University of Mississippi eGrove Haskins and Sells Publications Deloitte Collection 1972 Client profile: Out of the ivory places Anonymous Roy Stevens Follow this and additional works at: https://egrove.olemiss.edu/dl_hs Part of the Accounting Commons, and the Taxation Commons Recommended Citation H&S Reports, Vol. 09, (1972 winter), p. 16-21 This Article is brought to you for free and open access by the Deloitte Collection at eGrove. It has been accepted for inclusion in Haskins and Sells Publications by an authorized administrator of eGrove. For more information, please contact [email protected]. "Out of the IVOEfpalaces" Who makes Ivory soap? Chances are that almost any shopper will answer: "Procter & Gamble, of course!" But the average man or woman who shops in the supermarket will find it more difficult to name the makers of this list of packaged detergents: Bold, Bonus, Cheer, Dash, Duz, Gain, Oxydol, Tide and Salvo. Or such other household products as Cascade, Comet, Dreft, Joy, Mr. Clean, Spic and Span, or Top Job; or such bar soaps as Camay, Lava, Safeguard and Zest; or Crest and Gleem toothpaste; or Prell and Head & Shoulders shampoo; or Crisco and Duncan Hines prepared baking mixes, or Pampers disposable diapers. In fact, all these products, and more, are made by the producers of Ivory Empty plastic Prell tubes are soap—Procter & Gamble. The consumer carefully inspected before they are put tends to think of them by the brand through filling machine, sealed by name on the package, and by their he at and pressure, then tested to performance, rather than by the insure that containers of this shampoo international company that produces are completely leakproof. them for markets throughout the world. Ornamental facade above Ivory dale A Haskins & Sells client since 1952, plant entrance displays the moon-and- and one of the great success stories in stars P&G trademark, which evolved American business history, P&G has from a crude cross painted on cases of found its way into almost every soap shipped by Ohio River boat. Dates American home. (A quick check into are the years of P&G founding and laundry, bath and kitchen will prove of the building ofIvory dale. the point.) P&G's worldwide sales last year reached $3,178,081,000, of which At annual HirS-PirG discussion of the household consumer products sold in the client audit, OresonH. Christensen, United States accounted for about two- Cincinnati partner in charge, thirds. This means that on the average, (standing, left)andHirS managing P&G sold about $10 worth in the U.S. partner Michael N. Chetkovich (seated, market for every man, woman and right) confer with company officials: child in the country. Howard]. Morgens, chairman of the board (seated, left);NeilH. McElroy, Procter & Gamble is big in almost every chairman of the executive committee of way. Started in Cincinnati as a two-man the board of directors (seated, center); partnership in 1837, P&G now has about DeanP. Fite, vice president-corporate 29,000 employees in the U.S. and close affairs (standing, center); and James to 15,000 in other countries. About W. Nethercott, vice president and one-third of the American employees comptroller (standing, right). are in the Cincinnati area; the rest 17 are scattered in plants dotting the consumer confidence. Other companies map from coast to coast, and from the have had their chance to put together Great Lakes to the Gulf of Mexico. the same elements, yet they have enjoyed Amajority of employees are also P&G nowhere near the same success. shareholders. Ever since 1890, when the original partnership gave way to the Oreson H. Christensen, partner in corporate form, Procter & Gamble charge of the Cincinnati H&S office, dividend payments have flowed in an believes that management excellence is uninterrupted stream to stockholders, certainly a prime factor in the growth who now number some 89,000. of the company: "They are three deep in every position," he says."Promotion at In a survey of 2,300 top-ranking Procter & Gamble is mainly from within. business executives conducted by Dun s They hardly ever go outside to Review in 1970, P&G was chosen as one fill executive positions." of the ten best-managed companies in the country. Only three companies of the P&G was a client of Deloitte, Plender, ten had been honored in a similar Griffiths & Co. for many years before the survey seven years earlier, and P&G merger of DPG with H&S in 1952 and has was one of them. Dun's Review, asking been a client of the Firm since that of manufacturing soap and candles and rhetorically why P&G is the master year. Working with Mr. Christensen on the all things thereto belonging, and also marketer, quoted