hero_image_url=https://images.examples.com/wp-content/uploads/2026/08/Procter-Gamble-Rising-Tide-Biography.png edl_preview_height_px_main=861 edl_preview_height_px= 25830 count_images = 20 less_than_600 = 7 greater_than_600=6 count_of_examples=62

C O R P O R AT E

B I O G R A P H Y

C O M M E M O R AT I V E

H E R I T A G E

E D I T I O N

P&G

P ROCT E R & G A M B L E · E S T A B L I S H E D 1 8 3 7 · CI N CI N NAT I , OH I O

Rising Tide

Lessons

from

165

Years

Brand

Building

—

the

story

how

one

candle

and

soap

partnership

taught

the

world

buy

promise

Prepared

The

Corporate

Heritage

Archive

Brand

Strategy

Group

the

occasion

The

165

anniversary

the

founding

The

Procter

Gamble

Company

Date

publication

October

31, 2002 ·

Document

ref

HER

-2002-0165

I N

B RI E F

October

31, 1837,

William

Procter

and

James

Gamble

signed

partnership

agreement

Cincinnati

side

street

and

opened

shop

that

made

candles

and

soap

hand

One

hundred

and

sixty

five

years

later

that

shop

has

become

company

selling

household

names

than

140

countries

—

company

that

the

words

its

own

leadership

, "

