Before my 9 years at Microsoft, I spent 26 years at P&G, with the last 4 as a Senior Vice President. Given that experience, I have a strong opinion as to why P&G has performed so well.
It may be modified a bit by now, but for many decades, each P&G brand has been managed by a small brand group of 5-6 people. That group is responsible for growing market share and profits. It proposes product and marketing initiatives, and seeks top management agreement by developing a tight, thorough, persuasive 3-6 page document that proposes the change. Such a document works its way up the chain of command to the CEO. At each level, questions are posed and improvements in the proposal are made to reflect appropriate input. Let me describe the required structure of those documents and I think you will see how they force quality thinking:
1.) Recommendation: The first sentence or two of the document explains clearly what you recommend. This is typically a request for funds to launch a product improvement, a defensive marketing plan to blunt a completive initiative, the kickoff of a new advertising campaign or anything that is important enough that you need to ask for approval from the appropriate level.
2.) Background: Next comes a set of paragraphs that provide the background information required by the reader to understand the current situation and the opportunity you want to pursue, problem you want to tackle, etc.
3.) Rationale: This is the guts of the document and describes the key reasons why the reader should agree with your proposal. The reasons should be stated in order of priority and should be supported by consumer research, marketplace data, and business impact. You need to make a compelling argument that is clear and concise. This rational section should be of impeccable logic and thinking in providing the reasons why what you recommend makes sense.
4.) Next Steps: This concluding section should make it very clear what actions will be taken as a result of getting approval of your recommendation.
The advantages of requiring such documents are as follows:
1.) It forces quality thinking – It requires carefully analyzing available facts and options, resulting in a proposed action plan and the rationale for pursuing it.
2.) It focuses responsibility – The writer realizes their name is on the document and that driving change depends on them. It helps the management insure that someone is personally responsible, in that the writer’s performance appraisal will be directly impacted by the quality of the proposal and the thinking, and the implementation if approved.
3.) It generates healthy debate -The document is a fabulous tool for soliciting feedback and perspectives during the document’s development and the process of getting approval from the appropriate levels of management.
Leaders need to encourage quality thinking. Requiring sound, persuasive proposals is a great tool. By the way, it is interesting to note that Amazon was highlighted recently as using this same approach.