The Talent Masters, page 13
No amount of visiting can match the experience of living in unfamiliar places. The immersion in myriad things that are new and different tests a leader on many levels and provides enormous opportunities for growth. By breaking people out of their comfort zone, it develops personal sensibilities, sharpens judgments, and provides an unmatched opportunity to build relationships with a wide variety of people from different backgrounds and cultures. It expands both capacity, which is the ability to get more of the same work done, and capability: achieving more through doing a higher level of work. Finally, it fosters the kind of collaboration and working across boundaries that is one of McDonald’s goals for increasing the power of P&G’s global organization.
As Lafley reminds us, talent development is not only about developing and growing leaders but also testing the best with complex and challenging stretch assignments that will reveal which ones have CEO potential. “Running a tough country like Korea, Indonesia, Russia, or Nigeria, or a tough business that we’re not winning in, or a newly acquired business we don’t understand, or a chronically underperforming business—all of these are stretch assignments,” he says. “But we have to be careful not to blow up very good people with very strong potential by moving them a ‘bridge too far,’ and subjecting them to more challenge, complexity, and difficulty than they were ready for.”
Here’s how P&G pushes them just far enough. You’ll meet two people in particular who show how carefully chosen assignments can greatly accelerate the development of high-potential leaders.
THE WAGER
Dick Antoine was catching up with several leaders of P&G businesses gathered for the company’s annual November strategy meeting when he spotted Deb Henretta making her way toward him. He hadn’t seen Deb since she’d taken the assignment in Singapore five months earlier, and he was anxious to hear how it was going. Many P&Gers are eager to take an assignment abroad, but getting her to uproot her family from Cincinnati had been a hard sell. She finally agreed to put in an eighteen-month stint—short for an international move at P&G, especially considering the resources it consumes and the time it takes for the leader to adapt. People are usually in those assignments for three to five years. Antoine, then head of HR, and Lafley, then CEO, were willing to bend because they knew that her ties to the Cincinnati community were unusually deep. She had three school-age children, two of them teenagers and one of them already in high school, and she was strongly committed to the plethora of corporate and advisory boards she served on.
Besides, Antoine had a hunch that she’d stay longer. He had seen many P&G leaders resist such assignments only to discover how much they learned from them. Many ended up wanting to stay as long as they could. He had a feeling Henretta would be one of them. “I’ll tell you what,” he said before she left. “If you want to move back to Cincinnati after eighteen months, I’ll buy you dinner. If not, you owe me one.”
Henretta was totally at ease as she approached Antoine during the cocktail hour at that November strategy retreat. She greeted him warmly, then paused before asking, “So where do you want to go to dinner, Dick?”
Henretta had discovered that she loved running Southeast Asia. What’s more, her children were happy in their new schools and the entire family was enjoying traveling and learning about such a different part of the world. She had grown in ways she couldn’t have imagined. Before long she was running all P&G product lines for fifteen Asian countries, including China, and becoming a candidate for bigger roles in P&G. Four and a half years later, she still has not requested that return ticket.
EARNING A CRUCIBLE ROLE
P&G has for decades produced leaders who are great general managers with a particular bent for either brand or category management. To move up, they have to demonstrate expertise in consumer insight, drive innovation, and be “globally effective,” meaning able to lead in cultures other than their own. Other companies regularly scout P&G for high-level leaders. Among its alums are Microsoft CEO Steve Ballmer, former eBay CEO Meg Whitman, Intuit founder Scott Cook, Boeing CEO Jim McNerney, GE CEO Jeff Immelt, and the recently appointed CEO of archrival Unilever, Paul Polman.
P&G regards choosing the right assignments for leaders as a crucial part of building its leadership DNA. A mix of assignments, or “accelerator experiences,” gives leaders both depth and breadth of experience, so they can develop the capabilities to lead a large, complex, global organization. Each assignment is not just a reward or a call to duty but also a learning opportunity and a test, a basic element in sorting, sifting, and selecting leaders who have the mix of skills, personality traits, relationships, judgment, and experience to prepare them for greater responsibilities. It is a balancing act between the needs of the business and the developmental needs of the person.
Henretta was chosen for the Singapore assignment largely because of her success in an especially tough job, one of P&G’s so-called crucible roles: reviving the global baby care business, which had been trailing Kimberly-Clark for fifteen years. It seemed a risky move at the time, because she was new to the business; all its previous leaders were old hands, many of them manufacturing people. But Antoine thought otherwise. “It was one of A. G. Lafley’s really good assignment planning moves,” he says. “A.G. saw that P&G was heavily focused on big customers such as Walmart and not enough on the consumer. He thought Henretta could bring the needed consumer focus to the job. She had been in the laundry business, and like a lot of other people at P&G, her entire background was in marketing and brand management. She was on our watch list of high-potential leaders. Not only that, she was a mother of three kids, so she understood the consumer and knew how to talk to mothers.”