touches

lives

and

improves

life

for

two

billion

consumers

year

This

biography

sets

out

how

happened

and

what

the

rest

the

world

can

learn

from

C O N T E N T S

Executive

Summary

The

case

for

studying

Prologue

river

city

marketplace

The

Founders

and

the

First

Principles

1837–

1879

Ivory

and

the

Invention

Brand

1879–

1900

The

Machine

Market

research

and

the

brand

man

, 1900–1945

The

Washday

Miracle

Tide

and

the

modern

consumer

company

, 1946–1955

The

Decade

Decisions

Crest

Charmin

Pampers

1955–1965

The

Portfolio

Era

Build

buy

and

globalize

1963–1999

The

Storm

The

2000

crisis

The

Turnaround

2001–2002

Lessons

from

165

Years

Ten

disciplines

that

survived

ten

decades

Postscript

The

tide

keeps

rising

Appendix

—

Timeline

Major

events

, 1837–

2002

1 / 20

Procter & Gamble Rising Tide Biography — page 2

Appendix

—

The

Billion

Dollar

Brands

Portfolio

fiscal

2002

Appendix

—

Financial

Milestones

Net

sales

through

two

centuries

Sources

Method

Executive Summary

Very

few

enduring

companies

can

point

single

moment

founding

Procter

Gamble

can

point

contract

handshake

and

year

— 1837 —

and

unbroken

line

operation

ever

since

That

record

alone

would

justify

study

What

makes

the

company

genuinely

instructive

the

pattern

beneath

the

longevity

did

not

merely

survive

the

Industrial

Revolution

the

rise

mass

media

two

world

wars

the

television

age

the

supermarket

era

and

the

birth

global

retail

shaped

each

those

forces

The

company

that

gave

the

world

the

floating

soap

called

Ivory

went

give

the

marketing

profession

its

vocabulary

the

national

advertising

campaign

the

market

research

department

the

brand

management

system

the

clinical

proof

claim

the

billion

dollar

global

brand

When

historians

business

look

for

the

birthplace

modern

consumer

marketing

most

locate

between

the

Ohio

River

and

old

factory

district

Cincinnati

HEADLINE

FIGURES

—

FISCAL

2 002

Net

sales

40.2

billion

net

earnings

4.3

billion

than

100,000

employees

products

sold

over

140

countries

twelve

brands

with

annual

sales

above

billion

The

story

falls

naturally

into

five

acts

The

first

act

runs

from

the

1837

partnership

the

invention

Ivory

1879

and

the

establishment

the

first

national

brand

The

second

act

—

roughly

1900

1945 —

sees

build

the

organizational

machinery

modern

marketing

culminating

the

1931

invention

the

brand

management

system

The

third

act

from

1946

1965,

turns

scientific

advantage

into

household

dominance

with

Tide

Crest

and

Pampers

The

fourth

act

, 1963

1999,

extends

the

model

globally

and

assembles

portfolio

acquired

brands

The

final

act

, 2000

2002,

the

crisis

and

the

turnaround

—

the

moment

when

the

company

relearned

its

own

oldest

lesson

the

consumer

boss

This

document

was

commissioned

the

Brand

Strategy

Group

mark

the

company

165

anniversary

written

for

the

company

people

its

partners

and

its

students

—

anyone

who

has

ever

asked

why

brands

keep

winning

generation

after

generation

The

answer

one

sentence

industrialized

the

making

trust

scale

competitor

has

ever

quite

matched

and

has

spent

165

years

refusing

trade

that

trust

for

quarter

2 / 20

Procter & Gamble Rising Tide Biography — page 3

Prologue — A River, a City, a Marketplace

the

1830

Cincinnati

was

the

fastest

growing

city

the

American

West

—

river

port

muddy

streets

steamboats

and

slaughterhouses

known

its

own

citizens

Porkopolis

The

city

great

industry

was

meatpacking

Hogs

arrived

the

drove

and

left

cured

pork

leather

lard

and

tallow

—

and

tallow

the

raw

material

candles

just

the

rendered

fat

the

packing

houses

the

raw

material

soap

Every

Cincinnati

family

made

its

own

soap

bought

unwrapped

and

unlabeled

from

corner

grocer

The

trade

was

local

anonymous

and

fiercely

competitive

Nothing

about

suggested

the

birth

great

company

Into

this

city

came

two

immigrants

William

Procter

born

Herefordshire

England

had

apprenticed

the

dry

goods

and

candle

trades

before

crossing

the

Atlantic

James

Gamble

born

Enniskillen

County

Fermanagh

had

learned

the

soapmaker

craft

Ireland

young

man

Each

opened

small

shop

his

own

Each

married

daughter

Alexander

Norris

—

and

was

Norris

local

merchant

who

saw

what

the

young

men

did

not

Procter

the

salesman

and

Gamble

the

maker

would

stronger

one

house

than

two

rivals

October

31, 1837,

the

partnership

Procter

Gamble

was

formally

agreed

The

timing

was

appalling

panic

had

seized

American

banking

that

spring

;

credit

had

frozen

from

New

York

New

Orleans

But

candles

and

soap

are

purchased

every

weather

and

the

partners

first

principle

was

simple

and

durable

sell

product

honest

quality

under

the

firm

own

name

fair

price

depression

that

reputation

became

their

only

capital

—

and

compounded

The

company

early

decades

were

shaped

the

same

forces

that

shaped

the

city

the

steamboat

economy

the

packing

houses

and

then

the

Civil

War

during

which

supplied

soap

and

candles

the

Union

Army

The

war

taught

the

young

firm

produce

scale

manage

government

contracts

and

coordinate

supply

chain

that

reached

far

beyond

Cincinnati

1859,

before

the

war

began

annual

sales

had

already

passed

million

—

extraordinary

sum

for

frontier

manufacturing

house

The

pattern

was

set

would

grow

with

America

and

then

would

grow

the

markets

served

3 / 20

Procter & Gamble Rising Tide Biography — page 4

The Founders and the First Principles — 1837–1879

The

partnership

worked

because

the

two

men

were

complementary

temperament

not

identical

ambition

William

Procter

was

the

merchant

—

the

one

who

walked

the

wharves

knew

the

grocers

name

and

understood

that

buyer

chooses

with

emotion

before

reason

James

Gamble

was

the

maker

—

exacting

patient

suspicious

shortcuts

Gamble

standing

instruction

his

soap

boilers

became

company

legend

never

sacrifice

quality

cost

and

never

sell

batch

that

would

not

acceptable

his

own

kitchen

Both

men

were

also

devout

;

