Really interesting business experiment starting at Procter & Gamble: P&G “will sell or exit 90-100 mostly minor brands in bold attempt to refocus the business behind its 70-80 remaining best-selling brands. Less will be much more,” P&G CEO told analysts. “The objective is growth… We’re going to be much more agile and adaptable.”
I think a majority of big company CEOs think they should do this in their own companies. But few ever pull the trigger. It’s too scary. A common thing you hear at big companies is “SKU proliferation” — the sheer number of items for sale. It bloats the organization and makes action harder.
Steve Jobs legendarily used the strategy of cutting brands and SKUs for Apple’s turnaround. But few CEOs have followed suit in last 15 years. Like Steve, AG Lafley at P&G is one of the most respected CEOs in the world. If this works for P&G as well as it did at Apple, I think the odds go way up that many big company CEOs will pull the trigger on the same strategy. It could be transformative for business.
The stakes are high: Whether, and how, big companies will be able to grow their businesses and their number of workers in the future. Further, whether/how big companies will invest in new product creation in the future. Paring the old can be staging for creating the new.
Of course, Larry Page is busily ignoring Steve Jobs’ advice to do the same thing at Google! And Jeff Bezos is furiously expanding Amazon. There are no absolutes, but I think it’s very healthy for every big company to consider: How to best set up to grow and create new things?
Source: Tweets – 1,2,3,4,5,6,7,8,9,10,11,12
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@pmarca Says 