The evidence that had been found based on the P&G’s Website, Lafley’s emphasis on knowledge creation and innovation is working. Their quote is “we are who we are” bringing their best to serve their customer with their own creativity and innovation product. Then, based on their story page they said that no matter how much they grow, they always keep themselves grounded in their deep-rooted purpose, values, and principles. This is how Lafley has led P&G to an impressive grown its market capitalization to over $200 billion and diversified into beauty and personal care with the mega-acquisitions of Wella and Gillette.
According to Procter & Gamble Company cases, since A.G. Lafley became the chief executive officer in 2000, P & G leaders have worked hard to make daily routine innovation part and create an innovation culture. Lafley and his team maintain a vital part of P & G’s research and development capabilities – a world-class technology expert who is a critical core technology master for household and personal care, while bringing more P ; G employees beyond R ; D into innovation games. They strive to create an overall corporate social system that will capitalize on the people’s skills and insights throughout the company and give them the same focus which is the consumers. Without a culture of innovation, sustainable growth strategies are difficult to achieve. A.G. Lafley and Ram Charan cooperate The Game-Changer: How You Can Drive Revenue Growth and Profits with Innovation (Crown Business, 2008) to explain how to make consistent and innovative driving growth.
Lafley has led the P&G Company in practicing some form of innovation improvement to broaden employees’ capabilities. As the CEO, Lafley has to examine the competitive advantage and employees’ capabilities to find out what types of innovation would benefit the organization and build a relationship with customers. Lafley highlighted P&G’s key factor which is innovation because the new ideas for product development are crucial in achieving sustainable growth to enter new markets. The idea of a new product may stem from an individual’s thoughts, but only team effort can carry out that idea through prototyping and launch.
The P&G Company expanded the mission statement that “the consumer is boss”. This mission statement can be linked directly to innovation. This is because the innovation deserved the most attention through the purchase of a product by consumers. Once a product produces without knowledge creation and innovation, it won’t be purchased by consumers because of the product unable to improve the living of consumers. Therefore, Lafley tried to build better connections with customers to get feedback from them in order to improve the innovation of product development. The P;G Company can provide a creative product based on the customers’ needs and wants. For instance, the P&G Company focused on innovation that was meaningful to customers, including unique packaging and outstanding marketing.
5. The text discusses that, in the learning organization, there are external and internal sources of learning. What type of learning source prevailed at P&G prior to A. G. Lafley’s appointment, and what type of learning source did he prefer when he became CEO?
A learning organization is creating, acquiring and transferring knowledge through learning and learns from mistakes and modify behaviour to reflect new knowledge. An organization can learn from individuals through external and internal sources of learning. Organizational learning involves internal source such as employees and external sources such as customers, consultants, industry and academic publications, suppliers, business partners, and competitors (Lussier, R.N., ; Achua, C.F. 2012).
The P;G organization used the external sources of learning before A. G. Lafley was appointed CEO. Based on the case study, Durk Jager who was the previous CEO had questioned the ability of many P;G employees. Therefore, Jager has relied on the external sources of learning because he does not build trust with employees. Once a leader does not believe the employee’s ability to achieve organizational objectives, he or she would not use the internal sources of learning.
Lafley prefer both internal and external sources of learning when he became CEO. Internally, Lafley encourages regular interactions between the managers and non-managers in P&G organization. The creation of knowledge by individuals internally is an internal learning process in an organization (Simon, 1991). Thus, employees could learn from each other to understand the needs and wants of customers by interacting with each other within an organization. Individuals always come up with plenty of new ideas concerning the improvement of products and services among employees if they share similar perspectives and interpretation frameworks (Brown and Duguid, 1991).
Furthermore, the P&G Company expanded the mission statement that “the consumer is boss”. Thus, Lafley’s deep commitment to serving customers is considered an external source of learning. This is because Lafley always concentrates on the human dimension of understanding customers. Since organizational learning is a process of communication with individuals leading to better decision making. Therefore, communicating with customers regularly would be a better approach to learn how to improve innovation of products based on customers’ needs and wants. Besides that, feedback that can obtain and collect from customers is the most common source of new ideas (Pascale, 1984; von Hippel, 1988). Customers’ responses can help an organization learn to improve customers’ satisfaction and create new products development. In addition, business partners with specific expertise in some knowledge areas that can be integrated with the organization’s area of expertise will benefit the organizations. This will allow organizations to increase their competitiveness and leverage their skills and resources optimally (Hamel and Prahalad, 1994; Quinn and Hilmer, 1995; Teece,1992; Mowery et al, 1996).
After completing the case study, in order for P;G to succeed, they need to clearly define their objectives and goals. They will then be able to improve their mission statement and vision to ensure they meet the direction of the implementation phase in order to achieve these objectives and goals. If their mission statement is closely related to goals and objectives, then it will promote the development of business models, which mainly focus on the company’s bottom line success, such as achieving sustained profit, increasing market share, leadership positioning and employee welfare development.
In order to transform into a successful learning organization, Lafley could offer a two ways feedback in P&G organization. Feedback plays an important role for everyone in every organization’s workforce. This method can be used as a high quality learning tool to find out the difference between the organizational actual and desired performance. By giving feedback, Lafley could let his employees understand more about their organization expectations and goals. A constructive feedback also enables Lafley to provide a guideline to his employees by provide information in a useful manner or guide his employees back on track towards successful organizational performance.
P;G Company should provide training to the employees to enhance their knowledge creation and innovation in order to increase productivity and efficiency in the future. Employees should not overly rely on the manager, as it will affect the whole organization process and employee will become more and more reluctant to work on their own. This reduces the effectiveness of management inside the organization. Therefore, the company’s productivity will decrease and the image of the company will also drop. In the end, the whole company gain loss.
P&G Company should give a reward to those employees in the learning process. Employees who have successfully learned new skills and abilities should be recognized and encourage others to follow the role model. The leader should not punish the employee when the employee made a mistake. Rewarding is becoming more imperative. When the employee has been motivated positively and rewarded regularly, they will work effectively and help the company to achieve the goals. Employees’ positive attitude will boost their morale then decreasing those morale problems. So that developing a learning culture is no longer just another fanciful idea.
From my viewpoint, the leader should focus on information power and connection power in the learning organization. Information power having control of information and connection power is the user’s relationships with influential people. This two types of power will encourage the employees to distribute vital information and doing things right to achieve the organizational objective. Connection power will help the user to get the resources that the user need and building the relationship with influential people. Thus, the leader should provide service and information to the subordinate in order to decrease failures and mistakes. Besides that, the leader should encourage employees to use the connection power to build trust with others.
Finally, for P&G to be transformed into a learning organization, they must implement the concept of collaboration. Knowledge sharing is an important element in transforming P&G into a learning organization. Collaboration among members is the key in the learning organization and every member of the group must know the learning objectives and the outcomes. Collaboration is important in accomplishing learning organization because members of a group will then work as a collective problem solving team to accomplish their goals. For example, an online training programme where corporate learners can share ideas with their peers. In this process, everyone in that online training programme benefits from the expertise and skill sets of the group and they are able to deepen their own comprehension by sharing information with their peers.