Playing To Win
Being Fired — Repeatedly
I was interviewed on stage at a conference recently and the feedback was so striking that I felt compelled to write about the thing that audience members found so very interesting. So, my 51st Year III Playing to Win/Practitioner Insights piece is on Being Fired — Repeatedly: And Bouncing Back. You can find the previous 161 PTW/PI here.
P&G Alumni Association Event
I am known for working closely with P&G, starting from my first work with the company in 1986 (in fact, am posting this from Cincinnati where I will be spending the day with my P&G friends). I have been working there for so long, I typically have more seniority than almost everyone else in meetings that I have there.
The P&G Alumni Network puts on a big conference every two years for P&G alums from across the world to renew acquaintances and listen to talks by current P&G executives and fellow alums (including all the living former P&G CEOs this year). This year’s event was November 2–5 in Washington DC and I was invited for the first time. Outsiders are not permitted, but I guess I am finally considered enough of an insider to qualify. For my session, I was interviewed on stage by Najoh Tita Reid who was a successful marketer at P&G that went on to (among other things) to become CMO of Logitech and now Chief Brand & Experience Officer at Mars Petcare.
The interview received great feedback (happily!), but by far the most positive audience reaction was to my answer to Najoh’s question about the biggest setbacks I have experienced during my work at P&G. My answer concerned being fired on three separate occasions during my time with P&G. I was mobbed after the talk by people telling me how inspiring that story was. Who knew? I would have never guessed.
But because of the surprisingly positive feedback, I decided to write a piece about it. And it is such ancient history, I didn’t feel it was problematic at the conference or here to talk about events that happened last century!
In the mid-1980s, very early in the life of Monitor Company when we were only about 20 consultants worldwide, P&G hired us as its first ever outside strategy consulting firm. In the early 1980s, it had experienced an unprecedented series of setbacks — the toxic shock disaster with Rely tampons, the poor performance of Orange Crush, its entry into the soft drink business, the disappointing performance of Citrus Hill, its orange juice entrant, and the slow start for its entry into the cookie business with Duncan Hines cookies in 1983.
We were hired (among other things) to do a strategy study on the Duncan Hines cookie business in 1985–1986. (I didn’t work on that study — wish I had. I led on the tissue/towel (think Charmin & Bounty) work.) P&G had entered the chocolate chip cookie segment with a unique (at the time) soft cookie version of Nabisco’s leading Chips Ahoy brand. Our Duncan Hines study reached a very dour conclusion: P&G couldn’t win in this business. P&G had an unrealistic expectation of the potential of its soft chocolate chip cookie — it wouldn’t, for example, cause Oreo or Nutter Butter fans to switch to a chocolate chip cookie just because that cookie was much better than the existing chocolate chip cookies. And P&G underestimated the intensity of Nabisco’s competitive response. Nabisco went all in, including violating P&G’s soft cookie patent and eventually paying $53 million as part of a settlement of P&G’s patent infringement suit. We argued that it would have taken a massive additional investment to have a small chance of prevailing — and we didn’t think it was warranted.
P&G’s CEO at the time was the legendary John Smale, with whom I became great friends over time. We shared an interest in economic policy and collaborated on it post his retirement. But he didn’t like Monitor’s Duncan Hines cookie answer — at all. He told us that he hadn’t hired us to tell him to exit the business; he hired us to tell him how to fix it. I empathized with the view. We always want to be able to figure out a positive way forward. But sometimes there isn’t one. In any event, he fired us.
It was a traumatic event. For our then-tiny firm, it was an important and prestige client that just went poof. It wasn’t a fun moment.
However, about 18 months later, he called us back because competition had played out pretty much exactly as we have forecasted. His message was that while he found us somewhat annoying, we did see things that they didn’t see, and P&G leaders needed to learn how to see those things. That led to our creating the Applied Strategic Management (ASM) program for the newly-created Category General Management Teams (we also helped them make the transition from Brand Management, which had been in place since the 1930s to Category Management — which was a revolutionary change) and teaching that program to the category teams across the (then) four regions — nearly 80 programs across the 1987–1989 period. I helped our CEO Mark Fuller, who had led the P&G relationship up to that point, create and deliver the program and took over leadership of the P&G relationship. During that teaching, I got to know two leading Category General Managers, AG Lafley and Wolfgang Berndt — who would feature prominently in the future.
My lesson from firing #1 was that it was extremely painful, but if you are willing to take the hit for giving your honest assessment, you stand a chance of being rewarded. Will it always work out that way? I am sure not. But hopefully it does enough of the time to make it a positive NPV activity, in addition to being the right thing to do.
