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 macroeconomic 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 parts of the world where things are a little bit more stagnant.
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.
DH: 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. 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.
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 international expansion. In that way they can tap into the economic growth in Asia.
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.
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 provide propositions for all the segments in Asia, from the wealthiest billionaires to the people making less than a dollar a day. Developing 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, 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 between serving the region as a whole while still connecting with local consumers.
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.
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 relationships 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 proposition—EVP for short.
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.
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 innovation. 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.
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 emerging markets operating next to each other. So there is no better place to stretch people and to develop different leadership skills.
DH: I see a direct relationship. First, diversity 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.
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.
DH: 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. That’s where you’re going to get scale, lower costs, and, ultimately, profitable business growth.
DH: Absolutely. The global innovation model 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 going 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.
DH: Innovation is absolutely fundamental 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.
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.
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 better 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.
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 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 purification 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 mom
Being a mom comes in really handy in running 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 disappointments 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 encouraging 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.
1 Executive summary, PwC’s 2011 APEC CEO Survey—The future redefined: Asia Pacific at an inflection point.
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).
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.