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May 12, 2011
80 Years Later: What Have We Learned From Neil McElroy's Memo?
How long does it take for a brilliant idea to really take hold in your company, even after it has proven its worth elsewhere? Sure, tactics like telemarketing or tools like Facebook can become epidemic overnight, but what about ideas? I’m thinking about that tonight because it was 80 years ago this month that marketing’s most widely publicized memo gave birth to the idea of brand management.
The blessed event didn’t happen on Madison Avenue, but 670 miles west in what is now the Gwynne Building on the northeast corner of Sixth and Main Street in downtown Cincinnati. In 1931, this was the headquarters of Procter & Gamble, and the place where Neil McElroy had hung his hat each day for six years since graduating from Harvard. McElroy was a 27-year-old advertising manager assigned to the Camay Soap brand. On the morning of May 13, 1931, young McElroy arrived at his office, sat behind his typewriter and banged out a three-page memo to make the case for why he needed to hire two more people. The case he was really making was the case for proactive brand management.
The memo worked. McElroy got his two people. It also sparked a revolution in the way P&G managed its brands and structured its company. In fact, this historic memo (often called the “Brand Man Memo”) is credited with the eventual restructuring of the entire P&G business into what would be the world’s first true marketing organization. So, eighty years later, I’m wondering: Do you think McElroy’s widely publicized principles, which appeal so strongly to reason and which generated such colossal wealth for P&G, have really been adopted in earnest by your company or your clients? 
In a terse 800 words, McElroy outlined a management system built on ten simple pillars that would come to define textbook brand management.
1. Learning. Organizational learning is achieved through recognizing, documenting and sharing best practices. When your efforts are working for a particular brand, “examine carefully the combination of effort that seems to be clicking and try to apply this same treatment to other territories that are comparable.”
2. Field Research. McElroy makes the case for brand manager as detective, using face-to-face investigation in the field as the primary investigative tactic. If a brand is having a problem in a particular territory, the brand manager’s duty is to “Study the past advertising and promotional history” and then visit the scene of the crime personally to talk to “both dealers and consumers – in order to find out the trouble.”
3. Funding. Once the problem is identified, McElroy maintains that developing a solution is only half the battle. The other half is securing adequate funding for your solution to work. “You need to be sure that the amount of money proposed can be expected to produce results at a reasonable cost per case.”
4. Brand Training. The brand manager is advised not to simply develop sales aids for their brand strategies, but to meet with the sales force and work with them one-on-one “to the very finish to be sure that there is no let-down in sales operation of the plan.”
5. Measurement. McElroy emphasizes the importance of keeping records and making “whatever field studies are necessary to determine whether the plan has produced the expected results.”
6. Responsibility. The buck stops here. The brand manager assumes complete responsibility for brand strategy, advertising expenditures, and packaging. 
7. Focus. To ensure brand managers have time to adequately deal with the responsibilities above, they should ideally have only one brand under their charge (two at the most). All other duties should be delegated to their assistants. 
8. Brand first. McElroy makes a clear distinction between sales work and brand work, defining the roles of the salesman vs. that of a “brand man.” He subordinates the role of sales under the guidance of the brand. He proposes to “take from the shoulders of the Divisional and District Sales Managers all brand responsibility,” so as to “leave the sales heads in a much freer position to administer the sales policies of the Company and apply general volume pressure.”
9. Relations. Even with the “brand man” in the driver’s seat, McElroy emphasizes the importance of keeping on good terms with the district and division-level sales managers. He suggests the brand manager “obtain his authority and support” for strategies and visit him “a number of times a year to discuss with him any possible faults in our promotion plans.”
10. Support. McElroy suggests a three-tiered brand team with “Brand Men,” “Assistant Brand Men,” and “Check-up Men.” This ensures that the brand man is able to maintain 100% focus on field investigations and not be bogged down with office work. 
Like most revolutions, the precursors to this memo had actually been simmering in marketing circles and inside P&G for years. But the fact that a memo from a middle manager had such an impact is a testament to P&G’s culture at the time. After all, it’s not as if the company was a start-up striving to learn the ropes. P&G was already 94 years old and quite successful when the McElroy memo was penned. But P&G was also facing some new challenges at the time, increased competition and internationalization not being least among them. The “brand man” approach McElroy championed helped on both fronts.
These challenges are as pronounced for most companies today as they were for P&G in 1931. But has the introduction of brand managers eight decades ago really put an end to what Paula Grey has called the “producer’s view of the world,” a perspective where “customers and the marketplace were viewed as part of the system outside the business, a destination that products and services were sent outward to”? I’m not so sure and that’s where I’d like your help. As you celebrate this octogenarian memo, please take a moment to look at the ten practices outlined above and let me know if you feel they seem more rule or exception in today’s marketing department. If you would like to see the full text of the McElroy Memo, check out my branding blog where I’ve posted the original document.

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Sean Duffy is a founder of Duffy Agency, the digital marketing agency for aspiring international brands. Sean has over 25 years of experience working with strategic marketing in Boston, San Francisco, Stockholm, and Copenhagen. In addition to his involvement with Duffy Agency, Sean is a frequent speaker on strategic international marketing and online brand management. He serves also as Lecturer and Practitioner in Residence at the Lund University School of Economics & Management and as Mentor in their Masters Program in Entrepreneurship. Sean is an active member of  TAAN Worldwide where he has served two terms as the European Governor. He is also a speaker, bloggerTwittererand is on LinkedInWith offices in Malmö and Boston, Sean splits his time between Sweden and the States.

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