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Procter & Gamble: Creating A ‘Virtuous Cycle’

bob-macdonald-story-image.jpgProcter & Gamble Co. scored the advertising equivalent of a gold medal at the 2010 Winter Games in Vancouver with its campaign highlighting the moms behind Olympians. “P&G: Proud Sponsors of Moms,” was the tag line of the campaign that earned wide praise in the United States.

“We wanted to thank the mothers of the Olympic athletes,” Bob McDonald, chairman, president and CEO of P&G told students at the Tepper School of Business during the W.L. Mellon Speaker Series on Jan. 24. “Moms are the unsung heroes of life.”

And it wasn’t just a marketing line. The consumer-goods giant helped U.S. Olympians’ families pay the exorbitant cost of travel to and from the games and hosted them in the comfort of the P&G Family Home. This summer, during the 2012 Olympics in London, the company will take its campaign global by sponsoring athletes around the world and shining a spotlight on their moms. McDonald showed Tepper School students a commercial that debuted on Mother’s Day in the United Kingdom that ended with, “P&G: Proud Sponsors of Mums.”

Mom-focused Olympic ads are just one example of what McDonald called the “purpose-inspired innovation” that has guided P&G through its 175-year history and fueled its growth into 39 product categories and 200 countries.

Guided by its mission to improve lives, the company has used innovation to create some of its most iconic brands. “We were the first company to run advertising in the United States,” McDonald said. “We were the first company to develop a stannous fluoride toothpaste in Crest. We were the first company to invent a synthetic laundry detergent in Tide. We were the first company to invent disposable baby diapers in Pampers.” 

Philanthropy and community service are also important company values. “We believe we have to do well and do good at the same time,” McDonald said. “We want to create a virtuous cycle.”

He cited as an example the company’s Children’s Safe Drinking Water Program, which distributes P&G water purification packets to families in developing countries. The packets, which clean about 10 liters of water each, help prevent dysentery and other waterborne diseases that kill an estimated 4,000 children a day. “So far, more than 22,000 lives have been saved,” McDonald said.

P&G sells the packets at cost and distributes them to aid agencies, which teach people with contaminated water to wait 20 minutes for purification. “It is difficult to wait when you are thirsty,” said McDonald, who has visited people around the world in their homes to discuss their needs. “Water is the world’s biggest problem. The average woman in the world walks 6 km a day to get water for her family. Then she collects the firewood to heat it.”

His company also helped solve a water-related problem in the Philippines, where McDonald lived for four years in an area with no running water and a reliance on storage tanks. The water scarcity didn’t curtail Filipinos' fastidious ways. “Filipinos love clean clothes,” McDonald said. “They generated so many suds, it took five buckets of water to rinse.” Downy Single Rinse lets them rinse with one bucket of water.

He also shared his philosophy of management.

Leadership, he said, is a very time-inefficient business. “Imagine an employee who comes to you on a Friday evening before a three day weekend and says, ‘I have a problem.' You can’t say, ‘Sorry, I am time-efficient leader. I have to go home.’ It won’t work.”

A good leader also builds on workers’ strengths. “Everyone wants to succeed,” McDonald said. “Oftentimes as leaders, we don’t remember that. Have you ever met anybody in your life who wants to fail? Try to find someone succeeding rather than catch them failing and you will be a better leader.”


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Mark D. Burd

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Tepper School of Business
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mdburd@andrew.cmu.edu
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