Lafley got it right. Henretta transformed the baby care business. The commercials changed from technical advertisements to messages about love and all the emotions mothers feel for their children. She brought the business to a tie with Kimberly-Clark, and it’s stayed there ever since.
Brand equity, market share, and profit are standard measures of a leader’s success. But it’s equally important to observe how the person has grown. What skills and capabilities has she demonstrated? What are her strengths? Which ones should be expanded? What areas does she need to improve? Some talents might be deepening. What new ones might have just emerged in the recent past? Observing these developments, not just performance numbers, is essential to assessing a leader’s potential to move higher.
Part of how P&G defines potential is the ability to move into a leadership role two levels higher because it’s more of a stretch. That narrows the field. How many times have we heard a leader say, “I’ve got a great number two person”? That person might be fine in the number two role or as a successor to the number one person in that department or business unit. But he is not a high-potential leader if he’s unlikely to move beyond that.
Henretta had been president of global baby care for close to five years when P&G started thinking about what assignment she needed next. Lafley and Antoine thought she needed more “runway,” that is, more opportunity for personal growth, to increase both her capability and her capacity. Anyone with hopes for high-level P&G positions such as vice chairman or CEO has to have three “experiences”: responsibility for managing multiple brands in one country; responsibility for one business across the globe, such as laundry or personal care; and a job living in a different country. (In the case of those working at one of P&G’s European companies, that means living outside Europe.) Henretta had only one of those boxes checked, so they were trying to find her an assignment that would check the other two.
The first international opening that came up was leading Northeast Asia, based in Japan. The opportunity confronted her with tough choices. “My children were settled into their extracurricular activities,” she says. “I was feeling extremely good about my global business unit job. I had been running the global baby care business for about five years and had become a real expert. To be honest, I really liked my team and the business I was working on.”
She also had outside commitments. “I had a network of friends and professional connections that I knew would be very hard to keep connected with in the same way. I was on several community-oriented boards, including Cincinnati Children’s Hospital, and involved with advising several universities such as St. Bonaventure, where I received my undergraduate degree. All these activities are an important piece of who I am, since I believe it’s important to give back to the community and the schools that helped me get my start.” Henretta and her husband agonized but ultimately made the decision to go to Japan. And then, after all of the deliberating and adjusting, her boss decided to leave the company, and the plan was put on hold—Lafley didn’t want her leaving the baby care business at the same time for fear that they’d lose the progress they’d made. “The movers were coming to my house literally the next week,” she says. “It was incredibly disappointing. I mean, there’s no other way to put it.
“But there’s nothing like having something taken away from you to make you want it even more. And it had the same effect on my family.” A year later, when the job in Singapore opened up, Henretta was ready for it. It didn’t bother her that it was a lateral move by conventional wisdom. When Lafley first went to Japan, he had gone from managing the company’s North American laundry business, the largest single regional business in the company, which was some 20 percent of the company’s business, to managing 5 percent. Here was one of the company’s top leadership candidates at the time taking a move that looked like a smaller responsibility. And yet he’d become the CEO.
Still, she wanted to be sure that the particular job was right for her. “There are three worlds at P&G: the global business units, the functions, and the go-to-market organization. I was passionate about the GBUs—building global brands, doing strategic thinking, working the innovation pipeline. And I was quite concerned that those things were not really going to be the focus in the new job.”
Several P&G board members spent time talking with Henretta about why they thought she should take the job. They had grown substantially in their own international assignments, and they thought she had just the skills and capabilities for the job. Because Asia was a developing market, Henretta would remain in charge of the GBU portions of the portfolio in addition to taking responsibility for the operations work. She could leverage what she was good at and confident about, while picking up new skills in operations and the go-to-market world.
When Lafley sat down with Henretta, he surprised her by saying, “Deb, you know that assignment probably won’t be more than three years.” They were talking past each other, because she was trying to angle for something less. “I knew the family could do two years of anything, even if we didn’t like it and it became a hardship. But the three years was sort of pushing me over the edge.” Her desire for a short stay took an ironic twist when she discovered how much she liked the job and the location. “I’m now entering my fifth year,” Henretta said in late 2009. “This past year has really been at my request because my children have loved it so much. My son got halfway through high school and basically said, ‘Mom, if you get pulled back to Ohio, you’ll have to leave without me. I love it here, and I want to graduate from the Singapore American School.’