I continued to do a lot of work in the wake of the rehiring, but no piece more beloved to me than the one I did in 1989–1990 on segmentation of P&G’s retail trade customers. I remember it warmly in part because the folks in charge of customers/sales didn’t want the study done — they knew everything already — and I had to get it funded by a strategy supporter in the finance function — the wonderful Manny Pacis. These were the early days of the Every-Day-Low-Price (EDLP) merchandising philosophy pioneered by the then-still-small Walmart. The dominant retail merchandising strategy was called ‘Hi-Lo,’ whereby retailers sold products most of the time at full (i.e., ‘Hi’) price and for shorter periods spread across the year, sold them ‘on deal’ (i.e., ‘Lo’). P&G had always fully aligned behind and organized around the Hi-Lo customers and was deeply suspicious of EDLP — it seemed inconsistent with P&G’s strategy of offering highly differentiated products.
My study showed definitively that EDLP was beating Hi-Lo with shoppers and that P&G was inadvertently siding with the losing retailers against the winning retailers. My findings helped to convince P&G to flip 180 degrees, which helped it build the strongest relationship with the biggest retailing winner of the next 20 years — Walmart. It was a huge victory for an unwanted study.
However, Edwin Artzt took over as CEO from Smale in 1990 and declared that real executives don’t use consultants — though in practice it meant only certain kinds because he massively employed cost cutting consultants. But it meant Monitor Company was banned and as the lead partner on the P&G account, that meant me! Sadly, the P&G folks who benefited from the ASM, the retail segmentation study, and other studies ghosted me.
It was demoralizing. And for a couple of years, and even as Artzt’s ban loosened, I refused to return the calls of anybody from P&G. Then John Pepper, a friend of our work, succeeded Artzt in 1995 and the previously-mentioned Wolfgang Berndt became President of P&G NA — then about 70% of the company’s profits — and he called me. I really enjoyed Wolfgang during the ASM, so I broke my self-imposed rule and took the call. But I told him I was still furious at P&G. He asked me whether if he flew to visit me at my office in Cambridge, Mass, I would be willing to meet. I said OK and he came, along with Jacob Mathew who also went on to become a great friend. They told me they wanted to update the ASM toolkit and get my advice on how to improve the strategy process.
I decided to do it and during the course of that work in 1995–1996, I drew the first five-box Strategy Choice Cascade — a huge milestone for my work on strategy.
My lesson from firing #2 was to always leave the door open a crack, even if you are really mad! In retrospect, it would have been a terrible mistake to slam the door in the faces of Wolfgang and Jacob — but I had to control my anger to not do so.
The 1995–1996 work precipitated lots of interesting work across a variety of categories, cool work on changing culture, and a 1996–1997 follow up of the ASM in which current CMO Marc Pritchard, who reminded me of this at the alumni conference, was a participant. It was a heady and exciting time, full of great work with great people.
But Durk Jager succeeded Pepper at the beginning of 1999, and he just didn’t like me much. He particularly didn’t like when I gave him advice on things he was doing. I gave him advice on two opinions he was voicing to his organization, advising him to cease and desist lest he confuse and lose the support of his senior team. It was tough advice, but I thought that it was essential for P&G’s well-being. He must have really hated the second of the two pieces of advice because after that he sent me a letter explicitly firing me. I still have the March 2000 letter. It is brutal. Most times when a client doesn’t want to work with you anymore, it just doesn’t hire you again. This is the only time I was explicitly fired by personal letter.
But there is always karma… In June 2000, the firer became the fired — largely because of business results arising out of the two behaviors about which I warned him. He was replaced by AG Lafley and the night before his appointment was announced, AG phoned me. I will never forget that his first question was: How mad are you at P&G? My answer was: furious. But he told me that the board was announcing him as CEO the next day, that he had a lot of work to do, and hoped that he could count on my help.
That precipitated a wonderful period of collaboration with AG personally and P&G more generally; another nearly quarter century of it, and the book of which both of us are proud.
My lesson from firing #3 was a combination of the first two lessons — do what you think is right, accept the consequences, and always leave the door open a crack.
Well, there you have it: the apparently inspiring story. I guess I hope that one message is that, from the outside, even if something looks to be an unblemished journey of sweetness, light, and pleasure, it can contain seriously dark patches. Lots of people in my field tell me they wish they could have a relationship like mine with P&G. Maybe. But I am not sure they would have liked to experience what I did in 1986, 1991 and 2000 — and they certainly find it hard to fathom that those three firings actually happened.
So, if you are experiencing a real down patch in whatever business you are in, whatever role you are in, stick to doing the right thing and always leave the door open a crack. It could make the difference between a time to remember fondly and a nightmare you can never forget!