It's Not Your Father's P&G

[Note:  This paper was written on February 27, 2000, however, the points being made are relevant today despite the changes made at P&G.  Mr. Durk Yager's employment has been terminated.]

The above was the Cincinnati Post headline for Saturday, February 26, 2000.  Based on the events of the past couple of weeks, no truer words were ever spoken.  The objective of the new Chairman and CEO, Durk Yager, was to make P&G "nimbler, smaller, and faster."  Not a bad objective in this day and age.  However, there are other considerations such as the Purpose and Core Values of the company that should be taken into consideration.  The purpose of the company points to superior products, value and improvement of the consumers' lives, as well as leadership in sales, profit growth and the prospering of the employees, shareholders and the community.  The nimbler, smaller, and faster part is the way we operate and should not be at the expense of our purpose and values.

Why should we be concerned with P&G?  Patience, I think there is a lesson to be learned by their approach and as I see it, their mistakes.  First, they rushed out to acquire another company and at the same time took on an enormous debt without considering one of the major customers of the company, the shareholder.  When investors found out about the possible acquisition, they rebelled.  The stock value fell 19% in two weeks.  now panic has set in.  Not only did the deal fall through but they must now build shareholder confidence.  Net result:  budgets were slashed in order to raise profits and thereby shareholders' perception of management.  What does this have to do with customer and market research?  I think a lot.  We must understand the customer comes in different forms.  There are many levels of customers.  Some people believe we should not only look at our shareholders, consumers and retailers as being our customers, but also the employee as a personal customer.

The second example of a change in the P&G way of doing things involves a "P&G News Release" titled, "New Study conducted at Yale University Concludes that Bad Hair Days Affect More than Your Appearance."  This research project was basically set up to address the problem for which P&G's new product, Physique, was to be the solution.  While I do not disagree with the findings of the research, that is, that bad hair days can cause psychological problems.  I do take exception with what I perceive to be the basis of the research.  I believe that they wanted a study that showed that there was a personal need for Physique beyond just the cleaning and manageability of a person's hair.  P&G contacted Dr. marianne LaFrance, Professor of Psychology and Professor of Woman's and Gender Studies at Yale University, to conduct the study.  My concern is that they made a big show of the results of a study that was and I quote, "among an ethnically diverse group of research participants from in and around the Yale University campus."  If all I wanted was numbers, I would have walked down the hall of my office building and interviewed 10 people.  If I wanted to truly determine the affects of "bad hair days" I would have used a projectionable sample.  When I wrote P&G and asked about the study, I was told that "This is valid research."  What really surprised me was that the response came from Public Relations and not the Market Research Department.  I might even agree that this was "fast and nimble" research, but not valid.

Yes, it is not your father's P&G.  Things have certainly changed since I left 10 years ago.  But many things, including people and companies have changed.  Some have changed for the better, some have not.