Building a Company Without Borders

HBR. ORG Bart Becht is the CEO of Reckitt Benckiser, headquartered in Slough, England. Erection a Conway Externally Borders An Italian Is Ordinary The Uk Calling A Dutchman Is Ordinary The U. S. Calling An American Is Ordinary The German Calling By Bart Becht A Frenchman Is Ordinary The Russian Calling An Indian Is Ordinary The Chinese Calling A Belgian Is Ordinary The Brazilian Calling T The Idea You may nforconstantly possess heard of Reckitt Benckiser, but in the departed few years the conway has outperformed its rivals P&G, Unilever, and Colgate in enlargement—uniardispose during the downturn. Here’s how. ey say you can’t go settlement intermittently. If you achievement for Reckitt Benckiser, you can go settlement—but you may not shortness to, and you unquestionably won’t possess to. Sundry companies, when they define themselves as global, moderation they possess operations encircling the universe, they achievement virtually and in all era zones, and their key individuals are exposed through stints in other chaffers. Our rendering is further generic. Most of our top directors possessn’t held jobs in their countries of rise for years and conception themselves as global citizens rather than as citizens of any dedicated commonwealth. We possess operations in further than 60 countries. Our top 400 directors state 53 di erent commonwealthalities. We’ve departed the departed 10 years erection this amelioration of global April 2010 Harvard Calling Reconception 103 This condition is granted commendations of Reckitt Benckiser Group. HOW I DID IT cessationlessness owing we conceive it’s one of the best ways to engender new purposes and ardispose global entrepreneurs. And it has hired o . Products agoing in the departed three years—all the effect of global cross-fertilization—account for 35% to 40% of our net fruits. For pattern, Finish, an all-in-one dishwasher tablet you ooze into your instrument, is now the head in its chaffer state. Recently we prosperously introduced QuantuMatic—an habitual dispenser of dishwasher detergent that doesn’t scarcity to be re lled for up to a month. After a while perpetual newfangledness enjoy this we’ve enjoyed consistent, pro table enlargement, uniardispose during the downturn. Gone 2005 we’ve outpaced all our big competitors. During the recession we’ve endueed further than forforconstantly in chaffering, and we grew at a retest of 8% (at perpetual modify reproves) in 2009. A Conway Externally a Province The RB “Powerbrands” Though the concourse’s corporetest stigma confession is very low, its fruits are polite-known. RB centrees on 17 powerbrands: Air Wick Calgon (imdivorce softener) Cillit Bang Clearasil Dettol Finish French’s PREVIOUSLY ELECTRASOL Gaviscon AMERICA IN NORTH Harpic Lysol Mortein Mucinex Nurofen Strepsils Vanish Veet Woolite 104 Harvard Calling Reconception April 2010 Reckitt Benckiser effected from a merger in 1999 of Reckitt & Colman—a British purveyor of free uncloggeding fruits after a while a big stanch of stigmas—and the Dutchlisted Benckiser, a ample trivialer but reformperforming consumer commodities concourse. But we don’t shortness to be notorious as an AngloDutch operation, or by any other letter shamefuld on our operations or narrative. We’re not any province’s concourse—we’re a in-truth multiprovince concourse. That is by artfulness. Postmerger we modified the commonwealthal ameliorations immediately in fortotal retreat of our operations. Premerger sundry of the national callinges had been ordinary themselves further or short rebellious of the cessation of the universe and after a whileout consider to aggravateall corporetest previousities. We epidemic individuals who symbolical RB’s values into key collocations in new chaffers. Managers from one guilee of the merger were purposely stird to another domain, and then stird intermittently. Now in fortotal province we possess individuals of sundry commonwealthalities as polite as national citizens. Today an Italian is ordinary the UK calling, and an American is ordinary the German calling. A Dutchman is ordinary the U. S. calling, an Indian the Chinese calling, a Belgian the Brazilian calling, and a Frenchman the Russian calling. It’s not that you can’t sgait at RB in your national concourse. You can. But we too prproffer sole global cessationlessness and test to individuals who shortness to accrue their custodyers on a universe extent. To expedite this cessationlessness, we actual amercement rules that use resembling to our top 400 directors in all chaffers, making interunconcealed transfers unconstrained. We possess quiet one tenure decrease, and our remuneration disposes were exposed after a while global benchmarking. Our annual coin benefit comcollocation and crave-term inducement guiles are the corresponding for foreveryone, as are our pensions, medical guiles, and other benefits. We possess no expatriates in the transmitted significance, no tax equalization or answer-for of a job tail in one’s settlement province. When employees procure jobs in other countries, they’re epidemic as “national hires. ” We’ve built in plummet protocols to execute it easier for individuals after a while families to stir. For pattern, we capital whatforconstantly instruct the employee chooses for his or her result owing we perceive how leading that is to a extraction’s settlement. That way, we can directly achieve a transfer—we don’t possess to pass a lot of convoluted decreaseual pretense. We possess stird individuals to new countries in as inconsiderable as two days. We too do somebeing tolerably noble after a while graduates. In some chaffers we aid irrelevant students to get achievement permits in the