming richer and richer in terms of the information. How do you wade through all of that information to make sure that we as a company are able to be informed and have the insights from that data, but also to move quickly and agilely to be able to make decisions in the future so that we have that data at our fingertips with the information that we need so that we can quickly move and make decisions as a company?
Marcelo: I still remember your previous comment about time to insights. It looks like that's the key outcome for technology leaders. Thank you for that. HITEC and Thoughtworks, we have a strong focus on diversity and inclusion. When we look at statistics as of, I would say, 2022, women hold around 27% of technology jobs.
That's something that we all think needs to change. That number has to increase. For you as a female leader in the technology industry, any learnings from your personal journey? Anything you want to tell to our audience that are looking at Sarah as, "Oh, I would like to be Sarah in three, five years from now"? Anything you want to share with them?
Sarah: I think the key is the belief. It's the belief that you can go do it and do it your way. There is no mold. There's no image of what the leader needs to look like in the future. It's accepting that each of us are different. Actually, that's the beauty and the richness that comes with the fact that we're all unique and we all bring something different to the table. I think there's something about not trying to fit in, not trying to be somebody that you're not, being the best of you and bringing that to your role. I hope that as time goes on that it will become less and less unusual.
I think that somewhere along the way, technology became a boy's job. I'm not quite sure how that happened. I think there's a lot happening now in science, technology to encourage younger generation of females to get into those subjects, to feel comfortable and confident in those subjects, and to know that there are a whole variety of career paths that you can take once you've pursued that sort of direction. I think we absolutely need to increase the funnel because we all have bold ambitions around diversity, including myself and Carlsberg.
As you say, we still only have a small percentage of women actually in the workforce in these types of jobs, and then those are going to be unobtainable. We need to solve the funnel. We need to encourage more younger people into the funnel, or people who are maybe looking for a change of role, a change of career, to consider technology as something where they can excel and you can be you.
Marcelo: It's something I will be reflecting after this interview. Be the best version of yourself in the role you are, I should say. I think that's pretty deep, and also requires a lot of reflection from each of us to actually let ourselves be ourselves. Thank you for that, Sarah. We're getting to the end of the interview and obviously appreciate your time. Any final words of wisdom to those that are in a similar transformation journey that you're in Carlsberg? Anything that you want to share with the team?
Sarah: I think my sort of big learning, and it definitely has been a learning through trial and error and failing, has been to recognize that to get to any kind of transformation, it's a journey that's much bigger than just the technology function. We all have the examples where we can see a technology opportunity, and we almost think that if we lead with the technology, then everybody else will follow.
I think it's really important that we start with the business and the impact that you want to have on the business. What's the result that you're going to drive? Then back into that, what options have we got? How could we go about driving that business result? Sometimes the answer is not going to be technology. Sometimes there are other ways to get to resolve the issue. The role of CIO, the role as a leader in technology is to get the business outcome, number one, and then the technology follows.
I think that's the most important learning is to always keep in mind that this is about we brew beer. We sell beer. That's what we are trying to do, and that's what we want to achieve, not be the cleverest at technology or have the most exciting technology project. Now, I very much hope and am optimistic that you can do both and that we have some very exciting technology projects to help us enable that. It's making sure that the role of CIO in a company like Carlsberg is to be a member of the business leadership team and to drive the performance of the company, and the second job is to do that with technology.
Marcelo: Excellent. Business outcomes first. Thanks for. brewing beer and making beer. Rest assured, I will continue Carlsberg as much as I can. Responsibly. Drinking responsibly. Thank you for that, Sarah. Look, we have arrived at the final moments of our fireside chat with Sarah Haywood. I hope you found today's session extremely insightful. I did. A woman that is transforming companies, but also keeping herself close to the human aspect of any transformation, which is extremely courageous and humbling.
Thank you, Sarah, for joining us today, and thank you to our audience for watching this interview. We look forward to connecting with you again for the next episode of HITEC Transform.ed series to hear from other executives on their experiences in leading transformation at their organizations. Thank you. Take care. I'll see you next.