P&G at 175: John Pepper looks back at his four decades with the consumer products giant

CINCINNATI - When John Pepper decided to take a year off from academics before starting Harvard Law School in the early 1960s to work at Procter & Gamble, he had no idea that he was about to make the company and Cincinnati his home.

The Pennsylvania native had just received his undergraduate degree at Yale, using a scholarship he won after serving three years in the U.S. Navy.

During college, Pepper sold ads for the Yale Daily News. The experience helped flame his interest in business and the still relatively new concept of "brand management," which was developed at P&G by account manager Neil McElroy.

A famous, three-page memo by McElroy in 1931 had kicked off the entire field, and Pepper wanted to learn more. He packed his bags, headed to the Queen City and began what he thought would be 12 months of work at the consumer goods giant.

"After six months, I called the registrar and told him not to hold my place for the next year," Pepper said. "I was enjoying what I was doing too much to go back."

A career in cleaning

That was in 1963, and Pepper would spend the next 39 years with the firm. His tenure culminated with Pepper serving as Procter's CEO and chairman of the board from 1995-99, and again from 2000-02 after the short, tumultuous reign of Durk Jager in the role.

Now 74, Pepper recalled his long career with 9 News and WCPO.com to commemorate Procter & Gamble's 175 years in business.

One of Pepper's first assignments was to assist in developing and marketing Cascade, a dishwashing detergent brand that – like many of P&G's iconic products – is still around today. Pepper and his colleagues had a tough assignment.

"Only 7 percent of homes had dishwashers in them at that point," he said.

But Pepper liked the challenge, along with the team spirit at P&G. He quickly moved on to work on other product accounts including Dash laundry detergent, Camay soap, Mr. Clean floor cleaner, Downy fabric softener and Bounce softener sheets.

"Mad Men" era

Pepper reflected on the differences in corporate culture between the 1960s and now, describing an atmosphere that evokes images of TV's "Mad Men" series.

"Back then everyone wore coats and ties, with blue shirts or white shirts. It was very formal," he said.

"The biggest difference is the diversity of employees I was working with," Pepper added. "Back then, it was all men. There were some women in marketing, but they all came through marketing research."

By comparison, more than half of Procter's management team nowadays – which totals between 250-300 people – are natives from outside the United States. In the ‘60s, that team consisted of about 11 men, all from North America.

"What it gives us in terms of creativity now is invaluable," Pepper said.

P&G Timeline

Product pioneers

What hasn't changed at P&G is its competitive spirit. That attitude has made its products become staples in U.S. homes with familiar names like Tide detergent, Crest toothpaste, Pampers diapers and Charmin toilet paper becoming part of Americana, and their ad slogans remembered by consumers years after they were introduced.

"If we lost two-tenths of a point to a competitor, we all went nuts," he said. "We tried to figure out why it happened and what we could do about it."

Established in 1837, the company was founded when William Procter and James Gamble met after they married sisters, Olivia and Elizabeth Norris. Their father convinced the two men to become business partners, and they opened a small soap and candle company.

During the Civil War, P&G won contracts to supply the Union Army. But the firm really flourished in the 1880s, when it created an inexpensive bar soap that floated in water, which it named Ivory Soap. (The soap's formula reportedly was perfected in a house in Cincinnati's Westwood neighborhood, where Gamble lived at the time.)

Procter & Gamble has grown into a worldwide company with operations in about 75 nations and annual sales of $83.7 billion. With its products sold in more than 180 nations, P&G is the world's largest consumer goods manufacturer.

One of the firm's earliest innovations was its profit sharing program in 1887 that gives employees an ownership stake. It also was the first company to conduct data-based market research with consumers in the 1920s, and created a consumer relations department in the 1940s.

Each of the changes was pioneering in their time.

Changes and challenges

That progressive philosophy was evident in the ‘60s, when Pepper arrived at the company. P&G would allow its employees to work on United Way projects on company time, which impressed him.

"That was my introduction to Procter & Gamble's commitment to the community," Pepper said.

Also, Pepper saw older, seasoned workers taking new hires under their wing and mentoring them. "That belief in developing and teaching young people was there then and it's there today," he added.

Pepper's biggest challenge came in the 1990s, when P&G decided to overhaul its product development, testing and launch processes. The six-year, $1.9 billion effort was known as "Organization 2005."

"We knew we needed to increase the pace of innovation and move more quickly," he said. "And we needed to simplify decision-making."

Part of the challenge was deciding how to best expand into then-emerging markets in Eastern Europe and China, without threatening the core business.

Pepper's progress

It was during this era that Durk Jager became CEO in 1999. He resigned about 18 months later amid flat earnings and much Wall Street criticism.

Pepper, however, believes his former second-in-command has gotten a bad rap.

"The innovation flow which started in the ‘90s – with products like Swiffer and Febreze – owe a great deal to Durk Jager," Pepper said. "I want that to be recognized."

After he left P&G for good in 2002, Pepper served as board chairman of The Walt Disney Co. from 2007-2012.

Additionally, he took over as CEO of the troubled National Underground Railroad Freedom Center, where he helped streamline its operations and retire much of its debt.

While on the Disney board, Pepper served with Apple Computers head Steve Jobs.

"When people ask me about what he was like, I always talk about his maniacal commitment to do something fresh and unique," Pepper said. "I see that maniacal commitment to doing the right thing and making a difference at P&G."

In that vein, Pepper believes his biggest accomplishment will be how he treated his colleagues and employees.

"I think it will be whatever influence I've had on other people growing up and as they develop," he said. "The interactions with other people in the company will have the most lasting impact."

Still, Pepper's days at P&G hold a special place in his heart. He and his wife, Francie, continue to be active in various charitable causes. They live in Wyoming, just north of Cincinnati.

Photos Courtesy: P&G

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