Case Study 1 - Strategic HR at Colgate

Strategic HR at Colgate-Palmolive
Colgate-Palmolive Company (C-P) is a global company with sales of over $5 billion that recently
received new ‘marching orders’. The new CEO developed and communicated a new strategic
direction for the company based on what he called his ‘corporate initiatives’. Among other things,
the new strategy emphasized concentrating on new products, being the low-cost producer, and
simplifying businesses and people management procedures. It also focused on changing structures,
pushing decision-making downward, promoting entrepreneurial action, and improving morale and
motivation. The new strategy was aimed at making Colgate a leaner, more responsive competitor in
its global markets and in focusing the company more clearly on health-related products.
Consistent with this new strategy, several steps were taken. Four major businesses were divested,
including two sports and recreation companies. A major reorganization took place, which merged
two levels of senior management. HR programmes at C-P got a new mandate to help Colgate achieve
its new goals.
The programmes laid out for Colgate provide a glimpse of how HRM today is being pressed to get
involved in strategic management. At C-P, HRM was directed by the CEO to develop and execute
programmes designed to create a company culture that would achieve the following:
∙ Encourage a spirit of teamwork and cooperation among business units in working towards
common objectives, with emphasis on acknowledging and rewarding individual and unit
excellence.
∙ Foster entrepreneurial attitudes among the managers and innovative thinking among all
employees.
∙ Emphasize the commonality of interest between the employees and shareholders.
To that end, numerous HRM programmes had to be designed. For example, the company’s executive
incentive compensation plan was redesigned to place more emphasis on individual performance and
achieving operating targets. Employee benefits were redesigned to make them more flexible and
responsive to employees’ needs. The bottom line was that by implementing these programmes,
HRM helped refocus employee efforts in a manner that contributed to the extension of Colgate’s
strategic plan.
Soon, C-P topped the list of the 25 best big companies for work–life balance. C-P offers some great
employee benefits, such as flexible work hours, telecommute options, and nearby back-up childcare
centres, which is a nice perk for work-at-home parents. As a result, C-P has a high rate of employee
retention, which is a testament to their work culture. Colgate truly is a world of opportunity. To
support employee development and job satisfaction, Colgate proudly offers global career
opportunities and access to world-class training and education programmes. Colgate encourages
employees to expand their professional horizons. Attracting, developing, and retaining exceptional
people is a priority for the company. C-P has a two-pronged approach to developing people.
∙ Individual development planning (IDP): Colgate IDPs enable employees to partner with their
managers to identify skills, behaviours, and knowledge needed to achieve specific goals ∙
Succession planning: Colgate relies on global succession planning to identify and develop a
continuous stream of the next two to three generations of Colgate leaders
One major problem that C-P is facing in the current scenario is how to sustain organizational
excellence in a perpetually disruptive job market. With large scale turnover taking place across all
industries and retiring baby boomers in the western world, getting a good supply of people is a
challenge and C-P is learning to grapple with that challenge currently.
C-P managers realize the need for an even more coherent HR-strategy integration. Colgate is a truly
global company being globally diversified in over 120 countries in all continents. As such, it is
important to attract, develop, and retain people of all backgrounds, cultures, and nationalities.
Building this global mindset and cultural sensitivity in the people is critical to their business survival
and to the family’s satisfaction while operating abroad. This requires having superior
communications up, down, and across the organization, and to have values in place that encourage
cooperation, sharing of information, and joint decision-making.
There is a need to integrate people, processes, and functions along a common theme. It must begin
by developing the competencies, getting senior management commitment, communicating the
intent and encouraging everyone, from the administrative staff to the most senior staff to come
together. This certainly requires establishing processes which bring forth and tap the ability of all
employees to contribute effectively. Effective change management must be in place to manage the
transition from where the organization is now to where it needs to be. All this brings forth the
extremely crucial role of the HR team. Getting the team geared up is the key.59
Questions for Discussion
1. Which approach or model of SHRM is evident from the case? Discuss.

2. What does the company need to do to gear up its HR team in order to cope with the challenges
discussed in the end?

Case Study 1 - Strategic HR at Colgate

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Case Study 1 - Strategic HR at Colgate

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Strategic HR at Colgate-Palmolive

Questions for Discussion

1. Which approach or model of SHRM is evident from the case? Discuss.

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