There's been a change at the top of Proctor & Gamble (PG). Sort of. This morning the company announced the immediate departure of CEO Bob McDonald. McDonald has been under pressure from activist investor Bill Ackman making the "retirement" somewhat predictable. The wrinkle is that McDonald will be replaced by his predecessor A.G. Lafley who returns from retirement four years after leaving the company.
P&G's move is the second time in as many months that a floundering corporation has gone back to the future by bringing back a departed CEO. Last month J.C. Penney (JCP) did much the same thing when it brought back Myron "Mike" Ullman just 17 months after firing him in favor of Ron Johnson.
The week also saw JPMorgan (JPM) CEO and Chairman Jamie Dimon win a shareholder vote of approval allowing him to keep both titles. Taken as a whole it's hard not to see P&G's move in the context of a larger bifurcation of corporate America. On one side are younger, more innovative companies seeking change through youth movements; on the other are more traditional retreats back to an older world where elderly white males exert dictatorial power and radical change is frowned upon if not rejected out of hand.
Call it the rise of the Zombie CEOs.
As my Breakout co-Host Matt Nesto points out, McDonald has hardly been an unmitigated failure at P&G. The stock has seen strong gains over the last 52 weeks and is up nearly 20% year-to-date. "It's not like it's been lagging, they just did a big acquisition, things are moving, they've acknowledged some mistakes in their growth areas; it's a big company."
All three moves are a function of risk aversion. In prosperous times there's an unwillingness to make radical moves even when a situation calls for change. Lafley, Dimon, and Ullman are all more than capable but decidedly old school. Three years ago tradition was crumbling all around the world, and upheaval was welcome and needed.Read More »from P&G Brings Back Lafley: The Rise of the Zombie CEOs