When Bob McDonald gets off a plane in any market, the first thing he does is meet with consumers and then tags along as they shop. The purpose of such visits is to determine consumer needs and, subsequently, use the information to help Procter & Gamble innovate.
McDonald assumed the role of chief executive officer just weeks ago, succeeding A.G. Lafley, who is now chairman of the board. Though new to the CEO’s position, the West Point graduate and former Army captain is a P&G veteran.
He joined P&G about 30 years ago, spending years leading the Cincinnati-based firm’s businesses in the Philippines, Japan and South Korea. He most recently served as chief operating officer.
McDonald is outspoken about his desire to improve people’s lives. It’s that thinking that motivated the former Boy Scout to join the Army. After his five-year service, he sought out a company that had the same principles. P&G, he has said, fit the bill.
The key to improving people’s lives is innovation, according to McDonald. “Innovation is the primary driver of growth,” he said at the Food Marketing Institute’s Private Brands Summit last month.
He noted that P&G once was technology-driven, not consumer-driven. The result: “We were creating products that people didn’t want.”
The company made a change for the better, resulting in such products as the Olay Professional line and Clairol Perfect 10 hair color. Innovation has also translated into new franchise agreements like Tide dry cleaners and Mr. Clean carwashes.
Looking ahead, innovation will come in the form of simplification, including cutting SKUs by 30%, and reducing new-product introductions by 50% — but making the ones brought to market bigger and better. “These are the things we are doing to take advantage of our scale,” he said.
Bill Bishop, chairman of Willard Bishop, Barrington, Ill., said Lafley had a long and successful run, but McDonald provides a necessary leadership change. “This is a wonderful chance for a new person to impose their vision — a vision very well calibrated for the needs of today,” Bishop said.
— Carol Angrisani