Advertising Age has an interview with Procter & Gamble’s new CEO, Bob McDonald, in which he addresses how the company is evolving since he took over from former CEO AG Lafley.
A couple of excerpts:
• “We were under-exploiting the scale of this company. ... Many analysts covering our company think size is a detriment. They believe in the law of big numbers -- the larger you get, the harder it is to deliver the same percentage growth. Size doesn't matter. What matters is turning size into scale and turning that scale into accelerated growth.
“So you'll see more multi-brand commercial innovation. We've created a new team, which we call the Vice Chair Team, which includes myself, [Chief Financial Officer] Jon Moeller and the vice chairmen, who get together weekly, plan personnel moves, look at our programs focused on various competitors and countries, and work to make sure we're showing up as one company and our scale is having an impact.
“[Another strategy is] simplification. The natural tendency of a company is to become bureaucratic, hierarchical and slow-moving. We're trying to [combat] that through the removal of layers and hierarchy and the use of technology, which frankly fits my engineering background and the fact that I studied computer science. ... We're going to use technology to make this company operate like a $10 billion company rather than an $80 billion one.”
• “We've got a $25 billion business in developing markets now. That's larger than a lot of our large competitors. Again we've got to turn that size into scale and scale into growth. ... A lot of the opportunities in these markets [aren't] about switching people from a competitor. It's about getting them to use a product at all, whether it be disposable diapers, feminine care products. Or if you get into some parts of the world, you find people using the same soap to wash their hair, their bodies, their clothes, their dishes, their walls. It's a huge opportunity.
“But I don't want you to take away from that that we're not serious about growing our business in developed markets, because we are. We need more new categories, more new Swiffers, more new Febrezes, more discontinuous innovation, and we're working on that ... And that's the kind of thing that will provide important step change in developed markets, as well as we need better loyalty to all of our brands in all of our categories, and we're working on those things as well. Multi-brand commercial innovation is one example. If you look at our Olympic sponsorship or NFL sponsorship, it's about scale, multiple brands and increasing the size of the market basket for American consumers.”
A couple of excerpts:
• “We were under-exploiting the scale of this company. ... Many analysts covering our company think size is a detriment. They believe in the law of big numbers -- the larger you get, the harder it is to deliver the same percentage growth. Size doesn't matter. What matters is turning size into scale and turning that scale into accelerated growth.
“So you'll see more multi-brand commercial innovation. We've created a new team, which we call the Vice Chair Team, which includes myself, [Chief Financial Officer] Jon Moeller and the vice chairmen, who get together weekly, plan personnel moves, look at our programs focused on various competitors and countries, and work to make sure we're showing up as one company and our scale is having an impact.
“[Another strategy is] simplification. The natural tendency of a company is to become bureaucratic, hierarchical and slow-moving. We're trying to [combat] that through the removal of layers and hierarchy and the use of technology, which frankly fits my engineering background and the fact that I studied computer science. ... We're going to use technology to make this company operate like a $10 billion company rather than an $80 billion one.”
• “We've got a $25 billion business in developing markets now. That's larger than a lot of our large competitors. Again we've got to turn that size into scale and scale into growth. ... A lot of the opportunities in these markets [aren't] about switching people from a competitor. It's about getting them to use a product at all, whether it be disposable diapers, feminine care products. Or if you get into some parts of the world, you find people using the same soap to wash their hair, their bodies, their clothes, their dishes, their walls. It's a huge opportunity.
“But I don't want you to take away from that that we're not serious about growing our business in developed markets, because we are. We need more new categories, more new Swiffers, more new Febrezes, more discontinuous innovation, and we're working on that ... And that's the kind of thing that will provide important step change in developed markets, as well as we need better loyalty to all of our brands in all of our categories, and we're working on those things as well. Multi-brand commercial innovation is one example. If you look at our Olympic sponsorship or NFL sponsorship, it's about scale, multiple brands and increasing the size of the market basket for American consumers.”
- KC's View:
