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4. Culture and People
A strong corporate culture is an important part of any good business and attracting and retaining the right people has been a key part of RB’s
success. At the time of the merger, about 80 percent of senior employees were let go as they did not fit the new culture. It was easier to hire new
staff or leave a position vacant, rather than wasting time trying to change people or put the wrong person in the job. During recruitment, there are
four core values that RB is looking for:
- Achievement – we don’t just aim high, we always aim to outperform
- Entrepreneurship – we allow daring ideas to thrive
- Team Spirit – we work as one united by common principles and attitudes
- Ownership – we take initiative to do what’s needed.
RB has a unique culture of ‘constructive conflict’ and values this as a positive problem solving tool. Rigorous discussion and debate is encouraged at their meetings and participants are expected to come well prepared to fight for their ideas and to have thought it through very carefully. At the end of the meeting a decision is made – often whoever has the strongest argument wins! All then agree to get behind and support the decision and move on.
Debate often stems from the significant international diversity that exists within the organisation, with employees bringing different ideas and perspectives to the table. For example, among the top 400 executive employees globally, 49 different nationalities are represented. The global
nature of their Powerbrands means diversity within their management team is crucial to understanding and developing the markets in which they operate.
A global company needs employees with different national perspectives as it encourages ‘risk’ taking. It increases its ability to challenge any “it
won’t work in this market” parochial thinking. Diversity improves creative thinking, challenges existing consumer behaviour models and brings a wealth of ideas to the organisation.
Speed and action
Generating the ideas and making quick decisions is only one aspect however. Getting those ideas to the market fast is imperative. The first to market has the advantage – and the faster the innovation comes to market the longer you have to take advantage of first mover economics. The company structure at RB is flatter than most other organisations. Middle management is limited, bringing the executive team in closer contact with those on the ‘front line’. This helps generate faster response times and also reduces office politics, giving employees more control over their work.
In such a fast paced market, where consensus is not sought, there is no patience for lengthy meetings, glossy presentations or political power plays. Swift decision making is vital if RB expects to be first to market. In an industry that relies on innovation to succeed, they need strategies to get their new ideas to market before their competitors. For RB, this means not worrying if the manufacturing costs of their latest product are not as low as they could be when first launched – although cost cutting starts the very next day. A good example of this is the launch of the Dettol (Lysol) No-Touch soap. The product was first launched in the US market before any competitor products and was so different to anything else in the category
it drove significant growth for the company. At RB, decisions are made fast and innovations are driven globally. As a result, within one year of launching in the first market the No-Touch system was being sold in numerous countries around the globe and has sustained the first-to-market advantage.
RB recognises the value of their high performing employees and they are prepared to pay for it. Remuneration is
consisting of a base salary plus incentives such as bonuses and share options for those who feel confident to push their ideas to get great results.
High performance is not all that is expected of RB managers. International, speedy mobility is part of their cultural style. Given the global stature of their Powerbrands it is an advantage for the management team to move between international offices as their career progresses, gaining experience and invaluable insights into operations and product performance in different markets: taking ideas from one market and introducing them as radical in another.
Keeping production costs under control is important in any business. However, RB considers this just as vital as building sales. A conservative attitude is reflected right across the organisation.
In line with RB’s strategic aim of turning their above industry-average growth into cash, they have set up two cost-cutting teams. The ‘Squeeze’ team looks to reduce the amount of materials used in their packaging, and this can generate significant savings. For instance, in 2009, the team recommended a new, resealable pack of Vanish stain remover as an option for consumers, and saved the company millions by using 70 percent less plastic than the original.
Secondly, the ‘X-trim’ team is responsible for improving efficiency across the entire organisation. This may mean changing the layout of a manufacturing plant, or finding a cheaper way to distribute their products. For example a simple change in the production process of aerosol cans resulted in a major efficiency improvement. The decoration of aerosols cans had always been achieved by printing directly onto the body of the can at the can manufacturer’s factory, before storing the cans by their intended use (e.g. what product they would ultimately contain). These cans were then shipped to the RB factory and stored again until needed for production.
It was decided to label cans after filling in the production process. This resulted in savings through many areas. Firstly there was less inventory of cans, at both the manufacturer and RB factory, as one can could now be used for multiple variants. The printing of labels, and application, was cheaper than printing tin plate, even allowing for the cost of the new labeling equipment. This project resulted in million dollar savings, and resulted in a more flexible production process.