Procter and Gamble’s Success and CEO Bob McDonald’s Journey

Introduction

Procter and Gamble is a company that has shown impressive success since its creation in the year 1837. Procter and Gamble has made its way to a successful career and is now a globally recognized business to business firm that distributes several products around the world. Bob McDonald is the current President and CEO of the firm. He has held this difficult job since 2009 and has also contributed to recent success of the firm. The reason why this position is so difficult is due to the very diverse and complicated activity of the firm.

Nevertheless Bob McDonald has done a lot for the firm and has kept the firm up and running and at its best. A former U. S Army captain, Bob McDonald has worked for Procter and Gamble for 30 years before he became CEO. Since he applied for a job in P&G in 1980, he worked himself to the top through the years in the firm. Upon entering the firm, Bob never thought of becoming a CEO. He just needed a stable job and a permanent home in Cincinnati.

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Bob explains his wrong expectations in the following quote “I was leaving the military service, and I really joined P&G in order to spend my entire life and raise my family in a city like Cincinnati and never have to move. So in 1989, when the company came to me and said, "We'd like you to move to Toronto, Canada," I said, "Did I do something wrong? " (Bernard-Kuhn, 2012) Due to the fact that the former CEO of the firm anticipated that the company was going to be more successful in international markets, he sent Bob and other company employees to work in different parts of the world where P&G facilities existed.

When Bob achieved his new position as CEO he expressed his feelings by saying “I would describe those first weeks as filled with anxiety and humility. This is an institution that is, in my mind, the greatest company in the history of the world. There are fewer than 40 countries that have been around as long as P&G. ” Bob felt out of place and felt burdened to has such huge responsibility on his neck. (Bernard-Kuhn, 2012) Bob McDonald and P&G As I said before Bob, when Bob became CEO he had no plans. He was afraid of the responsibility given to him. This was what pushed him to implement some great strategies.

These strategies proved successful and increased the firm’s overall quality of performance. The first step Bob McDonald took as CEO of Procter and Gamble is reaffirming the firm’s purpose which is “to touch and improve the lives of the world’s consumers through branded products of superior quality and value”. (McDonald, 2012) He was determined to increase the firms growth through introducing superior products to satisfy consumer needs and wants in a sustainable and profitable manner. He was not exactly sure how he was to that and is why he replied to friends’ congratulations by saying, “Please don't congratulate me. It's way too premature.

Wait until I retire, and let's look back and see whether or not the company is stronger than it was when I took over. " (Bernard-Kuhn, 2012) Bob was frightened by the degree of responsibility that he was burdened by and was not sure how he was to succeed in making the firm better. Bob introduced a new strategy which was implementing immediately. His strategy was to focus on its “40 largest businesses, its 20 most successful innovations, and the 10 most profitable developing markets”. (McDonald, 2012) This strategy is basically based on good consumer relationship building through the augmentation of brand awareness and brand effectiveness.

Due to its diverse products Procter and Gamble has often found itself generalizing in terms of targeting. It was not doing a very good job of reaching out to the right consumers with the right brands. By focusing on certain brands, however, and properly targeting the right segments for these brands Bob was able to create a better public image for the firm. Basically the steps that were taken here are turning brands into innovative ones and proving the right brand and product for the right consumer. This strategy has led to 4% growth for Procter and Gamble each year four every year it since it was implemented in 2009.

This growth has been achieved even though there was no market growth and there were many problems emerging such as the financial crisis and decreases in the market shares. So that was pretty impressive. The company’s stated the results of its growth since the implementation of the strategy b stating “in the last fiscal year, P;G returned $10 billion of cash to shareholders through $6 billion of dividends and $4 billion of share repurchase. P;G paid a dividend for the 122nd consecutive year – one of only nine companies to have done this. The Company increased the dividend by 7%.

This was the 56th consecutive year the dividend increased – one of only six companies to have done this”. ("Procter and gamble," 2012) Bob McDonald Leadership When speaking of how Bob leads his company we see that he follows a value-based leadership. He has spoken of this type of leadership several times. He often says that “living a life driven by purpose is more meaningful and rewarding than meandering through life without direction”. (Knight, 2011) He believes that a successful business requires good planning because people want to work with leaders who are predictable and who plan out everything in their lives.

Bob said to a group of students in a speech that “people like to work for leaders that are predictable, they like to work for leaders that have a purpose in their own lives and a values system they can follow. ” (Henretty, 2008) Bob even encourages his employees to seek a purpose in life rather that only focus on a job in Procter and Gamble. He says that this makes for more innovation and more willingness to make efforts. He tells his employees “don’t make your goal in life a position at Procter and Gamble. You need something a little bigger than that”. Henretty, 2008) Bob defines a good leader as someone who builds teams that put certain value in their work. These teams should learn to work together and through time become like a family. He further defines good leadership by saying that ““the true test of leadership isn’t what happens when you’re there, it’s what happens when you leave. ” (Henretty, 2008) Basically his idea is all about team building and keeping the team together. The type of leadership Bob uses was favored by employees. This is because Bob encouraged employees to seek value in their live and to be innovative.

This tolerance of freedom led to willing employees. Employees started working as if the company was theirs. Of course there is a always a negative side to everything. Inefficient employees were often sacked. As a matter of fact Bob got rid of many employees to leave room for new innovative ones. Although this was not appreciated by some it had to be done in order to keep expanding as a team. Bobs speeches were very innovative and pushed employees to do their best. Conclusion To conclude, Procter and Gamble has grown tremendously since Bob McDonald ecame CEO. Bob used many strategies to enforce sales. The secret of his success were not only due to brand and product oriented strategies, but was also a result of good leadership and good team management. His leadership skills played a major role in shaping the employees of the company. Although Bob was forced to make harsh decisions and fire people he also recruited quite a number of able and experienced employees.

Reference

• Bernard-Kuhn, L. (2012). Procter ; gamble ceo: Company is people powered. The Cincinnati Enquirer, Retrieved from http://www. usatoday. om/story/money/business/2012/11/19/procter-gamble-ceo- mcdonald/1715573/
• Henretty, A. (2008, July 10). Man with a plan: P;g coo bob mcdonald on ‘values-based leadership’. Retrieved from http://www. kellogg. northwestern. edu/News_Articles/2008/bobmcdonaldpg. aspx
• Knight, B. (2011, September 7). P;g ceo bob mcdonald on values-based leadership. Retrieved from http://www. owenbloggers. com/2011/09/07/pg-ceo-bob-mcdonald-on-value-based- leadership/
• McDonald, B. (2012). Procter and gamble. Retrieved from http://www. pg. com/en Procter and gamble. (2012). Retrieved from http://www. pg. com/en

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