Well, another week passes and Procter & Gamble announces another round of cuts. Sad days continue for a storied company that can’t find a growth formula.
It is trite to say -and it has been said by many, many times- but you cannot cut your way to greatness. Yet this is what passes for strategic rigor in today’s corporate world. If you can’t grow the top, you squeeze the bottom. And you justify the squeeze as some kind of enabling move … when it is no such thing!
Not unlike the euphoria that supposedly accompanies extreme weight loss, each pound of working capital and SG&A expense rent from the beast is greeted with celebration. Leaner and leaner but weaker and weaker the body becomes. Frailty is lost in the euphoric glow.
Before the recent year’s repeated restructuring programs and portfolio pruning, P&G leaders advised investors they had this great big competitive advantage called “scale”. That bigness gave them something that other consumer goods companies didn’t have.
Out-sized profit margins leave little room to invest in either growth initiatives or defensive tactics. Maximized cash flows provide little buffer in the supply chain or customer accounts to attack service opportunities or exploit competitive missteps. Lean operations magnify the risk of mistakes or process issues.
As time has gone on, they have betrayed the fact that financial
As the company backs itself deeper and deeper in the corner, I fear catastrophe lurks and will come quickly and brutally.