Professional Documents
Culture Documents
AGENDA
1.Introduction 1.1 Procter and Gamble case study 1.2 Procter and Gamble 2. Managerial decision making 2.1. Characteristics of managerial decisions 2.2 Identifying and diagnosing the problem 2.3 Group decisions & group decision management 3. Assignment Procter and Gamble 3.1 History of Procter and Gamble 3.2 Cornerstones of the culture 3.3 The corporate new ventures team 3.4 Functioning of the new ventures team 3.5 Key success factors for entrepreneurial spirit 3.6 Other approaches for corporate new ventures
1. INTRODUCTION
High long term goals to double the business every ten years Establishment of a small Corporate New Ventures team (CNV)
Such approaches need management and good structured decision making, which will be presented subsequently
Lack of structure
Conflict
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Risk
Lack of structure
Uncertainty
Conflict
Most decisions are novel and unstructured - not solvable by existing structures or procedures
Divide in
Programmed decisions
Frequent, repetitive, routine there is certainty regarding cause-and-effect relationships Dependence on policies, rules, and procedures
Nonprogrammed decisions
Novel, unstructured. there is uncertainty regarding cause-andeffect relationships Requirement for creativity, creative problem solving
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Risk
Uncertainty
Conflict
Examples
University
Programmed decisions
How many students will be accepted
Nonprogrammed decisions
Construction of new classroom facilities
Private
Buy a house
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Risk
Lack of structure
Uncertainty
Conflict
Manager has insufficient information to know the consequences of different actions I.e.:
An Important decision under the circumstance nonprogrammed then uncertainty is almost every time connected with the outcome
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Risk
Lack of structure
Uncertainty
Conflict
Exists when the probability of an action being successful is less than 100 percent and losses may occur Manage risk means willing and able to see and to predict different outcomes of a decision
Managers consider all choices within their scope to operate the risk and reduce it to the lowest common denominator
If a manager takes important decisions, which are influencing subordinates, peers or even superiors, he will face resistance Conflict
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Risk
Lack of structure
Uncertainty
Conflict
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Evaluating alternatives
Diagnose problem, awareness of all circumstances - past & present
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valid?
If there is enough time - groups usually make higher decisions than most individuals
Use of more information possible Different perspectives adoptable to all kinds of problems Possibility for intellectual exchange and stimulation
Stakeholders Loyalty and motivation of decision stakeholders kept if part of the group discussion
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Domination
A group member influences the group and leads to a decision he wants to have Every group member tries not to criticize anybody to keep the spirit Leads to low creativity and hinders the ideal decision making Choosing an option that is acceptable even if this is not the best possible solution (due to laziness or time constraints) Battle between two team members Both want to win the fight, and the actual target gets out of sight
Groupthink
Satisficing
Goal displacement
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The managers ability to manage the communication, tasks and potential conflicts The group members ability to interact and influence the others effectively more effective in generating ideas
Bigger group
Experience showed that a group, composed with people from various backgrounds, had the highest outcome
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Values and behaviors change the culture over time & keep it in the company from generation to generation Depends on outside influences
The culture of a company is the collective experience, routines, beliefs, values, goals and the inside informal and formal system of a company
(Howard, 2008)
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P&G produces every product between toilet paper and fruit juice
P&G is a grown company which is based on a really deep and breadth competency
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P&G invested about two billion dollars in 2010 for R&D 50% more than the closest competitor Unilever Target to double sales every ten years
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Since the early years: hiring the best and brightest (sharp examination) Nearly impossible to access P&G as a high ranking manager from outside Every manager is grown from a lower position.
