I was a bit taken aback by the remarks of Procter & Gamble CEO A.G. Lafley, published in the Financial Times yesterday. Lafley, who in light of his success in turning P&G around and in the absence of a huge personality like Jack Welch, is one of the most admired CEOs in the U.S. at the moment, decided to escape the surly bonds of business strategy and talk some politics with an FT reporter.
He urged U.S. presidential candidates Barack Obama and John McCain not to push the U.S. into a "worse recession" by portraying the economy gloomily during the election season. Lafley said he objected to the "woe is me and ain’t it awful" rhetoric Obama and Hillary Clinton used during the primaries.
In case you’re with him so far, here are some of his quotes, and my responses:
“In my business we don’t need excessive negativism. You know we are in a business where psychology matters—even in the staples business—and in the economy psychology matters. It could go negative on the economy, that could be a problem . . . We will talk ourselves into a worse recession.”
CEOs are borderline superstitious about communication. As the world’s biggest advertiser, P&G spends a billion dollars every year talking you and me into buying brand names like "Cheer" over generic products we know in our hearts are probably just as good. Now he’s worried that, by acknowledging the insane oil prices and the foreclosure crisis, the presidential candidates could "talk" us into buying cheaper toilet paper?
This is the same logic that frustrates employee communicators who only want to help employees understand the marketplace and their company’s position in it, but who are told: Morale will suffer if employees know we’re number three, and it’ll cause us to sink to number four. Probably better not to say anything.
“I wish there were a little less rhetoric about the evils of trade and especially international commerce. I really do believe . . . that while there are always winners and losers in any transition, by and large the standard of livings have been improving around the world and that in the end is the measure right? I am hoping McCain and Obama will be a different dialogue on trade than Clinton and Obama.”
I haven’t heard much anti-trade talk in this election, have you? I’ve heard a few remarks about eliminating tax breaks for companies who outsource jobs overseas. Are even those timid murmurs too much for Lafley to take?
Lafley should also understand that thinking grownups are not reassured by a CEO’s remark, "I really do believe" that "by and large the standard of livings have been improving around the world and that in the end is the measure right." We’ll be the judge of our standards of living, thank you; and P&G doesn’t get to "measure" human progress. Humans do.
“We have never seen the energy cost and commodity cost scope or scale that we have today. There is not a material that we are buying that is not under inflationary pressure and I honestly haven’t seen that before. In the 1970s it was oil and oil derivative materials, now it is agricultural products, it is the full range of minerals and everything is up.”
Oh, now who’s Chicken Little! In the area where P&G’s bottom line is suffering, we’re sounding the alarm!
Lafley, you go back to worrying about how the economy will affect your margins; the rest of us will worry about how it’ll affect the losers in the transactions.
Deal?