TO: South African Breweries Ltd. Board Members
FROM: BiMPSY Business Solutions
DATE: August 21, 2011
RE: Assessment of Norman Adami’s Leadership at Miller Brewing
_____________________________________________________________________________
Dear Board Members,
The BiMPSY Business Solution group, the board of directors for Miller Brewing Company, has recently seen a major cultural change under the leadership of Norman Adami. The following report is an assessment of his leadership at Miller and how that change has affected our company. Adami’s aggressive tactics have rattled our main competitor Anhesuer-Busch (AB). By 2005, AB’s operating income had decreased by 22% with a corresponding loss of 1.8% in sales volume. Miller was also able to gain $10 billion to $12 billion market capitalization from AB.4 Adami has instilled the belief in his employees that the United States’ second largest brewer, Miller Brewing Company, can capture enough market share from its main competitor, Anhesuer-Busch, and possibly overtake it as the number one brewer in North America. We look forward to your questions and comments at the upcoming global board meeting.

Best Regards,

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Norman Adami not only changed the climate at Miller Brewing, but in 2003 when he became the President and CEO, he did something even more radical – he “fundamentally changed the direction of the company”5 by changing its culture towards a customer focused business model. Amidst declining sales, ineffective marketing campaigns, and failed product launches, Adami prevented a downward, vicious cycle by motivating, reinvigorating, and instilling a sense of urgency to a once complacent workforce. He adopted the Peters and Waterman Approach by using hands-on management (he had distributors on speed dial and discussed advertising campaigns at Fred’s Pub), staying close to the customer (he invested in sales forces and defined market areas to learn more about the local markets), and using productivity through people (“failing forward” technique of not reprimanding people for taking risks and develop more extensive training through Beer University)3 to create the culture change.5 Previous executives tried to stop Miller from failing, but Adami focused on winning. He took a holistic approach to include participation and involvement through the new bar he built, opening communication by reaching out to his employees, and rewarding people for “stepping up their game.”5
Adami utilized the continuous change process model5 to accomplish change at Miller Brewing Company. First, he installed a performance system to instill a sense of urgency in the group to always obtain the latest results in order to utilize Miller’s operational process strengths of efficiencies.2 He also fostered a quality of work life by remembering co-workers family birthdays and creating a social atmosphere by building a bar for the headquarter employees. Furthermore, Adami recruited top executives from SAB and other firms to create structural change to this system-wide organizational development. Additionally, after listening to distributors and customer insights, Miller organized and hired 200 sales force team members to work in Defined Marketing Areas (DMA) to help increase local relationships and improve marketing.1 Most importantly, he trained and equipped employees with knowledge of its products by requiring them to attend Beer University to increase job satisfaction and productivity. Adami is now at the final stages of the continuous change process model – measure, evaluate, and the control state.5
Adami implemented various strategic processes that would reinforce the culture that he created. He proactively reached out to local distributors and strengthened this new culture by maintaining an open line of communication. He managed the culture through the bar he built in order to foster this open communication, which is an opportunity to tell stories of the desired behavior. He developed the change through organizational socialization5 – he reinforced the values of the firm’s culture through the Beer University. Adami created stories of the new sense of urgency culture by calling for the latest statistics during the middle of a meeting or getting a new commercial on TV within a week in response to a new AB advertisement. Lastly, he held his staff accountable to their goals and installed a performance system that linked results to rewards. Thus, he rewards those employees who are partaking in the new culture.5
The culture Adami created at Miller Brewing has an advantage of being a more open, engaging, and challenging environment. It is an exciting, world class work environment filled with passionate employees who take on high risk opportunities. As a result, Miller sales grew, while its competitor, Anhesuer-Busch’s (AB), operating income declined. Consequently, the aggressiveness that Adami has re-instilled at Miller causes a disadvantage because employees are allowed to take on high-risk, high-reward opportunities while potentially ignoring consequences of the opportunities. Also, rewarding based off performance on the latest statistics could hinder innovation to challenge the product or process. One reason Miller Lite is doing well is because of the diversification of its portfolio through product differentiation and market segmentation; however, a performance based system may hinder creativity.1 The company could become stale again with uncreative marketing campaigns and undesired products if it gets out of touch with its customers and local markets.
Going forward, the board must ensure that Adami continues to develop innovative ways to challenge AB. The board of directors at SAB should encourage the Peters and Waterman Approach5 that Adami has taken to ensure the continuity of the new successful culture at Miller. We will focus on programs that will improve the quality of work life for employees, which will increase productivity5 and will stress the company’s values. The board should release a survey feedback procedure to gather data from distributors, employees, and customers on how the change is going. Based on the data, the board members need to decide if they will support this culture change, since this is key for the change to remain successful. Miller Brewing must listen to its customers, continue motivating, and empowering the employees and distributors, and stay one step ahead of its competitors through marketing and pricing. Overall, the board is excited about the culture shift going on at Miller and believes Miller can continue to challenge AB as the top brewing company.
Works Cited

1. SABMiller Annual Report 2005. (2005, June). Retrieved August 16, 2011, from SAB Miller: http://www.sabmiller.com/index.asp?pageid=75&category=all&yeaer=2005 2. SABMiller Annual Report 2006. (2006, June). Retrieved August 16, 2011, from SABMiller: http://www.sabmiller.com/indez.asp?pageid=75&category=all&year=2006 3. Carter, A. (2006, May 29). Inside the "Able Challenger" Stratgey. Retrieved August 16, 2011, from Business Week: http://www.businessweek.com/magazine/content/06_22/b3986102.htm 4. Carter, A. (2006). Miller Brewing: It's Norman Time. 5. Griffin, R. W., & Moorhead, G. (2010). Organizational Behavior: Managing People and Organizations. Mason, Ohio: South-Western. pp.405 -525