both

believed

the

business

existed

serve

its

customers

and

its

community

conviction

that

would

later

codified

the

company

famous

what

right

principle

The

founders

sons

took

over

the

1870

and

found

the

company

well

regarded

but

unremarkable

Procter

Gamble

made

good

soap

and

good

candles

and

sold

them

plain

wrappers

everyone

else

customer

could

not

have

named

the

difference

between

bar

and

rival

bar

five

minutes

after

leaving

the

store

because

the

product

carried

name

that

meant

anything

The

firm

was

profitable

respectable

and

invisible

Then

1879,

accident

changed

everything

James

Norris

Gamble

—

the

founder

son

the

company

first

formally

trained

chemist

—

had

been

working

new

white

soap

exceptional

purity

During

one

batch

worker

left

the

mixing

churn

running

through

the

lunch

break

beating

far

air

into

the

soap

than

intended

The

batch

everyone

surprise

floated

Customers

when

the

bar

reached

the

stores

did

not

complain

They

asked

again

and

again

for

the

soap

that

floats

Here

was

moment

most

manufacturers

would

have

shrugged

away

production

irregularity

novelty

footnote

But

Harley

Procter

grandson

the

founder

and

the

company

first

true

marketer

saw

differently

bar

soap

that

floats

difference

customer

can

see

difference

customer

can

see

reason

choose

And

reason

choose

attached

name

the

beginning

brand

4 / 20

Procter & Gamble Rising Tide Biography — page 5

Ivory and the Invention of a Brand — 1879–1900

The

great

historical

irony

Procter

Gamble

that

its

most

consequential

product

was

accident

and

its

most

durable

strategy

was

act

naming

Harley

Procter

chose

the

name

one

Sunday

church

reading

Psalm

45:8 — "

out

the

ivory

palaces

whereby

they

have

made

thee

glad

Ivory

was

not

description

;

was

idea

—

purity

whiteness

gentleness

With

name

came

claim

Procter

sent

samples

the

new

soap

independent

laboratory

New

York

and

asked

for

exact

analysis

The

chemist

report

99.44

percent

pure

soap

became

the

foundation

the

most

famous

advertising

slogan

the

nineteenth

century

: "

Ivory

Soap

— 99

and

44/100

percent

pure

floats

The

company

then

did

something

almost

nobody

packaged

goods

had

done

before

advertised

the

name

nationally

1882,

placed

Ivory

category

that

millions

customers

had

chosen

name

before

they

ever

saw

shelf

The

years

that

followed

built

the

institutional

foundations

that

would

make

such

brands

routine

1885,

opened

the

Ivorydale

plant

outside

Cincinnati

—

model

factory

with

worker

housing

gymnasium

and

commitment

cleanliness

that

bordered

obsession

1887,

under

the

leadership

William

Cooper

Procter

grandson

the

founder

the

company

adopted

profit

sharing

program

that

gave

workers

stake

the

company

results

—

one

the

first

its

kind

American

industry

When

incorporated

1890,

William

Cooper

Procter

pushed

through

reform

that

stunned

the

business

world

single

vote

per

shareholder

regardless

the

number

held

that

the

family

workforce

owners

could

never

steamrolled

outside

capital

"It floats." — and "99 and 44/100 percent pure."

The

first

national

brand

promise

American

packaged

goods

, 1882

1900,

the

template

was

complete

and

would

reused

successfully

for

the

century

distinctive

name

carrying

emotional

meaning

;

independent

verifiable

claim

;

consistent

national

advertising

;

relentless

sampling

;

and

manufacturing

culture

obsessive

enough

make

the

promise

true

Everything

has

done

since

variation

that

first

template

5 / 20

Procter & Gamble Rising Tide Biography — page 6

The Machine — Market Research and the Brand Man,

1900–1945

Between

the

death

the

founders

generation

and

the

end

the

Second

World

War

transformed

itself

from

company

with

one

famous

product

into

organization

built

produce

famous

products

production

line

The

first

major

step

was

technological

1911,

introduced

Crisco

the

first

all

vegetable

shortening

made

possible

the

hydrogenation

cottonseed

oil

Crisco

was

scientist

product

but

the

company

sold

cook

product

—

free

recipe

booklets

cooking

schools

and

advertising

that

taught

housewives

new

way

cook

Crisco

established

the

pattern

building

brand

around

patent

protected

technology

and

made

laboratories

central

the

company

future

The

second

step

was

geographic

1915,

opened

its

first

plant

outside

the

United

States

Hamilton

Ontario

International

expansion

thereafter

was

steady

rather

than

spectacular

—

entered

markets

when

could

staff

them

with

its

own

people

and

its

own

standards

discipline

that

would

distinguish

from

competitors

who

expanded

license

and

lost

control

The

third

step

—

and

the

most

consequential

—

was

organizational

1924,

established

the

first

market

research

department

the

packaged

goods

industry

sending

trained

interviewers

into

American

kitchens

ask

housewives

how

they

washed

cooked

and

cleaned

The

findings

were

not

academic

They

drove

product

decisions

and

advertising

messages

and

they

gave

systematic

rather

than

intuitive

understanding

the

consumer

1926,

the

company

launched

Camay

—

second

soap

brand

positioned

deliberately

against

its

own

Ivory

—

institutionalizing

the

idea

that

brands

within

the

same

house

should

compete

they

were

independent

companies

Let one man be responsible for one brand — its advertising,

its sales, its profits — and let him scheme and plan and fight

for it as if it were his own business.

