an interview with john pepper: what it takes to be a global leader

An Interview with John Pepper • 287

AN INTERVIEW WITH JOHN PEPPER: WHAT ITTAKES TO BE A GLOBAL LEADER

Human Resource Management, Summer/Fall 2000, Vol. 39, Nos. 2 & 3, Pp. 287–292© 2000 John Wiley & Sons, Inc.

Interviewed by:Christopher B. Bingham, Teppo Felin, and J. Stewart Black

“There are a few things that totally change yourlife, and taking my first international assign-ment in Italy was just that kind of experience.”In a recent interview, John Pepper, the formerChief Executive Officer (CEO) and currentChairman of the Board (COB) of Procter andGamble (P&G), highlighted international as-signments as one of the most powerful devel-opmental experiences in shaping him as aneffective global leader. “Of all the careerchanges that I have had, the international as-signment was the most important and devel-opmental. It changed me as a person,” statedMr. Pepper.

John E. Pepper joined Procter and Gambleas a staff assistant in the company’s soap divi-sion in 1963 after graduating from Yale Uni-versity. Twenty-one years later in 1984, he waselected to the board of directors and in 1986he was appointed president. In 1990 he as-sumed leadership of the company’s interna-tional business where he led P&G intoemerging markets in Eastern Europe, Russia,and China. In his 36 years with P&G, JohnPepper has been intimately involved in devel-oping the 162-year-old company into a trulyglobal company ready for the challenges andopportunities of the new millennium. As statedat the outset of this article, he attributes muchof his professional development and globalleadership capabilities to the time and experi-ences gained in international assignments. Thepages that follow highlight the importance ofinternational assignment experience through

the viewpoint of John Pepper and discuss whythe former CEO and current COB cited histime overseas as the most influential in hisdevelopment as an effective global leader.

Global Leadership Competencies

While discussing the importance of interna-tional assignments in molding his leadershipstyle, Pepper emphasized four key global lead-ership competencies that were greatly en-hanced and developed from working and liv-ing abroad. Though no particular global lead-ership model is followed in this article, thecharacteristics stressed by Pepper and listedbelow lend credibility and are analogous toother extensive global leadership studies dis-cussed in this special issue of Human ResourceManagement Journal.

• Dealing with uncertainty• Knowing customers• Balancing tensions• Appreciating diversity

Dealing with Uncertainty

Perhaps now more than ever the ability to dealwith uncertainty is a critical leadership capa-bility. The speed of change, the unpredictabilityof international politics and policies, the quan-tum leaps in technology, the rapid rise of newcompetitors and alternative products, all theseand many more factors make uncertainty the

“There are a fewthings thattotally changeyour life, andtaking my firstinternationalassignment inItaly was justthat kind ofexperience.”

288 • HUMAN RESOURCE MANAGEMENT, Summer/Fall 2000

rule rather than the exception. According toPepper, effective leaders must both work to re-duce what uncertainty they can and yet moveforward in the face of unrelenting ambiguitiesor lose the competitive race. While Peppernoted that both he and P&G had made mis-takes by moving ahead too quickly, more oftenthan not the problem has been moving tooslowly in the face of uncertainty.

Though managers cannot fully preparethemselves for all contingencies, from Mr.Pepper’s perspective, international assign-ments are unique in their potential for bothproviding vast quantities of uncertainty withwhich to learn to cope and a testing ground tosee who can cope and who cannot. JohnPepper’s own experience dealing with uncer-tainty while living abroad provides a poignantand well-illustrated example of this point.

I have been over my head a lot. I ran Italywhen I was 34 and didn’t know the lan-guage to start with. It was an incrediblychallenging environment. This was 1974,and communists were within two points oftaking over the country. Industry was shutdown two weeks after I arrived, so weweren’t producing, which put us in the red.Likewise, Italy had a price war in effect andour key competitors were dropping pricesso low you can’t imagine. It was challeng-ing, but it was fun.

An astute observer might note that politi-cal changes, industry problems, or price warsare not the exclusive domain of Italy or anyother country for that matter. This is abso-lutely correct. It isn’t that foreign countrieshave more challenges or uncertainty per sethan one’s home country. Rather, the key pointis that the existing uncertainties are relativelygreater for someone unfamiliar with the lan-guage, culture, customs, traditions, norms,systems, and so on. To a new internationalassignee, the complexities of the unfamiliarcountry and culture seem impossible to navi-gate. International assignees typically do nothave detailed mental maps with which to ef-fectively navigate inflation, strikes, languagebarriers, government regulations, competitivemoves, employee relations, natural disasters,and so on. Furthermore, the mental maps that

they do have are often inappropriate and/ordysfunctional for the new environment. As aconsequence, to effectively lead, internationalassignees must do three different things al-most simultaneously. First, they must workmore quickly to understand and reduce whatuncertainties they confront. Second, theymust move ahead even when uncertainty per-sists. Third, they must often develop new men-tal maps about how to move ahead and whichdirection to move in.

