David S. Taylor, Procter & Gamble’s group president of global beauty, grooming and health care — with hands-on experience in everything from plant production management to marketing to selling off brands deemed expendable — will take over as president and CEO at the company on Nov. 1.
A.G. Lafley, who has served two terms in that position after coming back to replace the beleaguered Robert A. McDonald in 2013, will remain as executive chairman and work closely with Taylor for an unspecified transition period.
The move has been anticipated at least since Taylor was named to his present position in January, as the Cincinnati Business Courier’s Barrett J. Brunsman wrote at the time.
“This is structured and organized the way it is so that we’ll have two of us, full on against the business. It’s open ended, and I am going to be here long enough to have an outstanding transition,” Lafley tells the Wall Street Journal’s Serena Ng, Joann S. Lublin and Ellen Byron. “Two heads are going to be better than one.”
They write that while Taylor, 57 and a 35-year veteran of the company, runs operations, “Lafley will advise on matters such as strategy, innovation and mergers and acquisitions.” He also “will help assess talent and will continue to coach and mentor” Taylor.
“David is such a broad-gauged leader — people follow him, he has followership,” Lafley tells the Cincinnati Enquirer’s Alexander Coolidge. “You put him in the middle of a business and the whole team gets better.”
But “Taylor’s ascent to the top of the world’s largest consumer goods group has not been straightforward,” points out Lindsay Whipp for Financial Times. “After 11 years of rising through P&G’s manufacturing operations, managing U.S. factories, he took a much more junior job at its brand building division alongside new graduates, taking advice that it was the best way to learn that side of the business.”
“It was the exactly the right thing to do, not only [for lessons] in building business but in humility,” Taylor told students at his alma mater, Duke University, last October, Whipp relates.
Taylor’s start in manufacturing included “a stint running P&G's largest factory in the world in Mehoopany, Pa. He later took several management jobs in baby care, beauty and family care. He's been stationed in Asia, Europe and North America,” Coolidge writes for the Cincinnati Enquirer. “From 2007 to 2013, Taylor headed P&G's stalwart home care business before being tapped to oversee the company's highly profitable razor business and its health care unit.”
In fact, he seems to have been just about everywhere P&G was as it overextended itself, as it has come to realize.
“He made his mark expanding products including air-freshener line Febreze, which hit $1 billion in sales in 2011, and he led decisions to exit brands like Iams and Eukanuba pet food, which P&G sold last year for over $3 billion,” the WSJ’s Ng, Lublin and Byron report.
“I believe in the power of P&G people, brands, products and values. P&G is transforming to be a faster-growing, more profitable company,” Taylor says in a statement announcing his appointment. “I’m committed to the strategies, and look forward to leading the people of P&G to win with consumers, drive growth and create shareholder value.”
Lafley adds: “With our plans for portfolio realignment essentially complete, P&G is positioned to deliver improved results. The board and I are confident that now is the time to transition the CEO role to David, who will sharpen the strategies and lead the execution of the next important phase of building a better P&G.”
The company will announce its quarterly results Thursday on a webcast at 8:30 EDT. With all of the restructuring going on, the earning reports may be difficult to understand, however, John C. Ogg writes for 24/7 Wall Street.
“While parting with [43 of its beauty brands, which were sold to Coty for $12.5 billion earlier this month] really seems like a natural progression for P&G at a time when investors want growth, even if that growth is engineered, it also will be the devil’s game for analysts trying to pinpoint the real estimates going forward,” Ogg says.
But even as more streamlining is expected, Taylor’s biggest priority has to be revitalizing P&G’s hallowed brands for a new breed of consumers — even those that have been perennial leaders in their categories.
“The company’s biggest challenge is to innovate a stable of products that, in some cases, have remained largely the same for years. In recent years, for example, the company has put a big push behind Tide Pods, individually wrapped nuggets of a detergent that it has been selling for decades,” writes Rachel Abrams for the New York Times.
“You’re trying to get that consumer to pay more every year for something that’s only incrementally better,” Sanford C. Bernstein & Co. analyst Ali Dibadj tells Abrams. “Essentially, they’re a luxury brand in an area where nobody wants luxury.”