Proactive, Reactive and Anticipatory Change

Proactive, Reactive and

Anticipatory Change

Eleodor G. Sotropa

Associate Director - Innovation

Global Business Services

Procter & Gamble

Unleash

business

benefits

that count

Create a

strong

foundation

for change

Live long by looking long.

—Tao Te Ching

Agenda

• Context

• A Strong Foundation for Change

– Five steps

• Driving Strategic value

– Business benefits that count

• Six Lessons

• The Future

It’s All About Change

P&G At a Glance • Founded 1837

• HQ in Cincinnati

• $76.5 Billion annual sales

• 138,000 employees

• More than 300 brands sold

in 160 countries

• Operations in more than 80

countries

• Gillette Expansion: October

2005

P&G’s 23 Billion-Dollar Brands

• The market is changing – it’s

harder to reach our consumer

• Consumers are more

demanding than ever

• Our competitors – we have to

work harder to stay ahead

• Innovation is critical to

sustaining long term growth

• Increased productivity = time

for building capabilities and

innovation

The P&G Business Need

Business Landscape 1999

• P&G has sustained

growth and improved the

lives of the world’s

consumers for more

than 160 years.

• Business Challenge:

How can a 160+ year

old company sustain

growth for another 160

years?

Our Opportunity

• Opportunity: Create a stronger

foundation for P&G’s growth by

transforming the Back Office into a

competitive business advantage

• Vision: To become the “go to”

organization for business

transformation

Agenda

• Context

• A Strong Foundation for Change

– Five steps

• Driving Strategic value

– Business benefits that count

• Six Lessons

• The Future

It’s All About Change

Create a strong

foundation for

Change

The Change Journey

Five Steps to a Foundation for Change

1.Going Global

2. Thinking Holistically

3. Growing in Partnership

4. Running as a Business

5. Measuring for Success

1999-2002: Creation of GBS

• Globalized AND standardized

>72 systems in 70 countries

• SAP Integration: Re-engineered

> 70% of our systems

• Formed 13 “service lines”

for business and employee

support

• Reorganized, retrained and

re-focused staff

Business Implications

• Duplicated services across regions

• Structural inability to take

advantage of economies of scale

• Inefficiently allocated staffing and

budgets

“Before”

Our Starting point: A Scattered Structure

In 1999:

Brands / Business Units operating

“independently” in countries around

the globe

Business Services:

“Localized” and dispersed among

business units, brands, geographies

“After”

GBS Service Centers and Data Centers

Cincinnati

San Jose

Newcastle

Brussels

Singapore

Manila

Five Steps to a Foundation for Change

1. Going Global

2.Thinking Holistically

3. Growing in Partnership

4. Running as a Business

5. Measuring for Success

How could a shared service organization really reshape our Company?

Not just IT or HR…but all aspects of business support systems…

Assessing the Holistic Business Needs

GBS’s Service Structure Today:

Employee Services & Solutions Categories

Employee Services

People Management

Facility Services

Computers & Communications

Meeting Services

Travel Services

Business Services & Solutions

Categories

Strategic Sourcing & Procurement

Financial Services & Solutions

Product Innovation

Supply Network Solutions

Consumer Solutions

Customer Solutions

Initiative Management

Business Performance Solutions

Five Steps to a Foundation for Change

1. Going Global

2. Thinking Holistically

3.Growing in Partnership

4. Running as a Business

5. Measuring for Success

Why we did it:

• We needed: Another big

step in our business

model

• What we realized: Could

grow stronger, faster if

we tapped into the

strengths of external

partners.

The Decision to Partner

Leverage Our best, with Their best . . .

How We Did It:

• Considered a “Big Bang”

• Looked for What,

before Who

--- Industry leaders

--- Strong cultural fit

--- Strategic partnerships

• Committed to

completing streamlining

and standardization FIRST

HR / Employee Services

IT Infrastructure

Transactional Accounts Payable

Facilities

Management

• 3 Partnerships

$4.2 Billion agreements

11 months start-to-finish

• Best-in-class industry

leaders

• Strong commitment to

partnership

• Clear measures for

success

What We Did

Five Steps to a Foundation for Change

1. Going Global

2. Thinking Holistically

3. Growing in Partnership

4.Running as a business

5. Measuring for Success

Running GBS as a Business

Why: We wanted to help the

Company do more:

• Grow in breakthrough ways

• Double our business

contribution in the next 4

years

• Deliver lower cost, AND

better services, AND greater

value

P&G’s Approach GBS Equivalents

• Profit/Loss Cost

• Market Share Service Levels

• Sales Volume Value Creation

• Brand Management Service Management

• Consumer Benefits “Total User Experience”

(functional and

emotional)