Guarantees to keep the culture of P&G on a high innovative & constant productive level with less negative outside influence Strengthens the satisfaction of the employees & supports the company targets
Profit sharing plan established in 1892. Every employee gets benefit if P&G is successful
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Expertise tied to brands through marketing, management & single brand targets
Internal competition between different brands is effective and biasing regarding the culture behavior Competition led to a protective culture
Information i.e. brand strategy only shared with people who need to know
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Extensive product & market testing before any product gets on the market Established products are tested for years to ascertain that it is better than competing (Customer satisfaction)
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The Corporate New Venture Teams (CNV) were established to bring back the innovation which was the leading virtue of P&G
Within every sector one New Venture team was established to explore the different expertise in the division and to create new products and categories
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Based on seven main officers of the company (independence of the former sector support systems)
ILT had undergone an examination of the structural issues of the company and established a Corporate Innovation Fund to support the NVs
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Sector A NV
Sector B NV
Sector C NV
Sector D NV
Problems:
CNV
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Develop one major new business every year and to create a process for innovation
They established technological and business success criteria for new product innovations
If a team meets the previous set goals they were able to proceed with the project in line with the management Motivation is promoted - No lack of information
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Brand management, R&D, finance, market research and product supply and support
Understand the technological capabilities of P&G Find hidden consumer needs Team members have to understand the functions of a product by themselves - not with the support of plenty of scientists
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Advanced information search system People should go for ideas which they think are interesting
No assigned ideas
Traditional sectors: society science, cultural exploration, demographics New paths: watching newest blockbuster, go for a walk
able to recognize potential connections between trends and show product opportunities Arranged into different trend areas:
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Result of the trend analysis Provided the framework to guide the CNV team to identify the consumer needs and trends
3. Application Areas
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5. Concept Selection
6. Establish Priorites
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First time that at this early stage of concepts the consumer point of view was included
Determining of basic consumer needs Evaluation of technological possibilities to provide the product Determine the business opportunity
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Ideas did not fit perfectly into a special sector No involvement of the different sectors to create an ownership CNV team was not the only creative team
CNV reported to the top management, other groups were separating their ideas from the CNV team
Key: the systematic approach to be disciplined during the idea finding process Important to run the ongoing business and to come up with a high level of entrepreneurship at the same time
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The right people on the right place Constant connection to external knowledge databases
Listening to the market Motivated and reliable employees (Screening of the employees) Internal competition between the different brands Communication (cross connection of different innovation segments)
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One of the biggest competitors of P&G Production of a wide range of food, home and personal care products (Magnum ice cream, Lipton or Knorr)
Category base had the authorization to direct and manage the corporate R&D resources
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Developed to facilitate the knowledge process across the products and business groups Designed to increase the transparency and the innovation process for all Unilever employees
Responsible for the implementation of innovation network Coordination of innovations on the product category level
Group shifted the former divided R&D process from a global, regional and local perception to a European point of view in the Food category
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Fear of the local organizations to lose control over local power Important to set a clear structure and goals of the innovation network
Innovation
Process Management (IPM) program was established to clearly clarify the tasks
Establish certain rules of communication and behavior to be successful Management to be aware of the innovation process in line with
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Innovation culture based on an internal open information exchange network Innovative processes and tools learning and adapting from best practice methods
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Establish regional organizational units to gain better knowledge & connection to regional and local customer needs Regional units act independent in sales, marketing, R&D and supply chains
Basis of the market research are home visits all over the world
Scientists & marketing specialist go into average households and observe customers to identify trends and behavior by monitoring housework and the usage of Henkel or competitor products
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Inno-Power-Teams
Teams are located below the supervisor of a product category Three to seven members from different company parts
Task
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Information gets connected and assigned to different years to establish a long term five year view Roadmaps get established
The puzzle of single information is not useful. Only the linkage of modules and information leads to success
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Conclusion
Innovation is not based on I have an idea-light bulb approach Structured centralized or decentralized managed system to drive a companys business Communication, the constant learning process and the linkage of different thinking people is hereby an important key success factor as well as the collecting of data from surrounding and inside forces
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Conclusion
The management of all these factors will always be an important part to get future businesses and brands into the market
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Questions?
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