Cannes Lions 2010: P&G President & CEO Bob McDonald on the ‘operating plan’ of touching and improving more lives
The Cannes Lions stage was set – Publicis Groupe Chairman Maurice Levy on the asking end and the answering end was P&G’s relatively new President and CEO, Bob McDonald, who has been in his current role for a year now. In this tete-a-tete with Levy, McDonald speaks on the company’s new growth drivers, the role that technology plays for P&G and why collaboration is the name of the game moving forward.
Speaking on his run as CEO so far, McDonald said, “Last year was bad, but we rededicated ourselves to our purpose, which was to serve people and turned that into an operating plan, touch and improve more lives of consumers. Today, P&G reaches 4 billion consumers, and we plan to increase it to 5 billion in the year ahead. An average consumer is spending $12 a year on P&G products and our target is to increase it to $14. So far, things are going are as planned. We have learnt that focussing on ‘purpose’ has inspired us and our employees on building relationships with our consumers that are not just about marketing our products to them, but serving them and improving their lives.”
According to McDonald, one guiding aspect of P&G is to understand what it means to connect with 4 billion people. He said, “It causes you to realise how thoughtful you have to be to connect with people all across the world, and how the purpose to change lives can be such a guideline.”
Levy then asked McDonald what it was like to connect with 548,000 consumers every day. The latter reiterated that the focus on the purpose and making the purpose pervasive had become a part of P&G philanthropy – to move from marketing to serving, where innovation was key.
For McDonald, it was ‘fun’ to think about products that consumers would want five years from now, and that was where consumer knowledge and insight played a role. He pointed out that the company spent billions of dollars in this area and was always looking for partners who could share that vision.
P&G had extreme clarity that in order to achieve the company’s growth targets, the company had to invest in all markets. McDonald pointed out that while the US was one of P&G’s strongest markets, the company was still not developed with Hispanic consumers as it should have. Of the 20 new factories that P&G is working on, one of the biggest is in the US.
McDonald added to that, “We are four times bigger than the next best in China and yet we are only in 15 categories in comparison to 35 in the US. Across all markets, what we need to do is touch more lives and bring our full portfolio of brands in each of these categories.”
McDonald further spoke on consumer facing initiatives from the company like P&G’s water purification endeavours in various markets and internal initiatives like focus on the environment that saw P&G reducing it carbon footprint by 50 per cent and the expectation is to bring that down even further.
The panel was then joined in by Google’s Nikesh Arora and Microsoft’s Darren Houston. Needless to say, the conversations from there were about collaboration and technology.
McDonald was clear that P&G had to become the best technology-enabled company in the world. He informed that the company had worked hard on digitisation not only on aspects like moving away from bench laboratory prototyping, but also in everyday work to bring in more effectiveness. He divulged that at P&G, the executives had to be comfortable with technology before getting a promotion.
The four panellists discussed that there was still time before the Microsofts and Googles of the world competed with each other. There was place for everyone. Even as various benefits of technology and its role in bringing brands closer to consumer were discussed, for McDonald, there was no substitute for ideas. He said, “The 1s and 0s cannot create ideas, and that is where our agencies come in because we want to impact people.”
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