Running SSO as a Business Borrowing from P&G’s Management Practices

Running GBS as a Business The “New” Terminology

Strategic

Cost Savings Service and value creation

Organizational

How we’re organized What they need

Cost allocation Consumption based

Cultural A captive audience Delighting the user

Either / Or AND

Push Pull

Mandated Services Offerings

Five Important Steps to Creating a Strong

Foundation for Change

1. Going Global

2. Thinking Holistically

3. Growing in Partnership

4. Running as a Business

5.Measuring for Success

• Scorecards

• SLAs

• KEAs

• User Sensing

• Top-to-Top

Connections

Measuring for Success

Agenda

• Context

• A Strong Foundation for Change

– Five steps

• Driving Strategic value

– Business benefits that count

• Six Lessons

• The Future

It’s All About Change

Unleash business

benefits that count

The Path from Reactive to Anticipatory Change

Business Benefits that Count

• Better Service 4 Less

• Scale

• Innovation

• Agility

• Productivity

$600 MM in cost

savings to date

A 16% increase in user

satisfaction with HP last year

Better Service 4 Less

Globalize 72 systems in 70

countries in just 3 years

Replace over 20,000 legacy reports with one reporting tool

@ your fingertips

Scale

Compress Time of

Innovation to Market . . With

Virtualization + Modeling

Revolutionize Delivery of Information by Offering

Personalized Decision Tools

Innovation

Integration of Gillette:

Within 2 weeks, our partners added

700 full-time people to the P&G

business to integrate Gillette

Together: 1100 projects Completed: in 15 months Cost savings: $1 Billion

Agility

Save Time with GBS Services

– helping you to Get Back 30

Building Video Collaboration – using Cisco Technology to

allow Innovators to “Be There without Leaving Here”

Productivity

Today: GBS Change Machine

Global strategy

for products,

Marketing,

R&D, &

Manufacturing

Customer

relationship;

local marketing

& consumer

understanding.

Employee & business

services, IT

infrastructure,

processes & business

support across P&G

Cross-functional

support: HR, PS,

Finance and

Accounting, CMK,

Design, External

Relations, R&D,

Legal, CBD

Agenda

• Context

• A Strong Foundation for Change

– Five steps

• Driving Strategic value

– Business benefits that count

• Six Lessons

• The Future

It’s All About Change

To succeed, you need top-management support

Strive to anticipate the future

Invest in people and new skills

Marketing matters

Shape the culture

Focus is priceless

It’s not always easy… but it is always about Change!

Six Lessons

1. The changing market demands

more personalized, direct

interactions.

2. Predicting the business and key

business drivers is becoming

increasingly important.

3. Greater demands are being placed

on improving speed to market and

innovation delivery.

Create 1:1

connections internally

& externally

Emerging Business Trends:

Strategic Work:

Enable

real-time

decision making

Virtualize

& model

Anticipating the Future

Marketing Matters

We successfully apply the P&G brand

building framework to our GBS services

• Identify our target audience

• Seek insights around what benefits they are

looking for

• We match our messages to meet those

needs

• We want to keep users Informed, Aware &

Engaged

The roll-out of Microsoft

outlook from Lotus Notes

A new generation in video conferencing to

boost global collaboration

Marketing Matters

Agenda

• Context

• A Strong Foundation for Change

– Five steps

• Driving Strategic value

– Business benefits that count

• Six Lessons

• The Future

It’s All About Change

Some Key Concepts…

• Focus on your consumer (user)

and your customer (client)

• Deep consumer understanding

--including un-articulated needs

• Define the What, Who & How

• Use a gated approach

We Borrowed P&G’s Innovation

Process… and adapted it to GBS

Discover

CONCEPT

FRAMING

IDEA

GENERATION

OPPORTUNITY

SEARCH PROTOTYPE

& TEST PILOT LAUNCH

Design Qualify Launch Ready

COMMERC.

PLAN

Defining the Opportunity . . .

• We focus on a few big

opportunities.

• We talk to our top business

leaders to find “what keeps

them up at night”

• We talk to our users using

design shop and consumer

understanding techniques.

Brainstorming & Ideation…

• Design shop techniques (i.e.

Ideo Labs)

• Engage “right side of brain”

• Diverge and converge

several times.

• Produce a mockup of the

experience.

• Consumer (user) belief

• Compelling business

proposition

• Reasons to believe

• Description of desired

experience including a

story board or mockup

The

Defining your Concept…

Building your Mockup…

• Unconstrained concept: Test

“how high is high”

• No real system, good visuals

and good flow that describes

one typical scenario

• It’s non-linear, so be prepared

to Iterate, iterate, and iterate

• Becomes the foundation or

specifications for the first

prototype

Building your Prototype…

• Technical feasibility for

developing FOAK

• This is where you start doing

more serious investing

• Connect & Develop strategy

• If technical constraints change

your promise, re-negotiate

concept with clients and users

• This becomes the kernel for

your pilot test

Build your Pilot...

• Tests entire system including

support processes

• Checks for scale and robustness

• Provides key information for the

commercialization plan

• Purpose is to fine tune, not to

re-design or re-engineer the

proposal

Manage Change: Compress

Time of Innovation to Market . .

With Higher Quality AND Lower

Cost

Revolutionize Delivery of

IT Solutions and Business

Services by Anticipating

This Approach Allows us to…

In the beginning

and to the end:

It’s All About Change