RB CEO Bart Becht describes the company's successful strategy in a CBNC interview

1. thE iNtERviEw bart becht
consumer
champion
As its brands defy the downturn,
Reckitt Benckiser steps up its global
expansion. Josephine Moulds
meets Bart Becht, the man art Becht, chief executive of Reckitt Benckiser, is not so
B
providing the sparkle. much a leader as a referee. As head of a firm responsible for
products ranging from Airwick to Nurofen, he encourages
constructive conflict in the 23,000-strong organisation.
“It’s my job to make sure that when there is a group of
people that passionately believe in a set of ideas, to let those
ideas flourish and not have them crushed by a majority or consensus,” says
the 51-year-old Dutchman, bathed in the glow of the packaging of some of
Reckitt’s leading brands, in a mock shop at its head office in Slough, England.
Becht describes the process that led to one The strategy has paid off. Reckitt smashed
of the company’s most successful products, 2008 forecasts and set ambitious targets for
the Airwick Freshmatic, built on the idea of 2009; rival Procter & Gamble cut forecasts
an industrial, automatic air freshener. In the and Unilever scrapped targets altogether.
early stages, most people involved did not The structure of Reckitt Benckiser is
believe this could be turned into a consumer designed to encourage entrepreneurial spirit.
product. The passionate few who did were Rather than the endless layers of management
not, however, duly silenced. Instead they that tend to plague large organisations, the
were allowed to work away until they found company has small teams and few processes,
something the consumer liked. with just two people between the marketing
director in a country and the chief executive.
Becht says: “I believe high-calibre, smaller
teams always outperform larger organisations,
i believe high-calibre, because if you double the organisation you
smaller teams outperform don’t get double the productivity; you lose a
substantial amount of productivity because
larger organisations now you have to organise all these interrela-
tionships between people.” (He refrains from
saying that this fervently held belief springs
from his stint at Procter & Gamble before
This approach does lead to some lively joining Reckitt in 1988.)
meetings. “You can imagine on Airwick “Within that context, I see my role as to
Freshmatic, when you have 10 people in the provide the overall strategy and direction, to
room, eight don’t believe in it and two do; set clear targets and make sure that we focus
you’re going to get kind of a rowdy discus- on the right priorities. After that we leave a
sion,” says Becht. “But it’s not a personal lot of space to the individuals to fill in their
discussion. It’s much more trying to convince role, and to accomplish their targets in a
each other what is the better idea, how we way they see fit.”
take it forward, how you change ideas, and Reckitt employees are encouraged to move
photo: max diamond
how you build on each other’s ideas. So it is around the world regularly, often doing differ-
what I would call constructive conflict, which ent jobs in the process. The reasoning is that
drives better ideas, rather than all sit around they become better and more rounded man-
the table and negotiate a consensus option.” agers, more capable of managing an inter-
18 CNBC EUROPEAN BUsiNEss i march 2009
april 2009 april 2009 i CNBC EUROPEAN BUsiNEss 19

2. thE iNtERviEw bart becht
national business with a portfolio of global Reckitt has had its fair share of failures,
RECkitt’s POwER BRANds
brands. Reckitt proudly boasts that its Veet although Becht says it has fewer now that it
hair removal products were sold in 75 coun- conducts more tests before a product comes
tries in 2007, compared with 26 in 1999. to market. Some six years ago, consumers reckitt Benckiser prides itself on its 17 power
Secondly, Becht hopes the expats will inject made it quite clear that they were not willing brands, which between them account
new ideas from abroad into their host coun- to pay up for a battery-powered toilet brush. for 62% of net revenues and 81% of the
try. He does still recognise the importance of The Harpic Ready Brush still sits in the toilets company’s growth.
locals for knowledge of the quirks of a partic- of the company offices, a damning reminder
FABRiC CARE
ular country. For example, Veet is used in the for those poor souls who spent an inordinate
Fabric Treatment
US to remove leg hair, but in India to remove amount of time fine-tuning a product that
Worldwide #1
hair from the forearms, which has a major would never sell.