countries wclose they’ve been examineing. The very occurrence that they possess traveled to examine moderations they are interpolitically minded and thus enjoyly to be aware to achievement in other countries as polite. At a lot of companies it’s inconsequent that employees, having “seen the universe,” conquer afront or after yield to their settlement countries to endure their custodyers. Our purpose is that you centre principally on the best job feasible for you, considershort of province. That skin of activity isn’t for foreveryone, and not foreveryone has to supervene that way. But those who huskness it veritably huskness it. It’s sensational, and it yields gait, question, education, and a buzz to individuals’s custodyers—acrave after a while the content of substance able to be entrepreneurial and innovative. We try to put our elevated germinatives in stretching situations encircling the earth. For pattern, we had one praiseworthy employee who shortnessed to be stird to an interunconcealed chaffering job. We had an gap in India, but that would possess been a penniless valuable for him—he’s Indian. Our previous three chaffering individuals in India were German, French, and British. If this employee shortnessed to accrue, he scarcityed to reap incongruous tests and education, so a reardispose harvest occasion would be for him to achievement in Brazil or Mexico. Our elevated germinatives possess to meet their condition very immediately, and most of them accrue tremendously when we procure them out of their affable zone. This condition is granted commendations of Reckitt Benckiser Group. HBR. ORG Reckitt Benckiser at a Glance A DECADE OF GROWTH , MILLIONS , ?, ? Total , Net Fruits (? M) , , , , , , , OPERATING PROFIT , Operating Pro? t (? M) NET REVENUE , Employees ?, ? , Total , Net Fruits (? M) Operating Pro? t (? M) Employees SOURCE RECKITT BENCKISER Uniardispose their demands in new chaffers are leading education tests for our elevated germinatives. One of our top directors, who is Dutch, quieodor talks encircling the solid shorton he erudite when we epidemic him to Turkey. In The Netherlands, wclose he had achievemented anteriorly, billing and receivables were predictable and quiet. In Turkey the publicity suddenly furled by 70%—while he was centreing on chaffer divide rather than on criminal receivables. As he puts it, there’s nonentity enjoy a publicity demand to exexchange your conceptions on neat financial government. If you don’t sharp-ended your subject, you don’t possess an subject, and that’s a lethal inconclusiveness for individuals who shortness to do polite at Reckitt Benckiser. That moderations our parleys are a bit chaotic. Everybody shortnesss to be heard, so it’s further enjoy an Italian extraction dinner than a nicely arranged consultation parley. What procures aggravate in our parleys is an attention and a consciousness that we possess to ght for reardispose purposes. Con ict is cheerful. We don’t custody encircling consensus. Not having it doesn’t dilatory us down and doesn’t moderation that individuals aren’t aligned. We execute sentences unswerving and then all remain rearwards them. What isn’t tolerated is encounter that simply dilatorys down sentence making or is for political or specific mould. Almost fortotal key sentence is made in the parley at which it’s rst discussed. We await individuals to follow defended after a while occurrences, be disposed to persuade their sharp-end of conception, and be conquering to speed after a while the sentence we nevertheless execute. Get 80% alignment and 100% obligation to instrument. And stir immediately. But I too don’t regard in crushing boy conceptions. If we possess 10 individuals in a ground, end of them coincident on one being and two ravingly refined somebeing else, we don’t try to counteract it to foreveryone’s content. We remit those two to illustration after a while their purposes—uniardispose if foreveryone else conceives they’re evil-doing. At the end of the day, what counts is not what the 10 individuals in that ground conceive, it’s what the consumer conceives. So we let them run maverick triviallamina illustrations to get consumer feedback. Sometimes our biggest purposes follow that way. About six years ago we had a prodigious interior deliberate encircling a fruit designated Air Wick Freshmatic, which habitualally releases freshener into the air on a register. It riseated when one of our stigma directors in Korea observed a new skin of habitual odor dispenser in stores there. In his subject it was not a polite-calculated fruit, but he reflection the purpose was intriguing, so he brought it to a order parley at our headquarters. Vigorous deliberate ensued. April 2010 Harvard Calling Reconception 105 After a while so sundry incongruous exported talks in our concourse, it was expedient to execute English the negotiative talk for all parleys. I’m Dutch, but I don’t utter Dutch after a while any of my Dutch colleagues, owing if others are encircling, it excludes them. We are one team after a while one talk. English isn’t most individuals’s exported talk, and repeatedly our English isn’t tolerably. But the way we see it, it doesn’t subject as crave as you yield a conception. If you don’t sharp-ended your subject, you don’t possess an subject, and that’s a lethal inconclusiveness for individuals who shortness to do polite at Reckitt Benckiser. You possess to remain for triton, no subject how obtusely you divulge it. Con? ict Is Cheerful This condition is granted commendations of Reckitt Benckiser Group. HOW I DID IT HBR. ORG RB’s Performance-Based Remuneration Reckitt Benckiser regards it has artfulnessed a amercement guile to raise its innovative and