Highlights Procter & Gamble Company

A candle maker, a soap maker?

Almost 170 years ago in 1837, with about $3,500 each, Procter, a candle maker, and Gamble, a soap maker, came together to form the company that continues to be their namesake. After quickly finding it's footing, P&G managed to reach the $1 million sales mark in 1859 and soon after hit the big time with the introduction of Ivory soap in 1879. Today, Procter & Gamble is over 100,000 employees strong with on the ground operations in more than 80 countries. P&G remains the world's largest manufacturer and marketer of household products and reaches across a spectrum of more than 250 products that it markets in 140 countries worldwide.

Products, products and products

If you were to make a list of some common household products that you use on a daily basis, chances are that quite a few of them would be P&G products. The company's research centers have churned out a remarkable string of successful innovations: Tide, the 'washing miracle' that was the nation's first synthetic laundry detergent (1946); Crest, the first toothpaste with fluoride clinically proven to fight cavities (1955); and Pampers, the first mass-produced disposable diaper (1961). The wide variety of products the company offers are symbols of trust, quality and understand that help families live healthier, easier lives every day.

Perfect pitch

As much a pioneer in marketing and advertising as in product innovation, Procter & Gamble has also produced some of the most famous campaigns in advertising history.

The famous "99.44% pure" Ivory soap campaign was one of the first to directly target the P&G consumer. In 1923 Crisco sponsored cooking shows on the radio; in 1932 P&G began sponsoring daytime radio dramas. The company aired its first TV commercial during the first televised major league baseball game in 1939. And long before Peoria became popular among politicians gauging the pulse of America, P&G played there - Pampers were test-marketed in the small Illinois city in the early 1960s. With a $3 billion marketing budget, Procter and Gamble is the world's biggest advertiser.

Company Leadership

In June 2000, long-time P&G exec A. G. Lafley was named President & CEO. Getting back in the lead has been "Job One" for AG and his leadership team, and they've made considerable progress behind clear strategic choices, operational excellence and financial discipline.

According to AG, there are six key drivers of P&G's success:

• Consumer focus. The consumer is boss and P&G puts the consumer at the heart of all we do.
• Strategic choices. This is about making clear choices about where to play and how to win.
• Organizational excellence. Execution determines success, and P&G has placed renewed emphasis on operational excellence.
• Ability to build big, successful brands. Branding is more important than ever - and big, leading brands more valuable than ever. We currently have 13 billion-dollar brands in our portfolio - and more expected. These brands account for the majority of P&G's consumer interactions - the millions of "truth moments" P&G faces and wins every day.
• Operating structure. It's taken some time to implement but we're now starting to realize real advantages in terms of consumer, customer and market responsiveness
• Financial discipline. P&G has reinforced its long-standing commitment to financial discipline. It's efforts are seen most clearly in consistent business results this past year, including improvements in gross profit margin and free cash flow.

Research and development

The company always looks for innovative ways to do business and grow its brand in all areas. For example, in the 1970's, P&G was one of the first companies to put its safety testing data in a computer database, helping to avoid duplicative testing. In 2001, P&G invested over $1.7 billion in research and development at 19 technical centers and nearly 100 universities around the world. In addition to this, as testament to the company's effort to do away with animal testing in the industry, in 2001 The Humane Society of the United States announced that the Procter & Gamble Company, RealNetworks, Inc. would receive the organization's inaugural Humane Awards in the corporate category.

Changing of the guard

Many established companies tend to be rather stuffy and conservative, but P&G, an innovator in so many fields, understands the need to change with the times. "The culture here is a bit on the conservative side, though it seems that the younger generation is changing that," according to one insider. "I am finding an emerging diversity of thought and dress. More and more men are finding it OK to keep their hair long or have an earring," says another. "Obviously we're still a somewhat conservative company. But there is more openness and acceptance of those who don't fit the traditional, conservative look or views."

You'll never buy soap again

In the summer in Cincinnati, the company rents out an amusement park for employees and their families to enjoy for free. In the winter, it does the same for events such as David Copperfield, Harlem Globetrotters or ice-skating shows. Sales reps get a company car and keep their frequent flyer miles. There's also a company gym, holiday gift packs, and coupons for P&G products. Says one employee, "I haven't bought detergent or soap for nine years!" And the perks aren't confined to the P&G campuses. "All kinds of perks all over town," a contact brags. "P&G owns Cincinnati."

P&G also was one of the first companies to offer "FlexComp," which gives employees a wide range of healthcare and other insurance choices. And P&G also gives 2 to 4 percent of an employee's salary (above base pay), which workers can use to pay for their benefits.

Getting your foot in the door

Procter & Gamble recruits for its management-track jobs at most prestigious business schools and undergraduate colleges. It also prefers to hire through its internships rather than directly into full-time positions at the company. Internships last about 12 weeks in the summer. The company asks that applications be submitted by January for the internships in order to fill them by March. Recruiting schedules, and in some instances, P&G contacts for certain schools, are posted on the company's career center web pages. The screening process is very selective. It usually involves several rounds of interviews after completing a very comprehensive on-line assessment designed to probe characteristics the company believes will predict success. The basis of Procter & Gamble's recruitment and evaluation for managers are what it calls the "What Counts Factors." The most important of these, insiders say, are leadership, initiative and follow-through (execution), innovation, and critical thinking.

Procter & Gamble's summer internship programs are the best way to get started at the company. Says one MBA intern who planned to accept a company offer, "Summer internships almost always result in job offers. This summer, interns received their offers before they left P&G. The CEO stated that one of his long-term goals was to recruit brand people only from the intern pool." Another MBA intern says she knew of no one in the program who did not receive an offer.

Equality is a priority

In February 2002, the National Minority Business Council (NMBC) awarded P&G its annual "Outstanding Corporate Support Award" for providing leadership and business opportunities to women and minorities. Since 1992 the company has spent $3 billion with more than 1,200 women- and minority-owned businesses. In addition, in 2001, Hispanic Network Magazine listed P&G among America's Top 50 Corporations for Women and Minority Business Enterprises.

P&G shares the wealth

But by far the most impressive perk P&G offers is its company profit-sharing retirement plan. Initiated in 1887 to address labor unrest, the program is the longest-running profit-sharing plan in the United States. Under the plan, the company automatically kicks in stock worth from 5 percent to 25 percent of a participants annual base pay, with the maximum company contribution coming after 20 years of service. The plan is considered a real gem because, unlike the pension programs at many companies, it's not a matching program: P&G makes the contributions above base salary regardless of what the employee does. "It's automatic, you don't even have to think about it," according to one employee. "I've had job offers with higher salaries but have never been able to make the long-term math pay out over what I can reasonably expect here," another employee says.