Why is P&G Renowned as a Successful 'CEO Factory'?

Procter & Gamble (P&G) reports that 99% of its senior leaders are promoted from within the company, with the business primarily hiring for entry level roles.

The consumer goods leader claims that it creates more future senior corporate leaders "than any other company in the world" through its training and development opportunities, as well as because of its employee value proposition.

Bala Purushothaman, Chief Human Resources Officer at P&G, says of the company's people strategy: "Our people have been at the heart of who we are since this company began".

Bala, who has worked for the company for more than 30 years, explains that P&G chooses to "invest in a superior employee value equation" in the same way it creates its consumer experience.

When it comes to developing and implementing this strategy, he says: "It starts with insights. We need to truly understand our consumers – their hopes, their fears, their dreams, their lives. 

“Then we apply those insights to deliver superior products, packaging, communication, retail execution and value. We're applying the same concepts with our employees to deliver a superior employee value equation."

Hiring for long-term growth

According to hiring data from P&G, the majority of employees have either less than one year of experience within the company (24%) or more than 11 years (18%).

This structure is a product of P&G's "Build from Within" approach to growth, with the company hiring early career talent and prioritising internal mobility.

To find talent that could be a long-term asset to the brand, the business assesses prospective candidates for traits such as ownership, resilience and leadership, using cognitive ability tests to filter for specific competencies.

P&G says it automatically filters out applications based on the results of these assessments, saving manual time for recruitment specialists within the company.

The result is a business that has rapidly become renowned for its proposition as a ‘career company’ and a finishing school for CEOs. 

Over the years P&G has become regarded as a training ground for senior leadership. Several factors underpin this reputation, including a focus on brand management discipline and operational rigour, and a culture built on results and accountability. 

This approach has produced executives who have gone on to run major corporations including former CEO of PwC US Tim Ryan, and Meg Whitman, who went on to be CEO of Hewlett-Packard and eBay after beginning her career at P&G in brand management. 

Building skills across the business

When it comes to developing its talent, P&G creates an environment where employees can build skills, have an ongoing dialogue with their manager and set individual goals that are tied to business objectives.

According to the company, this provides employees with a sense of ownership and accountability in their work and the wider business strategy, building its culture of growth.

In their first 10 years, the average P&G employee will hold five different roles, designed to be across different brands, businesses and even locations within the organisation.

This helps employees build a broader understanding of the business as a whole and develop new skills, preparing them for senior leadership roles.

The company believes that this cross-functional experience is essential for developing well-rounded leaders who understand the interconnected nature of the business and can make strategic decisions that benefit the organisation as a whole.

Training for leadership positions

To ensure new team members are prepared to take on new roles and experiences, the company has developed training and development support.

It uses a 70%, 20% and 10% approach to learning and development. This means that 70% of learning is rooted in on-the-job experience, 20% is social learning from colleagues and mentors and 10% is structured courses.

According to P&G, this approach could be suited for helping employees upskill to prepare them for long term growth.

The structured courses component includes both technical skills training and leadership development programmes, ensuring employees have access to formal learning opportunities throughout their careers.

Additionally, the company provides mentorship programmes that pair emerging talent with experienced leaders, creating opportunities for knowledge transfer and career guidance that supports the internal promotion pathway.