The Talent Masters, page 15
“Culturally there is a greater sense of hierarchy here, that what the boss says is what you do. And so getting people to be comfortable asking questions or pushing back was something I had to adjust my style to. In the U.S., if you put an idea out there, you might get a whoosh of pushback and ‘Let me tell you the fifteen reasons that isn’t going to work.’ Here you kind of have to pull the devil’s-advocate position out of people. So you have to make time in your leadership approach to do that.”
BREADTH AND DEPTH
For Melanie Healey, who joined P&G in 1990 and is now group president of North America, going global meant leaving Brazil, where she was born and raised by her Chilean mother and British father. Her career began when she graduated from the University of Richmond and landed a job with Wisconsin-based S. C. Johnson in Rio de Janeiro, where S. C. Johnson and other well-known consumer goods companies, including Unilever, Colgate, and Johnson & Johnson, had entrenched positions. She did a rotation of several months in each business function before being assigned to brand management. A few years later, when she got married, she took a job with Johnson & Johnson in São Paulo, where she became a marketing manager.
P&G was conspicuously missing from Brazil in those years, but in 1990 it prepared to make its entry by buying Phebo Soap, a $120 million family-owned company. That move piqued Healey’s interest, for two reasons: first, because of P&G’s reputation as being number one in marketing and brand management, and second, because it was a company known for growing talent. She wouldn’t have to leave to keep learning and growing. When a friend from Johnson & Johnson joined P&G in Brazil, Healey soon followed as one of P&G’s eight local hires in brand management.
With seven years of work experience, Healey was not the typical P&G new hire, but she had something the company needed: on-the-ground knowledge of the Brazilian culture and market. Some thirty-five expats were charged with growing the business in Brazil, and while they knew everything about P&G, they knew little about the specifics of Brazil. “It was a wonderful opportunity to learn from these very experienced people, who had opened the market in several other countries,” Healey says. “And the sense of camaraderie really helped. We formed great relationships among our team from day one as we figured out how to make our mark on the Brazilian market.” Healey led the introduction of Pampers Uni, a low-cost entry into the disposable diaper market that shook the local industry leader from its perch.
Her next assignments, running bar soap and then Downy fabric softener in Mexico, put her brand and marketing management to the test in a completely different venue. Mexico was P&G’s fifth-largest subsidiary, and the brands were well established there. “The point of that assignment was to learn how to operate in a more typical P&G environment as well as to experience a different culture,” Healey explains. “Those three years in Mexico City were great for learning how to operate when P&G resources are at your fingertips. I also learned a new language and came to know a new culture. And then there was the devaluation of the peso in December 1994. That kind of thing happens about every other year in Brazil, but the 1994 devaluation was a big one. I had to manage through that.”
After Mexico came an assignment in Brazil, then another in Venezuela, and then in 2001 a move to Cincinnati. Healey has had several promotions during her nine years at P&G’s home base. Over time, she realized that she was learning something more than the familiar lessons as a result of having lived in Brazil, São Paulo, and Mexico. It’s what she calls peripheral thinking, which is analogous to peripheral vision. It’s a hypersensitivity to subtle changes at the fringes of your environment. Some people call it street smarts, which is apt in her case. “I had developed a little bit of a survival instinct in Brazil, because as a child, I’d go off on my own to get the bus to school or wherever, and your chances of being mugged on the way to the bus were pretty big. You’d be watching every movement, every person’s body language. It wasn’t exactly paranoia, because you had to have pretty good self-confidence. You had to figure out what was happening around you and watch to see if something was a little bit different. Even as an adult in places like São Paulo and Mexico City, I had to think almost cynically about what could happen to me.”
This mental agility translated into instinctive business behaviors. “When something happens, whether it’s a competitive move or someone pitching a new product idea, I pick up on it pretty quickly. I can very readily put myself in the shoes of a competitor, an employee, a subordinate, a boss, and look at things from their perspective and react. When I’m in a meeting, I watch the body language and I can tell whether the person really believes what they’re saying or just feels compelled to say it, or whether there is a conflict between two players. I can figure out the truth of what’s going on in the business or the organization.
“Because of this peripheral thinking and having been in environments that have different constraints, I can see more possibilities. When people in one country say something can’t be done, but you’ve seen it done in three other countries, you can try to help them look at it from a different angle. The developing world is so vibrant, upbeat, and optimistic. They’re so eager and hungry to learn. That attitude is precious.”
As Healey’s varied assignments expanded her breadth of thinking, increasing levels of leadership responsibility deepened her understanding of her business. “In fem care for ten years I was able to develop incredible depth in that category and strong instincts about what worked and didn’t work. I learned how to ask the right questions, which is important when you’re turning a business around or launching new brands or managing a function, which is what I did a lot of. I was able to get deep into R&D, manufacturing, the financial health of the business, so I got to know all the levers I could pull. It was also a different business challenge. In Brazil, my assignment was to build a brand from scratch. In Mexico, I was building on a strong base and business momentum. But fem care had lost a lot of share and was in pretty bad shape. It needed a turnaround to restore top-line and bottom-line growth, and the organization had to be reenergized.