It was in this environment of uncertainty,especially in Italy during his first interna-tional assignment, that John Pepper gainedthe ability to deal effectively with uncertainty.

The experience of starting something, cre-ating something new, deciding how you’regoing to introduce brands, how to create anorganization, and how to create a culturefor that organization is extremely valuable.It’s this kind of learning that I received frommy international assignments and it hasbeen very important to my development.

Knowing Customers

The second global leadership characteristic thatMr. Pepper identified as critical and one that hefelt was somewhat uniquely developed throughinternational assignments was that of knowingand understanding customer needs. Thoughunderstanding consumer needs is important inany business, its importance is magnified expo-nentially in the global context because of themany variables involved in effectively selling aproduct outside one’s home country. While con-sumer needs have much in common around theglobe, important variations sometimes occurfrom country to country (or even within a givencountry), from region to region or from demo-graphic group to demographic group. Conse-quently, the path to globalization is littered withthe debris of companies that tried to treat allcustomers everywhere the same. The subtle,personal needs of each customer around theworld must be understood intimately. From Mr.Pepper’s perspective, they cannot be fully com-prehended while one remains in the comfortsof corporate headquarters.

Through years of international assignmentexperience, understanding the customer has

The experienceof startingsomething,creatingsomething new,deciding howyou’re going tointroduce brands,how to create anorganization, andhow to create aculture for thatorganization isextremelyvaluable.


become a key competence of P&G’s leader.When traveling throughout the world, Mr.Pepper makes it a point to visit consumer’shomes, whether in China, Russia, or Poland.“I think it is very important to maintain anintimacy with the business as you go along inyears because I think it gives you perspectiveand energy.”

The subtleties and nuances of differ-ences in customers’ needs and preferencesare difficult if not impossible to understandwithout direct access to the customers; how-ever, it is impossible for a given leader tohave a current and direct knowledge of allcustomers wherever in the world they maybe. By the time Mr. Pepper or any CEO hadspent significant time in even ten majormarkets over the course of 20 years, the spe-cifics s/he learned about the customers inthe first market will probably be out of date;however, knowing the exact specifics is notthe main point in the development of a glo-bal leader. The direct experience with cus-tomers gives a leader an understanding ofthe types of product features around whichcustomers can have different needs and pref-erences. Until said leader bumps into thesedifferences, s/he often is poor at predictingwhere s/he will show up. While the phraseis trite, it remains true: “You don’t know whatyou don’t know.” Mr. Pepper brought thispoint out with an interesting example:

We made some early mistakes by not reallyknowing our customer needs. Take as anexample, Always, which is the number onefeminine hygiene product. We knew weneeded to move to standardized packagingbut we moved much too fast. We changedsymbols, colors, and language. What we hadmissed, was that in China the consumer re-ally knows what to buy by the color coding.We had the view that it was much better tohave just one color for the whole brand,which in many ways is true. One color cre-ates a block appearance on the shelf. Wehad all these words to describe our change,but people weren’t reading the words. Chi-nese customers knew that the purple wasthis product and they were buying purpleAlways or pink Always. We changed the col-ors and we lost significant business in the

short term. We should have been more care-ful in the transition.

P&G has invested heavily in the experi-ences of its management team to help en-sure that the gulf between corporate andcustomer does not get large enough to re-peat the mishap in China. As John Pepperdescribed, international assignment experi-ence not only helps align the interests ofheadquarters and end-users, but also instillsin the executive on assignment a genuineconcern for the welfare of the people thatare buying the products.

In our kind of business you come into con-tact with consumers from different placesand you see many who are far lessadvantaged than in the United States.When Proctor & Gamble began in the 19thcentury, we were providing basic hygienefor people in a way that we in the UnitedStates can take for granted now. A bar ofsoap or a tub of Crisco is no big deal to us.You go into the homes in China or Russiaand you see people using the first sham-poo they’ve ever used. To me, this is a price-less story and it goes back again to just oneof the reasons of being in those homes. Ifyou are honest with yourself, you comeaway feeling like you really need to delivera good product. These people don’t havemuch money and they are going to use theirvery hard earned savings to buy your prod-uct. When you hear them talk about theirfamilies and the role they play, it is veryenergizing.

