While working his way up from Hyderabad, India, to 1 Procter & Gamble Plaza in Cincinnati, Ohio, Moheet Nagrath came to understand culture well enough to look past it. “I’m pretty convinced that there are superficial differences in culture and communication and how people do things,” said the global human resources officer. “There’s an essence. When you scratch the surface, people have the same needs, the same aspirations, and the same concerns.”
Nagrath spoke in reference to the company’s Purpose, Values, and Principles (or PVPs), written down in the late-1980’s amid P&G’s internationalization, and later translated to multiple languages. The statement sought to capture the company’s existing culture, while creating fresh sinews for integrating Mumbai with Geneva, Mexico City with Cincinnati. Over the years, it came to serve as a moral compass for guiding decisions. “What I tell the new hires is that this is the one thing in the company that will never change, these values and principles,” claimed the P&G Near East general manager.
Yet this universalism – the conviction that “we’re all the same” – sat in contrast to decades of lessons learned globalizing P&G’s billion-dollar brands, the guardians of which sat in the floors below as Nagrath spoke.
In the 1990s, P&G, like other companies, sought to take advantage of global scale and technology platforms, rolling out their products worldwide. But just as tastes for food differ, so do preferences for toothpaste, diapers, soap, and feminine hygiene products. Through trial and error, P&G, like so many other globalizing firms, overcame initial stumbles and became more adept at customizing products to local markets. By the 2000s, they had developed a methodology for a new class of culture-specific line extensions for specific markets, helping drive growth.
Just as the PVP became institutionalized throughout the organization, validating the assumption that “we’re all the same,” brand managers and product developers learned the opposite lesson: “We’re all different.”
Successfully managing with culture in mind is an art based on judgment – like a tightrope act, it hinges on balance. Or according to the words of famed French high wire walker, Philippe Petit, it’s about seeking self-correction and turning it into an art.
In a global organization like P&G, it’s not just about maintaining the balance between two alternatives, but doing so while leading a sprawling organization across roughly 80 national cultures. The tightrope turns into a suspended spider web.
This is what Nagrath and his fellow P&G leaders faced in their blockbuster acquisition of Gillette. They kept their balance and self-corrected using at least four methods:
Decategorize. When contact occurs in a situation like an acquisition and in-groups and out-groups form, members of the in-group have a tendency to homogenize members of the out-group, without attention to the diversity and differences within the out-group. To overcome this, leaders may structure contact situations so that members of the in-group and out-group must treat one another as individuals. P&G leadership took great pains to create integration teams composed of both groups who must work on shared tasks, thus forcing them to personalize their interactions and focus on specific, shared goals.
Recategorize. Another way to overcome in-group/out-group biases is to develop a superordinate category that includes both groups, thus enabling preservation of their cultural identities – and associated attributes – while creating a new, larger in-group. The challenge is to create a new “we.” It is common in mergers, for example, to rename the new organization to communicate this recategorization. Although P&G didn’t rename itself, like other companies, they pursued other forms of renaming.
Mutual differentiation. A related but distinct approach is to identify complementarities and structure group relations around them. Two groups may identify their relationship as a division of labor in service of a common goal. In the process, in-groups develop positive attitudes toward the out-group, while preserving the original identities. For example, Publicis Groupe, a French marketing and advertising agency, preserved acquired agency identities by reconceptualizing relationships as that of a family – families may elbow one another and even fight sometimes, but in the end they are family and help one another. Likewise, Gillette’s focus on male consumers complemented P&G’s expertise in female consumers. Gillette’s merchandising expertise complemented P&G’s branding acumen.
Healthy debate. Sometimes the cultural norms, values, and beliefs may inevitably conflict. At some point the value for hierarchy must contradict egalitarianism or consensus decision-making runs up against clearly demarcated decision rights. P&G leaders called out early the importance of taking the best of both, even if that meant recognizing Gillette practices as better. This was indeed the case in the development of a new decision-making protocol to move P&G away from theirnemawashi tendencies.
Successfully managing through culture depends on the ability to understand it well enough to know whether, when, and how to take it into account. Too much emphasis on difference blinds you to the commonalities between groups. Yet at the same time it is easy to assume that others are just like you, that there is a universal way of being human. As a native from Hyderabad sitting in Cincinnati, Nagrath developed this sensitivity. The managerial art lies in developing awareness to differences without paying undue attention to them. Whether you’re integrating a culturally diverse team or adapting a product for a new market, the key is balance – and to self-correct before you fall.
Sourced from the Harvard Business Journal.