Filippo Passerini, President – Global Business Services and Chief Information Officer of The Procter & Gamble Company

Driving innovation into every corner of the business, taking business services from the back office to the boardroom, to achieve record levels of customer satisfaction, savings, quality levels and business contributions.

Over the past 7 years, Procter & Gamble has tripled profits; significantly improved organic revenue growth and averaged earnings per share growth of 12 per cent.  Our approach to innovation has been core to this success.  Under the leadership of our CEO AG Lafley, P&G has taken a very deliberate approach to innovation and made innovation central to all that we do.

The objective has been to drive innovation into every corner of the business… from brands to business services.

In the next few paragraphs I would like to share with you what this transformation has meant for our Global Business Services organization at P&G.

By making innovation central to all that we do we have taken business services from the back office to the boardroom and achieved record levels of customer satisfaction, savings, quality levels and business contributions.

360-Degree Innovation in Global Business Services

Innovative Structure

In 1999, as we reached the turn of the century, we looked back on a decade of massive expansion.  In just over 10 years, P&G had entered 55 new markets and increased operations to over 80 countries. However, as a company we were not taking advantage of the economies of scale that this global expansion had opened up.  Our approach was very local, we had duplicated services across regions and inefficiently allocated staffing and budgets.

So we stepped back and envisioned a better future.  The model we wanted was what I would call an AND model. We wanted scale and agility.  We wanted better services and lower cost. And we wanted step-changes in collaboration, innovation and productivity. We had a clear vision of bringing the "back office" to the boardroom – leveraging not only IT but all business services to drive business transformation and growth.

To accomplish these goals, we set out to match what was needed with what was possible and create a structure that would offer us the right foundation for growth.  The model was based on 3 strategic choices:

1. Going Global

   Going global meant moving away from a scattered structure and making the choice to deliver services from a single Global Business Services organization.  To achieve this, we consolidated operations into just six coordinated Service and Data Centers.  Today, the majority of our services are delivered from one of these “centres of excellence”.

2. Thinking Holistically

   The decision here was to unite all aspects of business services support.  Today, our business services organization includes over 85 unique services…. From IT, to HR and all aspects of business services support systems.  The advantage here is that we are leveraging synergies across all of our service lines and ensuring that employees see a “common face” for all their service needs.

3. Partnering for Success

   We realized we could grow stronger and faster if we tapped into the strengths of outside experts, so we decided to “connect and develop” in partnership.  This led to the creation of partnerships with industry leaders who, today support us in the areas of IT, facilities management and employees services.  They lead the day to day service deliver, and together, we drive innovation against business priorities.

Innovative Work Processes

With a new structure in place, we set out to transform “how we work” too.  There were two innovations here.  The first is our “run as a business” approach… and the second is our “flow to work” design:

• “Running as a business”

  We made a choice to look at ourselves not as a support service, but as a business.  By talking, and operating, as a business we earned a seat at the business table.  We borrowed from P&G’s management practices too, customizing them to meet our own unique needs.  For example, we used brand management tools to better market our services to internal customers and we used business planning tools to align on priorities and action plans with the business. Our approach to measurement is another example of our “running as a business” approach at work.  We measure our success with our business consumers just like the business measures theirs in the market.  Our experience has been that you really do get what you measure.

• Flow to Work

  "Flow to work" means we refuse to sacrifice agility for the sake of scale. We "flow" our people and resources to business opportunities and priorities, to enhance our contributions to the business, and to empower our people with meaningful work.

The best test of our agility came in 2005 when we acquired Gillette. Working with our partners, we completed the integration in just 15 months.  Under a more conventional set-up, this process would have easily taken three to four years and would have required a headcount of 1,500 additional trained employees. But, working together with our services partners, we were able to assemble a first-class team within a matter of weeks.  With synergy savings of $1.2 billion per year, the unprecedented speed with which we were able to deliver was important.

Results

The 360 degree approach to innovation has helped us to create the right foundation for business services delivery at P&G.  It’s helped us to create the AND model that we were after at the outset:

• We’ve saved nearly $600 million and delivered substantial increases in user satisfaction (16% in the last year alone)
• We are leveraging our scale and staying agile enough to take on major projects like the integration of Gillette…
• And we are supporting innovation with our new IT priorities and by tapping in to the innovation expertise we have internally and externally

As we look into our future, we recognize that we must evolve to take our business model and our innovation potential to new levels. We call this next phase in our evolution GBS 3.0.  It‘s about focusing on services that matter most to the business and delivering ever greater value and efficiencies to P&G.    It’s about simplifying our structure and work processes so we work together even more effectively.  And, it’s about enabling our people to “flow to the work” – so they can focus on innovating rather than be bound or limited by organizational design.

At the end of the day, it’s all about innovation and we’ve learnt that we need to design for it!