‘Building a company without Borders’, by Bart Becht, Harvard Business Review, April 2010

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You have to be an exceptional CEO to be allowed to say how good you are in the HBR and Bart Becht, who runs Reckitt Benckiser (RB), is that good. Eleven years ago he merged a small Dutch company (Benckiser) with a boring UK consumer goods company (Reckitt and Colman) and has since created a global powerhouse that has outperformed competitors like Unilever and P&G. Even in the recession hit 2009, RB achieved 9% sales growth while other global companies struggled to grow at all. The products – the best known are Dettol and Airwick – are still boring but the sales and profit performance is not.

This performance is particularly interesting for those in HR roles because Becht says that RB’s success is mainly due to personnel policies and corporate culture, which is probably how he gets an article in the HBR. He says that his success is due to the fact that his company is one of the few that is, by his criteria, truly global; it encourages and allows the maximum possible global mobility for its top 400 managers.

With a few exceptions, RB does not appoint managers to run businesses in their countries of origin; they have managers from 53 countries operating in 40 other countries and any match of country to origin would be a coincidence. They do not make expatriate appointments; there is one global salary structure which makes transfers between countries easy and speedy; he talks about days rather than weeks to achieve a move. Also, there are no return tickets from one country to another; the next appointment could be anywhere.

It was at this point that I had a few doubts about this philosophy, knowing how much global transfers create problems for spouses’ careers and children’s education. There is no mention of this issue, apart from a brief reference to the company’s generosity around paying for education; and an interesting comment that this strategy is ‘not for everybody’. This made me wonder what happens to those who refuse moves and whether divorce rates among RB managers would be an interesting statistic!

The other key factor in the culture is open communication; English is the company language with no exceptions, even when Frenchmen and Italians talk to each other. Conflict is encouraged but it must not be allowed to cause delay in decision-making; those who cannot get their ideas accepted globally are encouraged to try them on a small scale and make their case again.

Only at the end does Becht mention the other key success factor that is, I suspect, as much to do with RB’s success as these cultural factors. They focus on power brands that have global potential and invest heavily in innovation. I am sure that Becht would argue that their competitors try to do this too; he seems to believe that only a truly global company with fully mobile international managers can deliver global marketing.

This is a thought provoking article that all HR people in international companies should read. They should decide for themselves whether the RB approach would work for them and whether the price of success is worth paying.

To read this article go to:

http://hbr.org/2010/04/how-i-did-it-building-a-company-without-borders/ar/1

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