Thus, from Mr. Pepper’s perspective, glo-bal leaders need both an understanding of anda concern for their customers. In fact, a trueunderstanding may be impossible without adeep concern for customers.

For me, this connection to customer needsdeveloped more while living abroad than itwould have ever developed within theUnited States. Not that you don’t need tostay close to consumers here, but living andworking amidst those in foreign countrieswho use your product, and seeing the im-portance the product has in the lives of the

If you are honestwith yourself, youcome awayfeeling like youreally need todeliver a goodproduct.


consumer, makes you try a lot harder toproduce a quality good or service that re-ally meets their needs.

Balancing Tensions

As the previous sections preview, there is nouniformity in customer preferences, competi-tive circumstances, economic conditions, em-ployee relations, or governmental regulationsacross the various countries and cultures. Welive in an increasingly borderless world that isnonetheless still filled with linguistic, cultural,political, temporal, economic, and social bor-ders. This creates conflicts and tensions be-tween and among various units in the world-wide company.

Many of these tensions stem from differ-ent drivers of global integration and efficien-cies and local adaptation. While there arebenefits of a global brand and standard pack-aging, as was illustrated in the case with Chi-nese customers, there are also local differencesthat have to be taken into consideration. Mr.Pepper identified being able to balance ten-sions between global efficiencies and localneeds as among the most important compe-tencies for global leaders.

Spending time in several international lo-cations during his career at P&G helped JohnPepper balance the global-local tensions andbetter prepare himself for his future positionof CEO and Chairman. Though P&G hasmade mistakes during the course of its inter-national operations, the organization hastaken consistent strides to learn from pastfailures and apply this knowledge to futureendeavors.

Mr. Pepper pointed out that spending timeconfronting these global-local challenges givespeople an experiential versus just an intellec-tual understanding of the challenge and de-velops their ability to recognize that often thesolution lies in creativity. For example, whilehe was in Europe as a regional executive, P&Ghad the challenge of introducing a new liquidlaundry detergent and gaining all the benefitsthat could come from a common product andpackage, yet there were differences in con-sumer needs introduced by different washingmachine designs. Some consumers used ma-chines that had effective dispensers; others did

not. The solution to the problem was in thecreation of a little plastic ball into which thedetergent could be poured and then consum-ers could place the ball in with the clothes. Asthe ball tumbled round and round (top to bot-tom) it would dispense the detergent evenly.

Mr. Pepper also pointed out that inter-national assignments are powerful means ofhelping leaders learn that usually the ten-sion between global integration and local ad-aptation lies not in going completely one wayor the other, but in discovering which ac-tivities should be integrated and whichshould be adapted. For example, the brandstrategy and its image for a product such asPert Shampoo (a “two in one” product ofshampoo and conditioner) might be thesame the world over, but certain things suchas the size of the package might be differ-ent. For example, customers in China couldnot afford larger “family size” bottles andinstead found single-use packets more func-tional. Thus, international assignments canteach leaders first hand that the solution toinherent global-local tensions often lies infiguring out which activities should be stan-dardized and locally integrated, whichshould be regionally coordinated, and whichones should vary country to country.

I think that international assignment expe-riences form the fiber of the ability to man-age standardization or localization. To glo-balize and standardize can be good, but topush standardization too far does not helpencourage the local sensitivity that is neededin order to create the variation that you needin a particular region. This is a real art, andone of the great challenges that a companylike our own faces is to know when to stan-dardize to the point of what we would callidenticalization, and where you shouldn’t.Some of our worst mistakes have been wherewe have standardized too far and not beenconscious enough of the need to tailor or tohave the environment that will create thenew idea that can be evaluated as a poten-tially new and better global standard.

As evidence of how difficult this balanc-ing act can be, Mr. Pepper offered the follow-ing example:

I think thatinternationalassignmentexperiences formthe fiber of theability to managestandardizationor localization.


For example, in our Pampers product linewe have an item that includes lotion. Wehave clinically proven that this lotion re-duces diaper rash. You introduce this sortof innovation in today’s environment andyou need to move the innovation aroundthe world very quickly. If you don’t, some-body else will get there first. The ques-tion is how much local checking shouldwe do before we take what we know is agood idea in the U.S. and we go across allof Europe? Well we went very fast and weare finding major problems with theproduct’s introduction in Scandinavia.Customers in some of these countriesthink it is not natural to have this lotionin a diaper and they were upset about it.There was no adverse physical reaction tothe lotion, just the perception that it isnot good.

We tried to address this as we typically dowith facts and figures, saying, “Listen, dia-per rash is lower, you shouldn’t be con-cerned.” Of course that doesn’t answer it.That was not the issue for these people. Inbeing culturally sensitive, you need to takethe time to go to consumer groups—thegroups that influence this opinion.

