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Team Shirley Takes the Field at P&G

Ed Shirley, Procter & Gamble’s new vice chair for beauty and grooming, unveils his game plan for reigniting growth.

Make no mistake. Ed Shirley is a man who hates to lose.

The 52-year-old has been honing his competitive streak since his days as a high school basketball player. As the recently appointed vice chair, global beauty and grooming for The Procter & Gamble Co., he’s now in the game of his life. The playing field is a big one. In addition to assuming responsibility for P&G’s $28 billion beauty and grooming business, Shirley has been charged with creating a cultural revolution at the 172-year-old packaged goods behemoth, one that encompasses cross-brand cooperation and a faster, more agile decision-making process in a notoriously bureaucratic environment.

“I’m highly competitive and I want to win,” says Shirley. “When I see opportunities and a pathway for us to grow faster than we have been growing because we’ve been playing individual games versus scaled games, it may not be easy, but it’s possible.”

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Shirley comes to his role as an outsider. The majority of his career has been spent at Gillette, which P&G acquired in 2005. Since then, he’s moved swiftly up the ranks of his new parent company, being named group president, North America in 2006 and vice chair in July, 2008 — one of four in the company and the only non-legacy P&G-er in the position.

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He assumes control of the beauty and grooming category from the hard-charging Susan Arnold, who aggressively built P&G into a beauty powerhouse over the last decade. While the company has been largely successful — with seven $1 billion brands in its portfolio and a global market share of 12.6 according to Euromonitor International — more recently growth started to slow. Arnold resigned as president of global business units in March, paving the way for Shirley to execute a new vision for the beauty and grooming division.

The key imperative is to reignite growth—quickly. “Our commitment externally to [Wall Street] is between 4 to 6 percent growth,” says Shirley. “But I’m a very competitive and driven leader and I look forward to finding a way to do better than that. I see an incredible opportunity to grow faster and make a difference in the company’s overall results, because the economies of our categories are very accretive. If we can do that, we’ll make a difference in the company, the Street will look at us differently and that’s very motivating.”

To drive growth, Shirley has identified a number of key building blocks. Chief among them is fostering collaboration between P&G’s brands, which include Olay, CoverGirl, Pantene, Gillette, Wella, Herbal Essences, Venus and a host of fine fragrance names including Hugo Boss, Dolce & Gabbana and Gucci. “Historically we’ve talked to the consumer individually as categories,” Shirley says. “What I see as the big opportunity is to identify how we can play across brands and across categories and meet more of the consumer’s needs holistically. That is the way for us to create breakthrough and differentiation.”

That means linking together brands both productwise, as with CoverGirl and Olay Simply Ageless Foundation, and through marketing programs, as with a partnership between Gillette’s Venus brand and Always feminine care. “It’s limitless in terms of the ideas we can create,” Shirley says. “In the past, maybe one or two brands participated. Now we’re creating the capability that more can, whether it’s television media or brand savers or cause marketing programs.”

As Shirley knows better than most, though, talking about change and effecting it is easier said than done, particularly in a corporate culture as regimented as P&G’s. He takes pains to emphasize the key phrase “change with continuity” as a way to describe the transition from Arnold to himself, and  calls creating synergies between brands as “probably the area of focus I’m spending most of my time on.”

It’s a position for which the executive considers himself particularly well-suited. Calling the key word of his leadership style “collaborative,” Shirley is encouraging his team—with whom he sits on the third floor at P&G’s Cincinnati corporate headquarters rather than on the executive floor eight stories up—to broaden their horizons of possibility. “I’m much more solution-focused as opposed to problem identification,” he says. “I like to create breakthrough and we’ve got to deliver consistent, sustainable growth—that’s our business model. But at the same time, throughout my career, I’ve looked at what would a breakthrough look like? What would have to be true for us to create a step change in our growth or our capability? I see possibilities.”

Since assuming his position, Shirley estimates he’s spent about 50 to 75 percent of his time traveling, assessing the business and its possibilities. Voluble and very focused when he speaks, his command of the categories he now oversees is clear, with beauty-centric words like glucosamine (a star Olay ingredient) rolling smoothly off his tongue.

The second key pillar Shirley sees in his quest to grow P&G’s beauty sales is the men’s grooming business. The synergy is an obvious one — after all, P&G paid dearly for Gillette in 2005 — and one that many industry analysts expected to see happen earlier — including Shirley. “It took some time to get the right formulations,” he admits of the products, “and the first order of business in bringing Gillette into P&G was do no harm. P&G paid $57 billion for the company and it was grounded on revenue synergies and cost synergies. We got the cost synergies and now we’ve got the revenue synergy game in play. Initially, they came from merchandising. Now, we’re into the next phase, which is formulation and taking advantage of the technical capabilities P&G has.”

To that end, Shirley has reorganized the division’s structure by gender. Gina Drosos will oversee the women’s side as president, global female beauty, while Chip Bergh will be responsible for the male side as group president, global male grooming.

Thus far, launches have included hair care, body washes and an upgraded deodorant offering that capitalizes on the clinical strength technology of P&G’s Secret brand. Skin care, called Gillette Series and positioned as either pre-shave or post-shave products, was introduced in Western Europe earlier this year. Key markets for growth in the men’s sector include the U.S., Western Europe, Eastern Europe, particularly Russia, and Latin America. Although Gillette will be the anchor of the grooming business, Shirley says there will also be a prestige men’s grooming play, declining to disclose details.

