Transforming a global corporation’s strategy and culture from the inside takes guts. Politics alone are enough to deter an innovative, ambitious executive from taking on such a Herculean feat. In the recently released book Collaborative Disruption, Tom Muccio recalls with vibrancy and humor what it took to transform not one, but two global corporate behemoths Procter & Gamble (P&G) and Walmart from the inside. It is a masterfully told tale of the joint business planning that transformed Retail and was one of the first major corporate ‘collabs.’ It is also a case study in organizational change management and provides a roadmap for what it takes to manage corporate transformation.
In the 1980’s, P&G and Walmart had a contentious buyer-supplier relationship that was common at the time. This dysfunction came with a real dollar cost stemming from inefficiencies, misaligned and competing priorities, and information voids. A small group of change warriors within P&G had been designing new ways of working with retailers when Walmart founder Sam Walton broached the topic of a strategic partnership on a canoe trip with P&G’s Vice President of Global Sales, Lou Pritchett when he said, “If you thought of my stores as an extension of your company, we would be doing business entirely differently than today.” From this sentence, stemmed one of the world’s most successful corporate partnerships and change management efforts.
Muccio, who led the Walmart partnership for P&G, describes how both companies had to transform their business processes, cultures, information technology systems, and organizational and governance structures in the face of stiff internal resistance. While telling this fascinating story, Muccio also illustrates the criticality of organizational change management tactics and interventions in overcoming resistance and delivering results. He highlights the four pillars of ArchPoint’s change management model which includes, Equip Leaders, Engage & Communicate, Align Culture and Organization, and Enable Employees.
Equip Leaders
Transformations are led from the top with bottom-up support. Top leaders, equipped with a vision, facts, plans, and messages enlist support from their teams and cascade the business case for change throughout the organization. While Muccio and his team were designing and evaluating a new Walmart partnership model, an expert in change management encouraged them to create an executive steering team across various functions and products to provide updates, seek feedback, and garner support.
John Smale, P&G CEO at the time, made this transformation possible because he had the backs of people like Muccio who were working in the trenches to make change happen. Leadership was influenced by a network of change champions at the executive and middle management level who helped Muccio, and his team overcome the resistance and doubt from both company’s entrenched bureaucracies.
Engage & Communicate
Muccio writes extensively about the role communication and engagement played in the success of the partnership. ‘We recognized the importance of regular, planned, and thoughtful communication,’ and describes how members of his multifunctional team wrote quarterly letters (this was before email) that were distributed to their individual functions. The letters contained information about wins, impact, as well as lessons learned. His team utilized their brilliance in sales and marketing and turned it internally to garner the support, hearts, and minds of their stakeholders. Yet, as Muccio writes, “All of these communication efforts, however, didn’t eradicate all of the resistance we faced. We still had to face the dragons that are common to almost any significant effort to bring about transformative change.” While resistance could not be eliminated, Muccio writes that there was no bigger factor than strategic, recurrent, and engaging communication in overcoming resistance, fear and doubt.
One topic that does not typically get attention in organizational change efforts is conflict management, but Muccio takes it head on. He discusses that not all resistance was negative. Some of it was legitimate and had to be addressed. Muccio describes how his team captured issues resistors raised and addressed them with facts and results. In most cases, the people on the front line of the partnership were the best advocates for the changes to their managers’ chain of command and turned skeptics into believers.
Align Culture & Organization
To truly transform an organization, leaders must change the culture that created the status quo. In addition to getting leadership support and the right people to lead the transformation, the organizational structures such as role descriptions, performance measures, scorecards and incentives must also change. Muccio describes how P&G collaborated with the functional teams and HR to do just that.
Changing the organization’s infrastructure that underpins the current state is critical. Yet, creating and aligning on a new set of operating principles and reviewing or refreshing corporate values were some of the most powerful accountability mechanisms the team had to foster adoption and transformation.
These principles and values have been a big part of Muccio’s legacy as his former team members, such as ArchPoint CEO Jesse Edelman, went on to lead and found successful organizations and incorporated them into their own management philosophies.
Enable Employees
Talent development was foundational to this transformation’s success. Professional development took place on the job, on the ground in Bentonville, AK, where P&G’s Walmart’s team was based. Reinvention of career paths, assignment rotations, and promotions became a hallmark of the program. Another way P&G enabled employees was through their test-and-learn practices. Team members were encouraged to take risks in designing new processes and systems, execute, learn lessons fast, and apply those lessons right away to scale. This ‘quick win-fail fast’ approach fostered momentum by self-perpetuating and reinforcing the culture change Muccio and his team were building. This, together with structural changes such as new incentives, rewards, awards, and scorecards, ensured the wave of change would sustain, even after it crested.
Collaborative Disruption offers a compelling narrative of how strategic partnerships and effective change management can transform even the most entrenched corporate cultures. Tom Muccio’s experiences with Procter & Gamble and Walmart illustrate the power of visionary leadership, strategic communication, cultural alignment, and employee empowerment in driving successful transformations. By embracing these principles, organizations can overcome resistance, foster innovation, and achieve lasting change. This case study not only highlights the challenges and triumphs of corporate transformation but also provides a practical roadmap for leaders aiming to navigate their own journeys of change.