P&G P&G engagement in Cincinnati have in buying and selling all sorts of president Howard Morgens: been partner Gene Morgerson, principal goods belonging to said trade of soap Bill Teager, senior accountants Bob Cox boilers and candle makers..." "Anybody can bring a product into the and Greg Bier, and numerous staff market with a lot of money and get a accountants. Scores of H&S and DH&S The articles of agreement provided for share. The question is, can they hold accountants are involved in many other a division of their assets after fifteen it? What is the long-range vitality of parts of the world. years. But business was so good that the product? Like people, all products the founders stayed together and kept have a life cycle. They are born, The busy season on the P&G engagement on growing. By 1859 the Cincinnati receive tender, loving care, and runs from May to August, because its factory had eighty employees and annual develop into lusty growth. But those fiscal year ends June 30. Therefore the sales of $1 million—a large enterprise for that lack vitality become obsolescent P&G heat is turned on after the winter- that time. In 1870 the founders turned and die. We try to market only those spring busy season on most other jobs. control of their company over to two products that possess long-range vitality." But as a result, accountants on the of their sons, but, as a recent P&G P&G engagement have had to adjust to booklet notes with amusement,"not Has this policy paid off? The figures late summer vacations. without first admonishing their successors from the latest annual report tell the that an advertising expenditure of story. P&G sales exceeded the $3 billion Harry Weyrich, now an Executive Office $1,500 in 1870 was excessive'.' mark for the first time during the past partner, recalls his professional fiscal year. Sales moved past $2 billion contacts with the company when he was A critical piece of good fortune came only six years ago and exceeded in the Cincinnati office working on the to the company in 1878, when it was $.1 billion only fifteen years ago. P&G engagement: "When you deal with already making 24 varieties of soap. Earnings last year were about four them, you always feel you have had Someone in the factory (his name is times the level of fifteen years ago. your day in court. They listen to you. lost to history) left a batch of white During this fifteen-year period, They are always receptive to what you soap in the blending machine longer earnings per share have grown at an think. You don't always find this than usual, and the revolving blades average rate of 9.4 per cent. in other companies." stirred tiny bubbles into the mass. When the mixture was made into bars What is the secret of P&G success? The P&G story began 134 years ago when and then sold, it surprised users by Many a management consultant would a shrewd Scotch-Irish chandler named floating. Customers who received the dearly love to find it, then package Alexander Norris persuaded his two accidental batch called for more of and sell it. But the vital element in sons-in-law to go into partnership to "that floating soap "Thereafter the the Procter & Gamble success story is manufacture soap and candles for the company whipped air into the mixture elusive, and probably is a compound of thousands of settlers streaming through and floating soap became a regular P&G several things —inventiveness, hard Cincinnati heading for the South and product. It was not yet called Ivory. work and a long history of advanced West. William Procter, a molder of One Sunday, Harley Procter, son of the scientific inquiry, combined in more candles, and James Gamble, who boiled founding Procter, was inspired in recent years with sound management, soap, signed an agreement "to become church by a passage in Psalms 45:8 consistent merchandising and copartners together in the art & trade referring to the fragrant smell of the 18 Huge hydrolizer storage kettles filled with base soap holdup to 10.5 million pounds of materials that go intolvory, Camay and other brands. Kettles extend down through three floors of Ivorydale building, which was builtin thel880sand intended to last. garments of women from "out of the ivory Delicately balancing a column of palaces." He quickly sold his miniature Ivory soap bars by exerting colleagues the name Ivory for the just the right pressure, inspector white soap that floats. checks them visually before putting themon wrapper line. At Ivorydale PirG In 1882 the younger Procter shipped packs Ivory, Camay, and Safeguard mini samples of Ivory to a number of bars in the wrappers of several chemists, asking each of them for an hotelandmotelchains.