Todd Williamson/Invision/Associated Press
- Ellen ByronThe Wall Street JournalCANCEL
Jan. 27, 2015 12:09 p.m. ET
To climb higher at
Procter & Gamble
first had to climb down.
The executive who last week emerged as the top contender to lead P&G started at the consumer-products giant 34 years ago as a production manager at a Greenville, N.C., factory that made adult diapers and sanitary napkins. By his early 30s, he was running a major diaper and tissue plant in Pennsylvania.
But Mr. Taylor knew that to keep rising he needed to join P&G’s marketing side, former colleagues familiar with his thinking said. So he restarted his career as an assistant brand manager for Pampers—abandoning his plant management position for an entry-evel one.
- P&G’s Revenue Declines on Currency Hits
“It’s like going back to the bottom of the staircase,’’ said
P&G’s former head of human resources.
It worked. Next month, the 56-year-old electrical engineer will become responsible for 43% of P&G’s $83 billion in sales and nearly half its profit, a move that puts him in the lead to take over the CEO’s office on the 11th floor of the company’s Cincinnati headquarters.
“David is one of a strong, deep and diverse bench of leadership talent at P&G,” said
a company spokesman. “We remain committed to developing world-class leadership across all our businesses.”
Mr. Fox said Mr. Taylor declined to comment.
He made his mark in part by overseeing big divestitures like the $672 million sale of P&G’s European paper business nearly a decade ago and last year’s $2.9 billion sale of the pet-food business, which included Iams.
That track record is a good fit with CEO
’s plan to speed growth by shedding dozens of minor or slow-growing businesses to focus on products and markets that account for most of sales and profit. Over the past several months, P&G has disposed of several brands including Zest soap and Lavasan, a Venezuelan laundry detergent. Last fall, P&G said it would sell Duracell batteries to
for $4.7 billion, but was required to inject $1.8 billion into the business first.
The challenges are evident in P&G’s results for the latest quarter, in which profit fell 31% and revenue dropped 4% under pressure from the stronger dollar. The stronger dollar pushes up P&G’s costs and reduces the value of its overseas sales. P&G said Tuesday that the pressure will continue throughout the fiscal year that ends in June, making it harder for Messrs. Lafley and Taylor to show stronger growth. The handoff at the top, however, will likely be driven by progress in improving the underlying business before currency effects are factored in.
Mr. Lafley is on his second tour as head of P&G. He came out of retirement and returned to the company in May 2013 after his handpicked successor,
left the job following a string of sluggish results. Mr. Lafley’s tasks include getting the company back on track to grow and finding a successor.
Current and former colleagues say the complicated balancing act of managing the machinery and employees inside manufacturing plants has given Mr. Taylor superior leadership and interpersonal skills.
Procter & Gamble
Mr. Taylor’s slight Southern drawl and quiet demeanor at first strikes a considerable contrast to Mr. Lafley’s jocular charisma. But those who have worked closely with both executives say they share similar management styles.
“David may not be all that different,’’ Mr. Antoine said. “He’s not loudly aggressive in the front of a room. That doesn’t mean he isn’t a forceful leader—because he is.”
Mr. Taylor had been running the big grooming and health-care units. On Feb. 1, he will also take over P&G’s beauty division, which sells CoverGirl and Head & Shoulders. Mr. Lafley built the beauty business during his first term at the helm, seeking faster growth and fatter profits than were possible from selling paper towels and dish soap. But it has been persistently weak, the only major unit to post declining sales in the year ended last June.
“The bulk of P&G’s challenges reside in the beauty business he’s inherited,” says
a Deutsche Bank managing director.
While divestitures could boost those units, crucial billion-dollar brands including Gillette, Olay and Pantene need face-lifts and strategic direction.
“That’s the challenge,’’ Mr. McDonald said in an interview last week.
How Mr. Taylor handles the beauty-business turnaround will demonstrate whether he is up for the top job, current and former colleagues said.
The executive rose quickly through P&G’s marketing ranks and in 1998 left for China, where he held increasing responsibilities over the haircare, tissue and paper towel businesses. He also worked with P&G’s anticounterfeiting efforts there. In 2001, Mr. Taylor moved to Geneva as a vice president over P&G’s family-care brands, including Charmin. Two years later, he returned to Cincinnati as vice president of the family-care unit in North America and by 2005 he was running the unit’s global operations. Since then, he has overseen P&G’s home-care businesses, which include Cascade dishwasher detergent, and, most recently, the health and grooming units.
He has had to make some difficult calls in the past.
P&G bought Iams for $2.3 billion in 1999 and had high hopes for the pet-food business. But a significant product recall, intense competition and difficulties finding successful new products hurt the unit. Mr. Taylor was assigned to analyze the business and ultimately he recommended that P&G should exit it.
He made a similar call in 2007 when he led the effort to sell P&G’s paper business in Europe. P&G had made significant investments introducing Charmin and Bounty there, and selling it was a controversial idea at the time, a former P&G executive said.
Mr. Taylor also oversaw parts of P&G’s expansion. His business included the air-freshener line Febreze, which hit $1 billion in sales in 2011 despite being a discretionary purchase at a time when many consumers were strapped for cash. Mr. Taylor had raised P&G’s bet on the global air-freshener market in 2009, when it agreed to buy Sara Lee Corp.’s Ambi Pur brand for $470 million. The deal expanded P&G’s air-freshener reach to 84 countries from just 17.
Now, Mr. Taylor will turn his attention to the company’s beauty business.
“David brings a new set of eyes, which can only help,” P&G Chief Financial Officer
In addition, he performs well under fire, former P&G colleagues said. “He doesn’t let his emotions carry him to an extreme,’’ according to Mr. McDonald.
Write to Joann S. Lublin at firstname.lastname@example.org and Ellen Byron at email@example.com
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