entrepreneurial amelioration. The conway has touted performance-oriented pay in its annual narration as key to RB’s vigorous enlargement. According to a 2006 Harvard Calling Instruct plight examine, the guile, which applies to the concourse’s top directors (including the CEO), consists of three divorces: shameful remuneration, short-term inducements, and crave-term inducements. Shameful salaries are set neighboring the median for competitors’ pay. The existent bene? follows in the ardispose of benefites. A director who meets all targets conquer typically entertain 40% of his or her shameful remuneration as a benefit that year. A director who blows the targets out of the imdivorce A director who blows the targets out of the imdivorce can win a benefit of up to 144%. (usually that moderations doubling the target mass) can win a benefit of up to 144%. Long-term amercement, in the ardispose of options and performance-related cessationricted hoard, depends on parley three-year corporetest enlargement targets for winings per divide. New crave-term goals are put into settle each year. Karen Dillon A couple of our directors regardd it should be a consumer fruit in Europe, but a lot further reflection that made no significance— it authority achievement in Korea on a very trivial lamina, but it would nforconstantly achievement in Western chaffers. For one being, it would possess to be priced polite over the plummet air freshener, and it wasn’t disengaged that the chaffer would subsistence that. Also, this would be our rst inroad into somebeing electronic, after a while wires, batteries, meanage switches—a compound technology confederacy. The fruit would suitable new manufacturing facilities if it went to any lamina. But two individuals moderationt we had to cause materials we had no previous test after a while. Today Air Wick Freshmatic is sold in 85 countries, after a while a ample dispose of options for consumers. It engenders polite in debauchery of ? 200 darling constantlyy-year. That fruit had the most prosperous expatiate in our narrative. Of way, beings don’t frequently achievement out that polite. We’ve agoing some beautifully reflection-out fruits that we were raving encircling—but consumers weren’t. A few years ago we introduced a supernatural fruit to unclogged your microwave: You put a inconsiderable sachet into the oven and set-on-foot it. While If someone shortnesss to remain up inferior urgency and say, “No, I ravingly regard in this,” then I’m conquering to procure a casualty. saw the germinative and were conquering to ght for the casualty to test it. If triton shortnesss to remain up inferior urgency and say, “No, I ravingly regard in this. You guys are all evil-doing! We’ve got to do this,” then I’m conquering to procure a casualty. So in this plight I said ne, close’s the money— go gure it out, but do it on a trivial lamina. And that’s what they did. In January 2004, judicious testing of the purpose after a while consumers in the UK executed unprecedented effects. By the end of the year the fruit was in further than 30 other countries, and we’d aggravateseen the erection of a new occurrenceory in China to execute it—which 106 Harvard Calling Reconception April 2010 the oven is heating, the sachet pops and spreads uncloggeder encircling. When it’s nished, the sachet has befollow a cloth to wipe your uncloggeder detached. It was a beautifully artfulnessed fruit. But it turns out that individuals don’t substantially shortness to unclogged their microwaves all that repeatedly, so we pulled it from the chaffer. If we are going to lose, we shortness to lose trivial and immediately. Failure is substantially a prodigious inducement for the skin of individuals who fit polite after a while our concourse, owing they’re so specificly competitive that they’ll achievement uniardispose unswervinger for the proximate consummation. Everyone shortnesss to do somebeing to get on the map. I quiet stird one director from Chile to Turkey. He wined that stir owing he had performed somebeing very challenging in his chaffer—he’d agoing one of our “powerbrands,” the sanitizer Dettol, in Latin America. It wasn’t the biggest consummation we’ve forforconstantly had, but the sharp-end is that he did it. He was the guy who brought Dettol to Chile and arranged a platardispose for its enlargement. That’s his vestige on the calling. That skin of being wins you a preferment in this concourse, and the preferment conquer probably procure you to another divorce of the universe. Some individuals behold at us and conceive they’d possess to be nuts to achievement close. We’re beholding for individuals after a while a actual raze of manliness, attention, and competitiveness. If you bear all of that to Reckitt Benckiser, it conquer be rewarded. (See the guileebar “RB’s Performance-Based Remuneration. ”) As the CEO who has guided the conway for further than a decade, I’d enjoy to procure praise for having a beaming strategy or sole insights into the global chafferplace. But in existentity the “vision” slide we use today is the suitable corresponding one we’ve used gone the merger. We possess a very unblended appropinquation to the calling: Centre on 17 powerbrands in unswerving-growing categories, innovate and endue rearwards them—and do so in fortotal chaffer. At the end of the day, what is most different encircling Reckitt Benckiser is its individuals and amelioration. I can judge in three minutes if someone would be a cheerful t for our concourse. We’d rather possess a collocation unconcealed for a crave era, if expedient, than put the evil-doing individual in settle. It’s that leading. HBR Reprint R K This condition is granted commendations of Reckitt Benckiser Group.