Issue 15 Cybersecurity Beyond the BRICS

Interview with P&G’s Deb Henretta

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Designing your fiercest competitorMastering change by making it real page 12

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46 PwC View Issue 15

Sharing in Asia’s growthP&G’s Asia Group President Deb Henretta provides unique perspectives on the region—its culture, diversity, and potential

Interview

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When it comes to the global economy, all bets based on old assumptions are off. “Of the few bright spots in the global economy, none is proving more influential on business strategies globally than the transformations underway in Asia Pacific.”1 In this interview, Ms. Henretta looks at the challenges and opportunities of doing business in the region. She also offers advice on how Western businesses can tap into Asia’s explosive growth.

Interview by Tom Craren and Gene Zasadinski

Tom Craren is PwC’s partner-in-charge of Thought Leadership. Gene Zasadinski is managing editor of View magazine.

pwC: You are currently based in Singapore and have been for more than six years. What attracted you to the Asia-Pacific region, and what continues to hold your interest?dh: I love being in a region where the growth is so dynamic. This is where business is happening right now. Asia is leading the globe out of the macroeconom-ic crisis. Growth trends have rebounded, and there’s so much upside potential with the consumers here. It is a lot of fun to do business in a place that’s growing, that’s dynamic, that’s vibrant, versus some other

Deb Henretta is Group President—Asia and Global Specialty Channel for Procter & Gamble. Currently based in Singapore, Ms. Henretta is the first female chair of the APEC Business Advisory Council (ABAC). For two consecutive years (2007-2008) she was listed as one of The World’s 50 Most Powerful Women (Fortune magazine) and, in 2006, was named to The Wall Street Journal’s Top 50 Women to Watch. She is and has been active in a number of philanthropic organizations, including Caring for Cambodia and the YMCA Prevention of Family Violence Coalition. Ms. Henretta also leads Procter & Gamble’s Advancement of Women, which has won the prestigious Catalyst Award.

parts of the world where things are a little bit more stagnant.

pwC: Are business and government leaders paying enough attention to the Asia-Pacific region?dh: If you’re going to be playing on the international scene in business or in government, you have to look at the whole globe, and if you’re doing that right now you are seeing a contrast between the problems in the developed world and the incredible upside opportunity in the developing world.

1 Executive summary, PwC’s 2011 APEC CEO Survey—The future redefined: Asia Pacific at an inflection point.

pwC: Are the developed economies not taking this broad view?dh: Sometimes I think the developed world tends to be too insular, and this is a mistake. The crisis of 2008 caused every-body to become more myopic, to focus on fixing their own issues. That’s understand-able, but it’s also shortsighted. The US, for example, can’t fix its economy by being insular because, relative to the rest of the world, we don’t have enough people to be self-sustaining anymore, and the world is too interconnected. And so what the US government and business leaders need to be doing is thinking about how they can participate in Asia’s growth.

pwC: How can they do that?dh: Some businesses will be more nationalized and have a little bit more of a regional focus, and that’s great. But the bulk of businesses are either going to have to think about being global or about supporting global companies in their inter-national expansion. In that way they can tap into the economic growth in Asia.

pwC: Is business ahead of government in this regard?dh: Yes, but organizations like the Asia-Pacific Economic Cooperation (APEC)2 are changing that by getting governments to refocus on opportunities in the Asia-Pacific region.

pwC: What would a business model look like for a company attempting to succeed in the Asia-Pacific region?dh: Well, at Procter & Gamble, we’re looking to capitalize on the cultural and consumer diversity that’s present in Asia. From a consumer perspective, as a large multinational company, we strive to pro-vide propositions for all the segments in Asia, from the wealthiest billionaires to the people making less than a dollar a day. De-veloping a product portfolio that can meet the needs of these extremes represents a huge business opportunity. From a cultural perspective, it’s important to find your way through a complexity of nationalities,

2 According to its mission statement, “APEC is the premier Asia-Pacific economic forum. Our primary goal is to support sustainable economic growth and prosperity in the Asia-Pacific region.” The full statement is available at http://www.apec.org. Ms. Henretta is the first female chairperson of the APEC Business Advisory Council (ABAC).

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tastes, and religions to find your way to simple, scalable solutions that enable and generate profitable growth. So, in the end, it’s successfully managing a dichotomy be-tween serving the region as a whole while still connecting with local consumers.

pwC: Is talent a critical aspect of enabling that business model to succeed?dh: Yes. One of the most challenging aspects of doing business in Asia is the notion of recruiting and retaining the best employees. At P&G we believe people are our greatest asset. We have to, because we are a build-from-within company.

pwC: So attracting, developing, and re-taining the best talent is a top priority?dh: It is. The people we hire today are the people who are going to be the future leaders of the company. This puts a high premium on us finding and then hiring the best and the brightest. In Asia, we’re making really good progress on this front.

