In 2004 Kimberly-Clark, the US company whose brands include Huggies nappies and Kleenex tissues, renewed its attempts to set up a pan-Andean regional management structure.
An Argentine, Sergio Nacach, became general manager for a market that encompassed Peru, Ecuador, Bolivia, Colombia and Venezuela. He was charged with boosting growth in sales and profits.
Kimberly-Clark’s development in Latin America had come largely through acquisitions. The purchased companies often kept their original management who, having sold the business, were not committed to change or to improving financial performance.
Mr Nacach had to battle expectations among the staff.
First, earlier efforts to create a pan-Andean management structure had failed because of the autonomy of the acquired units and cultural differences between the countries.
Second, the market appeared to have little potential. The countries were relatively poor: some items, such as nappies, were sold in single units because consumers could not afford to buy them in bigger quantities.
In addition, the goods – tissues, nappies, feminine hygiene products, paper towels – were humdrum everyday consumer staples.
Overall, the assumption was that sales growth would merely match that of personal income.
Mr Nacach set out to institute “a winning culture” that focused on employees. Although the idea of building a culture that engaged staff was not new, it was implemented infrequently – especially in Latin America, with its more paternalistic and hierarchical traditions.
Mr Nacach instituted several actions, including:
● Eliminating status symbols that separated employees from the leadership. This included removing security barriers to the executive floor and making it common practice for everyone to use each other’s first names.
● Using newsletters and frequent meetings to share information...