Christina S.

Avendano THP-2
BA 291.2 Professor Rodriguez / Professor Echanis
Individual Case Paper No. 1 : Colgate-Palmolive: Company in Transition (A)

Reuben Mark : The Man Who Put the Smile Back at Colgate

The Colgate-Palmolive (CP) that Reuben Mark inherited in 1984 was in dire need of
transformation. Yes, it had a worldwide sales and distribution system that was at par with Unilever
and P&G, an advertising and marketing budget that was the stuff of which agency dreams are
made, and a core of brands - Colgate, Palmolive, Ajax, Fab and the like - that were known around
the world. What it did not have, though, was a good profit margin and at that time, analysts were
describing the company’s performance as lackluster.
In a global organization like CP, CEO transitions are major events and should be looked at as
an opportunity for a company to evolve continually. Mr. Keith Crane, Mr. Mark’s predecessor, was
able cure some of the company’s ills like stagnation in most markets and cash flow problems, and
was able to restore CP back to health, however, he was not able to change the company’s culture.
Colgate still operated on the philosophy that any problem can be solved with advertising dollars and
trade discounts, and that any new product was worth rushing to the market.1
A long-time CP officer, Mark took the CEO helm at 48 years old and launched a restructuring
plan that aims to make changes in the company’s culture while raising long-range prospects of even
better earnings growth and equity appreciation. Mark took on the leadership role with vigor and
was viewed as a very open, people-oriented leader and a strong motivator. These qualities of a
transformational leader have given him the upper hand to smoothly institute changes in a global
organization like CP.
His first order as CEO was to focus. Since CP competes in a mature market with sluggish
growth, it can thrive only by acquiring companies with proven products that fit nicely with its own
businesses or by introducing successful new products. He launched a divesting and diversification
plan that led the company to concentrate on its core brands and exercise financial discipline.
Mark clearly acknowledged that the company’s managers around the world are one of its
major strengths. With all the changes that he intends to undertake, he must keep his workers
pumped up and find new ways to operate the company more efficiently. One of his greatest
concerns was how to reintroduce a spirit of independence and entrepreneurship that had once
characterized the company’s management. He envisioned the need ranging from the contribution
of new ideas of all kinds to the internal development of new products and even new businesses.
Following Mark’s actions in a span of five years after he was appointed CEO, it was known that he
slashed bureaucratic layers, instituted awards programs and compensations systems that reward
individuality and he gave stocks to CP workers for innovative suggestions and cost-cutting ideas.2
Colgate's international operations have always been important proving grounds for
executives because the company traditionally earns more than half of its profits overseas. Under
Mark’s leadership, he foster a period of exploration, of learning about consumer research, about
market trends and about reformulating its products. After an unusually long tenure of 23 years as
CEO, Mark retired as CEO in 2007 and has been cited many times over as one of the sterling icons in
corporate leadership. He definitely gave Colgate a reason to smile.

1 http://www.nytimes.com/1987/09/30/business/market-place-colgate-view-seems-bright.html
2 http://archive.fortune.com/magazines/fortune/fortune_archive/1987/05/11/69003/index.htm