“Now, as group president for P&G North America, which is 40 percent of P&G’s total business, I’m back to breadth versus depth. The North American portfolio is huge, with 123 different brands and subbrands in twenty different categories. I’m charged with the sales force, the supply chain and logistics teams, external relations, marketing, media. I’m committed to training and to formal and informal mentoring as well. It’s impossible to know everything about everything, so you learn to tap into the organization to figure out what is absolutely critical from a helicopter view, and where you need to go deep.
“At the end of the day, it’s that accumulation of different experiences that feeds the capability, and in a sense it amplifies your capacity too because you learn things quickly and can do things faster because of the experience. On that, it’s important to surround yourself with great people, people who complement you. The concept I use is casting for a play. I think about who is the best person to play a particular role. Who has the relevant experience and talents to really help? Jack Nicholson and Tom Cruise are both great actors, but I wouldn’t put Tom Cruise in One Flew over the Cuckoo’s Nest, and I wouldn’t cast Jack Nicholson to star in Top Gun.”
UPDATING THE GLOBAL NETWORK
As they work in different businesses, geographic regions, cultures, and markets over the years, many P&G managers keep up their relationships with former colleagues and bosses (who often become mentors). These global networks help them adapt to new environments and business challenges. Now P&G is institutionalizing them, using social technology to better connect P&Gers around the globe and leverage the learning those relationships provide.
McDonald himself is its champion. “I remember the shock I had in 1991 when I suddenly became responsible for people who weren’t in the same geography I was in. Remember Tom Peters’s book In Search of Excellence, where he talked about managing by walking around? Well, you can’t walk from the Philippines to Korea, so you’ve got to find a surrogate for connecting people. We now have our own internal Facebook and our own internal YouTube, which is consistent with the way people socialize today and with what they’ll need to be effective global leaders in the future.
“How do you get an organization of 127,000 employees in eighty countries to feel small and reachable? One way is by working with different people. In each assignment, you get to know a lot of people from other parts of the world, and as you move across different roles, you keep crossing paths. You develop a critical mass of peers who have international experience.
“The other way is through technology. For example, we’ve started doing worldwide webcasts from various locations in the world in real time. I recently did a town hall meeting in Brazil, which was uploaded to the company website so employees could access it. Meanwhile, the GMs sitting in the audience were communicating back with their organizations in real time, talking about what was taking place on the stage to an organization that might be two thousand miles away. The GMs are given Flip cameras, so they can do on-the-spot interviews and capture reactions for the people back home. Employees can also reach out and ask questions. It’s visual, and real-time.
“These connections are a great foundation for broadening people’s knowledge base about the global consumer and global competition. We’re also discovering that they allow us to deploy our new strategy deeper and more quickly than we ever could before. And the biggest surprise, which really shouldn’t have been a surprise, has been that they help people connect to our purpose—touching and improving lives. The more people feel connected with that purpose, the more fulfilled they feel on the job and the more motivated they will be.”
THE BIG PAYOFF
P&G’s strengthened leadership bench left the company well prepared when A. G. Lafley announced his retirement as the aftermath of the financial meltdown was ravaging many companies’ strategies and leadership. Every CEO in the company’s 172-year history has been promoted within. It’s a great tradition, but one that can be dangerous if tradition is the only point.
Lafley and the board approached the succession decision with one overarching goal: to choose the best person for P&G at that point in time. The search started early, as Lafley made talent planning, including CEO succession, part of his ongoing agenda with the board. Directors started tracking candidates soon after Lafley took office, and they got to know them better by visiting them periodically on their own turf. “We put a lot of horses in the race and let them run until we were ready to make a decision,” Lafley says. The list shortened as the planned retirement date neared, but a handful of viable candidates remained.
When the decision point was a couple of years away, Lafley and the board worked with their own HR experts Antoine and Nagrath and with Bill Conaty to refine the criteria for the CEO job. Integrity, character, and values were absolute essentials, and all of the candidates met that test. The remaining criteria were based on scenarios looking forward five to seven years that helped to pinpoint the issues the new CEO would have to contend with and therefore the skills and traits a leader would need to take the company forward. Consumers’ needs were changing and widely varied, and so were opportunities for growth. In developed countries, the economic downturn was pushing consumers toward lower-priced products. Meanwhile, economic growth in emerging markets meant that hundreds of millions of people were gaining the wherewithal to improve the quality of their lives. P&G needed a leader who understood the complexity of meeting diverse consumer needs through both innovation and cost.
