Authors: Ravi Madapati,
ICMR (IBS Center for Management Research).
In the late 1990s, growth was hard to come by for P&G. In an attempt to spur growth in mature markets, P&G CEO Durk Jager initiated the Organization 2005 program amidst high expectations. But, he fumbled mid-way. Lafley, who took over the mantle seems to be on the right path but it remains to be seen whether his moves will pay off in the long run.
"Success is defined first and foremost in terms of growth. Unless a company grows at an acceptable rate- year in, year out- it can't sustain its organization. Success also means growing profitably. Otherwise, it can't produce the resources and capability to invest, to take risks, seizing new opportunities. The program we lay out here today is designed to deliver that growth, at a consistently higher level. Just come back in a couple of years and take a look. I believe that the best way to accelerate growth is to innovate bigger and move faster consistently and across the entire company".
Jager indicated that the cultural changes he planned to introduce would create an environment that produced bolder, more stretching goals and plans, bigger innovations and greater speed. As part of the exercise, Jager redesigned the reward system to strengthen the link between executive compensation and results.
1] P&G press release: Organization 2005 Drive For Accelerated Growth Enters Next Phase, June 9,1999.