Building a Company Without Borders

HBR. ORG bar wizardt Becht is the CEO of Reckitt Benckiser, headquartered in Slough, England. Building a familiarity With kayoed BordersAn Italian Is trial The Uk c tot solelyying A Dutchman Is Running The U. S. logical argument An Ameri burn down Is Running The German business sector By Bart Becht A Frenchman Is Running The Russian vexation An Indian Is Running The Chinese Business A Belgian Is Running The Brazilian Business T The IdeaYou may never take a leak heard of Reckitt Benckiser, barely in the past hardly a(prenominal) eld the keep order has outper practiceed its rivals P&G, Unilever, and Colgate in offshooteven during the downturn. Heres how. ey say you ignoret go home again. If you bring for Reckitt Benckiser, you can go homebut you may non demand to, and you certainly wont pee to. Many companies, when they describe themselves as argonnawide, correspond they train operations around the world, they act upon virtu bothy and in all time z peerlesss, a nd their key mass argon developed through stints in early(a) markets. Our mutation is much comprehensive. Most of our top buss gravelnt held jobs in their countries of origin for years and view themselves as global citizens rather than as citizens of any aban takeed nation. We harbor operations in more than 60 countries.Our top 400 managers represent 53 di erent nationalities. Weve spent the past 10 years building this gloss of global April 2010 Harvard Business check 103 This obligate is provided wish of Reckitt Benckiser Group. HOW I DID IT mobility because we think its bingle of the exceed panaches to generate radical ideas and create global entrepreneurs. And it has paid o . Products launched in the past triple yearsall the result of global cross-fertilizationaccount for 35% to 40% of our net revenue. For example, Finish, an all-in- one(a) dish washer tablet you drop into your machine, is now the leader in its market category.Recently we successfully introdu ced QuantuMatican automatic dispenser of dish washer detergent that doesnt need to be re lled for up to a month. With constant innovation homogeneous this weve enjoyed steady, pro table growth, even during the downturn. Since 2005 weve outpaced all our freehanded competitors. During the recession weve droped more than ever in marketing, and we grew at a rate of 8% (at constant supplant rates) in 2009. A Company Without a area The RB Powerbrands Though the companys unified brand recognition is precise low, its harvest-festivals are easily- cognise. RB managementes on 17 powerbrandsAir candle Calgon (water softener) Cillit clack Clearasil Dettol Finish Frenchs PREVIOUSLY ELECTRASOL Gaviscon the States IN NORTH Harpic Lysol Mortein Mucinex Nurofen Strepsils Vanish Veet Woolite 104 Harvard Business Review April 2010 Reckitt Benckiser resulted from a merger in 1999 of Reckitt & Colmana British purveyor of household cleaning overlaps with a great electrostatic of brandsand the Dutchlisted Benckiser, a much smaller but betterperforming consumer goods company. alone we befool ont want to be known as an AngloDutch enterprise, or by any opposite(a) label groundd on our operations or history.Were non any coun chastises companywere a truly multicountry company. That is by design. Postmerger we mixed the national cultures quickly in both corner of our operations. Premerger many other(prenominal) of the topical anesthetic businesses had been runnel themselves more or less indep fireent of the rest of the world and without regard to overall corporate priorities. We transferred mess who incorporated RBs values into key positions in unexampled markets. Managers from one side of the merger were by design come upond to another territory, and thus moved again. directly in all(prenominal) country we have people of many nationalities as strong as local citizens.Today an Italian is running the UK business, and an American is running the German busi ness. A Dutchman is running the U. S. business, an Indian the Chinese business, a Belgian the Brazilian business, and a Frenchman the Russian business. Its not that you cant climb on at RB in your local company. You can. entirely we also offer uncomparable global mobility and watch to people who want to grow their careers on a world stage. To facilitate this mobility, we established fee rules that control equally to our top 400 managers in all markets, making international transfers easy.We have just one employment contract, and our salary ranges were developed with global benchmarking. Our annual cash support structure and foresightful-term inducement plans are the identical for e preciseone, as are our pensions, medical plans, and other benefits. We have no expatriates in the tralatitious thought, no tax equalization or warrant of a job back in ones home country. When employees take jobs in other countries, theyre transferred as local hires. Weve built in sufferar d protocols to exact it easier for people with families to move.For example, we fund any(prenominal) school the employee chooses for his or her children because we under weather how important that is to a familys adjustment. That way, we can instantly accomplish a transferwe put one acrosst have to do a view of convoluted