Paraphrase

the

May

1931

brand

management

memo

Neil

McElroy

The

decisive

moment

came

1931,

when

27-

year

old

advertising

manager

named

Neil

McElroy

wrote

what

became

the

most

famous

memo

marketing

history

Facing

the

problem

administering

growing

stable

brands

McElroy

proposed

that

each

brand

assigned

single

brand

man

with

total

responsibility

for

that

brand

advertising

sales

pricing

and

profitability

—

miniature

general

manager

who

would

compete

against

every

other

brand

the

building

with

the

ferocity

outside

rival

The

6 / 20

Procter & Gamble Rising Tide Biography — page 7

memo

was

adopted

and

the

brand

management

system

was

born

remains

this

day

the

management

architecture

virtually

every

consumer

goods

company

earth

The

system

was

tested

and

refined

during

the

1930

when

became

the

first

major

advertiser

make

the

new

medium

radio

its

own

1933,

the

company

began

sponsoring

daytime

serial

drama

sell

Oxydol

laundry

soap

;

listeners

began

calling

such

programs

soap

operas

and

the

phrase

entered

the

language

That

same

year

introduced

Dreft

the

first

synthetic

detergent

made

for

home

laundry

—

chemist

harbinger

the

revolution

come

The

wartime

years

1941

1945

deepened

the

company

chemistry

plants

produced

glycerin

for

munitions

and

the

company

researchers

worked

alongside

government

scientists

synthetic

detergents

When

the

war

ended

the

learning

returned

Cincinnati

product

history

7 / 20

Procter & Gamble Rising Tide Biography — page 8

The Washday Miracle — Tide and the Modern

Consumer Company, 1946–1955

October

3, 1946,

introduced

Tide

—

and

single

product

launch

changed

the

American

home

and

the

company

that

made

Tide

was

not

variation

soap

was

synthetic

detergent

engineered

around

new

principle

: "

built

detergents

combining

synthetic

surfactants

with

builders

that

suspended

dirt

the

wash

water

instead

letting

settle

back

into

the

fabric

Ordinary

soap

left

dull

gray

film

hard

water

;

Tide

washed

whiter

brighter

and

without

soap

scum

The

company

chemists

had

been

working

toward

since

the

late

1930

and

the

war

had

accelerated

the

underlying

chemistry

The

result

was

not

incremental

improvement

—

was

the

words

the

launch

advertising

washday

miracle

The

launch

itself

was

masterclass

the

method

Tide

was

introduced

first

carefully

chosen

test

markets

with

unprecedented

wave

sampling

—

coupons

free

boxes

and

heavy

television

and

radio

advertising

built

around

single

memorable

claim

: "

Tide

dirt

out

The

product

sold

itself

but

the

company

made

certain

was

never

left

alone

Within

two

years

Tide

had

become

the

best

selling

laundry

product

America

Within

decade

was

the

largest

selling

single

product

the

company

history

—

and

total

sales

had

passed

billion

for

the

first

time

Tide

also

demonstrated

the

company

ruthless

portfolio

logic

large

Tide

early

sales

came

cannibalizing

own

soap

brands

including

Oxydol

and

Dreft

The

brand

system

did

not

flinch

new

brand

could

beat

the

old

one

the

old

one

was

allowed

decline

—

because

competitor

brand

would

take

the

customers

anyway

Better

steal

from

yourself

than

robbed

someone

else

That

willingness

disrupt

its

own

franchises

became

one

defining

competitive

habits

Tide's in, dirt's out.