Asked when grooming can be a billion dollar business — P&G’s sweet spot — Shirley declined to give a time frame but would say, “We’ve got some pretty aggressive growth goals. It’s one of our key building blocks for growth over the next four to five years and will be a big piece of our overall growth.”

Shirley believes one way to grow the men’s sector is through women. “Women are key influencers for their guys,” he says. “If we say to a guy, ‘A lot of women don’t like scruff on their beard,’ they’ll think we just want them to shave more so they have to buy more products. But if his partner tells him, there’s a higher possibility that he’ll shave. We think there’s an opportunity to work with the women’s magazines and influencers to give her some tips that she can say to him that will help him.”

The executive admits the difficulty in trying to effect regimen change with men, but cites himself as an example that it can be done. Shirley, who on most mornings rises at 5 a.m., says he now uses body wash rather than soap, shampoo and conditioner, Total Effects SPF 15 Fragrance Free moisturizer (“We’ve yet to bring Gillette skin care to market here,” he notes.) and fine fragrance daily. (I didn’t use fragrance every day because I thought, deodorant antiperspirant — I’m OK. But now, because I’m aware, I use it every day.”

Shirley’s grooming regimen evolved as he got to know each of P&G’s categories more intimately while serving as group president of North America. He’s also taken to heart P&G’s commitment to consumer research. “The way P&G goes to market is to get inside consumer’s homes and not just hear what they say they do but to actually see what they do,” he says, noting he’s made home visits in India, Brazil, China, Russia, Poland and Ukraine thus far. “It’s an externally focused way of thinking and is liberating because it forces you to get outside of the trap of internal focus.”

Conversely, though, Shirley says Gillette had the edge when it comes to retail execution, a  capability he’s trying to bring to P&G. “I’ve got a passion for retail,” says Shirley, an avid shopper who cites Nordstrom as his favorite store. The goal is to combine in-store theater and impeccable execution that literally stops the consumer in his or her tracks. As an example, Shirley cites the recent launch of Olay Professional Pro-X, whose price points of $40 to $60 broke barriers both for the brand and for mass market skin care. Custommade shelf displays included merchandising the line’s three core products behind glass to differentiate them from the rest of Olay and emphasize their premium positioning.

“We call it deselection and selection,” he says. “If you can create a way in store to help the consumer naturally deselect everything else because they’re drawn to this new item or new way of presenting an item or a category, it allows you to communicate your own message. Otherwise you get lost. And where categories don’t do well is when it’s just a sea of the same. One of the things that Gillette brought to the company was an incredible focus on execution and making launches really big.” Thus far, the strategy seems to be working, as evidenced by the success of Pro-X, which the company says has exceeded expectations and has a nearly 5 percent value share after two months on the market.

Gillette also excelled at populating the frontend of stores with high-impulse items to stimulate incremental sales, a strategy that is currently being implemented in the beauty category. And Shirley is working with his brand teams to help clarify the in-store offering for the consumer. “Sometimes you can get carried away with sku proliferation and fragmenting categories and brands,” he says. “In slicing it too thinly, you can confuse the consumer and we’ve seen that in some of our categories.”

He cites Olay as an example. “I was standing in front of the shelf and couldn’t tell the difference
between Total Effects and Regenerist and Definity,” he says, referring to different franchises within the brand. His brand management team explained the unique selling proposition of each to him, and that became the basis for a new merchandising and communications approach. “I was confused, and if I’m confused, the consumer is probably confused, so we’ve upgraded.”

Trading up, be it in merchandising or product proposition, is the backbone of Shirley’s game plan. “We are going to gain share because we’ve got better innovation, and at the same time, trade consumers up through better performing, higher-value products.”

Although the success of Pro-X has demonstrated to Shirley that a trading up strategy is valid despite the recession, even a company the size of P&G isn’t immune to the effects of the global  economic crisis. Its strategy has been to implement a value reframing program for key franchises. For example, an ad campaign for Gillette Fusion, whose blades retail for about $20 for eight, proclaims, “Did you know for about $1 a week you can experience the best shave imaginable,” going on to note a cup of premium coffee often costs about $3. Another, for Olay Regenerist Microsculpting Cream, which sells for about $30, touts clinical results that prove its efficacy compared with creams that cost hundreds of dollars more in a bid to capture the attention of shoppers trading down.

“What we don’t want to do is destroy category value by taking prices down,” says Shirley. “What we can do is make sure we have the right portfolio, which allows consumers to stay in the family if they are in the position of having to trade down. Or they can rethink their purchase relative to other purchases they make. We’ve been successful on both fronts.”

Though his time is tight, Shirley is still a keen sportsman. An avid baseball and basketball player in his high school and college days, today his preferred pastime is golf. He has a handicap of 16 and often travels with his clubs — but it’s clear that the main game he’s focused on winning these days is the beauty and grooming one. When asked how he thinks Wall Street views him, Shirley’s answer is immediate. “We’re very careful not to overpromise, but as we deliver and start to grow at a faster rate,” he says, “and can attribute it to the fact that we’re showing up more as P&G Beauty and Grooming as opposed to individual games, leveraging brands like Gillette and growing the guy’s business, growing more in emerging markets and continuing to drive innovation, then I think they’ll say, ‘This is a great play.’”