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CASE STUDY 3-4 Linking Performance Management to Strategy at Procter & Gamble Consider the following description of a firm-wide strategy pur- P&G process in an attempt to reduce costs, and ended up sued by Procter & Gamble: creating an innovative products line they dubbed "basico" Procter & Gamble (P&G), the world's largest (for "essential in Portuguese). The team members felt that consumer products company, follows a fairly unique strat- they were doing good for the world, not just making money egy: P&G appeals to the heart and cares about human for the corporation. Demand immediately outpaced supply needs. In other words, P&G attempts to touch and improve when the first "basico" products were launched, which the lives of its consumers all over the world. As an example, included women's hygiene, diapers, and greener laundry take the razor-and-blade innovation pioneered by Gillette's detergent. The company quickly captured market share Himalaya team, which focuses on India but is a global group through small neighborhood shops and premium products based partly in Boston, USA. The team received information were lifted. The business in Brazil became a profitable about how men in India shave: about half of them use global growth model, and not just for emerging countries. barbershops and barbers usually break double-sided blades As a consequence, "Tide Basic" was recently introduced in in two and used them repeatedly, which crates unsanitary the United States. conditions. With the strategic goal of improving the lives of In sum, P&G's strategy inspires employees to add their its customers, the team created a razor-and-blade innova- hearts to their heads and aims at finding creative solutions tion that simplified the essential features of the shaving when purpose-inspired opportunities and commercial consid- done in barbershops. The products were a success in terms erations seem to collide. of improving both the human condition and profitability. Imagine you are an HR executive at P&G. Given the As a second example, consider a situation in P&G Brazil, company's strategic orientation toward purpose and values, where P&G feared a shutdown due to decreased business what would you do to help align a new performance volume. Low-income consumers were the fastest growing management system with the strategic plan? How would segment of the population, but P&G's global premium you explain this relationship? What would you say and do to products were too expensive for this market segment. Local garner company-wide support for your performance manage- P&G teams decided to live with families, scrutinized every ment system