09/09/96 AN OLD COACH WITH NEW DISCIPLINE

AN OLD COACH WITH NEW DISCIPLINE

When John E. Pepper took over as chairman and CEO of Procter & Gamble Co. last year, many at P&G thought his biggest challenge was the one sitting down the hall. Pepper, a polished Yale University grad with 33 years at P&G, had led initiatives directed at such feel-good goals as team-building and empowerment in the 1980s when he was Procter's much loved U.S. chief. But now he was paired with a new second-in-command, Dutchman Durk I. Jager, known more for his gutsy decision-making than his people skills. Jager was also the man Pepper beat out for the top spot.
As it has turned out, the two have forged an alliance that seems to work, at least so far. ``People are pleased there is not a battle going on between Jager and Pepper,'' says one P&G executive. Part of the reason for their detente is they have settled into a good cop/bad cop routine, with Jager playing the enforcer. But it's also true that the 1990s Pepper, while not exactly abandoning his kinder, gentler approach, has shown he's made of sterner stuff.
When he was named CEO, outsiders saw Pepper, 58, as a healer. Procter, after all, had been turned inside-out during a tumultuous five years under Pepper's hard-charging predecessor, Edwin L. Artzt, who wasn't shy about publicly berating his managers. And the company was still going through a restructuring that claimed thousands of jobs.
SHATTERED FAMILY. But the long-held internal perception of P&G as a family, with employees as cherished dependents, was shattered forever. Pepper may show the world a more genial face than Artzt, but he has continued his predecessor's emphasis on discipline and accountability. With P&G selling brands and exhibiting a financial discipline unknown before, no one is calling Pepper a softie, a man unable to make hard calls--as they did in 1989 when he was passed over for CEO in favor of Artzt. ``I was expecting an enormous change, and it hasn't happened,'' says one Madison Avenue source. ``I'm glad [Pepper`s] at the helm, but it won't ever get back to what it was when John ran the U.S.''
Pepper joined Procter out of the Navy as a brand assistant on Cascade dishwasher detergent. Rising through successive marketing posts, he oversaw first the company's U.S. and then its international businesses before becoming CEO. He developed a reputation as a manager willing to listen to underlings, whether it was giving a hearing to proposals others dismissed or calling a departing manager to try to dissuade him from leaving. Even today, his activities reflect his concern for others. He has helped to establish mentoring programs, for instance, in Cincinnati public schools. ``John always brags about his mentees, about how they're going on to college,'' says Peter Strauss, who works with the P&G chairman in the mentoring. programs.
Inside Procter, Pepper is expanding the mission of P&G College, the company school that's taught by P&G executives and aims to teach leadership and transmit company values. ``We are emphasizing heavily the whole area of coaching,'' says Pepper. After meeting recently with a number of young managers, Pepper says he was encouraged at the chance they said they were getting to run important parts of the business, and about how much time their bosses were spending with them. ``These are the reasons I'm with the company,'' he says. Hokey as it sounds, from Pepper, it's believable.
By Zachary Schiller in Cincinnati