Tide

launch

campaign

, 1946 —

fifty

six

years

later

still

the

world

leading

laundry

brand

The

1950

completed

the

company

immersion

television

moved

its

radio

serials

the

new

screens

category

after

category

with

superior

technology

and

superior

marketing

The

period

opened

with

Crest

1955,

launched

fluoride

toothpaste

based

stannous

fluoride

research

licensed

from

Indiana

University

and

then

refined

laboratories

The

company

did

not

ask

consumers

take

the

claim

faith

;

funded

three

year

clinical

study

schoolchildren

that

became

one

the

most

rigorous

product

validations

ever

conducted

consumer

goods

When

1960,

the

American

Dental

Association

granted

Crest

its

Seal

Acceptance

—

the

first

ever

awarded

toothpaste

—

the

brand

nearly

tripled

year

The

lesson

was

filed

away

and

reused

scientific

proof

translated

into

simple

consumer

promise

the

strongest

marketing

weapon

company

can

own

Then

came

paper

decision

that

quietly

transformed

the

company

future

1957,

acquired

Charmin

regional

Wisconsin

tissue

maker

and

used

its

scale

and

chemistry

build

national

paper

brands

—

Charmin

bathroom

tissue

and

from

1965,

Bounty

paper

towels

also

acquired

Clorox

1957,

only

ordered

the

Federal

Trade

Commission

divest

decade

later

The

FTC

decision

established

principle

that

shaped

subsequent

strategy

the

company

distribution

and

advertising

power

was

great

that

regulators

would

not

allow

acquire

dominance

adjacent

categories

would

grow

hereafter

mostly

invention

and

careful

defensible

acquisitions

The

most

consequential

launch

the

decade

came

1961

with

Pampers

The

idea

originated

with

Vic

Mills

chemical

engineer

then

his

sixties

who

was

exasperated

the

drudgery

laundering

cloth

diapers

for

his

grandson

The

insight

was

framed

consumer

problem

— "

baby

wetness

the

mother

problem

" —

and

the

solution

was

disposable

diaper

with

contoured

shape

and

moisture

holding

core

Pampers

was

not

instant

success

;

early

economics

were

brutal

and

mothers

balked

the

price

per

change

But

persisted

through

years

manufacturing

refinement

driving

costs

down

until

the

category

economics

worked

the

late

1960

Pampers

had

created

the

disposable

diaper

industry

America

—

and

remains

2002,

the

world

largest

baby

care

brand

Head

Shoulders

launched

the

same

year

applied

the

same

formula

dandruff

becoming

the

first

mass

marketed

clinically

effective

dandruff

shampoo

T HE

PAT T ERN

O F

T HE

DECADE

Enter

category

with

technical

advantage

(

Crest

Pampers

Head

Shoulders

Prove

the

claim

with

clinical

engineering

evidence

Market

the

proof

relentlessly

Scale

relentlessly

Defend

the

9 / 20

Procter & Gamble Rising Tide Biography — page 10

franchise

for

generations

The Portfolio Era — Build, Buy, and Globalize, 1963–

1999

For

its

first

126

years

built

nearly

every

major

brand

from

within

Beginning

1963,

added

second

engine

the

strategic

acquisition

The

first

major

purchase

was

Folgers

Coffee

1963,

which

carried

the

company

into

new

aisle

the

supermarket

Pringles

followed

the

1970

internal

invention

—

saddle

shaped

snack

designed

survive

the

distribution

system

—

and

demonstrated

that

the

company

could

innovate

foods

well

fabrics

and

paper

Downy

fabric

softener

(1960),

Bounce

(1972),

and

Always

feminine

protection

(1983)

extended

the

home

care

and

personal

care

franchises

while

the

purchase

Charmin

paper

business

was

joined

international

expansion

that

made

brands

familiar

Frankfurt

São

Paulo

and

Manila

Peoria

The

1980

and

1990

brought

the

acquisition

era

full

maturity

Richardson

Vicks

was

acquired

1985

for

roughly

1.2

billion

bringing

Vicks

Oil

Olay

and

Pantene

into

the

house

;

Noxell

followed

1989

with

Cover

Girl

and

Noxzema

;

Max

Factor

arrived

1991;

and

Iams

pet

food

was

added

1999

for

approximately

2.3

billion

The

thread

uniting

these

purchases

was

strategic

not

sentimental

each

gave

platform

high

margin

category

—

beauty

health

care

pet

care

—

where

its

marketing

machine

could

compound

already

strong

brand

the

mid

-1990

dozen

brands

each

sold

than

billion

dollars

year

The

late

1990

also

brought

the

company

most

ambitious

—

and

most

disruptive

—

internal

reorganization

. "

