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What Makes P&G Great

Last summer I was invited to visit Procter & Gamble’s headquarters in Cincinnati. I was filled with nostalgia, for that is where I began my career in marketing and general management long ago, and I had not been back in over two decades. At first I was struck with the strangeness of the place. There was a coffee bar in the lobby, turnstiles blocked the elevators, and I recognized few faces. But by the time I left, I realized that the truth was more complex, and therein lies the secret of P&G’s continuing success.

The changes were substantial. I was stunned, for example, when a senior executive explained how marketing agencies are now managed and compensated: so different from the model I had grown up with. Some brand groups – the heart of the company’s machine – no longer work at the main building, but rather are with multi-functional teams at technical centers. And the technology community, long dominated by not-invented-here syndrome, has enthusiastically embraced open innovation.

But for all the change, what is most important has not changed at all. Curiosity about consumers’ habits, needs, and interests pervades all activities. People are treated with respect and courtesy. Managers are on a continuous hunt for new learnings. Success is less important than progress and creative hypotheses. Data rules all. Crisp, clear communication of ideas – the message – is as important as the idea itself. Decisions are made deliberately and methodically.

These are enduring values. They are not challenged and do not change. And because there is this rock-solid foundation of unchanging values, everything else can change without disruption.

The past, of course, is no promise of the future. Consider Japan. Japan’s cultural homogeneity and shared values allowed it to transform itself at breathtaking speed from feudalism into a modern power during the late 19th century, and from wartime devastation into a global economic powerhouse in the late 20th century. And yet it has been unable to transform again to overcome its twenty-year-long malaise. Similarly, in the 90′s when a new CEO pushed P&G to change too quickly, the company lost its way.

Still. Young companies could do worse than studying and emulating P&G. Discover your values and make them your foundation. Anything else can change.

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