Stengel on Leadership, New Media and the Purpose Institute

Q&A: P&G's Departing Global CMO Talks About His Legacy, His Future and What Changes, If Any, His Successor Has in Store

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BATAVIA, Ohio ( -- After seven years as perhaps the most visible, outspoken and successful Procter & Gamble Co. chief marketer in decades, Jim Stengel has announced he's leaving the post Aug. 1 and the company Oct. 31, after some special project work. In this interview with Advertising Age's Jack Neff, he discusses his legacy, what the transition to Marc Pritchard as global marketing officer means and whether he really does love the media as much as, say, Madonna does.
Jim Stengel
Jim Stengel

Ad Age: A lot of people have been talking about your legacy this week. How do you see your legacy?

Mr. Stengel: I was reading the speech I made the day I was appointed in 2001 as I was doing some cleanout over the past few months. ... It's very much the spirit of what I'd tried to carry the past seven years.

The company was in a new situation then. [P&G CEO A.G. Lafley] was new in the role. Our business was not as strong. We were about half the size we are today. ... We needed to get back at what we're fantastic at, which is loving brands, loving and delighting consumers, innovation and the desire to be the best in the world but to do it in the right way.

In there was a sentence about my history and what's turned me on up to now, which was: "How do we make a difference in consumers' lives?" That's exactly what I want to do more of in my next chapter. One theme throughout that is inspiration. We have a fantastic organization and agencies. If they can be day in and day out inspired to a higher purpose, a deeper meaning, via our brands and our marketing, we're unbelievable. That one word, "inspiration," is what keeps coming through. And that's what I hope my legacy to be. And I think it is.

Ad Age: So you accomplished everything you set out to do originally?

Mr. Stengel: Yes. Does it mean we don't have opportunities? Of course not. We're an $83 billion company, and we have opportunities. But I feel I largely have done what I wanted to do. I feel great satisfaction, great pride and great relationships. ... There's also a great feeling that this is the time. And I think leaders always have to confront that.

Ad Age: Marc Pritchard stepping in as your successor is a surprise, I think, to a lot of people. One reason is that he has such a relative difference in style. You're seen as an inspirational leader. He's seen as more of a strong manager in the traditional P&G mold of being very analytical. Do you think there is a significant difference in style?

Mr. Stengel: Every leader is going to bring their own skill to the job. And I think there's always a right time and right place for each leader. I was a surprise seven years ago, I think, to people internally. But for a lot of people working closely with me, I don't think it was a big surprise. To the agency world, other than the agencies he's worked with, they don't know him. That's natural. They didn't know me, either, when I came into the job.

Ad Age: Because Marc has been involved in leading the efforts on streamlining and productivity, either the thought or concern about him coming in as your successor is about him applying that cost and efficiency focus much more squarely on the marketing organization. Some folks don't think you wanted to be involved in that phase and that was a factor in you leaving. Is there anything to that?

Mr. Stengel: If you look at my story over the past seven years, it's been one of creativity, innovation and ROI. Look at the speeches made, the progress our company has made, the capabilities we've built over the past seven years. I think the magic is discipline and creativity. If you're off balance in either direction, you get off track. So it's very much part of the continued story.

In tough economic times, it's ever more important to be focused on creativity and consumer value and ROI. And Marc will continue that. We are coming into different economic times in some countries than we've had in the past few years, and we've just had to do what we do really well even better in those times.

Ad Age: Your departure, combined with those of some others among the company's functional leaders in the past year, has fueled speculation that this is in advance of A.G. announcing his succession plans. Is there anything to that?

Mr. Stengel: Obviously, I can't say a word about A.G. He's fully engaged. I had a meeting with him Monday morning with the management team. He's all over the business. Still meeting with business leaders. Traveling on the business. We have our big management meeting next week and the agenda is fantastic.

We are a company that does succession planning as well as any I've seen. While my announcement may have been a surprise, it wasn't a surprise internally among the key leaders who were working this with me. And I would say that about every change we've had. ...

Ad Age: I also wanted to ask you about your role as a media star, which some people have commented on. I never met Madonna, so I can't make any personal comparisons. And obviously, a lot of us media folks have been puppy dogs at the table eagerly awaiting scraps, so I'm not sure how much you can be blamed for the attention. But what did you see as your role with the media in advancing the company's cause?

Mr. Stengel: I think it's almost unavoidable when you're the world's largest marketer and communicator and you have the leadership heritage we've had for decades, I think the role is an industry leadership role. As the industry goes, in many ways we go. I've had an objective in my time in the role, and Marc will have it as an objective as well, to make sure the industry is moving in the right direction. That's why we are involved in the ANA. That's why we are involved in the Ad Council.

So I think it's almost unavoidable that the role is going to have legitimate interest in the media, because we are a leader, and we have a lot at stake with marketing as a field and advertising as a discipline being respected, credible and innovative. The more the environment is ripe for that, the better for our industry and for a lot of our brands and companies.

