Dishing The Dirt On The King Of Soap


By Alecia Swasy

Times Books x 378pp x $24

Alecia Swasy has a chip on her shoulder. So would you, if you had experienced what she has. Reporting on consumer-products giant Procter & Gamble Co. for The Wall Street Journal in 1991, Swasy turned up some company secrets, such as the impending exit of a top executive. Her discoveries enraged CEO Edwin L. Artzt. P&G subsequently helped get a grand jury investigation going that led to a search of hundreds of thousands of Cincinnati residents' phone records in a vain attempt to identify Swasy's source.

Now, Swasy has written what she calls P&G's "inside story." Unfortunately, as you might expect, Soap Opera is a jaundiced tale. It's as if Swasy spent a year digging up every smidgen of dirt she could, then unloaded it all. Even P&G practices that many would view as positives here come across as obsessive and outlandish. While I'm glad I don't work at a place that collects used underwear to check out toilet tissue, such methods seem more comical than anything else. Swasy's intensive research has also turned up a plethora of more tawdry incidents, such as a prostitution ring allegedly run by some employees out of a P&G lab. That's shocking, but, like many other details, it seems to be included just because Swasy found out about it.

All this makes Soap Opera easy to dismiss. And that's regrettable, because Swasy has also done a fine job of exploring the secretive Procter world, where people are told not to work on airplanes for fear others will see what they're doing and, Swasy reports, P&G security guards once went over the notes of a reporter who had gotten into headquarters and interviewed employees about their orange-and-black Cincinnati Bengals displays. Although a profusion of footnotes and P&G denials make for some tough going, Swasy has captured colorful detail about the company that invented the notion of "morning breath" and made paranoia about spotty dishes and dandruff commonplace. Those campaigns turned Scope, Cascade, and Head & Shoulders into leading brands, but the impact on the national mind-set may not have been quite so positive.

P&G has called Swasy's portrayal "one-sided" and "inaccurate." The sheer accumulation of incidents, however, suggests that P&G indeed indulges in some questionable practices. The company seems willing to go to almost any length to silence opponents, for example. It sued three diaper services and a small Cleveland ad agency, claiming they spread disinformation to hurt sales of P&G diapers, Swasy notes. It canceled advertising on a Boston TV station that aired a commercial that urged viewers to boycott Folgers coffee. P&G invades its employees' privacy by monitoring phone conversations, Swasy says. And when its paper mill polluted a river in Florida, P&G disputed evidence that there was a ground-water contamination problem, even as it told its managers to use bottled water. In addition, Swasy claims the company has muzzled critics on sensitive issues by paying for scientific research. That's what she says P&G did with toxic shock syndrome after its Rely tampons were linked to the disease, ultimately leading to their recall.

Swasy's tendency to overstate her case is one reason P&G's directors aren't likely to take her book to heart. If they do, though, they should ask whether the practices she cites are inherent in the company's 156-year-old culture or whether they're mainly the work of recent management, including 1980s chief John G. Smale and especially Artzt. Swasy suggests both at various points, but the way she blends incidents across decades makes it hard to know for sure. For instance, she quotes former Vice-President Charles Jarvie, who left in 1979, as if he were talking about recent or current times.

What's most disappointing about Soap Opera, though, is Swasy's failure to give her reporting some context and greater meaning. P&Gers don't need to be told that Artzt keeps three copies of Leadership Secrets of Attila the Hun in his office to know he's a tough, even brutal manager. Swasy could be right that his warlike attitudes undercut P&G's ability to keep good managers and work effectively with customers. The larger question is: Will the lean-and-mean approach so fashionable today hurt companies in the long run?

For that matter, how widespread is the kind of misconduct Swasy accuses Procter of? She raises serious questions about whether P&G acted fast enough in warning women about toxic shock. That's a significant charge, which contravenes company lore--that the 1980 Rely recall was P&G "doing the right thing" regardless of the financial consequences. Since then, we've become more inured to stories about corporations covering up flaws in products, from heart valves to breast implants. If P&G acted badly, it's hardly alone.

But unlike such fallen idols as General Motors and IBM, Procter is still very successful. True, its dominance in some U.S. businesses, such as diapers, has eroded, and it's facing a major challenge now, as more consumers decide that premium brands aren't necessarily much better than lower-priced products. But in the late '80s, after its first profit decline in decades, P&G staged a major comeback--based on successful expansion abroad, acquisitions, and product innovations. Just since 1989, it has boosted foreign sales by more than $7 billion. It's entirely possible the company will do less well in the future, but Swasy inaccurately presents it as being on a long slide. Elsewhere, she suggests that Procter's solid financial returns have masked the misconduct she alleges, a point that seems closer to the mark.

Ironically, Swasy herself seems to have become enamored of at least one of P&G's methods. She reveals that, to help her find out what people wanted to know about the company, a former Proctoid conducted a focus group. Nothing could be more Procter-like than that.

Before it's here, it's on the Bloomberg Terminal.