At P&G, A Good Cop Bad Cop Act

So nice guys can finish first. John Pepper, named Procter & Gamble's CEO effective July 1, is a P&G lifer who has won enormous popularity throughout the company. Quite a change from his hard-driving predecessor, Edwin Artzt. In five tumultuous years, Artzt inspired more fear than affection, cutting employment and shucking money-losing brands and old-time marketing methods. The result: strong profits but a bruised culture.

Pepper downplays the morale problem. What he does promise, in true Procter fashion, is to double sales over the next decade. With cash raining in from P&G's ongoing restructuring, his key task will be to invest it wisely. Much of the money will go overseas, both to core franchises in diapers and shampoos and newer areas, such as health products.

With P&G's new worldwide operations chief, hard-nosed Durk Jager--runner-up in the CEO race--Pepper must improve returns abroad and fix P&G's lagging diaper business. Analysts and investors are happy both men are staying on--but wonder whether they can work closely together.

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