The biggest challenge for P&G's new CEO will be nurturing a culture of risk

Procter & Gamble: New CEO needs to balance blue chip' culture with the risk embracing culture of smaller competitors.
Procter & Gamble: New CEO needs to balance blue chip' culture with the risk embracing culture of smaller competitors.

James Pattinson, chief ordnance officer at Reluctantly Brave and former P&G brand marketer argues that his biggest challenge will be balancing 'blue chip' culture with the risk-embracing culture of smaller competitors.

Like Lafley, Taylor has spent his entire career at P&G. This is because P&G has a ‘recruit from within’ policy - each graduate joins P&G with the idea that they could one day be CEO - It’s one of the reasons P&G has such a strong culture.

Despite its many strengths, it also has many challenges

This appointment is important because P&G is seen as one of corporate America’s ‘classic’ blue chip companies but it has struggled since the great recession started. Taylor has a big challenge on his hands to steer the company through what is being termed the "most comprehensive transformation in [its] history". 

For the last few years, P&G has been engaged on a ‘productivity and growth’ strategy which many have seen as simply job losses and cost cutting. There are parallels here to be drawn with the Greek economy.

But the question for Taylor is what path should he take to return P&G to growth? And can cost cutting and productivity gains really be sustained? Or does he need to enact a culture change?

P&G, often cited as one of the best companies for leadership development in the world, is an amazing company with highly evolved processes and procedures, honed over the last 170+ years of its history.

Speed, flexibility and agility 

It also has the ‘gold standard’ in marketing and a strong heritage of innovation - from developing the modern brand management system, to pioneering employee stock ownership. It is a business with solid fundamentals to build from.

However, despite its many strengths, it also has many challenges.

The rigour, processes and scale of a business like P&G can also be big obstacles to effective decision making. This is especially apparent when the external environment has changed so much.

P&G that there is a restless desire to improve, change and reach for better solutions

Speed, flexibility and agility are more important than ever before. Markets and demand patterns are in flux, leaving P&G being out-performed by rivals.

P&G is a business, like other blue chip's, that values continuity and consistent strategy improvement. So it is therefore extremely unlikely there will be revolution under Taylor's watch any time soon.

Not least because Taylor has worked for Mr. Lafley for 20 years and will have been carefully groomed for succession.  He is a product of the very system that he needs to evolve.

I know from personal experience at P&G that there is a restless desire to improve, change and reach for better solutions. But at the same time P&G may benefit from a culture that is more innovative and more willing to take risks. In P&G’s case, incremental changes could add up to a significant change in overall performance.

Taylor could, for example, consider introducing what we refer to as a ‘Profense’ approach.

The business would benefit from bringing in different voices and perspectives 

This is combining a defensive strategy (protecting what’s important) with a proactive, forward moving strategy - adding small elements of innovation into everyday P&G processes in order to enact cultural change. But brand teams would need to feel empowered to take risks with internal process to achieve this, which can be a challenge at a business the scale of P&G.

Taylor might also benefit from bringing different voices and perspectives into the organisation. Though a business can never "buy in" the change an organisation needs, bringing different voices into decision making and introducing perspectives from outside 'blue chip culture' can pay dividends.

It's not easy to move to a more innovative, risk embracing culture. However, P&G has a track record of making the changes necessary to win now, and in the future. And with 170 years of being one of the biggest players in FMCG, there is no reason why it should not make another century.

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