“So imagine me now, after having made a huge stink at the beginning, having to ask to stay. And of course I lost the bet with Dick. We had a lovely dinner with our spouses here in Singapore.”
FINDING THE DISTINGUISHED FEW
Henretta had been with P&G for about twenty-five years when she made the move to Singapore. As is typical of P&G, her leadership potential had been spotted after she was about five years into her career. While P&G is highly selective about its recruits, it doesn’t put people on the leadership watch list right away. Leaders at the senior level are expected to spot potential in those working several levels below them, and high performers with promise to go higher are brought to the attention of higher-level leaders through a well-developed formal talent review process.
It’s a bottom-up system that starts at the second or third level of the company with people who have been around for about five years. Names get passed to the next level, and they work their way to the top, on a business, functional, and corporate basis. Let’s say people in baby care in Japan are doing a talent review in that country. They would give the global baby care business unit the names of the five or so top people working in Japan. Each function would also gather names to send to the corporate function. Of course there are overlaps, because somebody who works in the supply chain in baby care might have his name on two lists, for baby care as a whole and for the supply chain function.
Under Lafley and Antoine, P&G had numerous forums for planning assignments and revisiting succession plans, one aimed at general managers, for example, and another for those deep within the business functions. Three times a year a portion of the top forty or so people in the company—those who led businesses, countries, or functions—came to headquarters to talk about their top leadership talent, including how well each person’s attributes matched up against P&G’s critical success factors. The CEO conducted the discussion. The group reviewed the talent for half the businesses in, say, month four, for the other half of the businesses in month eight, and for all of the corporate functions and countries in month twelve.
“After a few years of tinkering, we finally got them to be very efficient,” Antoine says. “While we have roughly a hundred people on the agenda, we really focus on about thirty. We know these people so well that if no change is needed, we might just put the person’s picture up on the screen. Regarding the thirty we do focus on, we zero in on one or two items that really matter about that person. We don’t have to spend time reading resumes to catch up on their background. And this review was sacrosanct. It was never subject to being taken over by some other agenda item deemed to be more important.”
They experimented with talent reviews in larger groups and found it helped leaders get familiar with high-potential talent outside their business unit. But there was a downside: it sometimes inhibited frank discussion. Lafley and Antoine brainstormed over how to make the discussions more reality-based.
“This candor thing is what we struggled with the most,” Antoine explains. “You don’t want to trash somebody’s career in front of so many people, but you also don’t want to be talking about how great the person was only to find out later that they’ve got warts growing out of their ears.”
The solution was to add a session with the CEO, the head of HR, the vice chairman of that business, and the HR person for that business. Those four people began having meetings after the talent reviews, where they could say, “Okay, let’s talk about these very top people. Who are they, how are they doing, and what assignment plans or interventions do we need to make?” They could be more candid because they weren’t affecting the thinking of some forty other people. And because they knew the people well, they could make suggestions such as “Why don’t you consider some coaching for this person?” Moreover, it was easier to identify leaders who needed to move on. People were added to or dropped from the list of the company’s very top talent, and that information was subsequently reported to the board.
McDonald and Nagrath have since enhanced the talent review process, increasing the time and attention spent on it.
PROBING FOR TALENT OUTSIDE THE FORMAL TALENT REVIEW
Talent is always on the radar screen at P&G—in strategy reviews, innovation reviews, financial reviews, visits to country units or business units, and in-house training programs such as P&G’s General Manager College. The strategy reviews include the head of that business, of course, usually with his or her CFO and a few other key people, and then a handful of the seniormost leaders in the company, including the CEO. Afterward, the corporate leaders often talk informally about how the business leaders handled their strategy review from a leadership standpoint.
Almost all the leaders do a good job, but occasionally someone leaves the senior leaders scratching their heads. If something isn’t clear, the CEO obviously will try to help, but the fuzziness can raise questions: What does that say about the president of that business? What does the fact that her report wasn’t focused say about her leadership style? What does it mean that the person didn’t address one or two key issues that are causing problems within the business? That’s how the strategy reviews inevitably have a leadership element to them. Senior management takes note of the people who brought new thinking to the business and those they have to keep a sharper eye on.
Lafley turned the strategy process into a powerful coaching tool by introducing a novel practice—one we recommend other companies adopt. He reviewed each leader’s strategy document ahead of time and provided handwritten comments to the presenter before the meeting. The feedback might be, “I don’t understand how this will address our number one competitor killing us on pricing” or “Boy, I think you really hit a critical item here.” It is a way of coaching the leader, and the CEO learns something about the person from how he or she responds.