Ad Age: There are a couple of theories about what the transition means in terms of focus on the digital space and new media. Some, because they see you as a big champion of new marketing models, see this as a retreat. There are differing viewpoints on Marc Pritchard. Some see him as more of a traditionalist, but others point out that he played a very strong role in interactive media in the early days as an internal champion ... and a feeling that even you and the marketing function weren't moving fast enough on digital. So what does the transition mean here?

Mr. Stengel: We've been on a drumbeat and a mantra of receptivity analysis, communications planning, having an interesting and engaging interaction with consumers when and where they're receptive. You've heard that from me for years, and you'll hear it from Marc. When we do that, and we do it well, you see our programs evolving, some quite dramatically.

You'll see us doing more of that because we're not doing that to the extent we would like on all brands in all countries. And that's the drill we're on. Have we shifted? You bet. Have we shifted fast enough? I think we have on some brands and not on others. I actually do think you're not going to see a retreat. You're going to see us move into more and more of the media consumers are engaging with.

One thing has been a barrier in this [for P&G and for which R/GA Digital Studios Chairman-CEO] Bob Greenberg has been a mentor and a thought leader. We need to simply get more integrated and much more seamless and much [faster]. The agency world argued about that years ago. Those arguments are not happening anymore. At Cannes this year it was all about integration and the idea brought to life across disciplines.

Our pilots [on single-point agency leadership] are going exceptionally well. We are learning a lot from them. But there's no doubt the future for P&G and our agencies will be on high-performing, highly inspired integrated teams. That's where I think you get breakthroughs and embrace a lot of the opportunities we maybe were not embracing years ago when our teams were not as integrated.

Ad Age: Internally, does that play out too? I know P&G has had a digital brand-management function that has operated somewhat separately. Will that change?

Mr. Stengel: We're taking the same steps internally to integrate. That's what you see with some of these brand franchise leaders and some of the organizational changes you've seen from us.

Ad Age: Tell me about your plans for the future. What's the Purpose Institute about?

Mr. Stengel: This idea of purpose-driven branding and finding the meaning and potential meaning behind each brand and orienting everything around that ... is over my career what's really inspired me. Now I simply want to take that to the next step and focus all of my energy on that.

I'm working on a book, and I think it's going to be important to get that done, and get that done quickly. I have the idea, the name, the outline, some early people I'm collaborating with. You should expect to see that from me within a year. And that will be very much about this idea of what can happen when you lift an organization behind higher meaning.

Part two is I do want to affiliate with a university that's strong in this area. And I'm looking at some of the usual suspects, and having a lot of dialog. I see myself as an adjunct or visiting professor. It keeps me fresh. It keeps me with young people. I give back what I believe in so strongly and hopefully I can move everything forward.

The third area is something with the Purpose Institute and [ GSD&M Idea City President] Roy Spence. We're kindred spirits in this area. The work really he's been doing for the last decade on purpose-driven branding and clients like Southwest, Wal-Mart and BMW. He's worked with academic institutions, with governments. It's all about this idea of finding the inner purpose and raising performance to deliver that.

Over the past couple of years, [Mr. Spence] developed a separate division within GSD&M called the Purpose Institute. What he wants to do now is launch that as a stand-alone entity, still within the Omnicom network, over the course of the next six months. I've been consulting with him on that, working with him on that, and I will be part of that, as an advisor and maybe something more at some point.

They're going to work with teams that want to raise their game. We're going to look at seminars, look at materials, because we're both highly inspired by this idea. And we'd rather work together than work apart. He has a book under way as well in this general area.

I think we're going to see more action in this space. It's right for the times. You look at the attitudes of consumers today, those coming into the marketplace, the generation of my kids. It's very healthy what we're seeing. They're expecting companies and brands to serve their consumers in ways that benefit everyone.

That's my direction. It's meant to be not fully developed, because it's not fully developed. I'm driven by this purpose. But I'm going to be open to ideas and opportunities that I think are most interesting for me going forward.

Ad Age: So it sounds like the Purpose Institute is more of a consultancy than a conventional advertising agency or marketing shop.

Mr. Stengel: Yes. It also creates a little more time for me to develop my thinking. I need to keep sharpening my saw as well.

Ad Age: Any thought you might come back to work with a marketer as CMO or some other role?

Mr. Stengel: I don't say no to anything forever. I'm certainly getting a lot of phone calls. But at this point, this is where my energy and my heart is. I never say never.

Ad Age: Are you still speaking at the ANA?

Mr. Stengel: I'm still speaking at the ANA. I called [President] Bob Liodice, and he said, "It's even more interesting now that you're retiring. It's kind of a valedictory address about your learning, about growth and organization and change over the past seven years." So Bob's even more eager for me to be the keynote.
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