P&G eases itself into a new era

Moving Dick Johnson – Procter & Gamble’s highly regarded UK marketing chief – to a new strategic public relations role marks more than a promotion.

Moving Dick Johnson – Procter & Gamble’s highly regarded UK marketing chief – to a new strategic public relations role marks more than a promotion. It is symbolic of far-reaching change in the company.

No one can have failed to notice the pivotal role that aggressive PR played in crippling Unilever’s Power product. Nor how unusual it was for P&G – a company renowned for its secretive culture and ruthless marketing professionalism – to ascend a platform of “public responsibility” and openly berate its principal rival. In this new no-holds-barred environment it makes perfect sense to get closer to your “target groups” – the Government and Press high among them. Who knows when P&G might not find itself in a corner, as it once did in the US with the Rely tampons affair?

Johnson’s promotion is, of course, only one of a constellation centring around the retirement of chief executive officer Ed Artzt. On the face of it, his replacement by John Pepper is surprising. Pepper was runner-up at Artzt’s own inauguration as ceo five years ago. He’s softer-edged and more consensus-driven than Artzt. Many had thought Durk Jager, an Artzt protééfashioned after his own aggressive, uncompromising image, was the obvious successor.

But things are not all they appear. Jager will be powerfully entrenched as chief operating officer. So will other Arzt placemen like Harald Einsmann, after a global restructuring which leaves “the rest of the world” in a much stronger position. This is epitomised by an unprecedented four non-Americans holding the top six executive portfolios.

Arzt has been at, or near, the heart of P&G’s radicalism over the past decade or so, including the early transition to category management , everyday low pricing, the ruthless excision of “dead” brands or personnel and a visionary insight into the role of new media. Profits soared during his reign, but inevitably there have been questions about the longer term consequences of his legacy.

Pepper’s conciliatory manner will smooth some of the internal tensions created by the break-neck change within P&G. But big strategic questions remain. Should P&G remain a player in food? Cosmetics and toiletries need a bit of a rethink, too. Never say it can never happen. That was the kind of complacency that characterised IBM, Kodak and General Motors before they took a tumble.

Procter & Gamble, page 9, 11

Procter & Gamble, page 9, 11

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