I think we’ve got strong, healthy relation-ships with some of the top universities here, which is a great conduit to the best talent in the region. We’ve also developed what we call the employee value proposi-tion—EVP for short.

pwC: Can you elaborate?dh: This program integrates all that the company has to offer to develop our employees into future leaders in a way that meets the needs of our Asian employees as reflected in the outcome of our annual employee surveys. We take as much care and pay as much attention to building our employee value proposition as we do to building a brand for our consumers.

pwC: Has this program been successful?dh: It has. In fact, in 2010, P&G Asia was among those that received the Asian Human Capital Award for our EVP program, which was cited as a breakthrough in people inno-vation. So that’s some of what we’re doing to make sure that we attract more than our fair share of the best and brightest in Asia.

pwC: Are there advantages unique to training talent in Asia?dh: I think so. We really try very hard to work on the multicultural aspects of leadership, and there’s no better place to develop those skills than in Asia because there is such diversity—so many different cultures. Asia is like a microcosm of the world, with every culture, religion, and nationality represented. Asia also has both highly developed markets as well as emerg-ing markets operating next to each other. So there is no better place to stretch people and to develop different leadership skills.

pwC: Do you see a relationship between diversity and competitive advantage?dh: I see a direct relationship. First, diversi-ty can be a great source of innovation. If you have a group of “like thinkers” in a room, you’re probably going to get one answer to a business problem. If you have a group of “diverse thinkers” with diverse ideas, you’re going to get many possibilities for solving business problems. You can take those and build on them to get an even better solution.

Sometimes I think the developed world tends to be too insular, and this is a mistake. The crisis of 2008 caused everybody to become more myopic, to focus on fixing their own issues. That’s understandable, but it’s also shortsighted.

pwC: And the second reason?dh: I think dealing with diversity forces you not only to figure out how to solve problems, but also to do so in a simplified way.

pwC: Can you explain what you mean by “a simplified way”?dh: Asia is incredibly diverse. If you were to try to develop the perfect business solu-tion for every nationality and every culture in Asia, you would drown in complexity. So in Asia, diversity is not only a source of ideas and the means to continually improve those ideas, but also a driver of simplified solutions, that is, leveraging the similari-ties to the greatest degree possible. That’s where you’re going to get scale, lower costs, and, ultimately, profitable business growth.

pwC: You mentioned innovation. Is there an Asian flavor to innovation as there is to talent?dh: Absolutely. The global innovation mod-el for most big MNCs has largely involved innovating in the West and taking your ideas to the East. I don’t think that model works anymore. There will be some times when innovation will work that way, but there’s go-ing to be an equal number—if not a greater number—of times when innovation is going to start in Asia and go back to the West.

pwC: How important is innovation to the region?dh: Innovation is absolutely fundamen-tal to business success in Asia. And there are three reasons why I feel that way.

First, innovation is going to be key to improving the quality of life for people. There are incredible challenges in Asia—environmental, social, and political challenges—and most of these are going to have to be solved with innovation—be it product innovation, process innovation, or policy innovation. Second, innovation has always been a key driver of our success and growth at P&G. Third, innovation has the potential to lift people out of poverty. I think companies that are able to help pull people out of poverty, are able to help fuel growth for an economy, and improve the quality of life by dealing with some of the challenges that the planet faces, are the companies that are going to emerge as leaders of the future.

pwC: We’ve touched on a number of ways in which business can positively affect people’s lives. Does that, in a sense, define your company’s vision?dh: Absolutely. Our company’s vision is really simple. Our vision is to improve the lives of more consumers in more parts of the world more completely. Everything we do, whether it’s designing a product, coming up with a go-to-market program, or developing and implementing our social responsibility and sustainability initiatives, it is all geared toward a single question: Are we improving the lives of consumers? If the answer to that is yes, then it’s within our company’s purpose. If the answer to that is no, we don’t do it.

Asia is incredibly diverse. If you were to try to develop the perfect business solution for every nationality and every culture in Asia, you would drown in complexity. So in Asia, diversity is not only a source of ideas and the means to continually improve those ideas, but also a driver of simplified solutions, that is, leveraging the similarities to the greatest degree possible.

