Procter & Gamble aims to cut an additional $10 billion in costs over the next five years, P&G’s President and Chief Executive Officer, David Taylor, said during the firm’s presentation at the Consumer Analyst Group of New York’s conference in Boca Raton, FL on February 18. The plan will double P&G’s recent cost cutting efforts, coming nearly four years after the first round of savings were first introduced.

Much has changed during that time, as P&G’s presentation highlighted. The company is working to whittle its portfolio to 10 categories where it has strong leadership positions. But Wall Street is still waiting for P&G to reignite top line sales growth.

“We aspire to be the best,” said David. “Doing so requires we raise the bar. We know we haven’t been delivering lately, especially on the top line, and we need to take our standards up. Our most pressing need is to accelerate top line growth.”

David said plans call for improvements across all 10 categories, but that it is putting its focus on the four largest categories, namely baby care, fabric care, hair care and grooming, and its two largest countries, the U.S. and China. He said the four categories represent more than 60 percent of sales and profit, and the two countries represent more than 50 percent of sales and profit.

David outlined the company’s multi-pronged growth plan, which includes:

  • To introduce superior product that drives trial and repeat purchases — and ultimately grows P&G’s user base. “We have many strong products in key categories, not enough of them are truly superior to competition in a way that delivers ‘wow’ at first use.”
  • To increase media spending and reach. David said P&G will increase its media investment by “several hundred million dollars” in the second half of the year.
  • To improve packaging, making it “distinctive, familiar and appealing,” and to increase sampling.

David said he is often asked if P&G is willing to change. He declared, “Let me state unequivocally P&G is ready to adapt, evolve, and change to do what is needed to win.”

He added, “We will accelerate the top line first by focusing on product superiority. We will strengthen the media reach and marketing message quality, improving packaging and shelf presence. All of this is to grow the number of users for our brands and to accelerate our top line growth in a way that creates value for our shareowners.”

David also is addressing the way the company is organized in an attempt to create a more “agile” structure and culture. “A few years ago we got a little bit too central and global and too slow to address market opportunities,” he said. “We need more direct ownership for our regional business managers, all the way to the store shelf, clear line of sight for how their responsibilities impact the results they’re accountable for. We call this an end-to-end design.” He continued, “In the U.S., we designed a seamless end-to-end organization from category to customer, strengthening both the category mastery and the customer focus…It clarifies the positions and strips out some of the complexity that we had. It creates more value with the fewest possible transactions. It is not just an organization structure. It’s how we’re going to operate, from category to customer to shopper.”

In his view, P&G in the past has been too quick to move executives from one business unit to the next, noting that three years ago the average P&G salesperson had been in his or her assignment for less than two years. P&G is changing its approach to career development to foster both continuity and leadership development with a program called Staff to Win. David said, “I spent the first 17 years in one category and it worked out just fine.”