P&G’s Leadership Case Study – ‘Build From Within’

Succession Planning at P&G

"If I get on a plane next week and it goes down, there will be somebody in this seat the next morning,” - A.G. Lafley, P&G’s CEO as quoted in Fortune magazine.

Lafley took over Procter & Gamble (P&G) as CEO in 2000 and since then has been very successful in increasing sales by 110% and tripling profits. Does he have a succession plan? If he does he has not disclosed it yet and is certainly not overly concerned judging by his above statement. What is the reason? Does P&G have a strong leadership development program

P&G’s Leadership Program and Proctoids

P&G’s leadership program is called “Build From Within”. The program helps track the performance of each manager in a very detailed manner. The program ensures a manager is ready for the next level. According to CEO Lafley, “Each of the top 50 jobs already has three replacement candidates lined up.” Lafley himself oversees the development of the top 150 employees.

At P&G, a business school graduate is recruited at an entry level position. This position offers him/her a major window of opportunity for becoming what's known in the company as a Proctoid (less than 5% of hires come from the outside at a later stage). Proctoids discuss their business goals, their ideal next job, and what they've done to train others during monthly and annual talent review sessions. The recruits select a career track depending on his/her goals and P&G's needs. They are then trained to work in different countries and businesses. This helps build deep bench strength. So when a position is open, P&G has a pool of employees who are ready to move in to the new position in a particular country or region. According to Lafley, "We can fill a spot in an hour, that's the beauty of the system."

Training and Internal Reputation

P&G has a training center near to the CEO Lafley’s office where all executives teach and hold weeklong "colleges" for employees entering new levels. An executive’s willingness to train others ultimately determines who advances. Moheet Nagrath, head of human resources at P&G believes, “If your direct reports aren't ready, neither are you. A manager who isn't good at developing others doesn't attract the best talent [to be on his team]. Internal reputation is crucial.”

Advantages and Success Factors for the program

• Loyalty
• P&G rarely hires from outside, promoting talent from the inside
• At P&G, less than 5% of hires come from the outside at a later stage
• P&G maintains a comprehensive database of its 138,000 employees. An employees’ performance (stars) are tracked carefully through monthly and annual talent reviews.

Disadvantages

• Promoting from within can build well oiled teams that act quickly but at the same time builds an insular culture where most people think in similar ways. This can hinder innovation.

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Jamie Dimon - The man behind JPMorgan's Turnaround

Jamie Dimon (Dimon), president of JPMorgan is referred to as one of the best numbers men around, a Wall Street legend or the right-hand man to Sandy Weill - the titan of banking behind Citigroup. He is also known as an aggressive banker, savage cost-cutter, direct boss who eschews excessive wealth ($44.4 million or £22.2 million annual salary) and invests heavily in philanthropy. In 2007, he was ranked 15 on the 25 most powerful people in business by Fortune.

Dimon was born in New York to second-generation Greek immigrants. He has a degree in biology and economics from Tufts, and a MBA from Harvard. At Harvard he met Sandy Weill. Both went on to create the banking major Citigroup and emerged as a powerful force on Wall Street. In 1998, both separated after having worked together for 16 years. Rumor mills suggested that Dimon was fired by Weill for not promoting his daughter in the company.

After leaving Citigroup, Dimon became the chief executive of Bank One. In 2001, Dimon played a key role in the turnaround of Bank One. In January 2004, he negotiated the acquisition of Bank One by JP Morgan Chase & Company. After the merger, Dimon was appointed President and Chief Operating Officer of JP Morgan Chase. The merger was the third largest acquisition (at the time) in the US history at US$ 58 billion.

Dimon, since then has been aggressively involved with JPMorgan and aims to turn it into the biggest and best banking group in the US. So far, he has been successful in his endeavor and is emerging as one of the most successful navigators of the credit crunch. Over the last few years, he has focused strongly on cutting costs, improving technology and integrating JPMorgan’s disparate operations. But he also has been resolute about preparing the company for an economic downturn. While other investment banks are struggling, Dimon managed several accomplishments one after the other. He co-chaired the summit of world and business leaders in Davos, Switzerland. He even persuaded former Prime Minister Tony Blair to sign on as an adviser and ambassador for JPMorgan. And in what is being regarded as his biggest coup, he has plans to prop up Bear Stearns to avoid a full-blown banking crisis. This draws similar reference to John Pierpoint Morgan (JPMorgan’s founder). JP Morgan financed the US government and other large corporations during the Great Depression and the two world wars. In 1907 during the panic, his organization and personal funding for rescuing of the banking system was representative of the end of a long recession.

