Changing the organizational culture

One of the major aims of the restructuring plan was to change the risk averse culture of making incremental improvements to informed risk taking that would help launch new technologically advanced products in all the markets easily. Initial culture of P&G was conventional, lethargic, and bureaucratic. Its efforts were directed to change this culture to quick, modern and internet-savvy firm. The firm needed to innovate and move faster, which was the best way to accelerate towards growth.

Before 2005
Misaligned objectives Internal inspection as a measure of control Risk avoidance Lethargic, conventional and bureaucratic

After 2005
Organization aligned to common goals Team collaboration, focus on coaching and teaching Informed risk taking Innovative, quick and modern

P&G changed the way it looked at its appraisal approach. It moved from its traditional goal-setting approach to a stretch goal plan. Initially, the appraisal of the P&G employees depended on the targets set and their achievements. The approach moved towards stretching the target goals each time and attempting to meet them. P&G also implemented a new reward system for employees at each level of the organization for their exceptional contribution. Stock option compensation, initially limited to only 9,000 employees was now extended over to 100,000 employees. P&G invested hugely in IT to facilitate cooperation, coordination and collaboration. The firm introduced e-mail, intranet and videoconference facilities for employees. The use of chat-rooms was extensively promoted and thus became a vehicle of culture change. Decisions that had usually been delegated to committees were now assigned to individuals. Thus decision taking speed and ability was expedited. To play down the hierarchy, discrimination among the senior managers and junior level employees was removed in every possible area. From the tea cups used by employees to the cabin space each one had, concept of equality was introduced with the complete revamping of the P&G hierarchical structure. Dressing code of the employees at P&G was changed. Employees now had leeway in choosing their own dressing style. Changes in the corporate culture were not just restricted to some of the countries but were spread to all the countries where P&G operated. For instance, Project pride in P&G India was introduced in the late 1999 to promote an open work culture. All the six offices of P&G India were united under a common roof, which did not discriminate between senior and junior level employees.