— vanish
impact on how the product is marketed. Strong innovation, of course, must be
Water
New ideas are the lifeblood of the company, backed by strong marketing. And who can
Softeners
whose business is to excite consumers about forget the ludicrous advertisements for clean-
Worldwide #1
generally unexciting products – from disin- ing product Cillit Bang, which have inspired a
— calgon
fectant to headache tablets. Reckitt focuses techno remix and parodies in a number of dif-
Garment Care
on 17 so-called power brands in groups where ferent languages on YouTube?
Worldwide #2
it sees substantial growth potential. Reckitt still spends more than 90% of its
— Woolite
marketing budget on television advertising,
but Becht says that is rapidly shifting to dig-
sURFACE CARE
the consumer ital media. “The key thing about media is it’s
all about reaching your target audience in an
Multipurpose Cleaners
Worldwide #1 — lysol, Dettol, cillit bang
alWays Wants a Better effective and efficient manner, so it depends Lavatory Care Worldwide #1 — harpic
product on how consumers react to these media.
Clearly, digital is much more interactive dishwAshiNg
than television is, so it has some advan- Automatic Dishwashing
tages, but digital media does not work Worldwide #1 — Finish
Becht gives dishwasher detergent as an for every brand. The relative cost of
example. Even in the most developed mar- television and digital also plays a role hOmE CARE
kets, only 60% of consumers use dish- as to what extent we will use digital Air Care Worldwide
washers, with the remainder relying on the compared to television.” #2 — airwick
old-fashioned method of washing up by hand. The company actually increased Pest Control
That compares to washing machines, which spending on marketing in the last three Worldwide #2
sit in more than 90% of homes in developed months of 2008, despite the desperate — mortein
markets, making laundry detergent a largely economic climate. So far, Reckitt is weath-
commoditised category with limited oppor- ering the downturn very well. It posted a 26% PERsONAl CARE
tunity for growth. rise in profits for 2008, although results were Antiseptic Personal Care Worldwide #1
As such, Reckitt has focused its energies on flattered by currency movements as the com- — dettol
Finish, the number one dishwasher detergent pany does business worldwide but reports in Depilatories Worldwide #1 — Veet
in the world. It teams up with dishwasher sterling, which crashed at the end of last year. Acne Treatment Worldwide #2 — clearasil
manufacturers to help stimulate demand for Excluding the impact of acquisitions and
the hardware, in order to stimulate growth currency movements, Reckitt still enjoyed a hEAlth CARE
for its power brand. 10% jump in sales. That is expected to slow Medicated Sore Throat
It is questionable how far the company can to 4% next year – not bad when most devel- Relief Worldwide #1
go in the segments it has chosen to focus on. oped markets are plunging into recession. — strepsils
Air fresheners now come with motion sen- Becht insists this will not be a result of peo- Cough Relief
sors in order to release their fragrance when ple switching to cheaper unbranded products, Worldwide
somebody enters a room. Whatever next? but rather a product of slowing growth rates #2 —
“We don’t believe that there is an end to across developing and developed markets. Mucinex
innovation on our power brands,” says Becht. He has been well rewarded for his success, Headaches
“We have proven consistently that we can taking home a cool £4.5m in 2007, and sees and
excite consumers with better products and no reason this should shrink as a result of the Indigestion
new features on our products; that will con- current furore over executive pay. “The bulk — Nurofen
tinue to be the focus. The consumer always of the compensation lies in performance-ori- and gaviscon
wants a better product. They might not ented pay,” he says. “As long as we continue
always know what they want, but when you to be highly successful, people in this com- FOOd
come up with new ideas they know very well pany will continue to be paid well.” Mustard — French’s
what they like and what they don’t like.” Recession? What recession?
20 CNBC EUROPEAN BUsiNEss i april 2009