Interview with P&G's McDonald

P&G's next CEO is a man of discipline

Bob McDonald remembers vividly his first job interview with Procter & Gamble - and the sinking feeling that he'd blown it.

Fresh from a training exercise with the Army's 82nd Airborne Division, he'd barely had time to fold his parachute and wipe most of the camouflage smudge from his face before running to the interview.

To his surprise, he got the job - brand assistant for Solo, a laundry detergent that P&G long ago dropped.

But the company kept McDonald, and 29 years and four days after his first day on the job, P&G's board of directors appointed him chief executive and awarded him a seat on the board.

Ascending to the top of the world's largest consumer products company would, for many, be reason to pop the corks and celebrate. But that's not McDonald's style.

"It's kind of strange to say that success is becoming the CEO of a company," McDonald said in a recent interview. "I don't think that's success. Success is when you've finished your tenure as CEO and being able to look back and say the business and the people in the business are better off than when you started."

Those who know him say that attitude sums up McDonald, a man who rose to the top of P&G through "servant leadership," whose had his hands deep in the operations of the far-flung company and whose disciplined management is being counted on to keep P&G growing.

The Cincinnati-based company Wednesday announced that McDonald, currently P&G's chief operating officer, will be its 12th chief executive, effective July 1. He'll succeed A.G. Lafley, who will assume the role of full-time chairman.

To lead P&G as it begins its 2010 fiscal year, the board chose a Boy Scout, West Point grad and former captain in the U.S. Army who has spent his entire business career with one company.

"He carries himself as a leader, as an officer, and has a discipline that comes from his military training," said Bob Wehling, a retired chief marketing officer who worked with McDonald for more than 20 years.

McDonald's rise at P&G started with laundry, detergent and home care products, core businesses for the global giant, as he worked on products such as Dawn, Cascade and Tide. In 1991, he started working in the Philippines and eventually became responsible for P&G's business in Japan and much of Asia.

His global experience is viewed as critical to P&G's plans to accelerate sales in undeveloped markets in Africa, Asia and Eastern Europe, regions that hold the promise of growth, but can be difficult to penetrate.

"He's somebody who gets along with people of all cultures," Wehling said.

McDonald said he's spent about 40 percent of his time traveling around the world, partly to cultivate relationships with leaders in other countries where P&G does business. He serves on high-level economic development councils in Singapore and China and sits on the U.S. Advisory Committee for Trade Policy and Negotiations.

"Coming into this job, he's a lot better prepared than I was," Lafley said at a P&G employee meeting to announce the new CEO.

P&G analysts call him an "operator," someone who has dug into the workings of the business. One example: he led a restructuring of how P&G, one of the nation's biggest users of trucks, schedules deliveries of its products and monitors its truck traffic.

He can expound on the difference between the hair composition of Asians and Americans and how that affects shampoo formulas in the two regions.

He's overseeing plans to build 20 new manufacturing plants, most of them in developing nations.

"He's already very engaged in the day-to-day operations of the company and is not fearful of tackling large operational improvements," said Ali Dibadj, a P&G investment analyst with Sanford C. Bernstein & Co.

His appointment continues P&G's tradition of looking within for leadership. P&G's board has never elected an outsider as chief executive.

McDonald recently downplayed his pending promotion, which had been expected for some time. "If anything, there's anxiety as to whether or not you're deserving of the responsibility and the trust that comes from the consumers, the board, and the people in the company," he said.

With Lafley staying on as full-time chairman, he'll lead P&G during a time of slowed growth and management turnover, and concerns on Wall Street.

He says he has a simple guide for measuring his tenure as CEO. "The measure of success for me in any job I've had is only after I've left the job," he said. "Are the business and the people better off?"

The next few years will tell.

Source: http://beta.cincinnati.com/article/20090614/BIZ01/906140339/1055/NEWS/The+man+who+will+be+CEO