While those at headquarters surely hearabout these sort of challenges, Mr. Pepperargued that without firsthand experience, lead-ers are likely to discount the local issues. Whilebad carbonation may pose no real health riskin a cola drink, simply dismissing it may notwin the day with customers. Effective globalleaders need to have a real tactile feel for boththe global efficiencies and the local nuances.A feel for the local nuances can’t be gained“virtually” or by fax; they have to be gainedexperientially.

Appreciating Diversity

The final capability that Mr. Pepper felt wasrequired of effective global leaders, and thatinternational assignments were particularlysuited to provide, was an appreciation for di-versity. Mr. Pepper repeatedly stressed how hisappreciation for diversity had been strength-ened while living abroad. Through his inter-

national assignment experience, Mr. Pepperwas able to understand new viewpoints, expe-rience new cultures, and come away with sev-eral new paradigms for doing business and forliving life.

The whole ability to communicate acrosscultures has dramatically increased in im-portance over the last several years; theword “globalization” was not talked about10 years ago. I could pick up books, busi-ness books, and it wasn’t even in the index.It was nowhere to be found. Now it’s be-come extremely important, almost to thepoint of being cliché. Having internationalassignment experiences helps leaders tobetter communicate across cultures and ap-preciate the differences in the leadershipstyles that would make a very fine leader inthe Philippines as compared to one in Ger-many or in the United States.

While there is great cultural diversity inthe United States, as well as within othercountries, the magnitude of the differencesbetween and among people are probably mostclearly presented in an international assign-ment. Furthermore, because assignees areoften a significant minority (How manyAmericans live in Wuhan, China?), they areoften prevented from avoiding those who aredifferent and associating with people morelike themselves.

An international assignment definitely deep-ens your sensitivity to the diversity of peopleand situations around you. Having an inter-national experience helps managers see thatleadership doesn’t always feel the same orlook the same in every country and beingaware of that fact is a crucial ingredient forglobal leadership.

Conclusion

Clearly John Pepper believes that the vari-ous international assignment experiences hehas had have shaped him as a global leaderin powerful ways. It is also clear that he be-lieves such assignments can be one of themost powerful developmental experiences inshaping any potential global leader.

Having aninternationalexperience helpsmanagers seethat leadershipdoesn’t alwaysfeel the same orlook the same inevery countryand being awareof that fact is acrucialingredient forgloballeadership.


For people coming up in the company to-day and in the future, it will be very impor-tant that they have experience in variouslocal markets around the world. If leadershave been out there, they are really sensi-tive to differences in consumers, and at thesame time know how their basic needs arethe same. It is a different world today fromthe one in which I grew up. People can geta great deal of international exposure with-out having to do everything that I did. Yet, Istill highly recommend and want people toactually have the living and life experiencethat I did while living abroad.

Even P&G’s corporate website reinforcesthe importance of international assignmentsfor ascending leaders:

As we move to truly global businesses, hav-ing multi-country experience will be a morecommon requirement for advancement intomid and upper levels in many functional ar-eas. Separately, leaders in the new, more glo-bal company will need some level of geo-graphic flexibility.

As mentioned earlier, the current COB’stime abroad changed him as a person and wasthe most important and developmental ex-perience of his career. From his perspective,these experiences developed in him the capa-bilities he feels any global leaders needs: (1) theability to deal effectively with uncertainty, (2) aconcern for and an intimate knowledge of cus-tomers, (3) a capability for balancing the ten-sions between global integration and localadaptation, and (4) a strong appreciation for andutilization of diversity.

Managers today are in daily communicationwith counterparts all around the world. Thatis such a change from when I started in busi-ness and is very exciting. With technologychanging so rapidly, wait another 24 monthsand everyone will have cameras on theircomputers and we will be able to speak toone another and send films and have muchmore of a virtual presence. But I still thinkthe course of time will tell that the experi-ence of living in another culture, being therepersonally with your family, is an enormouslyand uniquely enriching experience.

But I still thinkthe course of timewill tell that theexperience ofliving in anotherculture, beingthere personallywith your family,is an enormouslyand uniquelyenrichingexperience.

CHRIS BINGHAM recently graduated with his MBA and Masters in International Studiesfrom Brigham Young University and will be entering Stanford University’s Ph.D. pro-gram in Strategy and Organization this fall. He has previously held positions with PriceWaterhouse and McKinsey & Company and is currently directing a study on Informa-tion Technology (IT) certification programs in Mexico City.

an interview with john pepper: what it takes to be a global leader

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