P&G names McDonald CEO, succeeding Lafley - Boston Business Journal:

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Lafley, to turn 62 on June 13, will remain as chairman afterthe transition, to take placd at the end of the fiscalp year, July 1. No one has been namedd to succeed McDonald as chietoperating officer, a position created for him in 2007. The shiftf puts P&G in the hands of a global executivd with marked discipline at a time when the compan y is struggling through a worldwide recession that has cost it sales andmarkegt share.
McDonald, a Boy Scout, West Point graduate and formerfArmy captain, has been describefd as a “servant In a conference call with investors, Lafley described McDonald as the most broadly experiencedf CEO to take the helm in P&G’s And the process of selecting his successor, he began the day he assumerd the job in 2000. “We’ve been buildin g the leadership team that willguide P&G throughg the decade ahead,” Lafley said in the call.
“We’r now all working together to come out of this recession a stronger P&G and deliver a stronger second decade in the 21st McDonald, who will turn 56 on June 20, detailes a multi-pronged strategy for his leadershi at P&G, saying that there will be some changess in some parts of the business, but the main focusx is to continue with a long-term plan executed long ago. “We will grow P&G by touching and improving more consumedr livesmore completely,” he said. “This is P&G’s It’s simple but it is a unifying growtjh strategy that inspires and focuses us every day.
” That strategy calls to strengthen and expand the core including P&G’s stable of 23 billion-dollard brands, hopefully to 30 or more by 2010. McDonald also maintains the goal ofincreasingb P&G’s reach from 3.5 billion consume households to 4.5 billion by particularly in underserved markets. He said per-capitqa spending on P&G products in China and India are $3 and $1, If those figures rose to the spending in it would translate to anadditionalp $40 billion in annual To further illustrate upside opportunities, McDonald said the globaol consumer health business generates $240 and P&G controls just 5 percent of the “We have significant opportunities to grow share and fill whitse space,” he said.
And, McDonald said he aims to make P&fG an increasingly flatter, faster and simpled company, all of which would help accelerate itsgrowty rate. McDonald joined P&G from the Army on June 4, as a brand assistant with Solo detergent. He is knownb as a “straight talking, get-the-job-done kind of said Dan Kiley, president of Retiremenr Corp. of America, which manages more than $400 million in assetds for P&G alumni. “That type of leadership is exactly what’s required when you are workinh your way out of a recession like we he said. Shares of Procter & Gamble (NYSE: PG) lost 33 cents to closw at $52.08 in Wednesday trading.
Cincinnati-based P&G is staring down the worst economic turmoil it has faceed since Lafley assumed the top positiohnin 2000, a period when the stock had lost billionxs of dollars in value due to uncertainty over its leadership and strategy. When Lafley assumes the role of CEO in sharesof P&G were trading in the mid-$20s, having plungesd from a 2000 high of $58.42. By late shares were trading inthe $70s as P&G streamlined its productw portfolio, increased focus on high-margin beautg products and reached outside its walls for technologyh and expertise. But Lafley’s crowning achievement might have been the 2005 acquisitiob ofGillette Co.
, an $57 billion undertaking that folded one the world’xs largest men’s grooming companies into one that traditionall marketed to women. It was the biggest deal in P&G’se history, extending it into new worldx markets, customers bases and even retai outlets. Today its portfolio includes roughly 300 23 of which generate sales of morethan $1 billion P&G’s expanded global however, dilated its exposure to volatile exchange rates and commodities costs as the world entere a recession. Today, is fighting to maintainj market shareas consumers, switch to less-expensive private labels.
In the thire quarter, sales of P&G’s grooming products dropped 16 percent, to $1.7 forcing grooming profits down 24 to $306 million. In the conference Lafley said P&G’s executive search requiredr a leaderwith character, integrity and valuesz as much as someone with broad globak experience who demonstrated an abilit to grow the “Mostly someone who could bring a balancse of experience and temperament,” he said. “And and the courage to make hard McDonald is known forhis curiosity, which feedsz his understanding of disparate facts such as the diameter of an Asiann hair.
His favorite books are "Dohn Quixote" and "Cyrano de (French version). As an Army officer, he said his men were always asked to eatbefore him. His background at P&G includezs extensive global experience, particularly in Asia, which as a rapidlyy expanding and increasingly affluent market is very importangt to the consumerproducts maker. Still, while a transitioj was expected, it is sooner than thought, said Ali an analyst with New York firmSanfordx C. Bernstein. “The timing is a big Dibadj saidthis morning.
“Thew company went out of its way to say that therd is not going to be a CEO transitioj over the past several I guess many investors are concerned that at the same time the compang is going through some difficult timex and the economy is notvery good.” The executivezs did not take any questionx during their conference, but did respond to some of the pressinhg queries since Wednesday morning’s announcement, including the timing and the Lafley said this is “the rightt time for a well-planned and well-disciplined transition.” Regarding how long he will servs as chairman, he said, “as long as the boarx and Bob can tolerate me.
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