Similarly Dimon has played a key role in JPMorgan and the Federal Reserve guaranteeing the huge trading obligations of the troubled firm Bear Stearns. JPMorgan agreed to pay only about $270 million in stock for Bear’s big losses on investments linked to mortgages. Dimon negotiated the deal with Bear and government officials, sleeping only for a few hours over the weekend. Though Dimon had his doubts about the deal and has not been an aggressive acquirer since his joining the company, the quick decision making to buy Bear is outstanding.

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GE and Jack Welch Leadership Case Study

GE and Jack Welch Leadership and Entrepreneurship Case Study

John Francis Welch Jr. better known as Jack Welch needs no introduction as a successful entrepreneur and leader. Jack Welch took a company and transformed it into a world-class performer and the most admired one too. Jack Welch was the the CEO from 1981 to September 2001 of General Electric Corporation (GE) . When Jack Welch handed over control of GE, GE was operating in over 100 countries with about 340,000 employees and $130 billion in annual revenues.

GE entered into diversified businesses ranging from aircraft engines to medical diagnostics, from lighting to appliances, from nuclear power to broadcasting (GE owns NBC) and from plastics to financial services. Most of these businesses were added to GE through almost 1000 odd acquisitions made when Jack Welch was its CEO.

More on Jack Welch's Principles follows....

Anti-Bureaucracy

"If you're not No. 1 or 2 in your field, get out." This statement by Jack Welch sums up his business philosophy. Jack made GE follow this principle by operating it like a small business in spite of its size. ...to be continued.

What is a case study?

Oprah Winfrey - Leadership and Entrepreneurship Case Study

Oprah Winfrey's skills as an entrepreneur are noteworthy. Oprah Winfrey is the Chairman of the Harpo group of companies. Oprah is a top television talk show host. How Oprah became one of the richest women and a successful entrpreneur in the world along with leadership qualities. Oprah's Harpo group entrered into various businesses and Oprah’s role in each of them was excellent. Oprah’s philanthropic ventures are varied and liked by many.

Facts about Oprah Winfrey
Oprah's original name was Orpah Gail Winfrey.
Orpah Gail Winfrey is named after the Moabite woman in the Book of Ruth in the Bible
She became Oprah after Orpah was misspelt in her school records.
Oprah parents: Vernon Winfrey and Vernita Lee
Oprah was born on January 29, 1954.
Oprah was born in Kosciusko (Mississippi, US)
Oprah is ranked as the most powerful celebrity by Forbes magazine
Oprah is the ninth most powerful woman in the world.
Oprah Winfrey is believed to be worth over $1.3 billion.
Talk Show queen, Oprah Winfreys Web site is Oprah.com
Oprah publishes the O magazine

Oprah's public speaking and leadership skills were evident in Oprah right from her early days. Oprah recited sermons from the Bible at her local church when she was less than four years old.

In 2002 Oprah formed a partnership with South Africa’s Ministry of Education to build the “Oprah Winfrey Leadership Academy for Girls”

Oprah’s Angel Network donated $1 million to help tsunami efforts. The Angel Network’s funds are pooled for emergency relief, such as that required by tsunami. Oprah also likes to use these funds to enhance other countries by focusing efforts on education, women and children.

Also read leadership case study on Warren Buffet

Leadership Best Practices

Best Practices in Leadership

Leadership is defined as the abilities and the activities of the leaders in the company to inspire a culture of Business Excellence in achieving the objectives of the company.

Some leadership best practices in leadership that are clearly visible:

• Rewarding performers not only on their financial results, but various other factors. To assess performance, many companies used the Balanced ScoreCard method, developed by Kaplan and Norton
• Top management meet often to discuss methods to improve their business performance
• Meetings and surveys are conducted at regular intervals to include employees in decision-making for company strategy and policies
• Understanding that recognition by peers is an important motivation, the best leaders showed recognition to their performing employees through different methods, such as commendation letters, putting their names on the company’s intranet newsletters, commending in the presence of people respected by the performers and giving small gifts. Formal procedures were also in place in some companies for such assessment and rewarding of performance
• Putting in place a system that allows employees to work on improvement besides providing them the needed resources. In addition facilitators who work with the employees on personal improvement programmes were engaged
• Involvement of top management in setting up Customer Relationship management as well as Supplier Relationship Managements through initiatives such as interactive meetings, two-way visits between the company and the suppliers and customers. The Efficient Consumer Response (ECR) approach was introduced by top-notch companies to build a closer relationship throughout the entire supply chain.