There has been a company restructuring recipe that has worked for decades. Buy a company, trim the fat, then reinvest to facilitate growth, and make lots of money. But sometimes this recipe doesn’t work — and the story of Kraft Heinz is a prime example. Earlier this year, the company suffered a massive loss in less than 24 hours — $4.3 billion, to be precise. And over a two-year period, the fiasco cost Berkshire Hathaway $20 billion, possibly its worst loss ever.
The Missing Ingredient in Kraft Heinz’s Restructuring
There has been a company restructuring recipe that has worked for decades. Buy a company, trim the fat, then reinvest to facilitate growth, and make lots of money. But sometimes this recipe doesn’t work — and the story of Kraft Heinz is a prime example. Earlier this year, the company suffered a massive loss in less than 24 hours — $4.3 billion, to be precise. As Kraft Heinz focused on aggressive cost cutting, they significantly impaired their ability to innovate to keep up with the changing landscape. Leaders need to understand that the pace of change is accelerating everywhere, not just in packaged foods. Understanding how humans are biologically hardwired to respond to threats and opportunities can help leaders navigate these rapid shifts.