Organization

2005,"

announced

1998,

collapsed

the

classic

brand

manager

system

into

matrix

Global

Business

Units

Market

Development

Organizations

and

Global

Business

Services

intended

eliminate

duplication

and

accelerate

decision

making

The

theory

was

sound

;

the

execution

proved

traumatic

Authority

became

diffuse

decision

cycles

lengthened

costs

rose

and

the

company

famously

sharp

accountability

blurred

just

competitors

—

and

private

label

—

sharpened

their

own

games

The

result

was

the

most

difficult

passage

the

company

modern

history

had

entered

the

1990

the

world

most

admired

consumer

goods

company

entered

the

year

2000

with

its

stock

under

pressure

its

earnings

momentum

gone

and

its

newest

management

ideas

disarray

The

portfolio

era

had

built

magnificent

collection

brands

What

the

company

had

neglected

was

its

first

principle

the

consumer

boss

—

not

the

organization

chart

10 / 20

Procter & Gamble Rising Tide Biography — page 11

The Storm — The 2000 Crisis

June

8, 2000,

Procter

Gamble

issued

stunning

profit

warning

for

its

fiscal

fourth

quarter

The

stock

fell

than

percent

single

day

—

the

largest

one

day

percentage

decline

the

company

modern

history

The

causes

were

visible

hindsight

The

Organization

2005

restructuring

had

taken

the

company

eye

off

the

shelves

Product

launches

had

slowed

costs

had

climbed

and

competitors

from

Unilever

Kimberly

Clark

aggressive

private

label

retailers

had

taken

core

categories

The

company

had

also

bet

heavily

speculative

acquisition

strategy

that

collapsed

the

spring

2000,

when

its

proposed

merger

with

major

pharmaceutical

company

fell

apart

The

CEO

who

had

pushed

hard

and

fast

Durk

Jager

lasted

just

seventeen

months

—

tenure

measured

not

years

but

single

dramatic

turn

the

wheel

The

board

turned

Lafley

23-

year

company

veteran

who

had

spent

most

his

career

the

beauty

business

and

had

recently

led

the

company

operations

Asia

where

had

engineered

celebrated

turnaround

Japan

Lafley

was

unlikely

heir

leadership

had

traditionally

come

from

the

fabric

care

baby

care

strongholds

and

Lafley

was

quiet

understated

product

man

But

understood

something

the

crisis

had

made

obvious

The

company

had

been

reorganizing

itself

for

years

while

forgetting

ask

the

consumer

what

she

wanted

The

first

thing

did

was

stop

the

reorganizing

The consumer is boss.

Lafley

chief

executive

2000–2010 —

the

oldest

principle

revived

strategy

The Turnaround — 2001–2002

Lafley

strategy

was

less

plan

than

return

first

principles

focus

simplification

and

the

consumer

The

first

move

was

focus

Lafley

asked

two

questions

every

business

: "

Where

play

and

How

win

The

answers

led

concentrate

the

categories

where

had

—

could

build

—

genuine

technological

advantage

fabric

care

baby

care

feminine

care

family

care

hair

care

and

skin

care

The

company

withdrew

from

businesses

that

did

not

meet

the

test

2002,

completed

the

divestiture

its

Jif

peanut

butter

and

Crisco

oils

businesses

Smucker

exiting

food

oils

and

peanut

butter

deepen

investment

faster

growing

higher

margin

franchises

11 / 20

Procter & Gamble Rising Tide Biography — page 12

The

second

move

was

portfolio

building

where

counted

2001,

acquired

Clairol

for

4.95

billion

adding

hair

color

its

Pantene

and

Head

Shoulders

platforms

and

making

the

company

the

world

largest

hair

care

business

The

acquisition

was

classic

strong

brand

high

margin

category

and

distribution

and

marketing

system

that

could

grow

further

The

third

move

was

innovation

—

and

here

the

timing

was

fortunate

Two

the

company

most

promising

recent

launches

Febreze

and

Swiffer

had

entered

the

market

1998

and

1999

but

had

been

lost

the

restructuring

chaos

Under

Lafley

they

became

the

company

most

visible

success

stories

new

the

world

products

that

created

entirely

new

categories

each

racing

toward

billion

dollar

status

The

lesson

was

not

lost

the

organization

innovation

not

reorganization

how

grows

The

results

followed

quickly

than

1.5

billion

structural

costs

came

out

the

business

two

years

Net

earnings

climbed

from

approximately

3.0

billion

fiscal

2000

4.3

billion

fiscal

2002,

record

net

sales

40.2

billion

The

stock

which

had

lost

third

its

value

day

June

2000,

had

roughly

doubled

from

its

trough

the

autumn

2002.

