How to manage a corporate through an internal crisis?


Procter & Gamble’s general manager for the North Africa and Levant region attended Business Forward’s 2019 anniversary to talk extensively about the managerial styles required for guiding corporate organizations through a crisis. Not an economic crisis per se, but an internal fiscal one.

Undoubtedly in recent years, macroeconomic conditions within Egypt and across the region, and even the entire world, have exerted a multitude of external shocks on businesses, including multi-national corporations such as P&G. However, Tamer Hamed decided to draw from his own experiences at P&G and focus his talk on how best to manage a team internally to ride through such shocks, caused by either an organization’s own mishaps or external causes beyond its control, or even a combination of both.

Hamed set the scene by beginning with a brief summary of what happened with the Egypt branch of the Cincinnati-based corporation over the last few years.

“P&G Egypt turned from a $300 million business losing money to a $400 million business making decent money; from cash bankruptcy to being self-sufficient and repatriating cash. From contracting scale to growing scale and most importantly, from a really traumatized organization for a variety of reasons internal and external, turned into an organisation that now sets the standards.”

So how then does one manage a company out of such a crisis? According to Hamed, it comes down to four key approaches. “One, face reality. Two, inspire and motivate for the future. Three, take organization as a business strategy. And four, balance,” he said.

Elaborating on the face reality approach, Hamed emphasized the importance of being honest and up front about the situation. He revealed how he needed to speak in plain terms about the bankruptcy the company was in. “Face reality and have very tough conversations. It was two and a half years ago, my first talk with the organization was ‘we are about to get bankrupt’ and I needed to explain what bankruptcy meant.”

By stating it plainly to the team, they will know where they stand and what needs to be done. Their efforts can collectively be galvanized to work on the one objective of improving P&G Egypt’s cash position, he added. Speaking from his own experience, he said “every single talent in the organization was focused on cash…I said ‘okay, your job is think how can we generate more on the higher profitability part of the business…The point here is to gear everyone for that objective.”

Hamed played up the importance of having the right attitude in the office for successfully grinding a company out of the red, which brought him to his next point.

Hamed’s second tip alluded to the language that should be used in the office environment during times of crisis. “It’s not inspiring to tell people we need to survive a crisis. It is not. Human beings don’t get motivated and inspired by that statement. Human beings get inspired with the outside, with the future… You have to inspire every single day in the toughest times when you’re down, you have to inspire and motivate for the future.”

By getting a team completely focused on working towards getting the company back into the green in the future, an organization can navigate itself out of problematic periods.

Organizational health was the third key strategy. In selecting a team and assigning tasks, Hamed insisted that the criteria for doing so isn’t what most would expect. “It’s not the most experience that matters. It’s not the so-called best competence. It is the combination of the fittest to the role and the best attitude,” he said.

His fourth and final buzz word was balance, referring to the task of choosing what to prioritize. The important questions that must be asked are “what choices do you make? What part of your portfolio you get rid of? What part of your portfolio you nurture? What part of your business you put this proportionate organization focus on?” Answering his own questions, Hamed said “the strategies to put must enable you…to make inroads, to gain ground…with the right priorities.”

As a result of this particular strategy, P&G Egypt came to be regarded as the best unit in the wider region. “Last June, we got celebrated as the best [P&G] business unit in Asia, Middle East, and Africa. We were voted, chosen by the company executive board as the best business unit because of the ability to grow balance.”

However, these managerial strategies seem to only be feasible and suitable when the challenges being faced are strictly from within the corporation. When pressed on a question from the audience on how to sustain growth when subjected to external shocks beyond the corporation’s control, Hamed suggested a couple more points.

His first was “obsession with capability. So translating everything we want to do in the business, now and in the future, into a capability. And then identifying what capabilities are existing, what capabilities do not exist today, but you need them to win in the future.”

Hamed cited what P&G Egypt did domestically to expand and improve their capabilities, explaining that they didn’t look at the country as one block but dissected it into separate regions which will need different approaches. “There are several Egypts within Egypt. There’s a country that is double the size of Lebanon with affluence that matches the highest in Europe or the States. There’s another country that is way below poverty line. There’s a third country that is, a mix of the both. Which country of those will you serve? Which capabilities will you need?”

Additionally, thinking and planning for the long term is also crucial. Hamed emphasized the importance of not thinking within your financial quarter, but always working to do better in the next one. He even said that it was totally fine for a dip to happen in a company’s current quarter. “Fight the temptation of the short term. I was okay to drop a quarter as long as I’m super clear that the next one will be up sustainably…But what is more difficult is to get your team to see eye-to-eye on it. That everyone is not after only getting the numbers but a style of play.”

Hamed saw this as a way to encourage employees to be more creative and inventive in trying to get out of the slump, by removing the pressure of trying to turn around a quarter that’s already doing bad. “If I want people to innovate, I need to be okay with one slip.”

Another in the audience had asked him a question about how P&G Egypt held on to their talent. In response, Hamed said that the company had agreed to a boost to their pay but most significantly, offered their employees the opportunity to go on work assignments abroad, something we described as a “catalyst for retention.” They were aware that those who joined P&G had the global side of the corporation in mind. “You are a priority. You will be taken to international assignments. International assignments means you increase your value and you get better paid.”

His final advice on keeping talent within an organization was similar to an earlier point he had made about workplace culture. Not exactly a ground breaking idea, but nevertheless important to discuss how crucial is having an office atmosphere conducive to keeping employees happy and effectively, keeping them at the company. On the way to achieving this, Hamed said, required restructuring. “We work on the culture inside…What behaviors you tolerate and what behaviors you do not tolerate. I had to let go of very capable lead team members at the beginning.”

With all of these strategies that Hamed’s team adopted, they managed to write a positively unique story for themselves. “Today, what P&G did in Egypt over two and a half years was taken globally and in Cincinnati as a case study for how to succeed in crisis and emerging markets.”

    Knowledge Partners

    CONTACT US

    School of Business
    American University in Cairo
    AUC Avenue – P.O. Box 74
    New Cairo 11835
    Egypt
    Email: BusinessForward@aucegypt.edu

    Copyrights © 2017 The American University in Cairo School of Business • All Rights Reserved

    Copyrights © 2017 The American University in Cairo School of Business • All Rights Reserved