P&G announces restructuring to simplify business units

P&G announces restructuring

Procter & Gamble (P&G) announced yesterday (8 November) plans to streamline its management structure around six business units, each of which will have its own chief executive.

P&G said at its annual investor meeting that it will shift 60% of its corporate employees to one of its new 'Sector Business Units' (SBUs), which include: beauty, baby and feminine care; fabric and home care; family care and ventures; grooming; and health care.

Starting 1 July, the unit heads will oversee 80% of the company's sales and their respective products from development to sales. Each SBU will be responsible and accountable for its own brand communications, consumer insight, product and package innovation, sales and retail execution, and supply chain across the company's largest markets.

Keith Johnston, Forrester vice president and research director serving CMOs, explained how this may impact P&G chief brand officer Marc Pritchard's role.

"It’s been stated in several releases that marketing will be run autonomously under the new business units, including brand and consumer communications. In this scenario, Marc Pritchard has either gained six new CEO clients or he will lead the centralized programmatic media, data and analytics, and marketing technology and operations that's been put in place in the name of efficiency. It would certainly seem counterproductive to unwind all that," Johnston told The Drum.

The Sector Business Unit CEOs will report to P&G chief executive, chairman and president David Taylor. P&G chief financial officer Jon Moeller will have the added roles of vice chairman and chief operating officer.

The move apparently addresses some areas that new board member Nelson Peltz cited when he called for a major structural overhaul.

P&G has been restructuring some of its operations since 2012. Earlier this year, the company announced its in-house agency 'People First.'

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