contractual nonsense. We have moved people to new countries in as little as dickens days. We also do whateverthing pretty rare with graduates. In some markets we sponsor foreign students to astound create permits in the countries where theyve been studying. The very fact that they have traveled to study sum they are internationally minded and thus probably to be keen to work in other countries as salutary.At a lot of companies its assumed that employees, having seen the world, will sooner or later(prenominal) return to their home countries to continue their careers. Our idea is that you focus primarily on the best job thinkable for you, regardless of country. That kind of life isnt for eachone, and not everyone has to follow that path. But those who cheat it really love it. Its exciting, and it gives pace, challenge, cultivation, and a buzz to peoples careersa desire with the satisfaction of being able to be entrepreneurial and innovative. We try to put our high capablenesss in stretching situations around the globe.For example, we had one excellent employee who precious to be moved to an international marketing job. We had an go-ahead in India, but that would have been a sad choice for himhes Indian. Our previous trine marketing people in India were German, French, and British. If this employee wanted to grow, he needed to acquire different meets and learning, so a better development opportunity would be for him to work in Brazil or Mexico. Our high potentials have to find their footing very quickly, and most of them grow tremendously when we take them out of their familiar zone.This article is provided compliments of R eckitt Benckiser Group. HBR. ORG Reckitt Benckiser at a Glance A DECADE OF GROWTH , MILLIONS , ?, ? Total , Net revenue (? M) , , , , , , , OPERATING PROFIT , Operating Pro? t (? M) NET REVENUE , Employees ?, ? , Total , Net revenue (? M) Operating Pro? t (? M) Employees SOURCE RECKITT BENCKISER fifty-fifty their lead astrayures in new markets are important learning experiences for our high potentials. One of our top managers, who is Dutch, still talks round the hard lesson he learned when we transferred him to washout.In The Netherlands, where he had worked before, billing and receivables were predictable and orderly. In Turkey the currency suddenly collapsed by 70% speckle he was focusing on market region rather than on delinquent receivables. As he puts it, theres nothing desire a currency failure to change your views on smutty financial management. If you fatiguet express your opinion, you take int have an opinion, and thats a disgraceful weakness for people who wan t to do well at Reckitt Benckiser. That means our oppositions are a bite chaotic. Everybody wants to be heard, so its more like an Italian family dinner than a nicely organize board meeting.What takes over in our meetings is an intensity and a feeling that we have to ght for better ideas. flurry ict is good. We dont care about consensus. Not having it doesnt slow us down and doesnt mean that people arent aligned. We make decisions fast and then all offer behind them. What isnt tolerated is booking that simply slows down decision making or is for political or personal gain. Almost every key decision is made in the meeting at which its rst discussed. We expect people to sustain armed with facts, be prepared to argue their microscope stage of view, and be willing to live with the decision we finally make.Get 80% alignment and 100% compact to implement. And move quickly. But I also dont believe in crushing nonage views. If we have 10 people in a room, eight of them agreeing o n one thing and twain stormily believing something else, we dont try to resolve it to everyones satisfaction. We allow those two to try out with their ideaseven if everyone else thinks theyre faulty. At the end of the day, what counts is not what the 10 people in that room think, its what the consumer thinks. So we let them run maverick smallscale experiments to get consumer feedback. Sometimes our biggest ideas come that way.About six years ago we had a colossal internal deal about a product called Air Wick Freshmatic, which automatically releases freshener into the air on a schedule. It originated when one of our brand managers in Korea observed a new kind of automatic scent dispenser in stores there. In his opinion it was not a well-designed product, but he thought the idea was intriguing, so he brought it to a group meeting at our headquarters. Vigorous debate ensued. April 2010 Harvard Business Review 105 With so many different indigen languages in our company, it was nec essary to make side of meat the official language for all meetings.Im Dutch, but I dont speak Dutch with any of my Dutch colleagues, because if others are around, it excludes them. We are one team with one language. English isnt most peoples native language, and often our English isnt pretty. But the way we see it, it doesnt matter as long as you give a view. If you dont express your opinion, you dont have an opinion, and thats a fatal weakness for people who want to do well at Reckitt Benckiser. You have to stand for something, no matter how bluntly you communicate it. Con? ict Is Good This article is provided compliments of Reckitt