The Death of Procter & Gamble???
When a marketing guru like Seth Godin makes a claim about the future of a company, people listen…
Recently Godin, author of Tribes, All Marketers are Liars and Seth’s blog, called out P&G as a company that will not survive the digital revolution.
On a digital marketing roundtable discussion on Six Pixels of Separation, Seth said that P&G, a thriving 170+ year old company that has successfully managed to double its business over the past 10 years of digital change, is going to die. Seth believes that NOW digital is about to change everything (again) and P&G won’t be one of the companies that adapts.
A couple of other roundtable participants Charlene Li, and David Weinberger debated Seth’s claim. Charlene noted that P&G is on top of digital & that new top management is putting Digital squarely in focus. Adage ran a recent article about the new focus here.
Discussion around the death of P&G is not new…the debate popped up last year in June. Piers Fawkes of PSFK (one of my favorite blogs by the way) kicked up a blog storm with post How Long Can P&G Last?? I wrote a response here.
I enjoyed the discussion around the Death of Procter & Gamble on Six Pixels of Separation. This was an excellent call to action for P&Gers; it gives us something to debate internally. However, during the conversation it felt like the group assumed that P&G only plays with a static product portfolio. In reality, P&G is big enough to be able to adjust its portfolio over time. So, P&G should (in theory) be able to adapt and innovate along with the changing times & the changing consumer. The big companies who don’t focus on innovation, don’t pay full attention to consumers, & don’t adapt WILL go away (e.g. GM). I think there will still a place in the business landscape for larger companies that offer products that provide great consumer value. If P&G can manage to continue innovating (products, communication, organization) it will probably survive. When I asked our outgoing CEO (A.G. Lafley) this week if P&G will be able to manage growth expectations over the next decade, I was reminded that P&G grew from 40 to 80 billion USD in revenue in the midst of the online revolution. And, P&G only serves 3 Billion consumers today. The world is not shrinking…so the question is, can P&G re-invent itself & find a way to touch 6 Billion consumers over the next decade (hopefully with products built with sustainability in mind)?
The new P&G CEO, Bob McDonald, will have a tough act to follow: A.G. Lafley was a great innovator. As Bruce Nussbaum of BusinessWeek points out in President Obama, Please Make Lafley Chief Innovation Officer (A.G.) helped break down the silos inside the company and replace them with global networks of R&D; he opened the once-closed company to integrating new products from outside it’s culture; he created advisory panels of top innovation consultants to add fresh voices and criticism to proposed new products: and he made major progress in transforming a top-down, not-invented here corporate culture into a looser, more networked, innovative culture.
As with every revolution, there will be winners & losers. It won’t be easy for any big company to manage the new digital reality, however, those that are focused on innovating holistically and are willing to accept change as a given will probably be OK.
Go on over and listen to the discussion. What do you guys think about this?