Gary Coombe has had an impressive career with Procter & Gamble (P&G). He joined the multinational consumer goods company in 1986 and over the three decades that followed, he worked in a variety of roles and departments. Then, in 2014 he became President for Europe, and since late 2015 has reported directly to the Global CEO David Taylor. “The first thing that struck me was what a great privilege it was to be asked to take on this role,” Gary recalls. “P&G has a rich history in Europe — more than eighty years — and our operations here account for approximately one quarter of the company’s global turnover. It was, and still is, a huge opportunity.
P&G is headquartered in the US and its main activities are in family, personal, and household care products. Well-known brands include Pampers, Gillette, Olay, Pantene, Ariel Always, and Fairy. While each brand serves a different purpose for the consumer, the overarching aim guiding each one is to make peoples’ lives easier. P&G has operations in fifty-seven countries across Europe where it services the needs of more than 900 million customers. On average, a typical household will purchase between fifteen and twenty products from P&G every year, which highlights its robust reputation in the marketplace.
It’s a remarkable period of time because the customer of today has all the power.
Today’s customers hold all the power
Gary says the world is changing faster than ever before, making it an incredibly exciting time to be leading an organisation like P&G. Business models are being disrupted, consumers are demanding new things, and technology is progressing rapidly. While all of this comes with its challenges, P&G is taking the journey in its stride. “Apple is disrupting the music industry, Uber is disrupting the taxi industry, Airbnb is disrupting the hotel industry; it’s apparent that all businesses and industries will be disrupted at some point, if they haven’t already been,” Gary explains. “The consumer goods industry is no exception. Therefore, we are constantly thinking about how we need to transform ourselves in order to thrive.”
In particular, the consumer profile for the business has changed dramatically, which Gary sees as a huge opportunity. “It’s a remarkable period of time because the customer of today has all the power,” he notes. “They are highly knowledgeable about the brands they want to buy, the manufacturers behind those brands, the retailers they buy the brands from, and the characteristics of those companies — how they behave, what their sustainability profile is, the ingredients in the products, and the pricing of the products. That’s a different challenge altogether, but it’s one we like because we pride ourselves on being a consumer-centric company.
“In Europe there has been a seismic shift in terms of demographics too. Half of the region’s consumers are over 50 years of age and they control 70 per cent of the wealth. This is particularly the case in the UK, where for the first time in history pensioners are actually better off than the working population. Where they shop, where they live, and also how they live, are all changing. They want stores in close proximity to their homes so they can quickly pop out and grab what they need. A couple of decades ago, people would shop only once or twice a week. Now people visit the shops up to ten times in a single week.”
Four key areas of focus
These rapidly changing times call for new strategies, which Gary has covered. He has pinpointed four key areas of focus for P&G Europe to ensure its success well into the future. The first is the simplification of the business. “We have become a company with many brands across an extremely diverse range of categories, and recently we have been through a transformation of our portfolio. Previously, we had 165 brands and we have sold or announced the sale of 100 of those. This means we have eliminated half of our complexity but only 10 per cent of our sales. That has been a huge transformation for P&G and we are well through that program now.”
The second priority is working on alternative retail channels such as e-commerce, which is booming across the region. Enabled by urbanisation and clusters of populations, the economics of e-commerce work really well for a company like P&G. “The reality is that e-commerce is growing very fast, and in addition to that the demand for pharmacy stores and discount channels is growing very fast. We are re-orientating our value creation plans and our innovation program around that to win with retailers, particularly those in the fastest-growing channels.”
Thirdly, P&G is focused on driving its brands so it can penetrate all consumer demographics. “This is particularly so for our over-50 customers. They have different needs and require different things. For example, the majority of people over 50 need glasses but won’t wear them in the shower. The font size on a shampoo bottle needs to be larger, and therefore readable. We have to be conscious of these things when we look at package design, brand architecture, and media buying.”
We are favoured by retailers because we create value for them. That is what we will continue to drive in order to win in the future.
Finally, Gary is committed to increasing productivity. “We are re-engineering our supply chain to allow for this,” he says. “By generating these productivity savings we are then able to reinvest in our growth.”
Beyond transactional relationships, moving towards value-creating relationships
The strategy around partnerships in this ever-evolving retail environment is also something Gary sees as critical to P&G’s long-term success. “The key word there is ‘partner’,” he states. “If we look at the relationships we have with the retailers of our products, ultimately it is a transaction-based arrangement. However, we see it more as a partnership for mutual benefit. We bring marketing, finance, IT, and product supply resources to the table so that we can create programs and grow value together. This is very important. If you can move beyond transactional relationships and towards value-creating relationships, it makes a huge difference.” It’s a similar story when it comes to other companies working in P&G’s supply chain, such as distributors, media agencies, IT developers, and manufacturers; all partnerships are developed for longevity and to create value.
Gary credits the success of P&G in the European marketplace as being largely due to his talented team of staff. There are 37,000 employees in the region, which can be a lot to manage. However, by investing in recruitment and training, the business has been able to capitalise on its capabilities. “We are a company of choice for the leading graduates around the world,” Gary says. “We are highly selective in our recruitment and therefore we only pick great people to join us. On an annual basis we typically receive around 1 million applications for just 3,000 graduate-entry jobs. We principally promote from within and grow our own talent. We invest deeply in their development, so we have a talent base which is unrivalled and in terms of gender, diverse. That’s another priority of ours. At most management levels we now have 50 per cent female leaders on those teams, and we are proud of that. In fact, we recently announced three new female Vice Presidents in the region.”
Embrace transformation and stay agile
Another pillar that gives the organisation a competitive edge in the consumer goods industry is the ability to embrace transformation and be agile, despite being a large company. Even after existing for 175 years, P&G is still able to grow significantly year upon year. Why? Because it is open to change and responds quickly to external environments. Additionally, Gary shares that a customer-centric culture and a focus on innovation gives P&G a strong point of difference in the consumer goods industry.
“We spend a lot of money on R&D — much more than our competitors,” Gary explains. “We have products with superior technology and we create innovation that not only delights consumers but grows category value and economic value. That’s important for the economies of the countries in which we work, and for our retail partners. We are favoured by retailers because we create value for them. That is what we will continue to drive in order to win
in the future.”
For Gary, leading P&G’s European operations during this time of mammoth change is a fascinating and challenging experience. The rate of change, the disruption, the explosion of technology, and how that’s all impacting on business and business models is incredible. “Having the opportunity to lead a business through that change, and to develop leadership and talent to help P&G thrive and grow in the future, is a great privilege,” Gary says. “If I leave a legacy in this job, I hope it will be the quality of employees in place when I leave. For that reason I am endeavouring to develop our talent significantly.
Age of disruption
“While I am full of energy and vigor, I probably only have one more decade to go in this industry. I would love it to go on, but nothing lasts forever. Therefore, one of the realities that exists for me is the desire to make sure we have the talent and leadership in place so that P&G continues to be the leading consumer goods company in Europe for many more years. It is very important to me that we hire, nurture, and develop talent.
“This is an age of disruption. It is a very fast-changing world and it requires new models of leadership. The old-fashioned leadership — the autocratic style in which strategy and decision-making is based on experience gained twenty years ago — doesn’t work anymore. Preserving the status quo doesn’t work anymore. Leaders today need to be able to transform and re-invent themselves continually. They need to recognise that they have to learn and re-learn continuously. They need to be able to lead change and embrace change, not just cope with it. As we nurture and develop the younger generation of leaders, we are teaching and mentoring them to be able to thrive in this fast-changing world. That is a very important part of the work I do and something I am incredibly passionate about.”