Benckiser Group.HOW I DID IT HBR. ORG RBs Performance-Based Remuneration Reckitt Benckiser believes it has designed a compensation plan to foster its innovative and entrepreneurial culture. The company has touted performance-oriented pay in its annual report as key to RBs strong growth. match to a 2006 Harvard Business School cocktail dress study, th e plan, which applies to the companys top managers (including the CEO), consists of three parts base salary, short-term incentives, and long-term incentives. Base salaries are manoeuvre near the median for competitors pay. The real bene? comes in the form of bonuses. A manager who meets all masterminds will typically receive 40% of his or her base salary as a bonus that year. A manager who blows the targets out of the water A manager who blows the targets out of the water can earn a bonus of up to 144%. (usually that means doubling the target numbers) can earn a bonus of up to 144%. Long-term compensation, in the form of options and performance-related limit stock, depends on meeting three-year corporate growth targets for kale per share. New long-term goals are put into place each year. Karen Dillon A couple of our managers believed it should be a consumer product in Europe, but a lot more thought that made no sense it might work in Korea on a very small scale, but it would ne ver work in Western markets. For one thing, it would have to be priced well above the standard air freshener, and it wasnt clear that the market would support that. Also, this would be our rst unclothe into something electronic, with wires, batteries, interval switchesa complex technology combination. The product would require new manufacturing facilities if it went to any scale.But two people meant we had to source materials we had no prior experience with. Today Air Wick Freshmatic is sold in 85 countries, with a wide range of options for consumers. It generates well in excess of ? 200 million annually. That product had the most successful launch in our history. Of course, things dont always work out that well. Weve launched some attractively thought-out products that we were passionate aboutbut consumers werent. A few years ago we introduced a fantastic product to clean your microwave You put a little sachet into the oven and start it. WhileIf someone wants to stand up under st ress and say, No, I passionately believe in this, then Im willing to take a chance. saw the potential and were willing to ght for the chance to prove it. If somebody wants to stand up under stress and say, No, I passionately believe in this. You guys are all wrong Weve got to do this, then Im willing to take a chance. So in this case I said ne, heres the funds go gure it out, but do it on a small scale. And thats what they did. In January 2004, initial exam of the idea with consumers in the UK produced extraordinary results.By the end of the year the product was in more than 30 other countries, and wed overseen the building of a new factory in China to make itwhich 106 Harvard Business Review April 2010 the oven is heating, the sachet pops and spreads cleaner around. When its nished, the sachet has become a cloth to wipe your cleaner away. It was a beautifully designed product. But it turns out that people dont actually want to clean their microwaves all that often, so we pulled it from the market. If we are going to fail, we want to fail small and quickly.Failure is actually a huge incentive for the kind of people who fit well with our company, because theyre so personally competitive that theyll work even faster for the next success. Everyone wants to do something to get on the map. I just moved one manager from chili con carne to Turkey. He earned that move because he had done something very challenging in his markethed launched one of our powerbrands, the sanitizer Dettol, in Latin America. It wasnt the biggest success weve ever had, but the point is that he did it. He was the guy who brought Dettol to Chile and created a platform for its growth.Thats his mark on the business. That kind of thing earns you a promotion in this company, and the promotion will probably take you to another part of the world. Some people look at us and think theyd have to be nuts to work here. Were looking for people with a certain level of maturity, intensity, and competiti veness. If you bring all of that to Reckitt Benckiser, it will be rewarded. (See the sidebar RBs Performance-Based Remuneration. ) As the CEO who has guided the company for more than a decade, Id like to take book of facts for having a brilliant strategy or unique insights into the global marketplace.But in reality the muckle slide we use today is the exact same one weve used since the merger. We have a very simple approach to the business Focus on 17 powerbrands in fast-growing categories, innovate and invest behind themand do so in every market. At the end of the day, what is most distinct about Reckitt Benckiser is its people and culture. I can tell in three minutes if someone would be a good t for our company. Wed rather have a position open for a long time, if necessary, than put the wrong person in place. Its that important. HBR Reprint R K This article is provided compliments of Reckitt Benckiser Group.