P&G Places a Premium on International Experience

In a borderless marketplace, economic patterns and business practices in one region can determine the fate of a company on the other side of the globe. Increasingly, being a corporate leader demands an international background.

   “You have to have an intuitive sense of how the world works and how people behave. It’s at the heart of the strategic imperative,” says Paul Laudicina, vice president of consulting firm A.T. Kearney and author of World Out of Balance: Navigating Global Risks to Seize Competitive Advantage. “There is no substitute for personal experience.”

   At Procter & Gamble, immersion in the world takes the form of an employee going on an international assignment to learn how business is conducted in another country so that the lessons can be applied at home or in another region. As the European supermarket and discount chain Carrefour has grown into the second-largest retailer in the world, for example, P&G managers in Europe must keep the company’s consumer products in prominent places on big-box store shelves.

   There’s no better place for that kind of education than the United States, home to Wal-Mart and Costco. The company might send junior or middle managers across the Atlantic to gain experience in building relationships with giant stores, which can exert more pressure on suppliers.

    It’s not just business practices that can converge—entire countries can. As Poland, Hungary and the Czech Republic integrate into the European Union, their economies may start to act like those of England and Germany.

   “You would want employees to have experience in Western Europe” and transfer that knowledge to Eastern Europe, says Giorgio Siracusa, P&G manager of human resources global business services.

   The majority of P&G’s 140,000 employees work outside the United States. So, a manager who is groomed to take over a top finance position in Russia might go to Britain for a few years to work in a more structured and complex market. P&G assignments tend to follow the Russia-to-England model. Only a quarter of home-to-host relocations originate in the United States; the rest are point-to-point across the globe. When P&G gives employees international assignments, an important part of their mandate is to develop local talent to replace themselves.

   Exposing future P&G leaders to new markets and cultures—39 of P&G’s top 44 global officers have had an international assignment, and 22 were born outside the United States—has produced a deep pool of managerial talent. “That’s an ingredient you must have if you aspire to be a global player in the long term,” says Siracusa, who is originally from Italy and worked for P&G in Poland during the early 1990s.

   P&G chairman, president and CEO Alan G. Lafley was the executive responsible for Asia in the mid-1990s, helping to increase P&G business in China from less than $90 million to nearly $1 billion. Vice chairman Bruce Byrnes was president for paper and beverage products for P&G Europe in the early 1990s.

   As P&G demonstrates, international experience can lead to the corporate suite. “The payoff is that you create a leadership of the future that is not ethnocentric, but has grown up in a global world,” says Gareth Williams, worldwide partner at Mercer Human Resource Consulting.

Workforce Management, April 10, 2006, p. 28 — Subscribe Now!