P&G gets the formula right

Namrata Singh in Mumbai

THREE years after the Indian subsidiary of Cincinnati-based Procter & Gamble Co, embarked along the path of change to imbibe a new culture of ‘Stretch, Innovation & Speed’ (SIS), the Rs 475.16 crore Procter & Gamble Hygiene and Healthcare (P&G) says this has had a positive impact in India.

Starting with a well-defined company vision and mission shared by all the Indian employees, each employee is being challenged to become more of an “owner” of his/her work. The increased ownership is leading to more focused choices and faster reapplication of learnings across the company. Some of the visible changes that have accrued as a result of SIS are as follows:

• It has facilitated unique employee-oriented schemes such as “Flexitime”.
• “Let’s Talk” open sessions with the CEO have increased employee feedback.
• SIS has increased P&G’s speed to market.
• A strong ‘Recognition Shares’ programme which awards P&G Co stock to outstanding performers, is driving increased employee buy-in and delivery of organisational goals.
• P&G moves to a non-hierarchical, paperless office — the New GO (GO stands for ‘general office’).

As part of the global restructuring at P&G, India became part of the Asean-Australia-India (AAI) Market Development Organisation (MDO). P&G is working on the concept whereby the MDO operates as one entity working out of Singapore. Hence, all regional initiatives are being treated as those of one company. By default, this leads to co-location of multi-functional resources as one location, i.e., Singapore. The direct benefit is that all plans are rolled out simultaneously across AAI, which brings about greater operational efficiency. Hence, while an AAI-wide strategy will be developed, execution will be country-specific, which, for the India operations means centralised marketing and manufacturing, i.e., imports of Head & Shoulders and Pantene shampoos and exports of Vicks to the entire AAI region.

Consider this, the AAI MDO accounts for 1.5 billion people—or one in every four of the world’s population. The bulk of the AAI population lies in India, Indonesia and Bangladesh (who together account for 80 per cent of AAI’s population).

The Indian subsidiary contributes a significant part of the AAI—being the second largest laundry business in AAI, second largest in feminine hygiene care, first in healthcare (Vicks) and the fifth largest in hair care.

“The restructuring is enabling us to freeze much more consumer meaningful initiatives where consistency of message, uniform product quality, at the least price, are all resulting from the restructuring. India benefits by having access to bigger initiatives and ideas. India also holds pride of place as it has now become a recruiting base for the entire region,” says Mr Gary Cofer, country manager, P&G.

India has been internally ranked the highest amongst Asian countries as a global source of talent for P&G. While 70 per cent of the managers recruited from India are posted in Asia, the remainder take up assignments in the US and UK. Thus, globally the general manager in the global business unit health care, the vice-president (North America) hair care, the vice-president (HR) global marketing development and the head market research for North-East Asia, are Indians.

Flexitime
P&G’s culture has facilitated unique employee-oriented schemes such as ‘Flexible Work Arrangement’ (FWA). FWA is one way of re-inventing the way to work and is currently being piloted in AAI, Singapore—like ‘Work From Home’ and ‘Leave of Absence’, etc.

The company says early results look good. FWA allows the company the ability to retain high-performing individuals, who may have other interests and pursuits outside of their job and allows them a chance to pursue these interests without sacrificing either. It additionally helps balance family and work life. It allows increased ownership and flexibility. The individual thus has more opportunity to explore how they can increase productivity both personally and professionally.

“FWA has infrastructure requirements like bandwidth, call diverting facility from office. This means investment. P&G will make that investment once India has the infrastructure to support that investment. The investment is not an issue. Once the model has proven successful in Singapore we will test it in other countries and if infrastructure improves here, it will be rolled out in India,” says Mr Sunil Durani, human resources director (India and Thailand), P&G.

The decision is also based on business and personal needs. If it helps the employee as well as the business, it will be executed. So, currently, ‘extended leave of absence’ (for example, for further studies) and ‘short term work from home’ are being implemented. Let’s talk

All organisations face the challenge of communicating uniformly and transparently across the organisation. In keeping with P&G’s culture of increased transparency, it started ‘Let’s Talk’ open sessions with the CEO, where employees raise questions on organisational changes, express their concerns about their roles and the business and have the CEO and directors reply immediately.

Since it is an open forum, all questions are allowed. Employees can even ask anonymous questions and have them answered. Topics range from hard core business related questions to views on facilities at the New GO—whether there should or should not be a gym, how the meeting rooms should look, continuing canteen subsidy, etc. In fact, the finalisation of the layout at the New GO was largely an outcome of discussions at ‘Let’s Talk’ sessions.

“P&G has found that opening lines of communication focuses employees’ energy towards positive output and away from corridor talk. The ‘Let’s Talk’ open sessions are increasing employee feedback on business choices, company policies, all helping to deliver a more meaningful face to the external world, and even boosting employee morale,” says Mr Anthony Rose, senior manager (public affairs), P&G.

Recognition
To better support its performance-oriented culture, P&G realised that flexible, timely recognition tools to encourage risk-taking, bold breakthrough thinking and sustained long-term results are essential.
“Internal research has revealed that employees greatly value work environments with strong cultures of recognition. Research also indicated that recognition contributes to employee satisfaction, enhances the work environment and, in turn, improves bottomline results,” says Mr Rose.

P&G is committed to recognising and rewarding individual and team performance and contributions which reflect P&G’s purpose, value and principles. The ‘Recognition’ programme entails four types of recognitions:

• On-the-spot recognition encourages employees to appreciate the contribution of their fellow P&G-ers by saying a simple ‘Thank you’ or sending a congratulatory e-mail or handwritten note or verbally acknowledging the effort amongst a group of fellow employees.
• Special appreciation awards are rewarded to people for unique or superior contributions beyond typical performance expectations, for risk-taking, superior coaching or mentoring and display of ownership and initiative. The physical award includes a plaque and a non-cash reward like a gift voucher or P&G memorabilia.
• Recognition shares are rewarded for superlative organisational, technical or business accomplishments, exemplary and consistent passionate ownership behaviour. Recipients are awarded a trophy and a predetermined number of P&G company shares. Special service awards given for specific years of service. When ever possible, the award is presented in front of the employee’s colleagues or others in the organisation at department meetings, quarterly reviews, significant milestones (completion of an important piece of work), senior management visits, department wide social outings or holiday gatherings and the behaviour and/or contribution which warranted the award is emphasised.

Says Ms Deepa Acharya, senior manager (legal), P&G: “Respect for an individual an Trust in employees form the basic foundation. The company’s philosophy ensures that the interests of the individual and the company are inseparable. This trust translates into a lot of early responsibility and exposure and work becomes a pleasure.”

The visible change
Misaligned objectives have been transformed into those aligned on common goals. While high penalties for failures is out, trust has been laid as the foundation. Intense inspection has changed over to coaching and teaching. From risk avoiding, P&G has changed to a risk taking and team collaborating one. While complexity was earlier delegated down, leaders are now taking on complex challenges.