Tag Archives: Fritz Henderson

Trending Towards The Gray

I’m watching Procter & Gamble stock today, looking for some reaction on the trading floor to the announcement that Robert McDonald will succeed A. G. Lafley as CEO. The market did not exactly raise a huzzah or hurrah at the news yesterday, which ran on the front page of the Wall Street Journal and on the AP wire. P&G finished slightly down. It was a gray day.

Maybe traders and investors are waiting for today’s official announcement before reacting, but when have you known Wall Street to wait? Maybe McDonald just isn’t seen as an inspired or inspiring choice; but I refuse to believe that. After 29 years at P&G, McDonald now serves as Chief Operating Officer of the sprawling consumer products giant. He has an impressive military background (West Point, 82nd Airborne), and a degree in Engineering. He is a logistics man. In his tenure as COO, McDonald focused on making P&G’s manufacturing and transportation network more efficient. He implemented a monitoring system to track trucks and reduce empty truck miles. And he made efforts to move production to emerging markets – another push for virtuous efficiency (or cheaper labor, depending on your perspective and your politics).

These are not the actions of an empty suit. McDonald is clearly someone with a deep and hard-earned knowledge of how P&G works and the expectation is he will make a concerted effort to institute new discipline across the company. No small task, given P & G’s size, breadth and depth: the company makes everything from my Braun coffee-grinder to dish soap, Gillette razors, potato chips, AA batteries and cosmetics; even the diapers your child is soiling right now are probably made by P&G. Imagine directing all that traffic, or simply trying to bring the whole thing into focus. The company claims people around the world use its products three billion times a day. By my reckoning, that’s about 35,000 uses every second of every day.

That makes the collective shrug yesterday over McDonald’s appointment all the more puzzling. Or maybe that shrug was the intended effect. P&G certainly could have made a big splash if it wanted to, by choosing Susan Arnold over McDonald. Arnold was often mentioned as a likely successor to Lafley until she left P & G in March of 2009 (motivated, no doubt, by the fact that she’d been passed over. The succession process had been two years in the works; the writing must have been on the wall sometime in 2008). Arnold was a P&G superstar. She started out selling dish soap (a brand assistant), and gained the highest rank of any woman in P & G’s 168-year history. But wait, there’s more: she’s openly gay, according to her profile on Wikipedia. (These are the wages of success: to have one’s sexual preferences detailed on Wikipedia.) Think Carly Fiorina meets Ellen DeGeneres. Think of the cultural capital the company would have reaped: over-the-top praise from big media outlets, eager to portray themselves as socially progressive; the lashing and futile threats of boycotts from the Religious Right. At the very least, it would have been a good day at the circus.

There may be a glass ceiling at P&G, but Arnold came pretty close to shattering it. There’s no questioning her competence, and it’s likely she was passed over not because of some institutionalized sexism or homophobia, but because of the business she was in. She came up through the beauty and cosmetics line (look for institutional sexism there, if you must), a business that flourished under Lafley; but there is a suspicion that in hard times, Cover Girl and Pantene won’t do as well as some of the more essential consumer items. Some investors had begun to question whether the acquisition of Gillette had made the company unwieldy, too big to succeed. The future of the company doesn’t lie in Arnold’s bailiwick. So it might have been as simple as that. The McDonald appointment suggests a new sobriety about the marketplace, a shift in focus or a correction of the Lafley strategy. (Since Lafley will stay on as Chairman, it’s a subtle suggestion, at best.)

But doesn’t the P&G succession story also suggest something larger and more significant? Something about the mood and tone of the country right now? I’m tempted to see in McDonald’s ascent something like the start of a trend — away from the superstar CEO, and towards the nuts and bolts operations guy. Less sizzle, more logistics. A similar restraint seems to have played into the thinking behind the choice of Fritz Henderson to lead GM through its dark days and into Chapter 11. There are doubtless other examples.

It’s sometimes said that the operations-minded are too immersed in the details to see the big picture; but sobriety, details and logistics might be exactly what we’re looking for after the housing bust, the financial crisis, the Madoff affair, the private jets, all the CNBC hype and John Thain’s $1,400 wastebasket. And it may be what we’re looking for, more broadly, in leaders: think of it as a trend toward the gray, more Ike, less Dubya. George W. Bush and Donald Rumsfeld could never have conceived, let alone plan D-Day; Eisenhower would never have invaded Iraq without a postwar plan. Obama is a rock star, to be sure. But many like him for his sobriety and evenness of temperament; he is unflappable, and he likes to make careful distinctions and discuss things coolly, so much so that before the elections some right-leaning pundits were praising his “conservative” instincts. (That’s over.)

Remember when Ronald Reagan famously told us it was morning in America again? Now, it seems, we’re just happy to hear that it’s a gray day and that nothing too out of the ordinary is happening.

Return of the Blob

The rhetoric around the ousting of former GM CEO Richard Wagoner has given a whole new meaning to the phrase “moral hazard.”

Interviewed Monday on the Today Show, Governor Jennifer Granholm said that Wagoner is “clearly a sacrificial lamb”. The remark was widely reported; and – what can this portend? – the editorial board of the Wall Street Journal found itself in agreement with the governor, adding that the “anticorporate furies” have been unleashed.

I suppose it’s because we sense that we are not just going through an economic downturn but witnessing the passing of an entire economic and social order that we have reverted to the language of a more primal one: the blood of the Paschal lamb, an innocent (“Rick Wagoner is a good man,” said Granholm), shed on the high altar of industry, to sate the angry god or slake his bloodthirst; winged avengers hover, ready to swoop down and feed, like the Furies in a dark Gustav Doré engraving.

This is economic crisis as miasma. The Blob. The sky darkens and the blood-guilt spreads; the chorus of the people cries out for a cleansing rite, expiation or salvation.

Never mind that Paul Ingrassia can produce a decade-long list of mistakes and bad judgment calls Wagoner made; his loyalty and goodness are now what count. He grappled, says another columnist, with a “cursed legacy” dating back to the Wagner Act of 1935. Never mind that GM’s new CEO, Frederick “Fritz” Henderson, has indicated that he will not depart significantly from Mr. Wagoner’s strategic choices; he has been “anointed,” declares a front page story. (But he makes a strange sort of messiah, one who likes to spend downtime reading novels in the company of his family and their five cats.)

At the very least, this older language of mysteries and rites allows us to express truths our own morally impoverished, wonkish vocabulary of social scientific facts, TV punditry and fiscal policy can’t accommodate.

Look at it this way: the auto industry is the closest thing to an ancient grudge American industrial capitalism has ever known, the archetypal struggle of American workers with American bosses. We’re not out on the heath, crying out to the unanswering sky to tell us what we have done — what could we possibly have done? — to defile ourselves and bring these punishments down upon our heads. We know that we have set our world out of joint, and we know that some old scores are going to be settled in the auto industry shakedown; but we want more than some measly concessions from labor and management.

We want “sacrifice” on all sides — the President himself said it. There will be blood. Or at least that’s the promise. And everybody seems to be groping for words to describe the cosmic hazards we will all face if, in this Easter season, that sacrifice does not appease the wrathful god Economy.