Jim Stengel: Marketing Lessons from 25 years at P&G
Geoffrey Precourt reports from the Association of National Advertisers' annual Masters of Marketing Conference 2008. For his full coverage, visit WARC Online's conference blog.
Three years ago, at the Association of National Advertiser's (ANA) annual meeting, Jim Stengel dropped a cherry bomb in the collective briefcase of the American marketing. The charge from the Procter & Gamble global marketing officer: "The traditional model we all grew up with is obsolete."
In truth, the march of digital media has made that old way of business even more obsolete in 2008. But all parts of the advertising, marketing, media, and metrics community seem to be responding-some more aggressively than others-and Stengel no longer is the lone wolf.
Indeed, it seemed a kinder, gentler Jim Stengel who offered up the keynote address at the 98th annual meeting in Orlando, FL. Stengel, who officially leaves P&G at the end of this month, offered a "commencement address-looking forward and springboarding to the future" to the Friday morning assembly.
"I wanted to leave you with the lessons I've learned in 25 years with Procter & Gamble," he offered. "Some of it is very personal and I plan to be as intimate as one can get in front of 1,200 people."
Some background: When Stengel joined P&G in 1983 as a brand assistant, the company's annual sales were registered at $11 billion and had no brands whose sales were in excess of $1 billion.
Last year, sales were $83.5 billion; the company had 24 brands whose sales were over $1 billion - the same number as those with sales between $500 million and $1 billion.
"It's been a period of steady, sustainable growth since the days I first showed up in a blue suit, a red tie, and big hair," Stengel said.
His lessons, he allowed, are "extremely simple. But we all have a tendency to overcomplicate. The simpler, the better. And the simpler, the more profound."
Stengel, who plans to write, consult and teach, added, "These are the five lessons I earned in marketing, branding, marketing, and life. I've brought life lessons to marketing and vice versa. And I do know that they all lead to better leaders, better people, and better brands."
1. Put People at the Center of Everything You Do
Stengel grounded his first lesson in a conversation he had seven years ago with Sir Terry Leahy, ceo of the UK-based supermarket chain, Tesco. "I asked him what we could learn from his company." Leahy's answer: "Treat your company the way you would want your customers treated."
The comment was an echo of something he'd heard from R.R. Dupree, the P&G ceo who'd led the company after World War II and who, Stengel recalled, "used to tell people that if you could take away the brands, the manufacturing processes, and the offices and only left the people behind, we would bring it all back together within 10 years."
For Stengel, those visions translated into his own mantra: "A brand is the action of the people behind it. And great brands need inspired, motivated, and intelligent people."
Stengel added that, "some people have told me I'm too accessible, that 'people can see you too easily.' But you want to be seen. You want to be interactive. And you want to ask yourself the question, 'Are you taking the time you need to mentor the people most important to you and your business?'"
2. Engage Your Heart and Your Mind in Everything You Do
"Too often in our industry and in our schooling, we think with our heads, not our hearts," the retiring P&G marketing head said. "For me, personal relationships are a metaphor for great marketing at P&G. And, in fact, what applies to a rich relationship works for business-to-business or business-to-consumer advertising."
Among the "heart" attributes that Stengel cited were trust, respect, fun, honesty, passion, integrity, with, spontaneity, and love. And, "if we thought of them in everything we do-from customer presentations right through advertising-we would do things differently. We would measure differently."
The marketing practitioners who seem to have caught onto both heads and hearts, he continued, were Apple, Amazon, Southwest Airlines, and, naturally enough, P&G. "We have 140 brands in 300 countries. We try to understand what drives market share. And, when we bring our strength and competitive advantage in the emotional areas that drive the brand, we end up with a much higher market share."
3. Focus on Results, Not Activity
Apart from individual brand performances, the marketing industry "needs not to focus on activities that are not directly related to things that drive our brands…. Too often, our work is short-term and tactical, doing nothing to build a brand over the long term. It's why many CFOs do not value marketing.
"We focus on a bustle of activities, not a few things that drive brands. If you only look at sales figures and ignore measures of brand health, you're short sighted."
Balancing business, brands, and people is how a company succeeds. For Stengel, an annual performance review begins with "how the business is doing, how it is building sales and profitability. Equally important: How is the brand doing? Have we strengthened the brand activity? And, third, how can we measure the growth of our people?
"You won't grow until you can show advances in all three categories. And, as an industry, we're not there."
4. Respect and Embrace the Power of Creativity
"We're all a little more left-brained," Stengel told the ANA advertiser audience. "Agencies are right-brained. We need to become more whole brained about solving problems and meeting challenges. No great company gets to the top without creativity."
The problem, he continued, is that too many marketers spend too much time talking about compensation, fees, and "other short term stuff." When he came into the top P&G marketing office seven years ago, he assembled the full spectrum of Procter communications agencies-many of them competitors-and challenged them to "figure out how you all can come together as a brand force…. How can you life P&G performance and capabilities."
The result? "Better business and special partnerships between agencies that have lasted for years…. Break-through can happen when you put people together. Magic can happen."
Today, he added, "the skills of the previous era are no longer sufficient. Companies that embrace right-brained empathy will flourish. Those who don't will flounder. Professional success requires a whole new mindset."
5. Have a Purpose
"A purpose changes everything," Stengel said. "Putting a purpose behind your brand is the only way to grow brands favorably. A purpose inspires motivation and inspiration for a brand. It answers the question, 'Why am I here?' for the consumer. And, in fact, every brand should know where it's come from, why it's here, and what good it does… a purpose works to a higher ideal. And it has to be authentic to consumers and employees as well. Once you understand what you're about, everything emanates from there. It's business that makes life better."
Indeed, so important is the concept of "purpose" to Stengel that he plans to use it as the magnet for the next stage of his professional life. Packaged Good will be a book that will anchor that work. He'll work with Roy Spence, founder of Omnicom Group's GSD&M Idea City, who plans to launch The Purpose Institute in Austin, TX. And he plans on lecturing in marketing-"to get involved with young people and teach"-at a West Coast university.
It's all part of his larger plan-one that he brought to the Global Marketing Office at P&G and one that he counsels advertising professionals to embrace: "Make a personal commitment to bring purpose to life in your organization. We could do so much more. The power is in a million movements, not one, two, three, or ten."