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the association of Southeast asian nations (aSean)3

The ASEAN governments are going to have to come together almost as a single market and production base so that they can bet-ter compete with some of the larger and faster-growing Asian economies. And while they’ve made pretty good progress in a number of areas, there is still more that can be done. One good example is the ASEAN Cosmetic Directive, which really helped standardize the regulatory requirements for cosmetics across the region. This is the kind of small but critically important step that is going to make it significantly easier for companies to do business in the region.

The Trans-Pacific Partnership (TPP)4

This initiative addressed by President Obama at the recent APEC summit is an incredibly strong trade initiative that will attempt to deal with emerging trade issues in areas like services and digital commerce. US participation in TPP is very welcome by business. American companies stand to benefit from the ambitious standards that TPP negotiators are aiming to achieve, especially in areas like speed to market, regulatory coherence, improved consumer value, and green growth solutions. By removing trade barriers, TPP will greatly simplify the way business gets done within Asia-Pacific and will help companies lower costs and grow their businesses.

Deb Henretta on . . .

perSpeCtIveS

Being the first female chairperson of the apeC Business advisory Council (aBaC)5

It was an incredible honor and challenge to step into that role. And while most of my work for ABAC is gender-neutral, my role does occasionally enable me to bring a woman’s perspective to an important issue facing the Business Council. For example, one of our objectives this year was to focus on the barriers to success being encountered by small business enterprises (SMEs6). As part of that effort, we put a focus on women because many SMEs are run by women entrepreneurs. So I and the other eight female members of the Business Council formed the ABAC Women’s Forum, which provided outreach efforts to connect with female entrepreneurs, business leaders, and business students. We then created a Web-based application that’s going to attempt to create a more regular conversation and dialogue among women in business.

giving backGiving back to a region that offers so much in the way of business opportunity is the right thing to do. So, for example, we have a program at P&G we call Live, Learn, and Thrive, which is our corporate social responsibility program, and through that we offer many programs that are geared toward the health and education of children. They include our Hope Schools in China—we just

built our 200th school. And because clean water is so important, we distribute water purification packets as a part of our disaster relief efforts in Asia. This water purifica-tion product is a P&G innovation which we created using our in-house technology to address one of the world’s biggest health problems: access to clean drinking water. The product not only eliminates all of the material residue that might be in the water, but also removes bacteria, viruses, and even low levels of arsenic. These are just a few of the ways we are helping to reduce poverty and to improve the lives of people in Asia.

lessons learned from being a momBeing a mom comes in really handy in run-ning a business. I always tell my children you’ve got to look at your glass as half full, not half empty. So, I remind them, when disappointments happen, look at your glass as half full. I ask them what other things are going right in their lives, and then maybe the obstacles or the disap-pointments are a little bit easier to take. And I think this applies to global business. If you are focusing on all the problems that need attention in the developed part of the world, you are looking at your glass as half empty. But we’ve also got to keep encourag-ing people to look at the glass as half full. And the glass that’s half full is the upside potential and opportunity that there is in Asia and the Asia-Pacific region.

3 Consisting of 10 member states, the aims and purposes of ASEAN are available on its website at http://www.aseansec.org.

4 The “broad outlines” of this agreement among the leaders of the nine Trans-Pacific Partnership countries can be found at http://www.ustr.gov/tpp.

5 Information about ABAC can be found at https://www.abaconline.org/v4/index.php.

6 Small and medium enterprises.

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editorial

Editorial Director Tom Craren

Managing Editor Gene Zasadinski

Assistant Managing EditorChristine Wendin

View points Editor Angela Pham

Contributing EditorsMike Brewster Emily Church Cecily Dixon Susan Eggleton Benjamin Isgur Sandy Lutz Susan Poole Anand Rao Bill Sand Jamie Yoder

online

Jeffrey Dreiblatt Adiba Khan Scott Schmidt Jack Teuber

design

Odgis + Company

Creative Director Janet Odgis

Senior DesignerBanu Berker

DesignersRhian Swierat T. Chloé Bartholomew

Contributors

We thank the following individuals for their contributions to this issue of View:

Caroline Calkins-Heine Steve Lechner Alfred Peguero Daryl Walcroft

photography

AP Images

Brian Bielmann

Corbis Images

Bill Gallery

Getty Images

Andreas Herzau/Laif/Redux

iStockphoto

Vincent Lafloret

Chen Ming/Xinhua/Eyevine/Redux

Tommaso Rada/4See/Redux

Reuters Pictures

Brian Smale

Stephen Wilkes

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