Proctor & Gamble: Turning The Tide

For over 175 years P&G has been the leader in consumer products, smart innovations and images-10new products marketed with style that always generated healthy profits. So what happened to P&G? Has it lost its luster? Instead of gliding on top of success they’ve wound up falling down revealing a different and slower company than it was made famous. To change the tide, Marc Pritchard, P&Gs CMO needs to impact simultaneously seven factors that are essential if they are to pull themselves out of this wreck.

Shared values: Without non-financial goals P&G is rudderless and Marc Pritchard needs to know that if employees do not share rock hard beliefs then they’re not coming. P&Gs credo is “we are committed to delivering products and services that make everyday life better for people around the world.” P&G clearly need to reinsert into their culture a sense of shared values as these seemed to have come adrift from their halcyon days.

Structure: The cleansing fire of restructuring that aimed to streamline and simplify P&G has faltered. Marc Pritchard needs to decide if P&Gs portfolio is structurally led or strategically led. At present P&Gs master brand endorsement policy has made P&G structurally led (and slow) across hundreds of brands, including P&Gs biggest brands, Ariel, Olay, Joy, Pampers, Safeguard, Whisper, Pantene, Tide and Downy. Whereas being strategically led would enable P&Gs brand managers more freedom to make major decisions with alacrity that can positively affect profits and P&Gs corporate reputation.

System: P&G need to adopt new systems to manage its innovation pipeline and brands globally. Therefore, greater viability and accountability measures need to be incorporated into their brands and reporting systems. One example is their ramped up investments into marketing and innovation that have not yielded the sales boost that it used to. Many analysts are complaining that even though P&G has increased investment it’s merely renovation innovation and P&G need a new system for doing things differently with alacrity.

Skills: The once venerable P&G is accused of being too slow to react to the trading down of the west, the trading up in Asia, social media and the swelling middle class in emerging markets — all areas where P&G is struggling to keep up. Therefore, P&G first need new skills to cope with the fast moving world by enhancing greater flexibility across divisional lines of communication that stop P&G from flailing around like a loose fitting part in a machine that could eat itself up. Ultimately building the appropriate skills to tap growth with P&Gs diverse product portfolio.

Staffing: The market wants to see a senior management team free to make major decisions that show P&Gs global brand management is gaining momentum and outperforming Unilever and Colgate; last week’s results demonstrably showed that parts of P&G are doing neither. However, P&G might be struggling, but it’s not folding — its portfolio represents some of the biggest brands in the world that attract top talent, but staffing and succession plans are essential, especially as P&Gs CEO might not survive.

Style: Success is not about skills it’s about attitudes and P&Gs culture is accused of being too insular, a culture that has been created from the top down evidenced by the ragging P&Gs CEO Bob MacDonald has been receiving from investors and analysts. Bob MacDonald has accepted that P&G’s cost base was bloated and its processes too bureaucratic — clearly P&G needs a new style of approach to break out of the malaise. The other area that needs a style change is P&Gs pedestrian marketing that is perceived as old school. images-11

Strategy: P&G is spending more, but growing less and P&Gs corporate ‘Credo’ has been weighed, measured and found wanton. Consequently matters are at a division of deep regret and to stop the spreading sore P&G need a succinct master brand strategy for P&G and each of its portfolio brands that can act as lens for the businesses to make decisions and a compressed management tool — something their one page Credo is evidently lacking.

The humbling descent of the famously disciplined P&G needs to remember former CEO, AG Laffley’s strategy — when times are tough you build share — and accomplish growth with determination, self-reliance and a degree of success that is particularly notable to investors. In these choppy waters one thing is for sure if P&G is to reclaim its leadership status and achieve a level of success that satisfies a vituperative Wall Street: P&G need an imaginative and audacious response that turns the tide.

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Author: Dean Crutchfield

In an award-winning career spanning two decades, Dean Crutchfield has created, built and re-invigorated some of the world's most iconic brands.

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