McDonald stood out as a candidate well equipped to build on the company’s momentum and consumer focus and take P&G to a new level. In June 2009, he was named chief executive officer, and on January 1, 2010, he became chairman as well, completing the handoff. A West Point graduate who joined P&G in 1980, McDonald expected to spend his whole career in Cincinnati. Instead he developed his leadership skills in a series of assignments in Canada, Japan, Belgium, and the Philippines—where he saw firsthand how P&G products affected people’s lives, sometimes providing affordable health and hygiene benefits that were truly transformational. P&G’s restated purpose—“to touch and improve more people’s lives, in more parts of the world, more completely”—follows directly from McDonald’s global experiential learning, and he has already started down that road. After bringing the cost structure in line with the economic downturn, he announced a new initiative to have one billion additional consumers using P&G products within five years—in China, India, Brazil, Africa. With people such as Melanie Healey and Deb Henretta in the pipeline, P&G is poised to make his vision a reality.
CONCLUSIONS
Developing talent through experiences expands capability and capacity in the four major components of talent: personal traits, skill mix, relationship building, and judgment about people and business. It was a smart decision to provide Deb Henretta and Melanie Healey with assignments in which they could grow exponentially in all four areas in a short period of time. This is learning by doing, and no book or classroom teaching can substitute for it.
Personal traits. Healey developed a quick sensitivity to changes in key variables, and the ability to read the social dynamics of a group. Henretta came to see past cultural differences to extract an individual’s real meaning. She learned to restrain herself from making conclusions before hearing all sides of the story. Healey and Henretta have shown unmistakably the most important item in talent—the inner drive to learn and then convert learning into their DNA.
Skills. In America Henretta ran one category. In Singapore she is running all categories in fifteen countries, places with different cultures, consumer behaviors, and distribution channels. This kind of experience expands cognitive bandwidth in deciding strategy, allocating resources, and developing competitive advantages. Healey had a breadth of experiences in South America and Mexico, then deepened her knowledge and insincts in one of P&G’s businesses. She learned to drill down to the important details and trust others’ expertise.
Relationships. Henretta’s job in Singapore posed a challenge. She had to develop relationships with the executive, legislative, and regulatory agencies of fifteen governments and deal with all kinds of regulatory constraints and logistical impediments. She is now a key player with the strategy and planning committee of the government of Singapore. Her capacity to deal with the broad business of P&G has grown many-fold. In Healey’s first days with P&G, her relationships among the team members and with constituents were key to breaking into the Brazil market. Later, her relationships with former colleagues and mentors helped her transition to new cultures and address different business challenges.
Judgment. When the scope of Healey’s job outstripped her expertise, she had the good judgment to assemble a team whose capabilities complemented her own and whose expertise she trusted. In Henretta’s Singapore assignment, ambiguity is a constant. Information is seldom timely, often not accurate, and generally incomplete compared with what she was used to when working at P&G headquarters. It’s a great challenge to judgment to know what information to use, which sources to trust, and whose recommendation and opinion should be given higher weight. Similarly, assumptions about consumers, competition, and national trends are always subject to change, and judgment is required to know which old rules of thumb to discard and which new ones to develop. Such a dynamic environment is a huge crucible of leadership development.
In every company we’ve seen so far, it’s a given that the leaders being developed are general managers. That’s not the case for companies in fields such as science and technology, where specialists don’t get many opportunities to develop general management skills. In the next chapter we’ll see how one technology company has created a new breed combining both disciplines.
Chapter 7
CREATING a NEW BREED
of GENERAL MANAGERS
How Agilent Turns Technologists
into Business Leaders
Our increasingly specialized world requires top business leaders with specialized knowledge. The need is clearest in science- and technology-based industries, and in financial services with its ever more sophisticated mathematical tools. But leaders in industries you wouldn’t necessarily think of as expertise-based also need specialized knowledge. A hospital chain CEO, for example, has to know the ins and outs of public policy to work well with regulatory agencies. A case in point is Kaiser Permanente CEO George Halvorson, who has all but made a second career of writing and advising about health care policy. Retailing CEOs, whose companies face fast-changing consumer tastes and proliferating market segments, need deep merchandising expertise and a solid grasp of logistics.
Most companies have long relied on leaders whose specialty is managing—that is, general managers—to take care of business. General managers develop their skills by running profit-and-loss centers, learning from experience in a way that no management course can provide. But it’s hard for managers who aren’t grounded in the discipline of an expertise-based company to lead it effectively. They may not be able to identify salient business issues because they can’t probe their subordinates to get to the real causes of operating or competitive problems or recognize a breakthrough idea. They aren’t equipped to make the best decisions about strategic direction, resource allocation, goals, and key hires.
Companies led by domain experts have their own problems: the leaders rarely know how a business makes money. They get promoted within the silos of their functions or specialties, where there are no P&L opportunities to develop managerial skills. Bringing in seasoned general managers from outside runs up against the first problem we described, and also makes CEO succession planning problematic.
