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Simplicity, Not Duplicity

CINCINNATI--(BUSINESS WIRE)--Nov 8, 2018--The Procter & Gamble Company (NYSE: PG) today updated shareowners and analysts on significant progress toward its goals of delivering stronger, balanced growth and value creation. The Company affirmed its focus on its core growth strategy of delivering noticeable brand superiority; driving productivity improvement and cost savings to fuel investments and margin; and transforming P&G’s organization and culture. This growth strategy is driving improved results, including faster top-line growth, increased consumption, and market share growth.

Under the theme of “leading constructive disruption,” P&G highlighted a broad range of initiatives across innovation, brand building, supply chain, information technology and citizenship that are creating new levels of competitive advantage for the Company and its brands. The Company also announced several organization changes, effective July 1, 2019, that will simplify the management structure and further increase focus, agility and accountability. A replay of today’s presentation is available at www.pginvestor.com.

“To deliver growth for P&G shareowners, we are accelerating the pace of change and stepping up execution to meet the challenges of today’s dynamic world. We are leading constructive disruption across the entire value chain, creating a more focused, more agile and more productive company designed to win with consumers at the speed of the market,” said David Taylor, Chairman, President and Chief Executive Officer. “We remain focused on creating and extending noticeable superiority of our brands, driving productivity improvement and cost savings to fuel investments and margin, and transforming P&G’s organization and culture.

“We’ve made good progress in each of these areas, which is showing up in our results. Consumption of P&G products is increasing. Market share is up globally, and it’s translating into faster top-line growth,” continued Taylor.

During today’s presentation, multiple P&G business leaders discussed how improvements in five areas of competitive superiority (product performance, packaging, consumer communication, retail execution in-store and online, and consumer and customer value) are driving stronger business results. These leaders also highlighted new initiatives from Tide, Downy/Lenor, Always, Olay, SK-II and Gillette that will continue this momentum.

P&G executives leading Research & Development, Brand Building, Supply Chain, and Information Technology highlighted multiple efforts already underway to step-change effectiveness and efficiency in each of these areas. Taylor discussed P&G’s achievements and objectives in corporate citizenship.

Increasing Organization Focus, Agility and Accountability

Building on a series of improvements already in place, the Company announced a new, simpler management structure to provide greater clarity on responsibilities. New reporting lines will strengthen leadership accountability and enable P&G people to accelerate growth and value creation.

Beginning July 1, 2019, the Company will operate though six industry-based Sector Business Units (SBUs) for the largest geographic markets, led by Sector Business Unit CEOs who will report to Taylor. These SBUs will have direct sales, profit, cash and value creation responsibility for its largest markets – U.S., Canada, China, Japan, U.K., Germany, France, Spain, Italy, Russia and smaller adjacent countries – accounting for about 80% of Company sales and 90% of after-tax profit. The SBUs will have responsibility for all facets of the business in these markets: consumer understanding, product and package innovation, brand communications, selling and retail execution, and supply chain. In these markets, the Company will continue to provide scaled market services to help the SBUs operate efficiently and with high quality.

Responsibility for the remaining markets will be organized into a separate unit with sales, profit, and value creation responsibility. The SBUs will provide innovation plans and operating frameworks to drive growth and value creation in these markets. The intent is to give these markets executional freedom, with just enough framework, to ensure their success.

The Company will continue to reduce the level of corporate resources, with about 60% of corporate work shifting to the business units and markets and will retain a core set of corporate resources needed to sustain the ongoing health, viability and sustainability of the Corporation. This includes back-office operations, governance and stewardship, and some areas requiring deep mastery. In particular, P&G will retain its Corporate Research & Development group that invents upstream platform technologies to benefit multiple businesses and opens opportunities for P&G to get into entirely new businesses.

Chief Financial Officer Jon Moeller will expand his responsibilities to include the operations side of the Company and will be appointed Vice Chairman, Chief Operating Officer and Chief Financial Officer, continuing to report to Taylor. In this capacity, Moeller will assume responsibility for markets beyond those managed directly by the SBUs, Market Operations providing scaled market services, and functions that support operations.

The Company reiterated this structure supports continued focus on the streamlined portfolio of 10 product categories; ongoing efforts to move resources closer to the consumers and customers it serves; supplementing internal talent with skilled, experienced external hiring; improving category dedication and mastery; strengthening of compensation and incentive programs; and ongoing improvements in productivity.

“This is the most significant organization change we’ve made in the last 20 years,” Taylor concluded. “We will have a more engaged, agile and accountable organization focused on winning with consumers through superiority, fueled by productivity, and operating at the speed of the market.”