John Smale, Former CEO of P&G and Chairman of GM, Dies at 84

Exec's Motto: 'Make a Little, Sell a Little, Learn a Lot, and Fail Cheap'

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Former Procter & Gamble Co. Chairman-CEO John Smale died Saturday at 84, leaving behind a legacy that included transforming that company and, after his retirement, shaking up management and instituting P&G-style brand management at General Motors Corp.

John Smale
John Smale

Born in Listowel, Ontario, in 1927, Mr. Smale joined P&G in 1952 working first on Gleem toothpaste. But he'd had a brief career prior to joining the company, working three years as a salesman for Vick Chemical Co., whose successor he eventually would bring into P&G via acquisition decades later.

He already showed a marketing bent of sorts during college at Miami University in Ohio, where he deviated from the staid image of a future Procter executive. He parlayed his experience as social director of Phi Delta Theta to write and market nationally two how-to books for fraternities and sororities -- "Party 'Em Up" and sequel "Party 'Em Up Some More."

At P&G, he brought cause for celebration to what's now known as the oral-care business. Mr. Smale led a team that convinced the American Dental Association to award its first seal of approval to Crest fluoride toothpaste for its cavity-fighting power in 1961. That led to the "Look Ma, No Cavities" campaign from Benton & Bowles, New York, which propelled Crest from a 12% to a 38% market share, allowing it to assume category leadership in the 1960s.

That also helped propel Mr. Smale up the ladder at P&G to VP of the toilet goods division, VP of the flagship detergent division, and, by 1974, exec VP of the entire U.S. operation.

By 1981, he became P&G's seventh CEO. He is both one of the longest to serve in that post and among the most transformational. Despite beginning his watch amid a stubborn recession, P&G more than doubled revenue and earnings to $24 billion and $1.6 billion respectively during his time as CEO, and P&G's stock price more than quadrupled.

Mr. Smale instituted the category-management system in which general managers over multiple brands would begin to take precedence over the company's legendary brand managers. He stepped up global expansion. And he undertook a series of deals, the most crucial of which was the 1985 acquisition of Richardson-Vicks, which would form the foundation of P&G's beauty business, bringing in such brands as Olay, Pantene, and Vidal Sassoon.

He also got P&G into the pharmaceutical business through the 1982 acquisition of Norwich Eaton.

"John deeply believed in product superiority and our ability to develop and deliver such products," said former P&G Chairman-CEO Durk Jager in an email. "This was the reason why he got us into pharmaceuticals through Norwich. He believed it would help us to become better in life sciences."

Mr. Smale was also a firm believer in the motto, "make a little, sell a little, learn a lot, and fail cheap," Mr. Jager said, one he would apply later in his watch as a P&G executive and CEO as he sought to spur innovation.

Mr. Smale was known as a tough manager with a habit of asking incisive questions -- sometimes ones subordinates wished no one would. And he had a way of seeing opportunities that others would miss. In an interview for presentation at Mr. Smale's 2007 induction to the American Advertising Federation Hall of Fame , Roy Bostock, a former CEO of Benton & Bowles and Bcom3 and now chairman of Yahoo, noted how in a 1967 meeting Mr. Smale reframed the discussion about the potential market size for Pampers to focus on the number of diaper changes. That led to a tenfold increase in projections that ultimately was borne out in the market.

In the same presentation, former P&G Chairman-CEO John Pepper noted Mr. Smale's "penetration to understand what the root issues were and then that determination to come to grips no matter what with the truthful answer."

Mr. Smale's work continues to resonate at P&G, since he as CEO assigned Mr. Pepper to lead the team in the 1980s that would write down the company's purpose of improving lives of consumers, said P&G Chairman-CEO Bob McDonald in an interview earlier this year. "Many people hold him to be the soul of the company," Mr. McDonald said.

When Mr. Smale retired as CEO at P&G in 1990s, it was far from the end of his contributions. Besides staying on P&G's board for another five years, he turned his attention to a struggling GM on whose board he also sat.

By 1992, with GM struggling to rebound from a recession earlier in the decade and losses mounting, Mr. Smale led a board revolt that ousted CEO Robert Stempel. Mr. Smale became chairman and Jack Smith became CEO. Mr. Smale then led an effort to institute a brand-management system similar to P&G's at GM. By 1994, GM posted then-record profits of $4.9 billion, and by 1995, Mr. Smale stepped down as chairman, though he remained on the board until 2000.

Successes aside, Mr. Smale's legacy wasn't without its challenges.

While P&G broadly built sales and shares throughout the 1980s, it faced growing threats from competitors. Kimberly-Clark Corp.'s Huggies began to eat away at the leadership of Pampers and launched a Pull-Ups training pants category that P&G made no serious effort to respond to until 2000. Colgate-Palmolive Co., which Mr. Smale's ADA-backed campaign had helped largely defeat in the U.S., turned its attention to the rest of the world, gaining footholds in Latin America, Asia and Western Europe that P&G is still struggling to overcome. Some P&G alums believe his success in engineering in the U.S. may have made the company slower than some rivals to expand overseas.

GM, despite a fairly rapid profit turnaround, continued to lose market share in the U.S. for decades. Two years after Mr. Smale left the board in 2002 one of the key executives he helped bring in to institute brand management left too. Ultimately, by 2009, GM required a federal bailout and a government-supervised restructuring to right its ship.

But Mr. Smale also never stopped thinking about ways to improve the company he left behind at P&G. Former P&G Chairman-CEO A.G. Lafley noted in the AAF presentation how Mr. Smale, more than a decade after leaving the company's board, was still asking how P&G was preparing itself for the next century.

Mr. McDonald noted how Mr. Smale cashed in his own stock to help pay for an annual innovation award given annually to five or six young executives who come up with innovative ideas.

"He is known for understanding the importance of innovation," Mr. McDonald said, recounting a seven-hour plane trip he took with Mr. Smale to London last November to speak to a dinner with retired P&G executives.

"He had graphs that showed the importance of innovation in the company," Mr. McDonald said. "He showed how every major step change in the company's sales was because of innovation, and [the impact of ] many of these innovations lasted forever."

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