Rebound from costly errors

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in Leaders & Managers,Leadership Skills

In 1995, Jim Stengel moved to Prague to run Procter & Gamble’s business in the Czech Republic and Slovakia. He had already spent 12 years climbing the ladder at P&G and he was headed for the executive suite.

Then he stumbled.

To launch Secret deodorant in the Czech Republic, he invested about $2 million to distribute samples to women around the country. He sought to introduce the product to as many of the 8 million Czech women as he could.

“I studied what worked around the world with Secret,” Stengel says. “I intended to leverage all the marketing principles that P&G had learned based on our successful sampling in other countries.”

Despite his efforts, however, the sampling was a disaster. Few orders came in. Secret sat on retailers’ shelves.

Stengel investigated what went wrong and found that deodorant was a seasonal product in the Czech Republic. Women only used it during warm weather.

“We sampled it in the spring when it was too cool,” he says. “That meant they kept the samples for several months” rather than trying it and then buying it.

To make matters worse, Stengel discovered a high incidence of stolen samples at local post offices. He didn’t think to hire security or work with P&G salespeople and local police to safeguard distribution of the samples.

Eventually, P&G’s products sold well in Eastern Europe. Stengel’s initial troubles in his new position didn’t jeopardize his career.

“My boss was very understanding,” Stengel says. “He always told me to try to get 70 percent of my decisions right, and that 30 percent would be wrong in these fast-paced, dynamic foreign markets.”

The missteps didn’t do lasting damage. Stengel’s ability to learn from his mistakes helped him become P&G’s global marketing officer from 2000 to 2007. He ran an $8 billion advertising budget and managed nearly 7,000 employees.

“In the Czech Republic, I didn’t understand the consumer as well as I should have,” he admits. “I also learned not to blindly follow a success model without making some modifications. Sampling wasn’t a bad idea, but I should have done it in a different season using a smaller-size product and providing better post office supervision.”

The missteps didn’t do lasting damage. Stengel’s ability to learn from his mistakes helped him become P&G’s global marketing officer from 2000 to 2007. He ran an $8 billion advertising budget and managed nearly 7,000 employees.

 

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