This article is by Gregory S. Carpenter, co-author of Resurgence: The Four Stages of Market-Focused Reinvention (Palgrave Macmillan, 2014). He is the James Farley/
In 2000, P&G was struggling. Earnings were down, about half its top brands were losing market share, and a major restructuring effort had led the CEO to resign. Under the painful headline “Does P&G Still Matter?” Advertising Age stated simply that “The marketer of the 20th century has become the Wall Street whipping boy of the 21st.”
Senior P&G leaders agreed on the need to change, a very important and difficult step, but no consensus existed about the best way forward. It is the sort of disagreement that can paralyze an organization, sometimes for years, as opportunities slip away.
As P&G’s new CEO, A.G. Lafley, selected Jim Stengel as global marketing officer in 2001. Among other changes, Stengel argued that the organization needed a deeper understanding of the lives of consumers. But it also needed to understand the internal challenges as well. It needed to rebuild marketing. After a series of reorganizations, “the place was pretty demoralized,” Stengel told me.
Creating Change Inside and Out
Starting from the simple idea advanced by Lafley that the “consumer is boss,” Stengel focused not simply on features or benefits but on brand ideals: how the brand changes lives. That demanded a more holistic understanding of consumers.
“We were very explicit about it: We need to be more empathetic, we need to be more caring, so let’s go out and talk to people, let’s do shop-alongs, let’s spend a day in someone’s home. Let’s go live in a village in China for a week to see what kind of difference we can make with our brands.”
To change P&G’s reputation, Stengel cultivated relationships with top media outlets, academics and thought leaders. He invited business journalists to discuss his concept of “brand ideal” and shadow him at P&G. With every move, he hoped to persuade his colleagues as much as the rest of the world that P&G was a company with a meaningful role in people’s lives.
These two efforts were, of course, inextricably linked. “If I can get the outside world to have a different conversation about us, I will impact internal behavior,” Stengel recalled.
Transforming Company Culture
These efforts fostered greater curiosity, openness and a sense of trust. P&G gave agencies more freedom to reimagine brands as a result. Wieden + Kennedy helped develop a new approach for Old Spice with a brand manifesto, arguing that Old Spice could be funky, weird, funny and relevant. Their breakthrough ad, “The Man Your Man Could Smell Like,” began a brand revival. “The numbers and the shares are off the charts. It’s still one of the top videos on YouTube,” according to Stengel.
Communications within P&G focused more on community building. Rather than deliver his message at a scripted annual meeting, Stengel launched The Stengel Marketing Hour, a live-streamed event he hosted himself, which included a monologue, pranks and the occasional fake ad.
“It was a bit like The David Letterman Show,” Stengel says. “But it was really all about helping people feel proud again, helping people understand our standards, attracting talent to us and actually, to some extent, affecting Wall Street.”
A greater sense of community encouraged collaboration that lead to meaningful innovation. A team in Latin America worked to improve Downy fabric softener. They discovered that softer clothing mattered little, because rinsing clothes to use Downy could require carrying water for a mile or more. So the team developed a new formula that eliminated suds, reducing the need for rinsing but still softening clothes. Stengel recalls conversations with Downy consumers who described it as “life-changing.”
The Power of Brand Ideals
P&G’s experience offers valuable lessons for turnarounds. Stengel and his colleagues confronted very difficult questions that remain especially relevant: What capabilities do we want to build? Who should we work with? What is the role of content and media companies? What is the role of innovation? How do I recruit? Their answers demonstrated greater focus on consumers, curiosity, more openness, collaboration and a greater sense of trust. Innovation and growth followed, and better results enhanced P&G’s reputation, reinforcing and accelerating culture change, creating a virtuous cycle.
Creating such change is clearly a team effort. But a CMO plays a unique role. By injecting the consumer perspective into the process, the CMO can forge a link between critical decisions and the lives of people beyond the firm. Improving lives can be powerful motivation. It can even inspire.
“If you uncork that,” Stengel remarked, “amazing things happen.”
