Beauty product company Coty Inc. needed a makeover, so it turned its own employees into change advisers and ambassadors.
by Kate Everson
August 18, 2015
In July, Coty Inc. purchased some of Procter & Gamble’s beauty brands for $12.5 billion. The acquisition turned the 110-year-old organization into one of the largest cosmetic companies in the world. But before this milestone, it partnered with its own employees to meet the company’s growth goals.
It used a process called insourcing to develop consultants from its existing employees. Chief learning officers can use the process to gauge how their programs align to business needs by bringing front-line perspectives to the decision-making table, and to promote their work by having employees act as sponsors. In Coty’s case, insourcing had employees weigh in on and support a business growth goal that relied on company performance and processes.
In 2011, Coty’s leadership saw that the organization had hit a progress plateau that thwarted its goal to be in the top third of the beauty industry’s supply chains. Until then, the company had been on track with a 2008 business plan that included making the company’s 10 manufacturing sites more efficient.
Then-executive vice president for supply chains, Darryl McCall, knew he had to refresh the company’s efforts. To do so, he turned to the people responsible for helping the company make the change — its employees.
“Success is really measured by getting 50 percent of your organization plus one person committed to volunteering to help,” said McCall, who retired in 2014. He recruited an army of volunteers who could not only help develop a plan to rejuvenate the company’s growth rate but promote it within the company’s ranks.
McCall, his 13 managers and their direct reports put together a business objective called “Act Today, Shape Tomorrow” to get the supply chain back on track with Coty’s growth plan. They visited the sites, acted as champions for it and created a sense of urgency around it. Volunteers learned to reinforce the idea of reapplying success models across struggling parts of the business, a skill that remained useful beyond the original initiative. All of this happened in the first 180 days of the process.
Coty’s then-CEO wasn’t ready to commit to applying it throughout the whole company — an early blow that didn’t deter McCall’s efforts but did force him apply the process to just his side of the business. Because of the $5 million price tag, the supply chain branch had to make up for its cost to get permission from the rest of the organization.
“The fact we had to absorb $5 million was a reason to hold ourselves accountable,” he said. “We took a two-year investment, applied a calculation to it and decided we had to generate $50 million of savings if we were going to have to find a payback.”
They were already saving about $40 million to $50 million a year between 2008 and 2011 before they hit the plateau, so McCall felt confident they could break even, despite some trepidation from the rest of the team.
Gregg LeStage, executive vice president at leadership development firm Kotter International, which worked with Coty during the process, said employee trepidation is one of the biggest barriers to successfully insourcing consultants within an organization. Starting small, however, is a way to overcome that hurdle.
“People do small change in small groups,” he said. “They find change agents. They train them, and then they take over the change. Once they realize that there is a way to coordinate large numbers of people and it won’t just collapse, that’s another obstacle cleared.”
But what’s in it for Kotter International, whose business relies on companies without inside consultancy talent?
“We don’t set up the methadone clinic,” LeStage said. “We teach them and move on. Consulting in its truest form is teaching someone to do what you do.”