The

company

that

had

seemed

the

summer

2000,

have

lost

its

way

had

returned

eighteen

months

the

formula

that

had

built

superior

products

superior

marketing

superior

execution

—

and

the

consumer

the

ultimate

boss

12 / 20

Procter & Gamble Rising Tide Biography — page 13

Lessons from 165 Years

What

does

165

years

continuous

brand

building

actually

teach

Ten

disciplines

emerge

from

the

record

with

unusual

clarity

The

Consumer

Boss

institutionalized

listening

before

the

phrase

consumer

insights

existed

The

market

research

department

1924,

the

kitchen

interviews

the

test

markets

the

clinical

studies

—

all

were

ways

forcing

the

organization

hear

the

consumer

over

its

own

assumptions

Every

crisis

the

company

history

has

been

crisis

listening

;

every

recovery

has

begun

with

listening

again

Brand

Unit

Trust

Ivory

floating

was

curiosity

;

Ivory

name

was

promise

Harley

Procter

understood

that

customer

buys

name

and

claim

not

lump

tallow

The

99.44

percent

purity

slogan

worked

because

was

verifiable

—

and

because

the

factory

made

true

Trust

once

broken

nearly

impossible

rebuild

;

history

the

history

never

breaking

Own

the

System

Not

Just

the

Product

true

invention

was

not

soap

but

system

brands

with

dedicated

general

managers

research

department

media

machine

distribution

network

and

culture

internal

competition

Competitors

copied

the

products

The

system

was

harder

copy

—

and

the

reason

could

repeat

its

magic

detergent

toothpaste

diapers

shampoo

and

paper

Cannibalization

Sign

Health

Camay

was

launched

against

Ivory

Tide

was

allowed

eat

Oxydol

Crest

displaced

own

Gleem

Each

time

the

company

chose

its

newer

stronger

brand

over

its

older

weaker

one

—

reasoning

that

competitor

would

take

the

business

anyway

Portfolio

courage

this

sort

requires

leadership

team

that

can

answer

shareholders

not

brand

13 / 20

Procter & Gamble Rising Tide Biography — page 14

Innovation

Must

Prove

Itself

Crest

had

the

clinical

study

Tide

had

the

chemistry

Pampers

had

the

engineering

every

case

refused

launch

claim

could

not

substantiate

—

and

then

spent

whatever

the

substantiation

cost

product

truth

translated

into

consumer

promise

the

only

innovation

that

survives

contact

with

skeptical

market

Build

Within

First

;

Buy

the

Edge

For

than

century

built

its

core

brands

from

within

—

Ivory

Tide

Crest

Pampers

Always

Febreze

Swiffer

used

acquisitions

from

Folgers

Olay

Clairol

enter

categories

where

lacked

technology

The

discipline

was

consistent

never

acquire

fix

weakness

;

acquire

only

accelerate

position

that

already

winnable

Scale

Moat

—

and

Constraint

distribution

media

buying

and

manufacturing

scale

gave

advantages

startup

could

match

But

the

Clorox

divestiture

taught

harder

lesson

regulators

will

not

permit

company

translate

scale

one

category

into

dominance

another

acquisition

Scale

must

earned

innovation

and

reinvested

consumer

value

—

becomes

liability

Crises

Compress

Decades

The

2000

profit

warning

was

the

single

worst

day

the

company

modern

history

—

and

the

turnaround

that

followed

was

one

the

fastest

American

business

Crisis

teaches

organization

what

actually

believes

discovered

2000

that

believed

its

oldest

principles

and

the

consumer

who

had

been

waiting

for

the

company

remember

them

Culture

Outlasts

Every

CEO

Sixteen

CEOs

have

led

since

1837.

What

has

endured

the

culture

the

profit

sharing

1887,

the

one

vote

per

governance

reform

the

what

right

principle

the

internal

training

academies

the

promotion

from

within

tradition

Culture

the

only

durable

competitive

advantage

—

and

the

only

one

competitors

cannot

license

Rising

Tide

Carries

the

Whole

Fleet

not

company

one

great

brand

but

fleet

them

When

one

category

matures

another

ascends

;

when

one

geography

slows

another

accelerates

The

portfolio

—

twelve

billion

dollar

brands

and

hundreds

supporting

stars

—

the

ultimate

hedge

Diversification

14 / 20

Procter & Gamble Rising Tide Biography — page 15

trusted

promises

managed

with

single

discipline

how

company

survives

165

years

and

counting

Postscript — The Tide Keeps Rising

October

31, 2002,

the

company

that

began

with

two

immigrants

wooden

trough

and

handshake

marks

its

165

birthday

has

survived

the

Panic

1837,

the

Civil

War

two

world

wars

the

Great

Depression

the

antitrust

era

the

hostile

takeover

mania

the

1980

the

globalization

wave

and

the

worst

single

day

its

history

two

years

ago

Its

brands

sit

than

half

the

world

homes

Its

balance

sheet

strong

Its

innovation

pipeline

fuller

than

has

been

generation

The

ten

years

will

bring

new

challenges

—

the

rise

discount

retail

the

fragmentation

media

the

demands

the

digital

consumer

and

the

inexorable

pressure

private

label

But

the

company

history

offers

quiet

prediction

will

meet

those

challenges

the

way

has

met

every

challenge

since

1837

—

listening

the

consumer

insisting

superior

products

trusting

its

system

and

compounding

trust

one

batch

one

box

one

bar

soap

time

The

tide

that

lifted

this

company

into

its

second

century

still

rising

WHAT

RIGHT

than

any

slogan

the

company

oldest

maxim

—

attributed

the

founders

and

restated

every

generation

since

—

captures

the

secret

the

long

run

what

right

for

the

consumer

what

right

for

the

company

what

right

for

the

community

and

the

numbers

will

take

care

themselves

15 / 20

Procter & Gamble Rising Tide Biography — page 16

Appendix A — Timeline of Major Events, 1837–2002

Selected

milestones

from

the

Procter

Gamble

corporate

record

YEAR

EVENT

1837

Partnership

Procter

Gamble

formed

Cincinnati

October

31.

1859

Annual

sales

pass

million

for

the

first

time

1862

Company

supplies

soap

and

candles

the

Union

Army

1879

Ivory

soap

developed

;

the

floating

property

discovered

accident

1882

First

national

magazine

advertising

campaign

for

Ivory

1885

Ivorydale

manufacturing

plant

opens

outside

Cincinnati

1887

Profit

sharing

program

adopted

—

one

the

first

American

industry

1890

The

Procter

Gamble

Company

incorporated

;

one

vote

per

reform

1911

Crisco

the

first

all

vegetable

shortening

introduced

1915

First

plant

outside

the

opens

Hamilton

Ontario

1924

First

market

research

department

packaged

goods

established

1926

Camay

launched

against

Ivory

—

internal

competition

begins

1930

Thomas

Hedley

Company

Newcastle

England

acquired

—

first

overseas

acquisition

1931

Neil

McElroy

memo

creates

the

brand

management

system

1933

Dreft

introduced

;

Oxydol

category

;

approaching

Swiffer

Cleaning

systems

1999

Built

New

category

;

approaching

18 / 20

Procter & Gamble Rising Tide Biography — page 19

Built

indicates

brands

developed

within

laboratories

; "

Acquired

indicates

brands

entered

through

acquisition

and

subsequently

grown

the

system

Appendix C — Financial Milestones

Net

sales

fiscal

year

(

years

ending

June

30).

Pre

-1950

figures

are

company

record

approximations

YEAR

NET

SALES

CONTEXT

1890

million

Incorporation

;

Ivory

sells

nationally

1937

147

million

Centennial

year

;

Crisco

Dreft

and

the

brand

system

place

1955

1.0

billion

Sales

pass

billion

;

Crest

launched

1980

10.8

billion

Portfolio

extended

into

paper

food

and

beverages

1990

24.1

billion

Beauty

platform

acquisitions

progress

1997

35.7

billion

Organization

2005

announced

2000

40.0

billion

June

earnings

warning

;

leadership

change

2002

40.2

billion

Record

net

earnings

4.3

billion

; 165

anniversary

Figures

rounded

for

historical

presentation

;

official

audited

figures

available

Annual

Reports

years

1890–2002.

19 / 20

Procter & Gamble Rising Tide Biography — page 20

Sources & Method

This

biography

was

assembled

from

the

Procter

Gamble

corporate

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